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School Bid Case Returning to Court : New Charges Sought Against 3 on Board

Times Staff Writer

The Orange County district attorney’s office is scheduled to argue Friday in appeals court that “willful misconduct” charges should be reinstated against three Orange Unified school board members in connection with a major kickback scandal that rocked the district 3 years ago.

The eventual ruling has implications for elected officials throughout the state, according to state Assistant Atty. Gen. Harley Mayfield. The district attorney’s office intends to argue that the Legislature in 1971 extended the time frame for bringing misconduct actions against public officials.

For the record:
12:00 AM, Mar. 31, 1989 For the Record
Los Angeles Times Friday March 31, 1989 Orange County Edition Metro Part 2 Page 2 Column 5 Metro Desk 1 inches; 30 words Type of Material: Correction
A story about Orange Unified School District board members was accompanied by three photos in Thursday’s Times. The photo captioned Robert J. Elliott was actually that of another person. Above is the correct photo.
PHOTO: Robert J. Elliott

The three board members--Ruth C. Evans, Joe J. Cherry and Robert J. Elliott--were accused by a grand jury in June, 1987, of “willful misconduct in office” for allegedly not minding the store while thousands of dollars in kickback contracts were negotiated from the Orange Unified School District headquarters.

But a Superior Court judge, citing case law, threw out the case because the alleged misconduct took place in a term of office the school board members had already completed.

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The Orange County district attorney’s office appealed the decision, arguing that a little-known state law passed in 1971--but never tested in court--extends the time frame for prosecuting a public official for misconduct in office.

“This case has statewide implications for the term of liability for public officeholders,” said Orange County Deputy Dist. Atty. Eric W. Snethen. “The case is significant because no officeholder should be able to have an insurance policy against prosecution for something in a previous term of office.”

Snethen said he would argue that the Legislature intended the 1971 change to ensure that an officeholder does not get off free just because a term was completed.

“It often takes longer than a term of office for offenses to be discovered,” he said.

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But Los Angeles attorney Mark A. Borenstein, who is representing the three board members, said the three are still immune from prosecution. His legal brief contends that the Legislature in 1971 did not intend to change the law to allow for prosecution for a previous term of office.

The Orange County district attorney’s legal brief, however, contains a letter from the author of the legislation, former state Sen. Robert J. Lagomarsino of Ventura. Lagomarsino’s letter in 1971 urged then-Gov. Ronald Reagan to sign the legislation. Lagomarsino wrote, " . . . The bill extends the statute of limitations to allow removal of an officeholder for malfeasance which is committed during a previous term.”

Borenstein, in his legal brief, countered that the Legislature did not intend to change the law in the way that Lagomarsino interpreted his legislation. " . . . A single legislator’s statement of intent should not be used to discern the entire Legislature’s intent (in passing a bill),” Borenstein’s legal brief says.

Decision in 3 Months

It will be up to the 4th District Court of Appeal in Santa Ana to decide what the law actually means. Attorneys for both sides will give oral arguments to the appeals court at 9:30 a.m. Friday. Snethen said a decision is expected within 3 months.

If the appeals court agrees with the Orange County district attorney’s office, the school board members will again face prosecution--and possible loss of office, Snethen said.

“I think we have the legislative documents to prove our arguments,” he added.

However, school board member Evans said in an interview Tuesday that she believes no drastic change will come from the appeals court. “I have confidence that things will work out all right,” she said.

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Elliott, contacted by phone Wednesday night, said he had no comment on the appeals court hearing. Cherry could not be reached for comment.

At issue in the dispute is the biggest school scandal in Orange County in the past decade. The scandal, which is still unresolved because no case has yet gone to trial, involves the alleged theft of thousands of dollars of public money through bid rigging and kickbacks in Orange Unified School District in the early 1980s. Orange Unified has about 25,000 students and serves all of the cities of Orange and Villa Park and parts of Anaheim and Santa Ana.

According to the 1987 grand jury, a former school district employee and his wife masterminded the alleged bid-rigging scheme, with the help of two Orange contractors. The grand jury, on April 1, 1987, indicted former Orange Unified school district maintenance supervisor Steven L. Presson, his wife Elizabeth, and contractors William A. Gustafson and Ronald Brock. The four were indicted on charges of misappropriation of public funds. Their case has been delayed repeatedly and still has not gone to trial. Lawyers for the four have said the delays are necessary because the case is so complicated.

Money or Services

According to the grand jury and court documents, Steven Presson used his position to steer rigged contracts. The grand jury indictments charged that Presson and his wife received kickbacks, in money or services for their home.

The indictments against the Pressons, Gustafson and Brock are for criminal felonies, which could result in prison sentences.

By contrast, the 1987 grand jury did not indict the school board members or accuse them of criminal misdeeds. Instead, the grand jury invoked a seldom-used state law that allows the ouster of elected officials, without any other penalty, for alleged “willful misconduct in office.” The civil action would involve a trial, and if the school board members were found guilty, the judge would be required to dismiss them from office.

The grand jury charged that four Orange Unified school board members who were in office in the early 1980s did not do their duties properly. Specifically, the grand jury said the four board members failed to make sure state law regarding school contracts was followed. Had the school board members been properly performing their duties, the grand jury contended, the alleged bid rigging in the district could never have taken place.

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The fourth school board member accused by the grand jury was Eleanore Pleines. She resigned on July 17, 1987, and the “willful misconduct” accusation against her was dropped. In grand jury testimony subsequently made public, former Orange Unified School District Supt. Kenneth Brummel said Pleines had urged him to investigate how maintenance and operation contracts were negotiated.

Investigation Begun

Brummel, who took over as superintendent in 1984, said he heeded Pleines’ advice and did launch an investigation. He said that in the fall of 1984 he found documents that made him suspicious. Without consulting the school board beforehand, Brummel in October, 1984, called in the Orange city police to investigate. Police and the district attorney’s office then undertook an investigation that took more than 2 years and resulted in the 1987 grand jury indictments.

In the meantime, the seven-member school board, by a 5-2 vote, decided not to keep Brummel beyond his contract and in effect fired him in October, 1986.

Three of those on the school board during the grand jury’s 1987 investigation had not been on it during the alleged bid rigging in the early ‘80s and were not accused of any wrongdoing by the jury.

The allegedly rigged contracts involved millions of dollars of work, but less than a million dollars’ loss resulted, according to Orange Unified officials. Last July, the school district filed civil suits against Steven Presson, several contractors and five insurance companies that allegedly held performance bonds for the questioned contracts. The school district’s civil suits estimated that $689,000 in public funds were lost because of the allegedly rigged contracts, and the suits sought to recover that amount. Those cases are still pending.


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