12:00 AM PDT on Sunday, July 24, 2011

By IMRAN GHORI
The Press-Enterprise

Colonies Partners had a “direct pipeline” to San Bernardino County’s legal strategy during several months of negotiations because of leaks from confidential meetings by former Supervisor Bill Postmus, according to his grand jury testimony.

Throughout 2006, Postmus, then chairman of the Board of Supervisors, regularly communicated with Jeff Burum, co-managing partner of Colonies, sending text messages from closed-session meetings where supervisors received updates from their lawyers and decided how to fight the Colonies lawsuit, he said in grand jury testimony released Friday.

In the negotiations, Colonies was pressing for tens of millions of dollars in damages in a flood-control dispute, and county lawyers were saying the company’s claims were vastly inflated.

Postmus continued providing information to Burum and later, Jim Erwin, who was acting on Colonies’ behalf at the time, during four mediation sessions in Ontario. During those meetings, the county officials and lawyers were in a room separate from Burum, his colleagues and their attorneys, and a mediator shuttled between them.

“Tell us exactly what it is you were communicating to Mr. Burum during those first two sessions,” Deputy District Attorney Lewis Cope asked Postmus.

“Whatever the position of the board was, what board members were where, what dollar amounts we were at, what our attorneys were saying,” Postmus responded.

Jessica Levinson, a law professor with Loyola Law School in Los Angeles who specializes in government ethics, called such leaks offensive and a betrayal of the confidentiality of closed session. California government bodies are allowed under the Brown Act to discuss legal strategy behind closed doors to protect sensitive information, and releasing that information violates that law, she said.

“I think it basically decimates the ability to negotiate a fair and just settlement,” she said.

“It’s like playing cards with someone who knows what your card is. It becomes kind of a pointless exercise.”

A criminal grand jury returned a 29-county indictment against Burum, 48, and three former county officials in May after calling 45 witnesses — including several current and former county and state officials — during 19 days of testimony in April and May. The district attorney’s office convened the grand jury as part of its ongoing corruption probe into the county’s controversial $102 million settlement with Colonies.

In addition to Burum, the others charged are former Supervisor Paul Biane, 47; Mark Kirk, 36, former chief of staff to Supervisor Gary Ovitt; and Erwin, 48, a former assistant assessor and former chief of staff to Supervisor Neil Derry.

According to the indictment, after supervisors approved the settlement, Burum’s company contributed $400,000 to political action committees with links to Postmus, Biane, Kirk and Erwin, which prosecutors contend are bribes.
Story continues below
The Press-Enterprise
Bill Postmus

All four are charged with multiple felonies, including conspiracy to commit bribery, misappropriation of public funds, improper influence and conflict of interest. They have denied wrongdoing.

Attorneys for the suspects have described the grand jury transcripts as one-sided and questioned Postmus’ credibility.

Postmus, who was first arrested two years ago, pleaded guilty in March to taking part in a conspiracy involving bribery and extortion that resulted in the settlement and now is cooperating with authorities.

The board approved the settlement in November 2006 on a 3-2 vote with Postmus, Biane and Ovitt in favor and Supervisor Josie Gonzales and former Supervisor Dennis Hansberger opposed.

The agreement ended a nearly five-year battle over flood-control improvements on Colonies Partners’ commercial and residential development in Upland.

On Friday, Burum’s attorney, Stephen Larson, called the evidence presented to the grand jury “unreliable, insufficient and misleading.”

“Mr. Burum is innocent, and he eagerly awaits the day when all of the evidence is presented publicly, in a court of law, not just what the prosecutors presented in secret,” he said.

Erwin’s attorney, Rajan Maline, said there is no evidence to support the charges against his client.

“Just because Bill Postmus says something doesn’t make it true,” he said.

‘News wire’

Postmus said he recognized that he was leaking sensitive information to Burum that could undermine the county but he did so because “I felt if I got this done, there would be some gain for me personally.”

Patrick O’Reilly, a Riverside public relations consultant who worked for Colonies, said Erwin gave him updates on the progress of negotiations during the mediation talks.

“Sort of like a news wire?” Cope asked.

“That’s a good analogy. That’s a good description,” O’Reilly responded.

He added that Erwin’s information “typically, it was usually from Bill Postmus.”

Many of Erwin’s reports to Burum and O’Reilly had to do with Postmus’ state of mind.

“It was more of this is what Bill feels today,” O’Reilly said. “It was more of a this is where Bill is at on this.”

Postmus said he and Burum discussed taking precautions to make sure their communications during negotiations did not become known.

They sometimes sent messages through the Blackberry personal identification number or PIN system, which they believed was more secure and less likely to be revealed to others in the county, he said.

At one point, Burum told Postmus he would start using a “dummy” or “throwaway” phone that was unregistered and couldn’t be traced to him, Postmus testified.

sUSPICIONS

Other officials said they suspected that information was being leaked out of confidential meetings.

Hansberger was worried about some county officials text messaging on their Blackberries during close sessions. Postmus, Biane and Ovitt were frequently on the devices, he said.

“They would always be picking up the Blackberry and talking to somebody,” he said. “With whom people were communicating, I didn’t know.”

Asked whether he believed information from the closed sessions was being shared with Colonies, Hansberger said he couldn’t recall a specific time, but he said, “I know I was very uncomfortable with some of the feedback, in particular, we would get from the Colonies which caused me to say to myself, ‘Gee, they couldn’t respond to that without knowing things they weren’t supposed to know from our side.’ ”

Hansberger said he believed these communications put the county at a disadvantage.

If Colonies was asking for $25 million and the county was offering $8 million, Colonies would come back with a demand for $40 million, Hansberger said.

“It became clear to me that they knew there was … a division of the board,” he said. Colonies officials seemed to believe they had enough supervisors ready to vote for a settlement that it put them at an advantage in negotiations, he said.

At one of the negotiating sessions, Gonzales said, she left the room only once, briefly, to use the restroom. When she came out, she noticed someone standing in the nearly dark kitchenette across the hall. As she passed by, Burum stepped out of the shadows, she testified.

She said his voice was hardly above a whisper when he said: “Josie, I need your vote. … Please, please, please give me your vote.”

Gonzales said she told Burum to have a nice day and returned to the mediation room, angry because she recalled Postmus and Biane using their Blackberrys almost constantly.

“I knew immediately that I had been betrayed. My mind just raced,” she said.

“I knew someone had emailed him, let him know that I had left the mediation room and gone to the ladies’ room.”

To read entire story, click here.