10:00 PM PDT on Wednesday, March 17, 2010

The Press-Enterprise

State and local prosecutors are seeking legal documents from San Bernardino County’s 2006 settlement with Colonies Partners as part of their investigation into whether the $102 million agreement was part of an illegal conspiracy.

In a letter delivered to supervisors Tuesday, the California attorney general’s office and San Bernardino County district attorney asked the Board of Supervisors to waive its attorney-client privilege in the Colonies litigation and make available all the relevant documents.

County officials said they would consider the request in consultation with their attorneys at a Tuesday closed-session board meeting.

Last month, prosecutors filed bribery, extortion and conspiracy charges against Bill Postmus, the former assessor and supervisor, and Jim Erwin, former assistant assessor and former chief of staff to Supervisor Neil Derry.

Postmus and Erwin are accused of conspiring with five unnamed and uncharged co-conspirators to approve the $102 million lawsuit settlement with the Rancho Cucamonga developer.

“Relevant to the charge that the settlement was a product of corruption is the fact that the settlement amount was neither justified nor properly and thoroughly vetted before it was voted on and approved,” states the letter from Gary Schons, senior assistant attorney general.

Proving so will require access to the information that the county’s attorneys and experts provided to supervisors, he said. The county has asserted attorney-client privilege on multiple occasions during the investigation, hampering investigators’ ability to complete their work, Schons said.

Schons and Susan Mickey, spokeswoman for the district attorney, declined to elaborate, saying they would let the letter speak for itself.

County spokesman David Wert said the county counsel’s office knew of no requests that have been refused and that the letter was the first time supervisors had been asked to waive privilege in the case.

He said the county has cooperated fully with investigators but that waiving privilege is not something it can take lightly.

Burt Southard, a spokesman for Board Chairman Gary Ovitt, said it was unlikely the board would make a decision at the Tuesday meeting due to the complexity of the issues involved.

Derry and Supervisor Josie Gonzales both said they were inclined to cooperate with investigators but needed to weigh the legal ramifications first. Supervisor Brad Mitzelfelt declined to comment.

In a statement, Supervisor Paul Biane also said he would rely on legal advice but added that he was concerned that waiving attorney-client privilege could put the county’s efforts to recover legal damages in “serious jeopardy.”

The county is suing Upland, Caltrans and San Bernardino Associated Governments, saying those entities were responsible for a storm drain that was part of the alleged damages claimed by Colonies.

The county and Colonies Partners had battled since 2002 over flood-control easements on the company’s 434-acre residential and commercial development in Upland before settling. Postmus, Biane and Ovitt voted in favor of the $102 million settlement while Gonzales and then-Supervisor Dennis Hansberger voted against the deal.

In the indictment last month, prosecutors said the unnamed co-conspirators include a current Board of Supervisors member and the chief of staff to another current member. Based on details in the criminal complaint, public records and statements, Biane and Mark Kirk, chief of staff to Ovitt, appear to be two of those John Does.

Biane and Kirk have denied wrongdoing, and Ovitt has denied that his vote was swayed by Kirk.

In his letter, Schons cited a statement made by Ovitt that his vote was based on his own analysis of the facts presented by the county’s attorneys. “Those same facts … are precisely what we seek,” Schons said.

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