County Seeks to Restore Public Trust

At times, the San Bernardino County corruption scandal has seemed downright silly, like when court documents showed one political operative hunting for a “marginally honest” private investigator to assist an election campaign.

But in the beginning it was about trash--and it was very serious. Corruption in San Bernardino County’s halls of power was so common that many considered it a part of everyday business, as natural as a power lunch.

A series of kickback scandals, starting when a trash executive bribed a county bureaucrat to win an exclusive landfill contract, severely tarnished public trust in government.

This week, a new wave of county officials bent on reform will go to court to get that trust back. Frustrated that criminal proceedings have yielded only minor sentences for even major players, they will embark on a monthlong civil lawsuit against 13 businesses, executives and former county officials.

They know the trial, moved to Ventura County because of heavy publicity back home, will dredge up painful memories of those years of corruption. And they hope the case will put those memories out to pasture once and for all.

“This thing has been a burden on just about everybody in the county, from the Board of Supervisors to the employees, since it came to light in 1999,” said Chief Deputy County Counsel Michael Sachs. “We’re looking forward to finally getting it resolved and behind us.”

The county, if it succeeds in proving its complicated case, is expected to demand damages of more than $6.5 million, officials said. But ultimately the reward may be less tangible than a check. It may be old-fashioned revenge.

The county initially sued 22 individuals and businesses in June 2000 to recoup money lost to corruption over the years, then filed additional lawsuits later. Various defendants in those suits have reached out-of-court settlements totaling about $21 million.

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‘Icing on the Cake’

Many of the remaining defendants, including former county officials, say they have no money.

“There is little likelihood that they currently have any assets to satisfy any judgment,” Sachs said. “In our mind, we’ve already got the money that we were able to get. This would be icing on the cake. At a minimum, these folks whom the county thinks did not get their just deserts in the criminal arena may have significant judgments hanging over their heads for the rest of their lives.”

In recent months, the county’s corruption investigation has spun off a series of new, loosely related charges: that San Bernardino County Dist. Atty. Dennis Stout secretly aided a candidate challenging a political rival, for example, and that county Supervisor Jerry Eaves’ relatives and aides received free junkets to the Stardust Hotel in Las Vegas.

Though serious, the newer charges were seen by many as politically driven--and hardly of the same caliber as the initial allegations produced by an extensive probe involving local and federal investigators. The case will focus largely on three separate scandals.

According to the county, between 1996 and 1998, former Chief Administrative Officer Harry Mays and businessman Kenneth James Walsh paid $227,000 to bribe Mays’ successor as the county’s top bureaucrat. The bribes, county attorneys say, ensured that Walsh’s business, Norcal Solid Waste Systems Inc., would have an exclusive contract to operate county landfills.

Mays then billed Norcal $4.3 million for his services, Sachs said--and kicked back $1.5 million to Walsh. The Norcal contracts were worth as much as $50 million a year.

“Mays’ compensation was tied to the performance of the Norcal contract,” Sachs said. “Mays perceived Walsh as the one who was essential to making Norcal a success. He paid Mr. Walsh to keep him around, to keep him happy.”

In a related deal, Sachs said, a dirt hauler paid Walsh, Mays and Mays’ successor, James Hlawek, a total of $220,000 to retain subcontracting work from Norcal and the county. And Hlawek forced the county to buy out another contractor for $4 million--money the county should not have had to spend, Sachs said.

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Focus on Leases

The county also will focus on two controversial leases. Hlawek has admitted in sworn testimony that Mays offered him $60,000 in cash to usher through a contract requiring the county to lease a former Kmart in Rialto.

The building, which the county turned into a mental health clinic in 1998, was leased for $26 million--but the lease was never subjected to competitive bids, and cost far more than the market dictates in that area, officials contend. Mays was an owner of the building, county attorneys say.

The county also paid $7.6 million to lease a building owned by Dionysius Properties, another company with ties to Mays that is a defendant in the case. That lease was also tainted by bribes, the county alleges.

The county claims that an Orange County businessman, W. Shepardson “Shep” McCook, paid Hlawek $35,000 as part of a deal to alter a lease connected to a series of giant billboards in Colton, near Interstates 215 and 10. In 1997, McCook’s company, Oakridge Corp., netted $4.3 million through a related transaction that county officials believe was tainted by the payment to Hlawek, Sachs said.

Most defendants and their lawyers either could not be reached or did not return telephone calls seeking comment.

Some, however, questioned whether the county’s charges will stick.

Mike Schaefer, a San Bernardino lawyer who represents McCook, pointed out that a judge has already tossed out part of the case against his client. The judge suggested that the county did not suffer a financial loss through the billboard deal--and therefore could not recover damages.

Schaefer said he expects to argue the same point in the lawsuit. He said the alleged bribe is an issue for criminal court. In civil court, the county’s arguments must focus entirely on money taxpayers lost because of corruption--and in this case, taxpayers lost nothing, Schaefer said.

“Even if he paid the money to Hlawek, the county is not entitled to get a check from McCook,” he said.

So far, the principals who have pleaded guilty to related criminal charges have been given light sentences, county officials say. Walsh, for example, considered a key player in the scandal, could have been sentenced to a five-year prison term and a $250,000 fine. Instead, he got 18 months; he served 16 months before his release in February and was not fined.

“The federal courts have been lenient on these guys,” said county Supervisor Fred Aguiar. “We’re hoping that in a civil court, justice will be served.”

Aguiar also expressed relief that the case is coming to trial.

Some, however, question the commitment to ridding San Bernardino County of corruption.

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Critical of County

Ed Scott, a former candidate for county supervisor who helped expose what critics have called corruption in the district attorney’s office, criticized the county’s recent decision to remove four veteran sheriff’s investigators from an anti-corruption task force.

“I think, unfortunately, the county hasn’t regained the public trust,” said Scott, a Republican candidate hoping to unseat Assemblyman John Longville (D-Rialto).

“The recent removal of the sheriff’s officers out of the task force is just further proof that the county is not interested in cleaning up corruption.”

On the contrary, said Mike Cardwell, deputy chief of the San Bernardino County Sheriff’s Department, the decision to reassign the officers is a sign that the investigation is winding down.

“That is not to say, unfortunately, that there is no more corruption in the county,” Cardwell said. “... The remaining cases that could be investigated are fewer and less significant than the array of cases we were looking at three years ago.”

Investigators will be freed up any time a development comes along, Cardwell said.