Jaramillo Ignored Warning, D.A. Says

Former Assistant Sheriff George Jaramillo ignored Orange County lawyers’ advice when he used department resources to stage demonstrations for a private company, not only by collecting thousands of dollars as a consultant but also putting himself in a position to earn more than $640,000 if the company were sold, Dist. Atty. Tony Rackauckas said Thursday.

At a news conference, Rackauckas outlined some of the key events and evidence that he said supported the charges filed Wednesday against Jaramillo and his sister-in-law, Erica Hill, in a corruption investigation.

“The taxpayers will have their day in court,” Rackauckas said.

Pete Scalisi, one of the attorneys representing Jaramillo, said he could not comment on anything Rackauckas said at the news conference because he had not seen it.

“But George is innocent,” he said. “He’s given many years of dedicated service as a law enforcement official, and I know he looks forward to clearing his name in court. I’m 100% confident he will be cleared.”

Jaramillo, who was fired six months ago, could face up to nine years in prison on six felony counts of misappropriation of public funds and four misdemeanor conflict-of-interest charges. Hill could face up to three years on three counts of misappropriation of public funds for allegedly helping him. Both pleaded not guilty to the charges and were each released on $25,000 bond. Their next court date is Wednesday. Records show the investigation began 10 months ago, after Charles H. Gabbard, the owner of CHG Safety Technologies, called Rackauckas’ office to report that Jaramillo had worked as a consultant for his company.

During the investigation, prosecutors learned that county counsel had warned Jaramillo in a written legal opinion on Nov. 6, 2000, that he could not represent the Sheriff’s Department in dealings with any firm from which he received more than $300.

In the months before he received the warning, he collected $18,000 in two checks as a consultant for CHG, according to the district attorney’s office. In the following two years, Jaramillo received an additional check for $7,000 and also signed a confidential agreement with CHG stating he would receive more than $640,000 if the company were sold, Rackauckas said.

Prosecutors allege that from 2000 to 2002, without revealing his financial stake in CHG to Sheriff Michael S. Carona or anyone else in the department, Jaramillo arranged six demonstrations to showcase a device that the company had developed to disable cars during high-speed chases, misusing deputies from a specialized patrol unit, squad cars, helicopters and other county equipment.

Rackauckas said Thursday that his investigators had found no evidence that Carona, whowas interviewed several times, knew anything about Jaramillo’s business relationship with the company and learned that Jaramillo was on CHG’s payroll only days before he fired him.

But the question of whether Jaramillo properly disclosed his business ties to CHG remains murky.

Jaramillo has said Carona was aware of and approved his relationship with CHG. Economic-disclosure statements filed with the county clerk show that Jaramillo reported the $25,000 he and his wife, Lisa, were paid in 2001 and 2002.

Sheriff’s spokesman Jim Amormino said Thursday that Carona was not required to read the disclosure statements. Jaramillo was trusted as Carona’s top aide to follow the “strict policies and procedures,” Amormino said.

County spokeswoman Diane Thomas-Plunk said no one on the county level reviewed the reports. She said there was no state law charging any person or agency with reviewing such documents, and that the role of the clerk’s office was to serve as a repository for public inspection.

“It is a self-policing kind of activity,” she said. “The primary purpose of the conflict-of-interest statements is to have them available for any member of the public to obtain and review them.”

Thomas-Plunk also pointed out the written legal opinion Jaramillo received from county counsel warning him of the conflict.

John Gladych, a lawyer for CHG, downplayed the significance of the contract that Rackauckas said would have netted Jaramillo $640,000, calling it a “proposal that never went anywhere.”

That contract was also signed by former Assistant Sheriff Don Haidl, who resigned last week, and Newport Beach businessman Harold Street.

Jaramillo, Haidl and Street made up an “executive investment committee” that was supposed to find a buyer for CHG. The three men were supposed to be paid on an increasing scale, depending on the amount paid for the company.

If the company were sold for $2 million, they would be paid a total of $200,000. If the company were sold for $7.5 million, Jaramillo, Haidl and Street would earn $1.9 million.

“It was a one-page proposal that Gabbard signed with the three men. They were supposed to find a buyer, make a presentation, but any expenses they incurred while doing this came out of their pockets. This agreement was good for six months, but the proposal never went anywhere,” Gladych said.

District attorney spokeswoman Susan Kang Schroeder said investigators knew of Haidl’s involvement with CHG. “But we don’t have any evidence that he engaged in the misappropriation of public funds or engaged in conflict of interest,” she said.

Gabbard, a one-time Newport Beach City Council candidate with a criminal record, has been granted immunity in the case. He acknowledged earlier this year that he steered thousands of dollars into Carona’s 2002 reelection campaign by offering stock in exchange for donations.

Rackauckas said his office had decided not to file criminal charges in that case and had passed the case on to the state Fair Political Practices Commission, which has no enforcement powers and is limited to imposing administrative penalties.

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JaramilloÕs ties to CHG

The Orange County district attorney filed felony and misdemeanor charges Wednesday against former Assistant Sheriff George Jaramillo because of his dealings with CHG Safety Technologies. A timeline of events related to the case was released by the district attorneyÕs office Thursday:

2000 March 16: Sheriff Michael S. Carona authorizes a product demonstration at El Toro Marine base using department resources to test and evaluate a laser technology designed by CHG Safety Technologies to help law enforcement stop high-speed pursuits. The company is owned by Charles Gabbard. July 26: A Òconfidential disclosure agreementÓ is signed by Jaramillo and Gabbard for CHG. Aug. 30: Jaramillo stages a demonstration of CHG products using sheriffÕs equipment and personnel at the Orange County Fairgrounds. Sept. 13: Jaramillo stages a demonstration of CHG products near Irvine Regional Park using sheriffÕs equipment and personnel. Oct. 15: Gabbard/CHG writes a $10,000 check to Jaramillo, but voids that check and writes another for $10,000 to JaramilloÕs wife, Lisa. Oct. 23: Jaramillo gets sister-in-law Erica Hill a job at CHG. She is hired as asecretary and moves up in the company, eventually becoming chief operating officer. Nov. 3: A consulting agreement is signed between Jaramillo and Gabbard/CHG. Gabbard/CHG pays Jaramillo $8,000. Nov. 6: Orange County counsel speaks with and writes a legal opinion informing Jaramillo about conflict-of-interest law. Jaramillo is informed he cannot participate in any dealings between a company from which he receives more than $300 and the county or the SheriffÕs Department. 2001 Jan. 4: Jaramillo stages a demonstration of CHG products using sheriffÕs equipment and personnel. Jan. 31: Jaramillo orders a deputy sheriff to run a criminal record check on Gabbard, which reveals his felonious history. The history would make it difficult to successfully market CHG products. Feb. 1: Gabbard/CHG pays Jaramillo $7,000. March: An Òexecutive investment committee documentÓ naming Jaramillo is drawn up by CHG. It states Jaramillo could personally receive more than $640,000 if CHG were to be sold. April 26: Jaramillo stages a demonstration of CHG products using sheriffÕs equipment and personnel. Hill helps Jaramillo. 2002 April 8: Jaramillo stages a demonstration of CHG products using sheriffÕs equipment and personnel. Hill helps Jaramillo. June 21: Jaramillo stages a demonstration of CHG products using sheriffÕs equipment and personnel. Hill helps Jaramillo.

NOTE: All CHG product demonstrations in 2001 and 2002 took place at the Orange County Fairgrounds.

Source: Orange County district attorneyÕs office