A wealthy California developer with close ties to former Rep. Alan Mollohan (D-WV) was indicted today in a burgeoning corruption scandal in San Bernardino County. Jeffrey Burum, co-manager of Colonies Partners, was charged in a scheme to bribe county officials to approve a legal settlement favorable to Colonies. Click here to download a 27-page pdf of the indictment.
Burum is on the board of Vandalia Heritage Foundation, one of several nonprofits on whose behalf Mollohan secured hundreds of millions in earmarks. Burum was also the Executive Director of the California-based National Housing Development Corporation (NHDC), which received $31 million in earmarks from Mollohan between 2001 and 2006. Vandalia President Laura Kuhns, who personally invested with Mollohan in real estate deals, was on the board of the NHDC, and still serves on the board of NHDC’s successor organization, called National Community Renaissance.
Burum has been a key campaign contributor over the years to Mollohan, who was defeated for re-election last year in the Democratic primary. In 2006, Burum contributed $75,000 to a 527 group called West Virginia Values that ran attack ads against Chris Wakim, Mollohan’s Republican opponent. Burum even made a $5,000 donation to Summit PAC, Mollohan’s leadership PAC in February 2010, just days after the bribery scandal first broke.
Burum was indicted along with Paul Biane, Mark Kirk and Jim Erwin. Biane is a former county supervisor. Kirk and Erwin are former chiefs of staff to county supervisors. A former chairman of the county Board of Supervisors named Bill Postmus previously pleaded guilty and agreed to cooperate with prosecutors in return for reduced charges.
The corruption investigation is being conducted by the county District Attorney Michael Ramos. San Bernardino County stretches eastward from the suburbs of Los Angeles to the Nevada border. When Postmus and Erwin were arrested in February 2010, the announcement was considered important enough to be made jointly with then-California Attorney General Jerry Brown, who is now Governor.
The case centers around a $102 million settlement of a lawsuit brought by Colonies against the county. Filed in 2002, Colonies sought $23 million in a dispute over approval of a 67-acre flood control basin on a 434-acre parcel of land it originally bought for $16 million. Colonies would eventually up its claims to $300 million. The case was settled in 2006 after Colonies allegedly bribed, blackmailed and improperly influenced county Supervisors to approve the settlement.
Postmus’ February 9, 2010 arrest warrant details the Colonies campaign. The warrent refers to Burum only as John Doe #1. It cites statements made by a Postmus assistant named Alan Aleman, who told investigators:
Postmus told Aleman that John Doe #1 promised to give him $100,000 to approve the settlement in favor of Colonies Partners.
The arrest warrant described similar arrangements for other members of the Board of Supervisors, with the money funneled through groups with names like Committee for Ethics in Government. The campaign allegedly intensified in 2005 after Postmus traveled to China with Burum on trade mission:
Aleman said when Postmus returned from China he was “totally committed” to spearheading and delivering the settlement in favor of Colonies Partners. Aleman said, “it almost became his daily obsession to lobby his other colleagues to settle the lawsuit. Aleman said that Postmus remained in constant contact with John Doe #1, through phone calls, text messages, personal meetings and dinners that John Doe #1 paid for.
Allegedly, the China trip wasn’t all meetings and hard work:
Postmus told Aleman that while in China, John Doe #1 treated him to expensive dinners and drinks, nightclubs and massage parlors. John Doe #1 paid for a prostitute for Postmus and gave him spending cash.
After the settlement, Erwin went road-tripping with Burum and a public relations man named Patrick O’Reilly. According to the (Southern California) Press-Enterprise:
The three men boarded a private jet at Ontario Airport — a seven-seater with more than enough room for them to stretch out. The coast-to-coast plane trip cost about $35,000, but the money was flowing. And it would keep flowing during the two-day excursion to Manhattan and Washington, D.C., featuring late nights, expensive dinners, top-shelf liquor, fine cigars and girls.
During the trip which cost $84,000, Burum allegedly treated Erwin to a $12,675 Rolex watch. Erwin failed to report the gratuities as he was required to do as a county employee. In March 2009, Erwin was arrested and resigned his job as Chief of Staff to County Supervisor Neil Derry. (Erwin denies he had sex with the hookers, claiming they “weren’t that attractive.”)
San Bernardino County and other local governments are seeking to overturn the Colonies settlement, arguing that it was tainted by bribery. Burum has denied wrongdoing. It is hard to see how Burum can effectively defend himself, however, in the court of public opinion. If the bribery allegations are not serious enough, the sordid details of his junketeering with county officials are hard to explain away.
Burum has enjoyed bipartisan help from Capitol Hill. Rep. Gary Miller (R-CA), who represents parts of San Bernardino County, has also steered millions in earmarks to Burum’s nonprofit organizations. Even with the highly publicized allegations against Burum first surfaced, Miller continued to arrange for earmarks in fiscal year 2010.
Meanwhile, back in West Virginia, the West Virginia legislature has approved a proposal to name part of state route 273 the Alan B. Mollohan Gateway. Perhaps it is appropriate. There is already a bridge named for his crooked father, Robert H. Mollohan, who served two separate stints in Congress.
In 1956, the elder Mollohan left Congress to run unsuccessfully for governor of West Virginia. According to the 1982 edition of Politics in America:
…Mollohan was crippled by political scandal. It was revealed during the campaign that while Mollohan was superintendent of the states’ boys school, he had received $20,000 and two cars from a Grafton coal company that obtained a contract to strip-mine on school land.