District Attorney Mike Ramos
Investigators pursue cases across county
Joe Nelson, Staff Writer
Posted: 12/30/2010 05:47:55 PM PST
The past year has been fraught with scandal in San Bernardino County as state and local prosecutors charged two former county officials in a sweeping corruption complaint related to a $102 million land dispute and convicted a third former county official on charges of fraud, theft and conspiracy.
Also in 2010, federal investigators raided the county’s Arrowhead Regional Medical Center in Colton and Upland City Hall in what appear to be unrelated investigations.
Most recently, District Attorney Michael A. Ramos announced that federal investigators had joined the ongoing state and local probe into corruption in county government.
“As we come to the end of the year, we are pleased to join with the FBI in the establishment of the San Bernardino County Corruption Task Force. And our partnership with the Attorney General’s Office remains stronger than ever,” Ramos said.
“I made a commitment to the citizens of this county to fight public corruption. I will devote every necessary resource to hold accountable those who have violated the public’s trust and to restore confidence in our local government.”
County officials and spokesmen for Rancho Cucamonga developer Colonies Partners LP maintain the $102 million settlement between the county’s Flood Control District and Colonies was the product of a fair process and hard bargaining that ultimately saved taxpayers from a judgment that might have reached $300 million had the county lost in court.
Still, Board of Supervisors Chairman Gary Ovitt, who voted along with then-supervisors Bill Postmus and Paul Biane to approve the settlement, said the county “supports any investigation of possible wrongdoing.”
“Let justice be served,” Ovitt said in a statement. “Anyone convicted of wrongdoing should be held accountable.”
Ovitt stressed, however, that county leaders have not let the scandal deter them from the public’s business.
“The county has not been fixated on or distracted by these matters,” he said.
The ongoing investigation began in the county Assessor’s Office, where prosecutors allege Postmus, the former assessor, hired friends and political allies to run a political operation at taxpayer expense.
In August 2009, Ramos announced that the state Attorney General’s Office was assisting local prosecutors in pursuing their investigation, which had expanded to include scrutiny of the county’s landmark $102 million settlement in 2006 with Colonies.
If that seemed a low moment in the county’s history, much worse was yet to come.
In February, Ramos stood side by side with state Attorney General Edmund G. “Jerry” Brown Jr., who will be sworn in as governor next week, in a conference room at the District Attorney’s Office.
Flanked by their top investigators and prosecutors and before a throng of reporters and cameras, they announced the arrests of Postmus and former union leader Jim Erwin.
Erwin and Postmus were charged with criminal conspiracy to illegally obtain the 2006 settlement for Colonies Partners LP, whose managing partners had sued the county over flood control easements at their Colonies Crossroads development in Upland.
The prosecutors called it “the biggest corruption scandal in the county’s history” and said the investigation was just beginning.
Erwin, along with other potential defendants and supporters, mounted a blistering counter-offensive, attacking Ramos with allegations of selective prosecution and sexual impropriety with subordinate staffers.
One former District Attorney’s Office analyst who claims she had an affair with Ramos – who is married – has filed a sexual harassment lawsuit against the county.
Ramos denies all the allegations against him, and prosecutors remain undeterred.
“We have successfully protected the case from a flurry of legal attacks and expect to present evidence at a preliminary hearing in 2011,” Ramos said in a statement. “Additionally, we were able to obtain thousands of attorney-client and mediation documents, as we continue our investigation into the case.”
Prosecutors allege Postmus and Erwin conspired with five uncharged co-conspirators identified in a criminal complaint as John Does to secure a majority vote by the Board of Supervisors favoring the settlement with Colonies.
Within a year of the settlement, Colonies co-managing partners Jeff Burum and Daniel Richards contributed a total of $400,000 to political action committees with ties to the three supervisors – Postmus, Biane and Ovitt – who voted in favor of the settlement.
Prosecutors contend the contributions were bribes.
The five John Does, easily identified by other details included in the complaint, are Colonies co-managing partners Burum and Richards, public relations consultant Patrick O’Reilly, Biane and Mark Kirk, former chief of staff for Ovitt. Kirk now works on special projects in the office of county Chief Executive Officer Greg Devereaux.
Both Burum and the county deny the allegations and maintain the settlement was the product of arms-length bargaining on both sides, mediated by retired state Supreme Court Justice Edward Panelli. They say the settlement potentially saved taxpayers upwards of $200 million had the county continued fighting the developer in court and lost.
Burum has said the contributions he made to the political action committees after the settlement were legal, transparent and merely an effort to rebuild needed relationships with county politicians after four years of contentious legal battle.
In September, Judge Duke D. Rouse dropped five of the nine felony charges against Erwin in the Colonies case, including the two counts of bribery, two counts of extortion and one count of committing a public officer crime, determining prosecutors failed to state their case against Erwin on those charges.
Erwin’s attorney, Rajan R. Maline, said he believes Erwin will be completely vindicated. Maline believes the settlement documents, which he expects to receive soon from prosecutors as part of the discovery process, will show that the settlement was fair and just.
“This whole notion that this $102 million settlement was unfair is ludicrous. It was a bargain for the county considering what they had done,” Maline said. “The damage assessment by judicial officials was much, much higher.”
The Colonies probe stemmed from the District Attorney’s Office investigation into misconduct in the Assessor’s Office.
Postmus and former Assistant Assessor Adam Aleman were among several arrested and charged in the corruption scandal at the Assessor’s Office, where prosecutors allege Postmus hired an “executive support staff” to boost his political career and those of people he supported politically.
Aleman, charged with giving false testimony to a grand jury and destruction of public property, agreed to cooperate with investigators in return for a lighter sentence.
He has since become a key witness for prosecutors, not only in the Assessor’s Office case but in the Colonies case as well.
Attorneys for defendants and a spokesman for Colonies partner Burum have assailed Aleman’s credibility, accusing him of telling investigators whatever they want to hear in an effort to save himself.
“The District Attorney’s two-year, multi-million dollar campaign to turn civil and administrative issues into criminal acts was ultimately able to produce only one single source: Adam Aleman, who clearly needed to say what the D.A. wanted him to say in order to avoid jail time,” said Ric Grenell, Burum’s spokesman.
The Gutierrez trials
Also arrested in connection with the Assessor’s Office case was then-Rancho Cucamonga Councilman Rex Gutierrez, who was tried twice this year before a jury convicted him of grand theft, fraud and conspiracy in October.
Gutierrez was hired into the Assessor’s Office as intergovernmental affairs officer in March 2007. During his trials, prosecutors argued that Postmus gave him the job as a political favor to Burum and that there never was any expectation that Gutierrez would actually do any work for the county.
Gutierrez, they said, seldom appeared in the office and billed the county for time he spent attending events as a city councilman.
Prosecutors said Burum arranged for Gutierrez to be hired in the Assessor’s Office as payback for his support of Rancho Cucamonga projects favored by Burum.
They highlighted the city’s $42.5 million low-income housing contract with the nonprofit National Community Renaissance, which was founded by Burum.
After the city rejected a $14 million contract with National CORE, the nonprofit introduced the $42.5 million proposal in March 2007, the same month Postmus hired Gutierrez.
The city approved the contract on a 4-0 vote five months later.
National CORE’s chief financial officer, Richard Whittingham, testified that the $42.5 million price tag was justified because the project called for more than twice as many units as the earlier proposal. In addition, the 2007 proposal called for an extension of the city’s affordability covenants to 99 years instead of 30 years as was proposed in 2005.
Rancho Cucamonga councilmen Sam Spagnolo and L. Dennis Michael testified that Gutierrez never pressured them to vote in favor of the project.
A San Bernardino Superior Court judge sentenced Gutierrez on Dec. 15 to 2 years, 8 months in prison. He must serve at least half his sentence before being eligible for parole.
Gutierrez’s conviction bolstered the ongoing investigations.
“This sends a powerful message that this county will no longer tolerate corruption at any level of government,” Ramos said in a statement.
Gutierrez’s attorney, Jim Reiss, believes the political climate in California and across the country, especially after the scandal in the city of Bell, was a significant factor in Gutierrez’s conviction.
He plans to appeal Gutierrez’s conviction, which will move forward in January, though he noted Gutierrez could be out of jail by the time the appeal process concludes.
“I think it’s going to be a lengthy process, anywhere (from) one to two years,” Reiss said.
As local and state prosecutors pursued their cases, federal investigators descended on the city of Upland and Arrowhead Regional Medical Center, the county’s hospital in Colton, in what appear to be separate investigations.
In June, federal agents raided Upland City Hall, the home of Upland Mayor John “JP” Pomierski, and two other locations.
According to court documents, the FBI is investigating allegations of conspiracy, extortion, bribery, fraud, money laundering and racketeering.
Among the records seized were documents related to a Central Avenue sports bar shuttered by the city in April 2009.
The owners of the property filed a federal complaint against the city alleging the Planning Commission’s decision to revoke the permit for the Chronic Cantina, which operated there, was based on false information provided by the Upland Police Department.
Attorneys for the property owners pulled their complaint in November and said this month that they intended to re-file it in January with allegations of racketeering.
Federal investigators also seized Pomierski’s cell phone and were specifically looking for any information on businesses Best Value Grocery, Upland Market Place, Venture West Capital, JRC Group, J.H. Builders, Southern Wine & Spirits, and 2nd Avenue Saloon and Sports Bar.
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