As anticipated, Adelanto’s newfound ethos of encouraging cannabis-related entrepreneurship appears to have put a score or more adventuresome capitalists on the road to booming financial success.
Yet even before those business entities have begun to cash in, another class of financial opportunists – attorneys – have seen their fortunes advance.
A little more than two years ago, just before Adelanto crossed the threshold into becoming the preeminent marijuana agricultural cynosure in California, it had a single city attorney to handle the legal issues confronting the city of 34,000. In the 25 months since, the headlong plunge by three of Adelanto’s political leaders toward a brave new world of extracting an exorbitant marijuana-production and sale-derived profit for businesses and the city’s governmental structure alike has involved so much potential, actual and manifested risk, not to mention burgeoning liability that the city now finds itself served by seven law firms involving at least 15 attorneys on retainer, including the firm in which the Adelanto city attorney is a partner.
Indeed, so entangled in potential and actual litigation is the city that it has already accrued more than $300,000 in additional legal fees before the first dime of cannabis-derived revenue has clinked into the city’s coffers. And the sheer enormity of the legal complication the city is now steeped in is threatening to gobble up, at least for the foreseeable future, whatever additional income the city stands to haul in when the marijuana train at last begins to chortle its way down the tracks.
Some degree of legal contretemps was foreseeable as the city moved to put itself on sound financial footing using the emerging economic dynamic of weed, not unlike that to be experienced by most if not all of the 481 other cities or incorporated municipalities and all 58 of the counties in California. Switching from a system in which the sale of the substance entailed a felony punishable by years and possibly decades in prison to one where it would become only slightly less readily available than chewing gum or hair tonic was bound to create some complication. Indeed, even in the soon-to-be-embarked era of permissiveness, substantial numbers of cities are electing to use the option contained in the new law that allows them to maintain their jurisdictions as ones where the sale or production of the drug remains prohibited.
It is precisely because Adelanto was among the first cities in the state to embrace the total marijuana availability concept that a mad rush of would-be millionaires inundated City Hall with their proposals. In their rush to accommodate those applicants, it appears, the ruling council coalition promoting the transformation of Adelanto into the celadon capital of Southern California began cutting corners, insisting that city employees not stand on protocol in processing the applications of those seeking to set up, at first, marijuana farms, and later, dispensaries or retail shops.
According to the council majority, facilitating those projects was justifiable from the standpoint that the city is desperately in need of economic expansion, and if a wee bit of corner cutting would serve that end, then corners would be cut. But the council majority insisted that its motives were pure and the intent was to benefit the city, and not themselves. It was a mere coincidence that one of the council majority members – John Woodard – was a real estate broker in Adelanto and that the sudden uptick in the sale of property meant for him commissions on any of the sales he handled.
The corner cutting ranged from relatively minor efforts to speed up the process to outright suspension of traditional land use approval formalities, manifesting in so-called “fast-passing” or “fast-tracking” of certain projects. This was exacerbated by several project applicants jumping the gun entirely. Some simply filed an application and then, without waiting for the normal course of events to proceed such as plan checking and project approval, initiated grading without permits. When some of the city’s employees conscientiously reacted to those violations, and either issued citations or signaled their intention to do so, they were slapped back immediately, either by members of the city council themselves or by senior city staff members, who were acting at the direction of members of the city council. Councilman John Woodard characterized city employees as being “out of control” when they contacted law enforcement officers about operations that involved marijuana marketing that appeared to be in defiance of state law.
Even before the city had gotten to the point that the city council had officially cleared the path for marijuana operations to be set up in the city, members of the council were militating on behalf of the soon-to-be-acceptable marijuana industry. Early on there were several high-ranking casualties in this drive by the council. The first of these was city manager Jim Hart, who was forced into departing just over three months after Adelanto’s voters in a clean sweep chased incumbent mayor Cari Thomas and her two council colleagues, Steve Baisden and Charles Valvo, out of office in favor of Rich Kerr as mayor and John Woodard and Charley Glasper as councilmen. Hart was less than enthusiastic toward the rapidly incubating game plan to convert the city into a marijuana-friendly environment. Quietly, in the backroom at City Hall, his exodus was orchestrated and the relatively newly composed council settled on elevating public works director Thomas Thornton to city manager. Thornton lasted in the post only four months, however, as he bridled at the requests and orders that he discipline or fire those city employees who were not willing to bend the rules the council majority wanted bent to make way for their vision of the Adelanto of the near future. In exchanges with city attorney Todd Litfin, Thornton bemoaned being beset by Kerr, Wright and Woodard, who he said were driven by their own personal agendas and were acting as “rogue council members,” and seeking to micromanage operations at City Hall on a daily basis. Without regret, Thornton resigned as acting city manager and returned to the public works department.
Next, the council turned to longtime city clerk Cindy Herrera, hoping she would prove more pliant than Thornton, and installed her in the interim city manager’s position. It was during her tenure in that position, in November 2015, that the council took a giant step toward the marijuanification of Adelanto, approving by a 4 to 1 vote with councilman Ed Camargo dissenting the massive scale cultivation of medical marijuana for commercial purposes, with such operations to be licensed and located within the city’s expansive industrial park. The following spring, the council rewarded Herrera, dropping the interim from her title and promoting her to city manager outright. Yet despite the council majority’s gratitude toward her for facilitating the basis of its strategy, the suspension of the rudimentary principles of municipal governance, the risks and ruthlessness with which that majority progressed toward its goal proved too much for Herrera, and she too by early 2017 was resisting the council majority in the direction it was taking the city. She was on the verge of being ousted in a Kerr-led move to fire her, when she arranged to simply move back into the position of city clerk. The city council followed that up with bringing in journeyman city manager Michael Milhiser, who administered the cities of Montclair, Ontario and Upland in the 1970s, 1980s, 1990s and 2000s, to serve as interim city manager. Six months later, aware that the FBI, DEA and SEC were in town and scrutinizing the actions of the members of the city council, Milhiser departed as the city brought Gabriel Elliott in as city manager. Elliott was unwitting with regard to much of what had been and was still ongoing in the city. Just three months into that assignment, Elliott was treated to the spectacle of one of the members of the council, Jermaine Wright, being arrested by the FBI and charged by the U.S. Attorney’s Office with taking a bribe to grant an undercover FBI agent masquerading as a marijuana concern applicant special treatment as well as with arranging to have his own restaurant, located in Adelanto, torched in an arson plot. Four months into his assignment, Elliott finds himself at odds with those remaining members of the council yet hell bent, despite the fate of Jermaine Wright, on ensuring Adelanto remains at the forefront of the California marijuana revolution, as he, like his predecessors, is having misgivings over the deviation from standard operating procedure the council wants to effectuate in accommodating entrepreneurs venturing their capital in the nascent hemp marketplace. Just prior to Wright’s arrest, Kerr, Wright and Woodard were mustering up the wherewithal to fire Elliott. Wright’s arrest, however, upset those plans, and since then that move has stalled, as councilman Ed Camargo is not on board to do so, and Charley Glasper is reluctant to go along with Kerr and Woodard at this point. Within the last day, however, Kerr and Flores hatched a stratagem to neutralize Elliott at City Hall, if not remove him therefrom entirely. Kerr has induced two women to come forward with charges that Elliott harassed them. On the basis of those complaints, Elliott has been placed on administrative leave, pending the outcome of an investigation into those charges.
In the same less-than-three-year timeframe in which Adelanto has employed five city managers, it has employed four city attorneys. Todd Litfin, who was city attorney when Hart was in place and remained after Hart was ousted, was called upon to draw up all of the legal documents in support of the November 2015 move to legalize the cultivation of marijuana. Litfin, however, balked, unwilling to do the council’s bidding and draft ordinances legalizing massive scale marijuana operations. He refused to be the city attorney of record when those ordinances and their attendant zoning codes were passed, and he abruptly resigned. Julia Sylva was quickly retained to finalize the cannabis cultivation permitting ordinance that prompted Litfin’s exit. The council passed that ordinance but Sylva burned out rapidly, leaving in April 2016 as a prodigious number of applicants flooded into City Hall, resulting in the city granting permits to no fewer than 25 cannabis growing operations in five months. She was replaced as city attorney by Curtis Wright, of the law firm Silver & Wright LLP. With Wright in place, the council majority doubled down, effectively escalating the ante and transitioning Adelanto from a jurisdiction allowing cannabis-related businesses limited only to agricultural operations to one that embraced all level of marijuana-related commercial enterprises, including medical marijuana dispensaries and the coming advent of recreational marijuana emporiums. Wright, like Litfin and Sylva before him, witnessing the city careening dangerously close to, if not actually across, the line into a public-private criminal racket, bailed on the city in July 2017. He was replaced by Ruben Duran, who became Adelanto’s fourth city attorney in 22 months.
During Kerr’s mayoral tenure, Adelanto has proven to be every bit as inhospitable to its mid-range and upper echelon employees who have not jumped on the cannabis bandwagon as it was to the top managers and lawyers who did not enthusiastically endorse the pro-cannabis plan. Approaching a dozen employees have been forced to walk the plank, at least a few of whom were given the heave-ho because they were unwilling to conform to the changing culture. Generally speaking, Kerr, Woodard and Wright sought to justify their dictates to have specific employees fired by saying the city’s financial circumstance required that the position each of those employees held be eliminated. No fewer than four of those who were keelhauled have struck back with wrongful termination suits: public works superintendent Nan Moore, who had been with the city for 18 years; senior management analyst Mike Borja, who had been with the city for ten years; conservation specialist/administrator Belen Cordero, who had been with the city for 17 years; and public works maintenance worker Jose Figueroa, who had been with the city for upwards of 25 years. One of the other employees who was let go was senior planner Mark de Manincor, who had been with the city for ten years. There have been recurrent reports that de Manincor was going to sue the city, but as of Thursday a.m., no lawsuit had been lodged against Adelanto by de Manincor in San Bernardino County Superior Court.
In the cases of Moore, Borja and Cordero, all of whom are represented by attorney James Alderson, they had their positions eliminated out from underneath them relatively early on in the Kerr regime. Their lawsuits maintain they were cashiered as a consequence of collusion involving Kerr, Wright and Woodard. The three elected officials violated the Brown Act, California’s open public meeting law, in an effort to effectuate the terminations, according to the suit, which the troika pursued both through and outside of proper channels by pressuring staff directly. Council members are not empowered to terminate anyone other than the city manager and city attorney and are restricted to dealing through the city manager in seeking to make staff changes. Section 609 of the Adelanto City Charter prohibits council members from firing city staff.
The firing of Figueroa came later, as did that of de Manincor. In de Manincor’s case, his sacking appears to have come about as a consequence of his unwillingness to suspend guidelines, regulations and ordinances with regard to several of the cannabis-related projects.
The deviations that have become the de facto policy at City Hall are taking a financial toll on a city that is already in a precarious state, with the council in June 2013 having declared the city to be in a state of fiscal emergency, and officials dodging bankruptcy ever since. One cost that is escalating stratospherically is legal services.
In recent months and weeks, the city has made payments for work provided by no fewer than 15 attorneys working for seven different law firms. Those include the law firms of Jackson Lewis, Winston and Strawn, Silver &Wright, Best Best & Krieger, David Evans and Associates and Ecoff Campain Tiles PLC. In addition, the city has made recent payments to Julia Sylva, though she resigned as city attorney more than 20 months ago.
An indication that the city is being overwhelmed by the litigation brought by Moore, Borja, Cordero and Figueroa came on December 6, when the city council sojourned to Ontario and the offices of the law firm of Best Best & Krieger located at 2855 East Guasti Road, to hold a meeting there.
Except for the formality of allowing any members of the public wishing to speak to the council three minutes to do so, the entirety of the meeting was held behind closed doors. That discussion consisted of, according to the agenda for the meeting, a “conference with legal counsel – existing litigation per government code section 54956.9(d)(1) a. Borja v. City of Adelanto, et al., Case No. CIVDS 1615867; b. Cordero v. City of Adelanto, et al., Case No. CIVDS 1616163; c. Moore v. City of Adelanto, et al., Case No. CIVDS 1616168.; [and] d. Figueroa v. City of Adelanto, et al, Case No. CIVDS1714861.” Further, according to the agenda, was a “conference with legal counsel – anticipated litigation. Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: (one potential case). Based on existing facts and circumstances, there is a significant exposure to litigation.”
Information provided to the Sentinel is that the potential litigation referred to is a suit that is to soon be filed against the city by de Manincor.
Previously, the law firm of Jackson Lewis was handling the Borja, Cordero, Moore and Figueroa lawsuits for the city. That a second firm has now taken up the city’s defense is the first tier of indication of how those cases are getting away from the city and raging out of control. An even more serious indicator is that so many of Best Best & Krieger’s attorneys are needed to set the situation right that instead of having a single lawyer or perhaps two or three come to Adelanto for the exchange with the council, it was deemed appropriate for the council to go to Ontario to be able to have a half dozen lawyers bring their focus to the matter.
Given the U.S. Attorney’s Office’s action with regard to Jermaine Wright, the suggestion is that Best Best & Krieger’s work on behalf of the city – and work being done by some of the other law firms being paid by the city – now extends beyond the province of municipal law and is being concentrated on formulating a criminal defense for members of the city council.
Adelanto’s official spokesman, Mike Stevens, this week told the Sentinel that he was unable to get Kerr or other city officials to respond to the notion that the city’s move toward marijuana liberalization is in some part responsible for the uptick in the number of lawsuits filed against the city by former employees. Nor did they expound with regard to the perception that employees who were reluctant to embrace cannabis liberalization with the same vigor as certain elements of the city’s elected leadership had gotten into a series of showdowns with Kerr, Wright and Woodard, and had lost in those confrontations.
Stevens was likewise unable to explain the rationale for holding the December 6 council meeting at the Best Best & Krieger office in Ontario and he did not have information on how many lawyers participated in that meeting. He did not have an explanation as to why Best Best & Krieger was being consulted with regard to litigation that the Jackson Lewis firm had previously handled.
Stevens did say, though, that things are up in the air at City Hall in the wake of Elliott’s suspension. Elliott, he said “has been placed on administrative leave because of two sexual harassment claims having been filed against him. I haven’t been able to reach anyone at City Hall to let me know 1) Who is in charge now? 2) Is the administrative leave paid leave? 3) Who the complainants are? and 4) Any details about the alleged incidents, i.e., what was to have occurred and when?”
-Mark Gutglueck