Legal

By Mark Gutglueck (www.sbsentinel.com)
Posted on August 1, 2014

SAN BERNARDINO — After six days of hearings before Superior Court Judge Michael A. Smith in which prosecutors and defense attorneys have alternatively sought to justify and destroy the public corruption case brought against three former county officials and one of San Bernardino County’s most powerful developers, the sustainability of the more than three-year-old case has yet to be resolved.

Earlier confident predictions from some in the defense camp that the case would be dismissed in its entirety at some point this week did not prove out. Nevertheless, the prosecution, which averted complete disaster when Smith balked at permanently dismissing a dozen counts in the indictment as the defense had requested in one of its motions, was appearing bedraggled by week’s end, and prosecutors’ best hope at this point is that they will be able limp away from this round of motions toward trial with a portion of the original charges in the indictment intact.

Rancho Cucamonga-based developer Jeff Burum is with Dan Richards one of two managing principals in the Colonies Partners, a consortium of 21 investors who brought to fruition the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeast Upland in the early 2000s. He is accused of arranging to pay off former supervisors Bill Postmus and Paul Biane as well as the former chief of staff of supervisor Gary Ovitt more than seven years ago.

Prosecutors allege Burum threatened, coerced and extorted Biane and Postmus to get them to agree to settle a lawsuit the Colonies Partners had brought against the county over flood control issues at the Colonies developments and then rewarded each of them with $100,000 contributions to their political action committees in 2007 after they joined with Ovitt in approving a $102 million settlement of the lawsuit in November 2006. Prosecutors allege Burum also provided Ovitt’s chief of staff, Mark Kirk, with $100,000 in the form of a contribution to a political action committee he formed, as an illicit payment for influencing Ovitt to support the $102 million settlement.

Postmus, along with former sheriff’s deputies union president Jim Erwin was originally named in an indictment handed down in February 2010. In that indictment, Postmus was charged with accepting bribes from Burum, and Erwin was charged with facilitating the extortion and bribery of Postmus. At that time, both Postmus and Erwin pleaded not guilty to the charges in the indictment. In March 2011, however, Postmus pleaded guilty to all 14 charges contained in the indictment and then served as a star witness before a newly impaneled grand jury that handed down a superseding 29 count indictment in May 2011 that named Burum, Biane, Erwin and Kirk.

The case had been contentiously fought from the start. Defense attorneys in 2011 filed demurrer motions challenging the case against their clients on the sufficiency of the evidence and applicability of the law. In August 2011, Judge Brian McCarville granted several of the defendants’ demurrers, ruling that prosecutors erred in simultaneously charging Burum with conspiracy to engage in a bribing scheme while also charging him with aiding and abetting the receipt of bribes.

McCarville also ruled that Burum could not be charged with misappropriation of public funds since he was not a public official, leaving only two of the original seven charges against Burum, the figure at the center of the case, intact. McCarville further dismissed one felony count of misappropriation of public funds for each of the other defendants. The prosecution, consisting of both the California Attorney General’s Office and the San Bernardino County District Attorney’s Office, appealed McCarville’s ruling to the Fourth District Court of Appeal in Riverside, which in October 2012 upheld McCarville with regard to the four bribery counts against Burum that had been tossed, and also threw out a conflict-of-interest count McCarville had let stand. The appeals court did, however, reinstate the misappropriation of public funds charge against Burum that McCarville had dismissed.

Prosecutors then made a last-minute appeal of the Fourth District’s ruling to the California Supreme Court on December 10, 2012. More than a year later, on December 23, 2013, the California Supreme Court reestablished the essential elements of the case, granting the gist of the prosecution’s appeal more than a year and two months after the Fourth District Court of Appeal in Riverside dismissed the most crucial charges lodged against Burum.

Last year and earlier this year, Burum’s attorney, Stephen Larson, a former federal judge, filed a total of five motions to dismiss the case, including ones based on statute of limitations grounds, lack of probable cause, prosecutors’ misinstruction of the grand jury, withholding of exculpatory evidence, prosecutorial misconduct, misconduct on the part of investigators in their filings to obtain search warrants and an illegal effort by both prosecutors and investigators to seize privileged materials in the possession of the defense team.

Beginning on July 23, Smith began hearing oral arguments on those motions before a near-capacity crowd in one of the largest courtrooms in the newly opened San Bernardino Justice Center. In one of his first rulings, he severely weakened the prosecution’s case by dismissing conspiracy charges against the defendants on statute of limitations grounds. That dismissal also erased the 43 overt acts alleged as part of the conspiracy in the indictment.

Smith then moved on to throw out 12 other charges in the case, likewise on statute of limitations grounds, pending his own determination of whether he would give the prosecution the opportunity to amend the complaint.

While the indictment stated that law enforcement officers did not learn of the alleged bribery scheme until November 2008, defense attorneys argued that the victim, i.e., the county and its officials, knew of or had strong grounds to suspect as early as 2006 that the illegal activity described in the indictment had taken place, thus making the May 2011 indictment too late given the three-year statute of limitations.

Smith said that though there were numerous suspicions with regard to, and even unsubstantiated allegations of, wrongdoing being batted about while the county and the Colonies representatives were seeking to negotiate a settlement in 2006, the circulation of such rumors did not meet the legal standard for initiating a criminal investigation, calling the suspicions no more than “a gut feeling something wasn’t right. There were no facts or information to support a reasonable suspicion that there were offers or payments to defendants” or that Postmus and Biane had “agreed to accept payment in exchange for their votes” at that time. Thus, Smith ruled, defense attorneys’ contention that the statute of limitations had elapsed when the indictment was handed down in May 2011 was not sustained and he gave the prosecution leave to amend the indictment with regard to 12 of the counts he had earlier thrown out.

Smith granted a defense motion to dismiss a single count of conflict of interest each against defendants Burum and Erwin, concurring with an earlier appellate court ruling that the conflict of interest statute could not be applied to private citizens. Burum has never been a public official and Erwin, who was a public official previously and afterwards, was not working for the government at the time of the alleged crimes.

Smith gave strong indication he is leaning toward dismissing misappropriation of public funds charges against all four defendants, although he has not yet made that call.

The court then turned to the so-called Johnson motion, named in reference to the precedent-setting case Johnson v. Superior Court, a defense request that the charges be thrown out, citing allegations prosecutors withheld exculpatory evidence from the grand jury. Larson asserted that prosecutors offered grand jurors a highly selective sampling of Bill Postmus’ statements and did not produce to the grand jury statements Postmus made which contradicted his grand jury testimony and additionally withheld information about Postmus’ use of methamphetamine, which was characterized as “out of control” by one county official. Larson further criticized prosecutors for essentially hiding from the grand jury Burum’s testimony before a prior grand jury which Larson said was exculpatory. Supervising Deputy California Attorney General Melissa Mandel insisted to Smith that the grand jury had been provided with a transcript of Burum’s previous testimony but that the grand jurors had elected not to read it. The prosecution had gone beyond its statutory responsibility in providing access to exculpatory material relating to the defendants, Mandel claimed.

Mandel said Postmus’ drug abuse and his plea deal had been disclosed to grand jurors.

In responding to the defense contention that a more thorough showing of exculpatory evidence to the grand jury in 2011 would have resulted in the grand jury not voting to indict, Smith ruled prosecutors met their obligation to inform the grand jury of any exculpatory material that was available and that the prosecutors’ obligation extended only to making it available, such that the grand jury could use its discretion on what evidence it wanted to examine before concluding whether an indictment was appropriate. In so doing, Smith denied the Johnson motion. Moreover, Smith said, what exculpatory evidence there was would not have been likely to overcome countervailing probable cause to issue the indictment.

A series of four “995 motions” for dismissal, based upon the defense’s contention that the prosecution presented insufficient evidence to the grand jury to justify the indictment, resulted in what amounted to a running debate between Mandel and Larson as to whether Burum’s efforts in 2006 which consisted of having Patrick O’Reilly, a public relations consultant working for the Colonies Partners, prepare mailers that targeted both Postmus and Biane, represented an extortion attempt, as Mandel suggested, or the simple exercising of Burum’s First Amendment free speech rights, as Larson maintained. That year, Postmus, the chairman of the board of supervisors and the chairman of the San Bernardino County Republican Party, was vying for county assessor. Biane was unopposed in his run for reelection as supervisor but was campaigning on behalf of Measure P, which was to raise supervisors’ pay from $99,000 per year to $151,000 per year. The mailers dwelled on Postmus’ homosexuality and drug use, which was not generally known, and on Biane’s near insolvency.

Mandel said the mailers transitioned from being permissible political speech to extortion when Burum offered to withhold the mailers and financially support their future political endeavors in return for Postmus’ and Biane’s support of the lawsuit settlement. Mandel called this a “quid pro quo” and said that the combination of threats beforehand followed by the provision of the $100,000 donations after the vote constituted “aiding and abetting the receipt of a bribe.”

Mandel said the $100,000 bribes were laundered by Burum’s funneling of the money into the political action committees controlled by Postmus and the three defendants in the case.

Paul Grech, the attorney representing Kirk, disputed that characterization, however. He said that the indictment was an effort to criminalize standard political activity such as the formation of political action committees and that at any rate, there had been no need to bribe his client since his client had done nothing to further the alleged criminal activity alleged in the indictment. Kirk had no vote in the settling of the lawsuit, Grech said, and told Smith that supervisor Ovitt testified under oath that Kirk did not influence his vote to approve the Colonies settlement.

Smith made no ruling on the 995 motions.

The last defense motion Smith heard on Thursday dealt with what the defense team alleges was an illegal and unconstitutional “raid on the defense camp,” in which district attorney’s office investigators used a complaint by Bill Postmus that his cell phone had been hacked to obtain and serve a search warrant on the El Segundo-based investigative firm of Thomas Dale & Associates, which was doing investigative work for Larson on behalf of Burum.

In obtaining the warrant, prosecutors and their investigators had assured the judge issuing the search warrant that they would utilize a special master to review the seized materials before the prosecution obtained access to them, so as to prevent any of the defense’s privileged materials from being compromised.

Larson’s colleague, Mary Andrues, said the prosecution had not honored that commitment and had instead “rummaged through privileged information.”

Deputy District Attorney Reza Sadeghi went on record as denying Andrues’ claim, though he acknowledged that the prosecution team was chomping at the bit because it believed that “Mr Burum was involved” in tapping Postmus’ cell phone. The prosecution team dug themselves in even deeper when Sadeghi elicited testimony from district attorney’s office investigator Eric Bremner that he did not see any of the materials or documents seized during the search and that the files seized were entrusted to the special master without any prior examination by the district attorney’s office. Sadeghi assured Smith that the only document he saw during the search on the Thomas Dale & Associates premises was the search warrant document. Shortly thereafter, Andrues played for the court an internal security video taken at the Thomas Dale & Associates office in which Sadeghi, Bremner and other investigators were seen looking through the seized documents while the special master, Brian Collins, was outside or standing around the Thomas Dale Associates lobby, according to an employee Sisley Brunon. “I did see him go upstairs relatively early in the search, but he returned downstairs after only a few minutes,” Brunon said in a declaration submitted to Smith. “Specifically, I observed law enforcement agents searching through file cabinets and other storage areas in what appeared to be a careful docunent-by- document review.”

Andrues also played audio from Bremner’s belt recorder of exchanges between Bremner and Sadeghi in which they are heard discussing the privileged documents they are looking at.

This produced a palpable, rapt silence in the courtroom at the demonstration that Sadeghi had misled the court with his pointed questioning of Bremner and his own statements.

Andrues said that in abrogating the function of the special master the prosecution out-and-out violated Burum’s Sixth Amendment rights and attorney-client privilege. Investigators, she said had brazenly engaged in “outrageous conduct,” by which the only cure was dismissal of all of the charges against her client.

Though Smith, a former prosecutor himself, sought to maintain a calm demeanor and gave no verbal clue from the bench as to his thoughts in the face of Sadeghi’s faux pas and the questionability of Bremner’s testimony, the degree to which the judge was shaken by what had just transpired in his court was visibly apparent to those in the courtroom.

The final issue aired in the four days of hearings this week followed, with oral arguments on the motion brought by the prosecution to disqualify Larson, Andrues and their law firm, Arent Fox, as Burum’s legal representatives. That motion is based upon Arent Fox having hired former assistant U.S. Attorney Jerry Behnke in May. Behnke was formerly a part of a joint federal/state/local task force that targeted public corruption crime, and it is the prosecution’s contention that Behnke’s employment with Arent Fox provides the defense with an unfair advantage.

In the immediate aftermath of the debacle involving Bremner and Sadeghi’s misrepresentations to Smith about their handling of the materials seized in the Thomas Dale & Associates office search, Mandel appeared to relish being able to hector Larson for what she suggested was an ethical breach in hiring Behnke, whom she represented as being the “lead prosecutor” in U.S. Attorney’s investigation of the Colonies case.

Mandel established that Behnke supervised the serving of search warrants by the FBI at Burum’s business and home in Rancho Cucamonga in September 2011.

Mandel elicited testimony from now-retired district attorney’s office investigator Robert Schreiber that Behnke was present for the formation of the joint task force and that he met and conferred with Behnke on a half dozen occasions between April 2010 and June 2011 at the FBI’s Riverside office. During these task force meetings, which were essentially overseen by Behnke, Mandel said, county, state and federal investigators freely exchanged information about the Colonies investigation.

Larson failed to inform the prosecution about Arent Fox’s hiring of Behnke, Mandel said, insisting that was an omission which “potentially impeded the People’s right to a fair trial.”

Smith indicated that oral arguments relating to the 995 motions on all four defendants had been concluded and he was taking them under submission but that he was reserving his ruling until August 6, when the hearing would next convene. Likewise, he indicated that arguments as to the prosecutorial misconduct in making the raid on the defense camp were concluded and he would reserve his ruling on the motion to dismiss that has arisen out of those circumstances until August 6.

Smith made no ruling on the motion to disqualify Arent Fox, deferring that until later.

Smith said his ruling on the remaining issues pertaining to PC 424 – misappropriation of public funds – was also reserved and that he needed briefing from both sides relating to matter.

He also referenced the government code in indicating his belief that the donations made to the political action committees controlled by Biane, Erwin and Kirk could not be considered personal income for state tax purposes and was inclined to dismiss nine related counts against those three defendants.

On August 6, a last hearing on an omnibus prosecutorial/investigative misconduct motion to dismiss will be held.

Smith said he intended to review the audio and video recordings related to the search at Thomas Dale & Associates.

Upon the last of Smith’s rulings on the dismissal motions, which could come as early as August 6 but will likely not be made at least until August 11, a clearer picture of what issues will be litigated before a jury will emerge.

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