10:00 PM PDT on Monday, July 25, 2011

By DUANE W. GANG
The Press-Enterprise

When Colonies Partners first sued San Bernardino County in 2002 over flood-control improvements on its Upland development, they faced a Board of Supervisors unwilling to settle the dispute, recently released grand jury transcripts show.

Nearly five years later, it was a different story, thanks to a changing makeup of the board and what prosecutors contend was a conspiracy to illegally obtain the $102 million deal.

“I think there was a genuine belief that the flood control district had not harmed the property,” former Supervisor Dennis Hansberger testified recently about the Board of Supervisors at the time.

The board in 2002 was entirely different from what it is today, made up of Hansberger, Bill Postmus, Jerry Eaves, Fred Aguiar and Jon Mikels, who represented Upland.

Mikels opposed the settlement and supervisors deferred to his judgment on the case, as well as the advice from their attorneys, current and former county officials testified.

Colonies Partners and co-managing member Jeff Burum helped fund Paul Biane’s successful campaign against Mikels, documents show.

And Burum is accused of showering Postmus with gifts and international trips to win his support for a deal, prosecutors contend.

In May, a criminal grand jury returned a 29-count indictment against Burum and three former county officials.

Also charged are Biane, 47, who defeated Mikels with the help of Colonies Partners; Mark Kirk, 36, former chief of staff to Supervisor Gary Ovitt; and Jim Erwin, 48, a former assistant assessor who worked as a Colonies consultant.

All have denied wrongdoing, and attorneys have said the evidence prosecutors presented to the grand jury was one-sided. A judge released 2,700 pages of grand jury testimony Friday after The Press-Enterprise filed a motion to have the transcripts unsealed.

‘ONE-SIDED EVIDENCE’

Stephen Larson, an attorney for Burum, said in a statement Monday that the grand jury “heard one-sided evidence that will prove to be unreliable and deceptive.”

“If you read the entire transcript, prosecutors actually work to dissuade the grand jury from hearing from witnesses and evidence that tell an entirely different story than what the prosecutors tell,” Larson said.

“Mr. Burum is innocent, and 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.”

Mikels’ dealings with Colonies and Burum were strained after the company filed its lawsuit, according to the court records.

In testimony before a separate grand jury in September 2010, Biane recalled that Colonies’ “relationship with Jon Mikels had completely soured.”

Biane testified about how Burum told him of a meeting with Mikels over the lawsuit.

“And, again, these are Jeff Burum’s words, but Jon Mikels grabbed the binder, slammed it on the desk, and he said you can stick that where the sun don’t shine,” Biane said.

In the 2002 campaign, “I would guess the Colonies Partners …would have been looking for anybody else other than Jon Mikels,” Biane said.

That person turned out to be Biane himself. Colonies backed him with $12,000 toward his successful 2002 election effort.

Burum in past interviews has said he began donating to campaigns to have his opinion heard and be treated equally, since other developers also give significantly to local officials.

After defeating Mikels, Biane immediately began pushing to settle with Colonies, “and took the position that they had, indeed, been injured and they should … receive compensation,” Hansberger testified.

Likewise, Postmus testified that Biane came to the board wanting to get a settlement with Colonies done.

“Did he not tell you after he was elected to the board that he was put into office by the Colonies?” Deputy District Attorney Lewis Cope asked.

“Yeah,” Postmus replied. “He said they were his key supporter, and he was going to get the settlement done. It was very clear.”

Postmus pleaded guilty to related charges in March and is cooperating with prosecutors.

In his prior testimony, Biane said he already had announced his candidacy and secured endorsements from a host of local elected leaders before garnering the Colonies support.

Prior to his May arrest, Biane had consistently said settling the case was in the best interest of the county, rather than risk losing far more money in court. His attorney has declined comment on the latest grand jury transcripts.

Postmus groomed

The makeup of the Board of Supervisors continued to change as Colonies and the county battled in court from 2002 to 2006.

Eaves left the board in 2004 as a part of a plea agreement to unrelated criminal charges. Clifford Young, a university administrator, temporarily took over.

Aguiar also left the board to take a post in former Gov. Arnold Schwarzenegger’s administration, and his wife, Patti, temporarily filled the seat. The two served less than a year on the board.

Later in 2004, Josie Gonzales was elected to permanently fill the Eaves seat, and Ovitt won election to serve the remainder of Aguiar’s term.

But Biane did not appear to push hard enough on a settlement, and Postmus was groomed to take over the lead, according to the testimony of one former county aide.

“Bill explained to me that the Colonies Partners had really invested a lot of money in defeating Jon Mikels, who was the former supervisor before Paul Biane got elected,” testified Adam Aleman, a former Postmus aide who has pleaded guilty to separate criminal charges and is cooperating with prosecutors.

“But they were very frustrated and upset that Paul Biane may not have been as supportive publicly or may have been waffling,” Aleman testified.

Word went around town that Biane was not as supportive of a settlement, Aleman testified.

“And on that China trip, Bill told me that he was groomed to take over for Paul’s position,” Aleman said.

In September 2005, Postmus and other county officials, along with Burum, went on a trade trip to China. On his return, Postmus became consumed with settling the case, former County Administrative Officer Mark Uffer testified.

To read entire story, click here.