Huguette LaBelle, Chair of Transparency International, warned in 2007, “Despite some gains, corruption remains an enormous drain on resources sorely needed for education, health and infrastructure.”
LaBelle suggested this issue be taken seriously. For inland residents, particularly those in San Bernardino County, the clock is ticking. Some wonder whether it’s past time for citizens to take action to strengthen accountability in local public institutions.
Many of the high school seniors in San Bernardino County who will accept diplomas later this year were just entering the world 18 years ago when the longest and most expensive corruption scandal in the county’s history was bubbling to the surface.
It was 18 years ago when the Rancho Cucamonga-based Colonies Partners and San Bernardino County officials began their negotiations about a flood-control basin in Upland. Three years later, the county refused to pay Colonies Partners $25 million dollars for the flood control improvement and the rest, as they say, is history.
Now, San Bernardino County taxpayers in one of the poorest regions in the state and possibly the nation find themselves on the hook for millions of dollars, while a large swath of the community continues to languish in poverty.
The Colonies Corruption case cost taxpayers the initial $102 million-dollar settlement over the flood control channel, in addition to charges associated with the civil case, followed by untold additional costs to prosecute the criminal case. The total spent on this case must also include costs incurred by the San Bernardino County District Attorney’s office to prosecute the case and the State Attorney General’s office who assisted in the prosecution.
To date, the county’s legal department has obfuscated disclosure of the actual costs associated with the prosecution, despite a public records request from The Voice/Black Voice News.
Former San Bernardino County Supervisor Bill Postmus pled guilty in 2011 to 15 felonies in connection to the Colonies case and turned state’s evidence against four others, including Jeff Burum, a Rancho Cucamonga developer and co-managing partner of Colonies Partners; former County Supervisor Paul Biane; and Mark Kirk, a former chief of staff for former county Supervisor Gary Ovitt. They were found not guilty on all charges, including bribery in the Colonies settlement.
Jim Erwin, former Assistant County Assessor and former President of the Sheriff Employees Benefit Association, who had acted as a consultant for Colonies in the settlement, was charged with bribery, intentionally failing to file his state return for 2008 and two counts of perjury. In his case, the jury hung.
And then, as if to add the proverbial insult to injury, the attorney who represented Colonies defendant, Burum, presented members of the San Bernardino County Board of Supervisors with a letter demanding reimbursement for the $45.2 million the partnership had spent to successfully defend itself in both its civil and criminal court battles against the county.
The demand letter was for both Colonies Partners and criminal defendant Erwin. Erwin has also filed a separate, $25 million malicious prosecution claim against the county for the Colonies case. Others involved in the case, including Biane and Kirk, were not included in the demand letter. More suits against the county in regard to the Colonies case are expected.
Admittedly, the Colonies corruption case dragged on for so long that many constituents lost interest, others were bogged down in its complexities, and still others were too young to understand the economic ramifications when the saga began. Others, perhaps, were too busy dealing with the economic struggles in their own lives to have paid much attention.
It is their struggle that is the impetus for this story. Many who advocate on behalf of the poor and underrepresented believe what is being asked of San Bernardino County taxpayers to settle the financial cost of this case is unconscionable.
In the $45 million demand letter to the county were itemized lists of costs associated with the civil and criminal cases, charges local taxpayers are now on the hook for. The lists included such items as meals, lodging, even land that had to be sold to cover the legal costs incurred by Burum and his company.
As San Bernardino politicians and attorneys wrangle in the coming months over how much taxpayers will be liable for related to this malfeasance and corruption, it is important to review what is known about this county.
For 18 years the community has peeled apart this scandal and examined it from every angle, but little consideration has been given to its potential impacts on an economically struggling community. Now, who will hold pubic officials accountable to fully disclose the costs?
As Colonies Partners and the political co-defendants in this case petition taxpayers for reimbursement for the cost of their meals, lodging, property sales, and more, local taxpayers are busy struggling to pay for increased gasoline taxes and grappling with the impact of growing poverty.
A lot has changed in the intervening years since the County of San Bernardino and Colonies negotiated over the flood-control basin in the City of Upland. Last year, the Orange County Register did a compare-and-contrast analysis of California’s economy and used the years 2006 and 2016 as the point-in-time markers. Most significantly, more families in this region lived in poverty in 2016 than in 2006.
According to the 2006 census, the poverty threshold was $10,294 for an individual and $20,614 for a family of four. In 2016, it was $12,228 for an individual and $24,563 for a family of four, and the number of families in Southern California living at or below the poverty line rose by 9.1 percent over 2006.
In 2016, only 4.6 percent of San Bernardino residents made more than $150,000 a year, while 61.9 percent of the city’s residents earned less than $50,000 a year. The same was true for the community of Victorville. In Rancho Cucamonga, the poverty rate increased by 120 percent and Ontario saw an 81 percent rise. In Murrieta in Riverside County, the number of families living in poverty rose by 123 percent.
A white paper published by the International Monetary Fund in 1999 entitled “Does Corruption Affect Income Inequality and Poverty?” noted, “ . . . high and rising corruption increases income inequality and poverty by reducing economic growth, the progressivity of the tax system, the level and effectiveness of social spending and the formation of human capital and by perpetuating an unequal distribution of asset ownership and unequal access to education.” This could describe the struggles of the inland region.
The history of corruption in San Bernardino County is epic. In the early 2000’s, county officials Harry Mays and James Hlawek were found guilty of bribery in a waste management corruption scheme that dated back to the 1990s. Mays was sentenced to probation and Hlawek spent time in prison. A county investment officer and the treasurer/tax collector were also involved and did time in custody for taking bribes in exchange for county contracts.
In 2004, former County Supervisor Gerald Eaves pled guilty to charges related to the acceptance of unreported gifts from a businessman who received county approval to erect billboards on county land. Also caught up in the scheme were the Mayor of Colton and two city councilmen. Also in 2004, two San Bernardino councilmembers pled guilty to accepting bribes from a developer.
Others caught up in the Colonies case included former San Bernardino County CEO Mark Uffer who filed a whistle-blower retaliation lawsuit against the county after the Board of Supervisors voted to terminate him. Uffer alleged he was fired because he tried to halt the County-Colonies settlement and reign in numerous other corrupt practices.
A former County Assessor’s Office employee and Rancho Cucamonga councilman, Rex Gutierrez, spent time in jail for charges related to corruption in the San Bernardino County Assessor’s office.
Former Upland Mayor John Pomierski resigned just before he was indicted (along with John Hennes, the city’s building appeals board appointee) for purportedly trying to extort money from a nightclub and medical marijuana cooperative that were seeking city permits. During this period, the Arrowhead Regional Medical Center also experienced its time in the fire. And, in 2014, Upland City Manager Robin Dale Quincey pled no contest to felony conflict of interest charges.
The cooperation between the FBI and the San Bernardino District Attorney’s office in solving the Pomierski case led to the formation of the Inland Empire Corruption Task Force that was later joined by the Riverside County District Attorney. Work by the task force led to the arrest of San Bernardino city councilman Chas Kelley, who pled guilty to felony perjury for under-reporting campaign funds.
The task force also worked together on the arrest of Moreno Valley Councilman Marcelo Co. According to reports, Co took a $2.36 million bribe. He pled guilty to felony perjury for under-reporting campaign funds—it was the largest bribe ever accepted by a public official in an undercover operation.
In recent years, allegations of corruption have surfaced in the cities of Beaumont, Upland, San Bernardino, and Moreno Valley, in addition to the San Bernardino International Airport and Arrowhead Regional Medical Center in Colton.
And more recently, customers of the West Valley Water District are coming to terms with a whistle blower’s allegations of corruption within the highest levels of that agency. (The Voice will report on this in more detail in the coming weeks).
Allegations of corruption are not isolated to the San Bernardino County portion of the inland region. Riverside County is in the process of confronting its own demons. Last February the former mayor of Palm Springs and two developers were charged with a combined 30 felony counts that involved $375,000 in bribes.
Those concerned about the impact of corruption on the region’s economy believe something must be done to curtail the alleged political theft that has occurred historically in this region. As poverty continues to increase, as more and more of our elderly and others cannot afford housing, and as many as 23 percent of the inland area’s youngest children live in poverty, though the Inland Empire Corruption Task Force is doing good work, the region can no longer afford to respond to allegations of corruption as “business-as-usual.”
The nexus between corruption and poverty continues to drain local resources. Citizens have a right to know all costs associated with such corruption and elected officials must be accountable to ensure that such information is available to the public.
To be continued . . .