Wednesday, November 25, 2015
S.C. Turns Down San Bernardino Scandal Cases
By a MetNews Staff Writer
The California Supreme Court yesterday declined to intervene in efforts by citizens’ groups trying to invalidate the controversial settlement of litigation between a developer and San Bernardino County.
The justices, at their weekly conference in San Francisco, voted unanimously to deny review of decisions by the Fourth District Court of Appeal, Div. Two in are San Bernardino County v. Superior Court (2015) 239 Cal. App. 4th 679 and Colonies Partners, L.P. v. Superior Court (2015) 239 Cal. App. 4th 689.
The plaintiffs, the Inland Oversight Committee and Citizens for Responsible Equitable Environmental Development, sought to invalidate the $102 million settlement on the ground that supervisors who approved the deal had a conflict of interest because they had been bribed by the developer.
The Court of Appeal panel, however, overturned the trial judge’s ruling that the plaintiffs had standing, and also held that the settlement was inoculated from challenge by a 2007 judgment validating the bonds issued by the county in order to pay the developer the agreed sum.
The settlement was the culmination of the developer’s claims that it was due compensation from the county in connection with flood control easements on its property in Upland. After a trial court ruling for the developer was overturned on appeal, the parties agreed to mediation, and the settlement was agreed to.
Three years later, however, an investigation into the background of the settlement led to the indictment of Bill Postmus, a county supervisor at the time of the settlement and later the county assessor, on bribery charges. Postmus, who was also facing a drug charge after methamphetamine was seized during the execution of a search warrant, pled guilty to several charges and became a prosecution witness.
Colonies partner Jeff Burum; James Erwin, a former assistant assessor who allegedly acted as Burum’s agent in attempting to persuade supervisors to enter into the settlement; Paul Biane, one of the supervisors who voted to approve the settlement; and Mark Kirk, then chief-of-staff to Supervisor Gary Ovitt, were charged with bribery, conspiracy, embezzlement and other crimes in a 29-count indictment issued in May 2011.
The indictment claimed that the defendants and Postmus conspired to have the county approve the deal in return for $100,000 donations to political committees controlled by Biane, Kirk, Postmus, and Erwin.
The criminal case has had a torturous history, with some charges dismissed but with the indictment largely intact after prosecutors won a December 2013 state Supreme Court ruling adopting their argument that it is possible to be guilty both of offering a bribe and of aiding and abetting its acceptance or conspiring to have it accepted.
The case is set for trial Feb. 1 of next year.
The IOC and CREED alleged in their complaints, filed in 2012, that the settlement should be declared invalid, and Colonies ordered to disgorge the money it had received, under Government Code §1090.
Section 1090 generally prohibits a public official or employee from acting on a contract in which that person has an interest. The state Supreme Court has explained that the law “is concerned with ferreting out any financial conflicts of interest, other than remote or minimal ones, that might impair public officials from discharging their fiduciary duties with undivided loyalty and allegiance to the public entities they are obligated to serve.”
But Justice Thomas Hollenhorst, writing for the Court of Appeal, said there was no support for the plaintiffs’ argument that citizens may sue directly under the statute. Nor does the taxpayer standing statute, Code of Civil Procedure §526a, or the common law provide standing, he said.
As for the validation proceedings, the justice said the fact that the bribery had not been discovered at the time was irrelevant. The “notion that matters validated in a validation judgment may nevertheless be collaterally challenged on the basis of later discovered facts” is unsupported by the case law cited by the plaintiffs, he said.
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