By Ruth Musser-Lopez and Mark Gutglueck
In an unexpected turn in a trial that by its sheer length has already exhibited serpentine bends to rival the switchbacks on Highway 18 from San Bernardino to Lake Arrowhead, defense attorneys in the Colonies Lawsuit Settlement Public Corruption Case on Monday rested without calling a single witness to the stand.
More than seven months have elapsed since jury selection for the case was initiated in December. Opening statements began on January 4, after which 39 witnesses called by the prosecution testified over nearly six months, with the prosecution resting its case against defendants Jeff Burum, Paul Biane and Mark Kirk on June 28 and the case against Jim Erwin on June 29. Thereafter, the two juries hearing the case – one of which is to consider whether the state has met its burden in establishing guilt beyond a reasonable doubt with regard to Burum, Biane and Kirk, and another which is to decide the fate of Erwin – were given a two-week hiatus which included the July 4 Holiday. In jurors’ absence, the prosecutors and the defense attorneys dealt with hammering out the language in the jury instructions with regard to the remaining charges that the judge presiding over the matter, Michael A . Smith, will give to the jurors before they begin their deliberations. Also considered were what are known as 1118.1 motions. Penal Code 1118.1 provides the opportunity for defendants in a criminal matter to appeal to the judge, after the prosecution has put on the totality of its case, to consider the evidence that has been presented and dismiss those charges which in his or her estimation have not been sufficiently supported by the evidence and testimony.
Even before the trial began in January, the case against the defendants had been significantly reduced from the 29 counts and 40 separate charges against the defendants to 17 counts and 25 separate charges against the defendants. In that winnowing process, what many considered the most important and damaging count of all, conspiracy, which accounted for one charge each against the four defendants, had been eliminated from play. The prosecution had sought to reestablish the crucial conspiracy element, but failed at both the state appellate court and California Supreme Court levels. During the trial, in May, Judge Smith threw out two of the counts and two of the charges against Erwin based on the California Supreme Court’s upholding of a ruling by an appellate court with regard to a case involving similar charges to two of those brought against Erwin relating to his having failed to report, on economic interest disclosure documents known as California Form 700s which must be filled out by public officials, gifts provided to him by Colonies Partners managing principal Jeff Burum.
When the prosecution rested, 16 counts and 23 separate charges remained. By the time Judge Smith had moved through all of the 1118.1 motions, four counts and seven charges had been thrown out, so that 11 counts and 16 charges remain, none of which carries a mandatory prison sentence.
In this way, Burum yet faces count 4, a charge of violating Penal Code Section 165: aiding and abetting former supervisor Bill Postmus in receiving or agreeing to receive a bribe to influence a vote; count 5, a violation of Penal code Section 165: aiding and abetting Biane in receiving or agreeing to receive a bribe to influence a vote; count 7: a violation of Penal Code 86, aiding and abetting Postmus in receiving or agreeing to receive or asking for a bribe to influence a vote; and count 8: a violation of Penal Code 86, aiding and abetting Biane in receiving or agreeing to receive or asking for a bribe to influence a vote.
Biane is yet up against count 2, a violation of Penal Code Section 165: receiving or agreeing to receive a bribe to influence a vote; count 6, a violation of Penal Code Section 86: receiving, agreeing to receive or asking for a bribe to influence a vote; and count 10, a violation of Government Code Section 1090, engaging in a conflict of interest.
Mark Kirk still stands accused in count 9 of a violation of Government Code Section 9054, the improper influencing of a public official; and count 10, a violation of Government Codes Section 1090: engaging in a conflict of interest.
Erwin still faces more charges than any of the others, including count 4, a violation of Penal Code Section 165: aiding and abetting Postmus in receiving or agreeing to receive a bribe to influence a vote; count 5, a violation of Penal Code Section P.C. 165: aiding and abetting Biane, in receiving or agreeing to receive a bribe to influence a vote; count 7, a violation of Penal Code Section P.C. 86: aiding and abetting Postmus in receiving, agreeing to receive or asking for a bribe to influence a vote; count 8, a violation of Penal Code Section P.C. 86: aiding and abetting Biane, in receiving, agreeing to receive or asking for a bribe to influence a vote; count 14, a violation of Revenue & Tax Codes Section 19706: failure to file a tax return; Count 15, a violation of Penal Code Section 118: perjury on his 2007/2008 Form 700; and count 18, a violation of Penal Code Section 118: perjury by failing to disclose receiving $7,500 on his Form 700.
The prosecution, consisting of the California Attorney General’s Office and the San Bernardino County District Attorney’s Office, alleges Burum in 2006, impatient with progress toward a resolution of the litigation the Colonies Partners had filed in 2002 against the county over flood control issues at the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in Upland, employed Erwin to blackmail then-supervisors Bill Postmus and Paul Biane in an effort to get them to settle the suit. After Postmus and Biane did so by joining with then-supervisor Gary Ovitt in November 2006 to confer on the Colonies Partners a $102 million payout to make that settlement, the prosecution alleges Burum filtered bribes to Postmus, Biane and Kirk, Ovitt’s chief of staff, as well as to Erwin in the form of separate $100,000 donations to political action committees they controlled. These allegations were made in an indictment handed down against Burum, Biane, Erwin and Kirk in May 2011.
Because Mark McDonald and Peter Scalisi, the attorneys for Biane and Kirk, respectively, had not provided opening statements, as was their prerogative, in January, both gave those statements on Monday, as the launch of the defense case in the trial.
Mark Kirk, Scalisi said, was not in the closed sessions of the board of supervisors wherein the ultimate decision to settle the Colonies lawsuit against the county for $102 million was made. “Mark got some of the information but not all of it,” Scalisi said, indicating that Kirk was thus not armed with an understanding of where the debate stood with regard to the settlement and was not equipped to influence the vote.
Scalisi referenced and quoted from Ovitt’s testimony at trial. Ovitt’s words “absolutely it was my decision, my decision alone and I stand accountable for it,” Scalisi said, exonerated his client. “The bottom line is that evidence has shown you that Gary Ovitt said under oath that he voted for the settlement because it was the right thing to do, and Mark Kirk never influenced him in any way to vote that way.”
Scalisi went on to quote himself in questioning Ovitt in March “Knowing Mark Kirk the way you do, is Mark Kirk the kind of guy who could take a bribe or not take a bribe?” Scalisi then quoted Ovitt’s response, “Absolutely not. I would not think of him that way at all. Absolutely, he is honest and you can trust him.” Scalisi said, “That is a guy that knows Mark Kirk very well.”
Scalisi turned his focus to Bill Postmus, upon whom the prosecution had relied to provide the narrative of wrongdoing that was to illustrate the criminal case. But Postmus had done more to vindicate Kirk than implicate him, Scalisi insisted.
Referencing Postmus’ open acknowledgment of his profligate drug use, Scalisi said, “Bill Postmus came in aired his dirty laundry and testified in the most honest and trustworthy way he could.” Scalisi then offered his theory that the district attorney’s office’s investigators had preyed upon Postmus in his drug addled state to prevail upon him to concoct falsehoods implicating the four defendants in a patently false tale of threats, coercion, blackmail, extortion, graft and bribery which had been originally suggested by Adam Aleman, Postmus one-time protege but eventual betrayer, who had, Scalisi said, supplied a false and entirely unreliable story to investigators in his effort to get out from under criminal charges he was facing. Those investigators,whom Postmus had referred to as the “thug squad” were dubbed by Scalisi as the “Bud squad” in reference to lead investigator, Hollis “Bud” Randles, Postmus story changed, Scalisi said, when he was out from under the influence of the “Bud squad,” which had, Scalisi said “cherry-picked” Postmus statements to construct the prosecution’s false case.
Scalisi said of Postmus, “He had an interview with the FBI when he was without the Bud squad,” referring to Postmus voluntary statements made during an interview he had with FBI agent Jonathan Zeitlin and Assistant U.S. Attorneys Jerry Behnke and Joseph Widman on October 14, 2011. Scalisi, offering his assertion that at that point Postmus was in his waning days of drug addiction, quoted from that interview:
“Like for instance, I mean I’ve been told, I don’t know if it was the DA’s office, that someone had read, you know the transcripts that came out you know publicly, it was my understanding that (during the Grand Jury) Mr. Aleman had stated that Mr. Kirk told him that, you know, I’ve been told this, he had taken a bribe or he had solicited a bribe or was going to take something,” Postmus said. “Well I know for a fact that is not true because Adam and I talked about that. The fact that, you know, $100,000 that anyone had solicited, and in the assessor case, there’s dozens and dozens and dozens of things where he changes his statement in the interviews.”
When the district attorney’s investigators ambushed Kirk to inveigle him into an intensive grilling session in which they held a tremendous psychological advantage over him and thereby sought to break him down and have him implicate himself, Scalisi said, Kirk had not wavered, holding up under the interrogation, while continuing to maintain in the face of the hard-charging investigators “that no way is that PAC [political action committee] contribution a bribe.”
In the prosecution’s presentation of the audio recording of that interrogation, Scalisi said, Kirk can clearly be heard telling the investigators, “There was no quid pro quo. There was never anything offered there.”
Kirk had cooperated with Randles, which Scalisi said was the mark of an innocent man.
“He sat down and answered Mr. Randles,” Scalisi said. “He answered all the questions. Twice he said there was never any quid pro quo.”
In November of 2004, when Ovitt was just elected to the board of supervisors and before Kirk had become his chief of staff, Scalisi said, Ovitt had already resolved to support the settlement of the litigation with the Colonies Partners. That was supported by the testimony of Bill Postmus, Scalisi said, who had said “Gary told me he was always in favor of the settlement before he was even elected.”
The lawsuit should have been settled, Scalisi said, and he suggested the county had saved money by entering into the settlement when it did, although it had squandered money previously by dragging its feet on settling the litigation and thus causing the Colonies Partners to “blow a bunch of money on lawyers, pumping up the settlement. “$102 million is a big settlement,” Scalisi said. “But you don’t have to look at it that way. The flip side of it is that the vote saved the county $198 million,” the difference between the $300 million the Colonies Partners were starting to demand toward the end of 2006.
Mark Kirk was described by Scalisi as, “a stand up guy” who emphatically did not cheat the county out of $102 million. In actuality, Scalisi said, it was the county that got its money’s worth out of Kirk.
“He was an employee working for Mr. Ovitt, putting in the hours that he was supposed to put in,” Scalisi said. “He was a hard working guy. The county got its money out of him.”
And Scalisi said, “The evidence is going to show you beyond all reasonable doubt that it was perfectly legal, perfectly okay for Mark Kirk to be involved in a PAC [political action committee]. To have a PAC is perfectly legal. All of the PAC’s 460s [California Form 460s are campaign finance disclosure documents] were filled out. Everything was open to the public. There was no effort by Mr. Kirk to hide his involvement in the PAC.”
McDonald told the juries, that as Biane’s attorney, he had remained silent throughout most of the trial because the evidence presented against his client had not been strong enough to merit a response and where issues of import to Biane had been raised, the other defense attorneys had addressed most of those. “I did not ask many questions of many witnesses or even make objections,” McDonald said. “You don’t need to have me ask questions that have already been asked. By the time things got to me, there was not much to ask.”
On a few occasions, McDonald said, he had gotten animated when an issue “just had to do with Mr. Biane,” but otherwise, he said he felt no need “to reinvent the wheel.”
McDonald said, “My client has asked not to testify. The only reason I would put my client on the stand to tell any kind of story is if he had anything that he had to justify or explain. So, Paul Biane does not have anything to say.”
McDonald acknowledged that Biane had supported the $102 million settlement. Nevertheless, McDonald maintained the inducement the prosecution has alleged – the $100,000 donation to the political action committee set up by Biane’s chief of staff Matt Brown – had nothing to do with his client’s decision to support the settlement. There was sound reasoning in support of the settlement which Biane among all of those on the board of supervisors had the wherewithal to understand, McDonald said.
“I don’t need to repeat that Paul Biane was heavily involved in real estate,” McDonald said, enumerating, “the Las Osos Development, four buildings, a car wash, the Jack in the Box, property north of the 210 [Freeway] on Haven [Avenue in Rancho Cucamonga]. Paul Biane developed that. He is a real estate developer in his own right. He did not need to be a Jeff Burum to understand the intricacies of development. Look at the mountains. We have heard all about the basins, the easements, the problems that come with development. Paul, like everyone who develops, has to deal with that. His voice comes with his real estate development. He was the expert on the board of supervisors” with regard to the “fundamental issues” relating to the Colonies development and the ensuing lawsuit, “easements and land rights,” McDonald pointed out. When, during the mediation sessions involving the county’s representatives and the Colonies Partners’ representatives, a presentation with regard to those issues was made by a Colonies Partners’ lawyer, McDonald said, Biane watched and listened. “Paul was saying, ‘I get it,’” McDonald said.
Biane understood, McDonald said, that in the mediation, for the county “there must be one voice of what to do.”
Biane came to the board of supervisors from a culture that recognized the primacy of those seeking to engage in aggressive economic development.
“Mr. Biane wasn’t elected to settle the Colonies [lawsuit],” McDonald said, but noted, “The people who elected him were pro-development. This was an easy step to make in their minds. That is why he was sitting on the board of supervisors. From day one, while he was on the city council in Rancho Cucamonga [before his election to the board of supervisors], he was in favor of some kind of settlement.”
Biane is a good guy, McDonald said.
“I could talk about all of his accomplishments, as a dad, as a husband, his children: Bella Philo; his wife Leah. That is not part of this case. I am not going to put any of those people on the stand, as wonderful as they are. The evidence is in. The cross-examination is complete.”
Stephen Larson, Burum’s lead attorney, then provided to the jury a synopsis of the information that had been provided by five witnesses subpoenaed by the defense which the prosecution had stipulated to. This obviated the necessity of actually having those witnesses testify under direct examination by the defense attorneys and then being subjected to cross examination by the prosecution. Those witnesses were supervisor Josie Gonzales, who had previously testified as a prosecution witness; Gonzales’ chief of staff in the 2006-2007 time frame, Bob Page; the now-retired judge who had heard a portion of the litigation between the Colonies Partners and the county as a bench trial in 2006, Christopher Warner; the former president of the Red Hill Country, James Piatt; Colonies limited partner Ted Hopson who was also an attorney representing some of the other Colonies Partners’ limited partners; and Scott Sommer, an attorney for the Colonies Partners representing it in the litigation against the county.
The prosecution and defense agreed to forego recalling Gonzales to the stand and stipulate to the existence of a pin messages between Gonzales and Page sent in November 2006, while Gonzales was on a trade mission to China. Gonzales had testified previously about an encounter with former California State Senator Jim Brulte in China, which she at first identified as taking place in September 2005 and later indicated was in November 2006, after it was demonstrated she was not in China in 2005. Gonzales said that Brulte invited her out to a night on the town with Burum. It has been established that Burum was in China in September 2005 but not in November 2006. Both the prosecution and the defense stipulated to an interview Page did with defense investigators in which Page said he was aware that Postmus was on the trade mission trips to China and that he had heard that members of the Colonies Partners had been to China on some of the trade missions. Page further said that he had not attended the 2006 trade mission to China because he had remained stateside with his pregnant wife but that he heard from Matt Brown, Biane’s chief of staff, that Colonies Partners representatives were in China. He said he sent a pin message to Gonzales using their BlackBerry communication devices saying he heard members of the Colonies Partners were there. Page told investigators that Gonzales emailed him and told him that on the day Page sent her the pin message she had encountered Brulte in the bar at the White Swan Hotel and that after seeing him, she did not leave her hotel room. According to Page, Gonzales did not indicate that she saw Jeff Burum in China in 2006 and she did not at that time mention being pressured by the Colonies Partners or anyone at all with regard to the settlement. Also according to Page, Gonzales acknowledged that documentation provided by the Colonies Partners which was purported to lay out the company’s costs to justify the $102 million settlement had been available to her but she had deferred looking at it until she would have the benefit of being able to review it with the assistance of county attorneys. While elements of Page’s statements shore up a portion of Gonzales’ testimony in March which was attacked by the defense, Page’s statements in some measure contradict Gonzales’ testimony, including her claim that Burum was visible at a distance across the lobby of the White Swan Hotel when she encountered Brulte there, and that she had not been provided materials from the Colonies Partners to justify the $102 million settlement figure on a timely enough basis for her to review it before the settlement vote.
The prosecution and the defense attorneys stipulated to a statement from Judge Warner that he had no personal relationship with Jeff Burum prior to the Colonies trial and that he did not know who Jeff Burum was until he was pointed out to him in court in 2006 during the civil litigation trial.
Further stipulated to was a statement from Piatt accompanied by documents to establish that the Red Hill Country Club in Rancho Cucamonga, where Aleman had testified that he had attended some meetings between Bill Postmus and Jeff Burum on a couple of occasions between January and June of 2006, was undergoing extensive renovations from November 15, 2005, through April 26, 2007. These renovations entailed the closure of the clubhouse and the substitution of temporary trailers where food was cooked and from which that food was served to members and guests during the demolition and construction period, according to Piatt, who also described the seating accommodations there which included plastic chairs and tables with umbrellas that were proximate to the tennis courts. One of Burum’s defense attorneys, Jennifer Keller, had elicited statements from Aleman under cross examination that the fairways were visible from the tables, which is contradicted by Piatt’s statement that the outdoor seating by the trailers did not overlook the golf course. The defense maintains this tends to disprove Aleman’s claim to having been present at what he estimated were “six to twelve” meetings between Postmus and Burum in the first half of 2006.
Both the prosecution and defense stipulated to Hopson’s statement that the Colonies Partners were pursuing the completion of the residential and commercial portions of its Upland project in 2007 and 2008, and that Burum was also involved in several major developmental efforts, including a joint venture with the Lewis Operating Company which never came to fruition wherein they cooperated under the heading the Rancho Alliance, other efforts to initiate master planned communities through the Diversified Pacific Opportunity Fund, as well as Burum having joined in with other developers in 2007 to explore building a NFL stadium off of the I-10 Freeway in Ontario. Hopson’s statement suggested that the generosity Burum was displaying in 2007 with the $100,000 donations to political action committees controlled by Postmus, Biane and Kirk was intended to smooth over feelings that may have been hurt by the hard fought effort to settle the lawsuit, so that those development efforts might proceed. This controverts the prosecution’s contention that the donations were simply disguised bribes.
Sommer, who was a leading element of the Colonies Partners’ legal team in the litigation against the county, would not be called to testify, Larson said, but the defense attorneys and the prosecution stipulated to a Power Point presentation he had prepared during a mediation sessions in 2004 which put forth the Colonies Partners’ case that the damages the company had sustained could be valued at $178 million.
At that point in the proceedings, it was agreed that the jurors would be presented with those stipulated statements or documents from those six witnesses, who would not need to testify.
A 15-minute break ensued. Thereafter, with all of the accused, their attorneys and many of their supporters and family members in the courtroom together with the prosecution team and observers anticipating the initiation of the defense’s case after more than a half year of the prosecution driving the tempo of the proceedings, Judge Smith asked Larson if he was prepared to call his first witness. Thereupon Larson informed Smith that the defense on behalf of Burum was resting. Rajan Maline on behalf of Erwin followed suit, as then did McDonald and Scalisi.
The decision by the defense to bring testimony in the trial to a close without putting on any type of a defense case beyond the set of stipulations, while foregoing calling witnesses entirely, came as an unexpected development to nearly all of the regular attendees of the proceedings, including the entirety of the press corps reporting on the case since it opened in January. And indeed, the lopsided nature of the case in terms of the time and effort devoted to the prosecution’s case – a few days shy of a full six months and 39 witnesses in contrast with a half-day and no actual on-stand witness examination and cross examination – is glaring. The defense move, which some observers referred to as a gamble and which some in the defense camp called perfectly logical, hinges on the stated belief in the defense camp that despite all of of the prosecution’s efforts, it had simply failed to meet its burden to prove its case against any one or all four of the defendants.
Part of the defense strategy – and the uniformity among each of the defense attorneys would seem to be an intrinsic part of that strategy – was to make such a show of confidence in the strength of the defense’s position vis-a-vis the weakness of the prosecution that it carries over into the separate jury rooms in which the two panels will deliberate. Yet, the strategy was still something of a gamble, as the prosecution managed to put together a case that was long on circumstantial evidence and elliptical suggestion, even if it was relatively short on irrefutable or indisputable evidence that the money that changed hands was clearly understood by all parties to be the bribes as the prosecutors claimed.
Yet to come are the closing arguments. On July 10, during her response to the several defense attorneys’ 1118.1 motions to have all of the charges against their clients dismissed, California Supervising Deputy Attorney General Melissa Mandel put on a passionate two-hour duration oration – by far her most dynamic showing in the entirety of the proceedings – in which she gave a tour-de-force recapitulation of the case in its entirety and simultaneously illuminated pieces of evidence and disparate snatches of testimony that had seemed irrelevant and orphaned previously, all in an effort to convince Smith to allow the case to proceed. That presentation for Smith’s benefit, which was as heavily weighted in emotional appeal as it was in its impressive factual delineation, is very likely to be the blueprint for her closing arguments. That the collective defense squandered the opportunity it had to bring in some witnesses who might have laid out information that could complicate that anticipated presentation or could serve to hamstring Mandel in proceeding as forcefully as she did with Smith on July 10 baffled some observers.
But for Stephen Larson, a former federal prosecutor and federal judge as well as the architect of Burum’s defense and portions of the strategy being pursued by the attorneys for the other three defendants, the reason for getting the case into the hands of the juries as soon as possible is as simple as it is compelling.
“The prosecution had six months to prove its case, and they failed,” said Larson. “We used those six months to cross examine their witnesses – which of course never happened before the indicting grand jury – to expose the rest of the story and establish that these men are innocent and these charges should never have been brought.”
As Mandel and the other lead prosecutor on the case, San Bernardino County Supervising Deputy District Attorney Lewis Cope were leaving the courtroom, they were asked if they anticipated the defense’s action in abruptly moving to take the case before the jury without calling any witnesses to testify. Cope said, “We knew that was a possibility. We remain confident in our case.”
After 6 Months Of The Prosecution’s Case, Colonies Defense Rests After Half Day
By Ruth Musser-Lopez and Mark Gutglueck