Lawyers squabble over Colonies grand jury transcripts

San Bernardino County's transportation planning agency, the city of Upland and Caltrans are fighting the county over the use of grand jury transcripts from the Colonies corruption investigation in a pending indemnity lawsuit.

In that lawsuit, the county wants the three public agencies - including the San Bernardino Associated Governments (SanBAG) - to pay any damages associated with storm drain construction that dumped floodwater into the Colonies development in Upland.

Rancho Cucamonga-based Colonies Partners LP had sued the county, which ultimately settled with the developer for $102 million - a deal tainted by charges of bribery and conflict of interest.

Attorneys defending SanBAG, Upland and Caltrans in the indemnity case, filed a motion Thursday in San Bernardino Superior Court requesting a hearing before Judge Michael A. Smith.

They want Smith to order that they can use the transcripts from the criminal case surrounding the settlement in their defense in the indemnity civil case.

The county should back away, they say, from going after the agencies in the midst of a criminal case in which the settlement itself is in question.

In a telephone interview Friday, SanBAG attorney Ken MacVey said the transcripts show that every attorney working for the county up to the time of the landmark settlement believed the settlement was, at best, excessive, and at worst, potentially illegal.

And the fact that the county is trying to prevent that information from coming out in the indemnity case "violate fundamental principles of fair play, jurisdiction and court comity," MacVey said in his motion.

"They're trying to prevent the truth coming out about what everyone of the lawyers had to say - that there was no basis for this settlement," MacVey said.

The county filed its motion on Sept. 16, arguing that allowing the defendants to use the April grand jury testimony in the indemnity trial would violate the attorney-client and attorney work product privileges. Under a confidentiality agreement with the District Attorney's Office, the county maintains it agreed to release the privileged materials to prosecutors solely for the benefit of the criminal investigation and nothing more.

The court-ordered unsealing of the transcripts on July 22 doesn't change that, the county maintains.

MacVey argued that the county understood that the information it provided to prosecutors may be disclosed to third parties pursuant to statute or court order.

"I think they have concerns that the information in there really does show that they have a real problem with their case, so they're taking these extraordinary steps," MacVey said Friday in a telephone interview. "We don't think they have any legal basis for doing this."

During its heated legal battle with Colonies Partners LP., the county sued the three public agencies in 2004 seeking indemnity for any damages that could arise from the litigation. The county maintains that the three agencies built a storm drain during the extension of the 210 Freeway that diverted floodwater onto Colonies' property, and therefore are liable for damages to the property. The county settled with the developer for $102 million on Nov. 28, 2006.

On May 9, the criminal grand jury indicted Colonies co-managing partner Jeff Burum, former county Supervisor Paul Biane, former assistant assessor Jim Erwin and Mark Kirk, former chief of staff for Supervisor Gary Ovitt. The four, who deny any wrongdoing, are accused of conspiring to secure the settlement in the developer's favor in exchange for bribes and political favors.

By Joe Nelson, Staff Writer

Source: San Bernardino County Sun