10:40 PM PDT on Tuesday, March 29, 2011

The Press-Enterprise

Special Section: San Bernardino County Corruption Probe

Prosecutors say a plea deal by former San Bernardino County Assessor and Supervisor Bill Postmus could invalidate a $102 million lawsuit settlement, but they will leave it up to the county Board of Supervisors to decide whether to go after the money.

And county officials say it’s too soon to know what their next step will be.

Postmus was chairman of the Board of Supervisors in November 2006 when the county agreed to pay Colonies Partners $102 million to settle a lawsuit over Colonies’ Upland development.

Postmus admitted Monday that he accepted a bribe and had a financial conflict of interest when he voted to approve the settlement. Prosecutors allege that Colonies paid more than $400,000 to political action committees with ties to Postmus and others that were set up specifically to receive the money.

When San Bernardino County District Attorney Mike Ramos and then-California Attorney General Jerry Brown announced charges against Postmus in the Colonies bribery case at a February 2010 news conference, they said their goal was to recover the $102 million.

The money “was extorted and stolen” from taxpayers, Ramos said then.

But in a news release Monday, the district attorney’s office did not say whether it would take that step.

Postmus’ admission “may lead to further proceedings in the civil courts seeking to void the $102 million Colonies settlement,” the release said.

Susan Mickey, spokeswoman for the district attorney’s office, said it would be up to the county counsel, who reports to the Board of Supervisors, whether to begin further proceedings.

County spokesman David Wert said the county is consulting with its lawyers in the case. Supervisors likely will receive a closed-session briefing at their April 5 meeting, he said.

“It’s going to be some time before the county’s attorneys can analyze what this means and what the various scenarios would be — and there would be various scenarios,” he said.

One possible result of voiding the settlement could be reopening the litigation between the county and Colonies, Wert said.

Supervisor Janice Rutherford, who criticized the settlement last year during her successful race against former Supervisor Paul Biane, said she is waiting to hear from the county’s attorneys about what the ramifications would be.

“It’s like a game of chess, and every move has several different countermoves, and you need to think very far out,” Rutherford said.

Ramos was unavailable for comment Monday or Tuesday.

Senior Assistant Attorney General Gary Schons said the state attorney general’s office will leave the question of the settlement up to the county.

“Our focus continues to be on the criminal aspect of this matter,” he said.

The Colonies case also included five unnamed and uncharged co-conspirators. The John Does were later identified as Jeff Burum and Dan Richards, co-managing members of Colonies Partners; Biane, who voted for the settlement; Mark Kirk, former chief of staff to Supervisor Gary Ovitt; and Patrick O’Reilly, a media consultant to Colonies.

None of the John Does has been charged and all have denied wrongdoing.

Mickey and Schons said they could not comment on whether Postmus’ plea deal could lead to criminal charges against those individuals.

Legal battle

Postmus pleaded guilty Monday to 15 felony charges against him in two criminal cases. If he cooperates fully with prosecutors, the charges will be reduced to three felonies.

Two of the remaining counts, conspiring to accept a bribe and conflict of interest, are part of the case accusing Postmus of accepting bribes in the $102 million settlement. The third remaining charge — misappropriation of public funds — stems from Postmus’ tenure as assessor.

The Colonies settlement was reached after a nearly five-year legal battle between the county and Colonies over flood-control easements at the company’s Upland development.

Colonies contended that the county should pay for a 67-acre drainage basin that handled runoff from Highway 210, built in 2002. But the county argued that easements dating to the 1930s gave it the right to use the land.

Richard Grenell, a spokesman for Colonies, said the settlement was a good deal for the county, which could have been held responsible for $300 million if the case had gone to trial.

“The county misled and lied about their actions” in diverting flood control water onto the property, Grenell said.

Burum did not participate in any conspiracy or pay any bribe, he said.

Grenell declined to comment on how Colonies might respond to a civil action by the county seeking to invalidate the settlement. The company has denied any wrongdoing.

Colonies already has been paid the full $102 million. Shortly after the settlement, the county immediately paid the company $22 million from the flood control district’s reserves and used bond financing to pay the remaining $80 million.

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