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Corruption Redress Is Near for San Bernardino County

August 06, 2004|Hugo Martin | Times Staff Writer

San Bernardino County could collect up to $9 million in restitution from a group of businessmen and former high-ranking county officials who allegedly conspired in a series of bribery schemes tied to lucrative landfill and billboard contracts, according to a tentative court ruling Thursday.

The Superior Court ruling is a significant victory for the county, which has lived under the shadow of a corruption scandal that surfaced in the mid-1990s and involved several county officials, including a supervisor and two former chief administrative officers.

If the ruling becomes final, as expected in the next few weeks, the county could collect $4 million to $9 million in restitution through its lawsuit. The ruling also allows the county to press for punitive damages from the defendants at a separate hearing.

"I think it's a good result," said Michael Sachs, the county attorney overseeing the civil case.

But attorney Randall S. Waier, who represents the businessmen allegedly involved in the corruption schemes, said the ruling, by Ventura County Superior Court Judge Vincent J. O'Neill Jr., was not supported by legal precedent.

The civil case was moved to Ventura County because of the pretrial publicity the scandal received in San Bernardino County.

The county's lawsuit revolves around several contracts approved by county officials while the county's top administrative officer, James J. Hlawek, was accepting cash bribes, free hotel stays and other gifts from several businessmen who benefited from the contracts.

Hlawek, a defendant in the lawsuit, provided some of the most damaging testimony in the case when he admitted taking bribes and gifts in exchange for his influence. Hlawek already has pleaded guilty to federal corruption charges and is cooperating with the county in exchange for a lighter sentence, prosecutors said.

The other defendants included Harry Mays, Hlawek's predecessor as county administrative officer.

After Mays left county service, he was hired as a consultant for Norcal Solid Waste Systems, a San Francisco landfill firm that sought a contract to operate the county's landfills. During the trial, Hlawek testified that Mays paid him about $90,000 to "grease the skids" for the landfill contract, which experts said was worth at least $200 million.

Hlawek testified that he often met with Mays and Kenneth James Walsh, a former vice president at Norcal, in crowded bars and secluded parking lots to accept his payoffs. One of the bribes Hlawek said he received was a white envelope containing $15,000 and two marijuana cigarettes.

Judge O'Neill ruled that the defendants must repay the county for all the bribes Hlawek received, the $774,000 salary he earned during his four years in office, a portion of the $4.2 million in the consulting fees Mays earned from Norcal, and more than $200,000 in kickbacks that Mays, Walsh and Hlawek allegedly pocketed from a related dirt-hauling deal.

Hlawek also testified that, while county administrator, he accepted about $35,000 in bribes and free hotel stays from William "Shep" McCook, an Orange County businessman who sought a San Bernardino County contract to build seven billboards on county flood control land.

The county suit charges that after erecting the billboards, McCook sold five of them for $4.4 million to Eller Media Corp. In his tentative ruling, O'Neill said the county had the right to collect nearly all of the $4.4 million that McCook earned from the sale. O'Neill also said the county should get the $35,000 in bribes that Hlawek allegedly received.

O'Neill's tentative ruling on the sale of the billboards overturns a previous decision by another judge who concluded that the county did not have the right to the $4.4 million.

Defense attorney Waier said he planned to appeal Thursday's decision. "There is no authority for this," he said.

O'Neill also ruled that all the defendants were jointly liable for the damages. This means that if, for example, Hlawek were unable to repay the bribes he accepted and the four years of back salary, the other defendants would be responsible for his share.

Waier had argued that the county did not deserve any damages because the billboard and landfill contracts were fair deals that benefited the county. He also argued that the defendants had already been punished in criminal court.

Mays and Walsh have pleaded guilty to corruption charges. Mays served two years in prison; Walsh served 16 months.

McCook's trial is scheduled to begin this year.

O'Neill is already convinced that the defendants must pay some punitive damages.

"The court does find beyond any doubt that the tort liability of all defendants as described above was malicious, oppressive and fraudulent so as to subject each defendant to liability for punitive damages," the judge said in the ruling.

Sachs said the judge would probably issue his final decision in two or three weeks, then the two sides would present arguments about how much in punitive damages the county should get and how much the defendants could afford to pay.

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