09:41 PM PDT on Tuesday, July 19, 2011

The Press-Enterprise

Special Section: San Bernardino Corruption Probe

San Bernardino County Supervisor Neil Derry pleaded guilty Tuesday to a misdemeanor charge of failing to report a campaign contribution in a deal that will spare him from jail time and won’t affect his ability to stay in office.

Superior Court Judge Michael Dest dismissed the two more serious felony charges of perjury and filing a false report against Derry and ordered him to pay a $5,000 fine to the California Fair Political Practices Commission and about $5,000 in court fines and penalties.

The agreement brings a quick resolution to the charges the state attorney general’s office brought against Derry in April, accusing him of attempting to launder a campaign contribution. A preliminary hearing had been tentatively set for Thursday.

A plea deal won’t prevent Neil Derry from seeking re-election.

Derry was the latest San Bernardino County official to be charged in the last three years as part of an ongoing corruption investigation that has led to the conviction of one former county official, plea deals with two former officials and continuing criminal charges against four former officials and a prominent developer.

The charges against Derry stem from a $5,000 campaign contribution in May 2007 that prosecutors allege Derry attempted to launder.

Derry described the deal as a compromise and continued to maintain his innocence.

“I felt it was necessary to get back to work for the public and spare my family a long drawn-out trial in which I would have been proven innocent anyways,” he said.

The agreement means that Derry will be able to return to his normal activities as a supervisor and will no longer have criminal charges hanging over him as he prepares to run for re-election next year, his attorney George Newhouse said.

The attorney general’s office sought to have Derry barred from running for political office for four years but Dest denied the request, said Lynda Gledhill, spokeswoman for the attorney general. She declined to comment on the agreement.

Newhouse said the judge can remove that ban — normally imposed with FPPC violation convictions — if there are “unusual and extenuating” circumstances as Derry’s legal team argued there were in this case.

“We said ‘Look, this is a politically-motivated case and any resolution that has any foreseeable adverse impact on Supervisor Derry’s career is a deal-breaker,’ ” Newhouse said.

The judge also suspended a 30-day jail sentence and placed Derry on three years summary probation. Newhouse described it as the “lowest form of probation” as it places no restrictions on Derry. He would only face penalties if he were to violate any laws, Newhouse said.

“We consider it not total exoneration but mostly exoneration,” Newhouse said.

The agreement was arrived at during what was supposed to be a routine appearance over scheduling. No prior negotiations had taken place but Dest summoned attorneys to his chambers and urged them to settle, Newhouse said.

While facing the charges, Derry has had to recuse himself from several votes because of a federal policy under which agencies could lose federal funding if a member of the agency is facing criminal charges.

The supervisor said it was “incredibly disconcerting” for him to limit his participation on issues such as the county budget but he will now be able to return to normal duties.

According to the complaint, San Bernardino developer Arnold Stubblefield approached Derry about supporting his 2008 election campaign but did not want do contribute directly to him.

Investigators said Derry suggested Stubblefield donate to the Inland Empire Political Action Committee, saying the group supported him. A month later the committee donated to $10,000 to Derry, campaign finance records show.

The committee was controlled by former Assessor Bill Postmus, who pleaded guilty in March to 14 felonies and has been cooperating with prosecutors, court documents state. Investigators claim Derry admitted that he hand-delivered the check from Stubblefield to Postmus.

Derry said those statements attributed to him in the complaint are false.

“They made that stuff up,” he said.

The investigation into Derry was handled by the district attorney’s office but District Attorney Mike Ramos turned the case over to the attorney general’s office to avoid a potential conflict of interest due to past differences between the two county officials. But Derry accused Ramos of being behind the charges.

“The AG’s office did it as a favor to our corrupt district attorney and his political machine,” Derry said.

Two years ago, Derry called for an investigation of allegations of sexual harassment by Ramos. An internal county investigation later cleared Ramos. Earlier this year, a judge dismissed a civil suit against Ramos by a former employee alleging sexual harassment.

District attorney spokesman Christopher Lee said the office would not comment on Derry’s allegations, saying it was an attorney general’s case.

Government ethics experts said the attorney general’s office bringing criminal charges against Derry over a campaign finance violation was unusual and that both sides can claim they got something out of the deal.

“I think for Derry this is a big win,” said Jessica Levinson, a law professor specializing in campaign finance and government at Loyola Law School in Los Angeles. “He’s not gong to be incarcerated. There are no prohibitions on his ability to run for office in the future. The fine seems pretty minimal.”

But she and Bob Stern, president of the Center for Governmental Studies in Los Angeles, noted even a misdemeanor conviction in a campaign finance case is a more serious outcome than most such cases.

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