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Solimar Research

San Bernardino County Remains King of Corruption

May 17, 2011

With different aspects of the City of Bell scandal continuing to come to light, "Bell" is starting to become short-hand for government corruption. Still, Bell's mess does not displace San Bernardino County from its longtime position at the top of the local government corruption charts.

The situation in Bell is easily summarized: A small group of top-level city employees and four councilmembers abused their powers to get rich at taxpayers' expense. According to prosecutors and news investigations, the city officials may have received millions of dollars in excessive salaries. They simply wrote themselves large paychecks.

Meanwhile, the corruption allegations, indictments and convictions in San Bernardino County are numerous, complicated and mostly concern real estate development. The latest twist was last week's indictments of former county Supervisor Paul Biane, developer Jeff Burum, former Assistant Assessor Jim Erwin and Mark Kirk, a former chief of staff for Supervisor Gary Ovitt and currently the county's director of governmental affairs. San Bernardino County District Attorney Mike Ramon and the state attorney general's office allege that Burum used campaign contributions, gifts and threats to get Biane, Ovitt and then-Supervisor Bill Postmus to approve a $102 million settlement of a lawsuit that Burum had filed against the county. Biane, Erwin, Kirk and Burum have denied wrongdoing.

In 2006, the San Bernardino County Board of Supervisors voted, 3-2, to settle the lawsuit filed by Burum's Colonies Partners, which was developing a 440-acre housing and retail project in Upland called Colonies Crossroads. The developer had sued for reimbursement for providing flood control facilities that it said were the county's responsibility. The settlement smelled bad at the time, as the county had already won one appellate court ruling in the litigation, and both the county counsel's office and outside attorneys urged rejection of the settlement.

Maybe it was merely business-as-usual.

Back in the 1990s, consecutive county administrators, Harry Mays and James Hlawek, went down after running the corner office like a criminal enterprise. Both were fined and subjected to county civil suits to recover ill-gotten riches. Mays spent two years in prison; Hlawek got off with three years probation. A county investment officer and the treasurer/tax collector also did time for taking bribes from a local businessman in exchange for county contract favors. In 2004, then-Supervisor Gerald Eaves pleaded guilty to accepting unreported gifts from a businessman who received county approval to erect billboards on county land. The mayor of Colton and two city councilmen went down in the same bribes-for-billboards scheme. Around the same time, two San Bernardino councilmembers pleaded guilty to accepting bribes from a developer. To summarize: Seven elected officials and three appointed government officials in three jurisdictions were guilty of various corruption schemes from the mid-'90s to the mid-'00s.

In March of this year, Postmus, the former supervisor who resigned under pressure as county assessor in 2009, agreed to plead guilty to three felonies for conspiracy to accept a bribe, conflict of interest and misappropriation of public funds. The plea deal included Postmus's agreement to testify in future criminal trials.

Two of the felonies to which Postmus copped stemmed from payments and gifts that he and his political operations received from Colonies Partners. (The other felony concerns Postmus hiring people in the assessor's office to do nothing but political work. Postmus aide Adam Aleman had already pleaded guilty to destroying public documents and lying to a grand jury about the political operations on the public's dime; a different aide is awaiting trial.)

When the district attorney and attorney general's office indicted Postmus last year, they did not name five un-indicted co-conspirators. However, it was easy to identify Biane (who voted for the settlement and lost re-election last year), Kirk, Colonies managing partners Jeff Burum and Dan Richards, and Colonies PR consultant Patrick O'Reilly as the five. All have vigorously denied wrongdoing, but the indictments appeared to be a matter of time. Erwin was already being prosecuted.

Meanwhile, local newspapers have reported that the county has spent $21 million suing the City of Upland, San Bernardino Associated Governments (SANBAG) and Caltrans in an attempt to recoup some of the $102 million settlement cost. SANBAG recently increased its contract with attorneys defending against the lawsuit to $8 million. Upland has spent $3.6 million defending the lawsuit. That's more than $30 million in public funds spent in an argument over a lawsuit settlement that, according to prosecutors, was illegitimate.

And there's so much more.

In April, the attorney general's office charged county Supervisor Neil Derry with perjury and filing a false campaign expense report. The attorney general alleges Derry laundered $10,000 in campaign contributions, including $5,000 from area developer Arnold Stubblefield, through Postmus's political operation.

Rex Gutierrez, a former assessor's office employee and Rancho Cucamonga councilman, is now a resident of Tehachapi State Prison. Postmus hired Gutierrez at the assessor's office as a favor to Burum, whose nonprofit company received a $42.5 million contract from Rancho Cucamonga to maintain affordability covenants at an apartment complex.

Former San Bernardino County CEO Mark Uffer last year filed a whistle-blower retaliation lawsuit against the county after the Board of Supervisors voted 3-2 to fire him. Uffer alleges he was dumped because he tried to halt the county-Colonies settlement and reign in numerous other corrupt practices. A trial on Uffer's claims could provide the biggest show yet.

John Pomierski resigned as Upland mayor in February, shortly before being indicted for allegedly trying to extort money from a nightclub and medical marijuana cooperative that were seeking city permits. Also indicted was John Hennes, an appointee to the city's building appeals board.

District attorney's office investigators and the FBI raided Arrowhead Regional Medical Center, the county hospital in Colton, last fall. Investigators have not explained what they were seeking, but there are allegations that high-ranking county officials received free treatment at the hospital.

District attorney's investigators also are known to be asking questions about the county's negotiations, since suspended, with potential developers of 1,200 acres of surplus county land in Rancho Cucamonga.

The City of Bell? One simple scheme to take tax money. That's the minor leagues compared with San Bernardino County.

Paul Shigley

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