Mike Cruz, Staff Writer
Posted: 02/13/2010 05:02:59 PM PST

SAN BERNARDINO – When county supervisors gather Tuesday to decide what to do about the massive government corruption alleged by state and local prosecutors, four of the five board members say they will remain objective despite close personal ties to the scandal’s key figures and events.

Last week’s arrests of former county Supervisor Bill Postmus and former assistant assessor Jim Erwin raised new questions about the county’s $102 million payout to settle a lawsuit with developer Colonies Partners four years ago.

Erwin, who is accused of funneling bribes from Colonies to politicians, was chief of staff and a key political ally of Supervisor Neil Derry. Supervisor Brad Mitzelfelt was Postsmus’ chief of staff in 2006 when prosecutors say Postmus took a $100,000 bribe for his support of the Colonies settlement.

Uncharged in the case but implicated as unnamed co-conspirators were Supervisor Paul Biane, who prosecutors allege accepted a $100,000 bribe for his vote, and Mark Kirk, chief of staff to board chairman Gary Ovitt, who is alleged to have accepted $100,000 to deliver Ovitt’s vote.

All of those accused have denied any wrongdoing and only Postmus and Irwin have been charged.

Only Supervisor Josie Gonzales, who voted against the settlement, can claim to be unconnected to the case.

District Attorney Michael A. Ramos has called for the county to recover the $102 million for taxpayers, citing bribery and other illegal acts that surrounded the settlement. But any decision to file a lawsuit against Colonies Partners must be made by the board of supervisors.

On Friday, Derry, Biane, Mitzelfelt and a spokesman for Ovitt, said they saw no conflicts of interest that would prevent them from voting on issues related to the Colonies settlement.

“I don’t think there’s any problem at all,” Ovitt spokesman Burt Southard said.

An attorney for Colonies co-managing partner Jeff Burum dismissed the criminal case as baseless and called the settlement fair and appropriate.

Ovitt stands by his decision to join a 3-2 majority in favor of ending the county’s four-year legal battle over who should pay for improvements to a flood control channel on land Colonies was developing in Upland. The county had lost two important court decisions and Ovitt feared that not settling could cost the county much more, Southard said.

“Gary cast his vote as one of the three on the best evidence and best information available at the time,” he said.

Two experts agreed that the four board members probably don’t have legal conflicts of interest. Whether ethical conflicts exist is more difficult to ascertain.

The supervisors must ask themselves whether they can use good judgment and remain impartial on matters involving Colonies, said Jeffrey Smith, director of the Banta Center for Business, Ethics and Society at the University of Redlands.

The financial relationships surrounding political action committees with alleged ties to Colonies Partners and the supervisors could raise ethical questions, at least, Smith said.

“Supervisors who organized, participated or received political benefits from such PACs should be very sensitive to the ways in which the appearance of a conflict arises when they are making decisions about the entities that have underwritten these PACs’ activities,” Smith said in an e-mail.

Bob Stern, president of the Center for Governmental Studies, said legal conflicts typically deal with economics and apply to income, investments and real estate. Legal conflicts don’t necessarily apply to campaign and PAC donations or relationships, he said.

Hours after Postmus and Erwin were taken into custody, Gonzales called for Tuesday’s special meeting, citing the “explosive” allegations, so the board could “be apprised of its legal options and give direction expeditiously.”

Biane, who spent nearly $50,000 in campaign funds to hire a white-collar criminal attorney, declined a request for an interview but issued a statement defending his vote and his ability to make decisions related to Colonies.

“It does not create a conflict” Biane’s statement said. “I’ve done absolutely nothing wrong or illegal.”

“My vote in favor of the Colonies settlement was done because I could not justify continuing to pay legal fees and risk additional unfavorable court rulings that could have resulted in a judgment the San Bernardino County Flood Control District could not afford to pay,” Biane continued.

Mitzelfelt said that, though he was Postmus’ chief of staff, he was not aware of any alleged bribes and doesn’t feel he has a conflict on Colonies’ matters.

“I’m not under scrutiny in this case so I’m in a very good position to very objectively and aggressively do my part in finding out what happened,” he said.

Mitzelfelt said wasn’t privy to the closed session discussions on the Colonies settlement and had only a few general discussions with Postmus about it.

“I didn’t have a detailed knowledge of what was before the board,” the first district supervisor said.

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