San Bernardino County has experienced more than its share of corruption during the past two decades, including the conviction of two county administrative officers, a county supervisor's admission that he accepted bribes, and both successful and pending prosecution of elected officials in county and city government. But none of the past episodes compares with the scandal outlined in mid-February by Attorney General Jerry Brown and District Attorney Michael Ramos.
According to prosecutors, the developers of Colonies Crossroads in Upland provided $400,000, trips, gifts, prostitutes and other considerations to county officials. In exchange, the Board of Supervisors voted 3-2 to pay the developers $102 million to drop a lawsuit they had filed over flood control basin improvements.
Prosecutors indicted former San Bernardino County Supervisor Bill Postmus and Jim Erwin, a former assistant to Postmus and former chief of staff to Supervisor Neil Derry. Postmus and Erwin were arrested on February 9. Prosecutors also allege that five unindicted co-conspirators were involved in the scheme. Although the co-conspirators were not named, they are easily identified as Supervisor Paul Biane, Supervisor Gary Ovitt's Chief of Staff Mark Kirk, Colonies Partners co-managing partners Jeff Burum and Dan Richards, and their public relations consultant Patrick O'Reilly. All involved have denied wrongdoing and contend the prosecution is politically motivated. Biane and Ovitt issued statements saying the $102 million settlement was in the county's best interest.
Nearly 10 years ago, the City of Upland approved the Colonies Crossroads project on 440 acres adjacent to the 210 freeway (see CP&DR Local Watch, December 2003). Partially built since then, the completed project would contain about 1,150 housing units and a 1.1 million-square-foot shopping center. Development stumbled at first because of a dispute over a 65-acre flood control basin in the middle of the site. The developers sued San Bernardino County, arguing the county's flood control easements no longer existed and demanding $23.5 million for reconstructing flood facilities. A San Bernardino County Superior Court judge ruled for Colonies Partners, but an appellate court overturned the decision in 2003. The litigation returned to Superior Court and a different judge again ruled for the developers in 2006, finding that the county had given up ownership and maintenance of the flood control basin. A few months later, the Board of Supervisors decided not to appeal and voted 3-2 to pay Colonies Partners $102 million to drop the lawsuit (see CP&DR In Brief, January 2007).
Postmus, Biane and Ovitt supported the settlement even though the county counsel's office and outside attorneys with Jones Day urged rejection. Jones Day soon resigned from representing the county, as had the firm Munger, Tolles & Olson one year earlier, when supervisors considered a $77 million settlement.
Now, prosecutors allege that, to get the $102 million settlement, Colonies Partners paid $100,000 apiece into four separate political action committee accounts used by Postmus, Erwin, Biane and Kirk for political and personal matters. Prosecutors also allege the developers paid for meals, entertainment and a prostitute for Postmus during a 2006 "trade mission" to China, and in early 2007 treated Erwin to a lavish three-day trip to New York City and Washington, D.C., that included the gift of a Rolex watch. At the time, Erwin was assistant county assessor for Postmus, who had resigned from the Board of Supervisors after winning the assessor's position. Prosecutors allege that Erwin, a longtime labor leader for the Sheriff's Employees Benefit Association and local political operative, served as an intermediary between Colonies Partners and county supervisors. Prosecutors also allege the developers and Erwin had threatened to blackmail Postmus with public revelations of his homosexuality and drug addiction.
Postmus resigned as assessor in early 2009 after disappearing from public view for months and eventually confessing his drug addiction. He was charged later that year with nine felony counts alleging, essentially, that he ran a full-time political operation in the assessor's office. Erwin was charged last year with 10 felony counts for allegedly failing to disclose gifts he received from Colonies Partners. The most recent complaint charges Postmus with five new felonies and Erwin with nine.
"These individuals engaged in conspiracy, corruption and bribery that cost San Bernardino County taxpayers more than $100 million," Brown said. "This is one of the most appalling corruption cases ever seen in California."
State and local prosecutors say the investigation is ongoing and they could file additional charges.