Telink Scandal Trial Begins in U.S. Court : 5 in County Telephone Bid Scheme Face Limited Charges of Mail Fraud

The long-delayed trial involving a rigged-bid scandal that rocked San Diego County government three years ago, forcing half a dozen officials to resign, began this week in U.S. District Court, where jury selection is under way.

The trial, which is expected to last four months, involves an alleged scheme to influence the award of a $24.5-million county telephone contract to Telink Inc. in 1982.

It is also the first trial for any of the original 13 defendants and two corporations indicted on numerous racketeering and fraud charges in 1984.

So far, three defendants have pleaded guilty, as have the two corporations, Telink--a now-defunct Anaheim company--and its parent firm, Burnup & Sims Inc. of Florida, which pleaded no contest to fraud and racketeering charges and agreed to pay $4.8 million to various government agencies, including $3.5 million in restitution to the county.

On trial before Judge Earl Gilliam are five of the remaining 10 defendants, including two former high-ranking county officials: Abraham Stein, once the county’s chief of communications, who has since been convicted on an unrelated charge of conspiring to import heroin from Nepal, and H. Larry Gonzales, who was fired as director of the General Services Department.

While the five defendants face numerous fraud and racketeering charges, the trial will focus only on charges of mail fraud, as ordered by Gilliam in a pretrial ruling. The judge severed all other charges for the purposes of this trial, although they are still pending.

The indictments filed in 1984 described a scheme involving the use of cocaine, prostitutes and bribes to influence the multimillion-dollar contract award to Telink. Last year, Dist. Atty. Edwin Miller called the case the “most massive fraud against a governmental entity ever perpetrated in San Diego County history.”

The scandal had its roots in a plan proposed in 1980 by Stein, then head of the county’s communication system. He wanted to create an elaborate phone system that would link county offices by microwave transmissions and pay for itself in 7 to 10 years. Stein was forced to resign a year later due to unrelated allegations of misconduct, but the telephone system plan moved forward and Telink was awarded the contract in June, 1982.

Investigators contend that, even though Stein was out of county government, he controlled the actions of Gonzales, who was in charge of the General Services Department, a key agency in evaluating the plan.

Disturbed by hints of corruption, San Diego business leaders called for a county grand jury investigation. The inquiry, however, soon expanded into a joint probe by federal and county investigators and prosecutors. The county canceled the Telink contract in 1983.

Last November, a principal defendant in the case, Robert St. Pierre, former vice president of the bankrupt Telecommunications Design Corp. (TDC) of Orange, a consulting firm hired by the county to evaluate the bids for the microwave telephone system, pleaded guilty to one count of fraud and agreed to cooperate in the prosecution of the remaining defendants.

St. Pierre, who now sells used cars in Orange County, admitted that he and his company had received kickbacks from Telink to assure that Telink received the lucrative county contract. He is expected to be a key witness in the trial.

Others who have pleaded guilty are David Stein, brother of Abraham, who was charged with one count of mail fraud and sentenced to 90 days in jail, and Tom Bell, a salesman for the UCS telecommunications firm, who received a three-year sentence for perjury in his testimony to the grand jury.

Joining Gonzales and Abraham Stein as defendants in the trial are Don Woodaman, former president of the TDC consulting company; James Linder, a former Telink marking executive, and Robert Schreiber, an official of Telecomm Consultants Inc., another consulting company hired by the county that was involved in the Telink contract.