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As part of the
ongoing investigation into public corruption in the County of San
Bernardino, a federal grand jury in Los Angeles today returned a superseding
indictment against San Bernardino County Supervisor Gerald Eaves and Orange
County businessman W. Shepardson McCook, who are accused of participating in
a bribery scheme that led to the construction of billboards in the City of
Colton.
The 58-count indictment alleges that Eaves and McCook conspired with two
members of the Colton City Council, the San Bernardino County chief
administrative officer and a second Orange County businessman to pay bribes.
According to the conspiracy count, the co-conspirators caused people to
travel in interstate commerce and to use interstate wires and the mails to
violate California state bribery laws.
The scheme outlined in the 37-page indictment alleges that McCook cultivated
several elected officials, gave them bribes to approve the construction of
huge billboards at the intersection of the I-10 and I-215 freeways and later
shared some of his substantial profits with the CAO and the other
businessmen.
McCook, the president of the Oakridge Corporation and the owner of Arcturus
Outdoor Advertising Company, allegedly hatched a plan in 1992 to construct
the billboards and to sell them at a substantial profit. As part of the
plot, the conspirators had to:
• obtain approval from the County Board of Supervisors, which oversaw flood
control land where the billboard would be built;
• obtain approval from County flood control officials;
• obtain approval from the City of Colton;
• obtain approval from the California Department of Transportation to
construct the billboards adjacent to the two freeways; and
• later obtain approval from the County to sell the billboards.
As part of the plan, Eaves allegedly solicited vacations, and McCook
allegedly provided vacations in Las Vegas to Eaves, his relatives and his
associates. Additionally, McCook allegedly paid cash bribes to officials
with the County and with the City of Colton in exchange for their official
support of the scheme.
Eaves, 62, of San Bernardino, and McCook, 55, of Newport Beach, are
additionally charged with five counts of using interstate wires to commit
bribery.
The indictment charges Eaves alone in six counts of “honest services” mail
fraud for defrauding the people of San Bernardino County of their right to
his honest services in relation to his votes on the billboard project by
accepting the gifts from McCook and by using his official position to assist
McCook without disclosing the bribes being paid by the businessman.
McCook is additionally charged with eight counts of using the mails or the
wires to commit bribery, seven counts of “honest services” wire fraud, and
31 counts of money laundering.
The indictment lists, but does not charge, four individuals as
co-conspirators. All four have previously pleaded guilty to federal bribery
charges. Those co-conspirators are:
• Allan Steward, 55, of Laguna Beach, a developer of commercial real
estate;
• Abe Beltran, 69, of Colton, who was a member of the Colton City Council
from 1992 through 1996;
• Donald Sanders, 44, of Colton, who was a member of the Colton City
Council from 1994 through 2001; and
• James J. Hlawek, 55, of Carlsbad, the county administrative officer from
June 1994 until August 1998.
All four of these co-conspirators are scheduled to be sentenced in June.
The bribes in this case surround a project to construct seven billboards in
the City of Colton, a project that earned McCook $4.4 million when his
company sold five of the billboard in 1997.
In relation to his support of the project, Eaves allegedly solicited and
received bribes in the form of vacations that were taken by himself, members
of his family, friends and associates. The indictment specifically alleges
that McCook gave Eaves numerous vacations that included stays for himself
and others at the Stardust Hotel in Las Vegas. Furthermore, the indictment
alleges, Eaves took some of the vacations himself and failed to tell his
constituents about the gifts when he filed Statements of Economic Interest
with the California Fair Political Practices Commission.
Eaves voted in favor of leasing the County-owned property to McCook’s
company, and then Eaves voted three additional times in favor of amendments
to the agreement that were favorable to Oakridge. In 1997 Eaves voted in
favor of a proposal that allowed Oakridge to sell five of its billboards,
earning $4.4 million.
The indictment alleges that the Colton City Council approved the project
after McCook paid bribes to Sanders and Beltran. McCook needed the support
of the Colton City Council because City ordinances prohibited the
construction of billboards within 500 feet of a freeway. Additionally, City
laws prohibited billboards with a height of more than 45 feet, with a sign
area of more than 100 square feet, and within areas designated by the City
as “permanent open space.” These prohibitions could be overcome if the
Planning Commission or the City Council granted a “major variance.” The
billboards proposed by McCook needed a “major variance” because they would
have been prohibited under any of the four reasons above (for example, each
billboard was to be 675 square feet).
On July 16, 1996, the Colton City Council granted the “major variance” and
approved the billboard project within weeks of its own Planning Commission
turning down the application.
Mere weeks after the Colton City Council approved the billboard project,
Beltran accepted $20,000 in cash from McCook. In early 1997, McCook
allegedly paid Sanders $6,000 in cash in exchange for his support of the
billboard project and another $8,500 after the billboards were sold.
According to the indictment, McCook paid Hlawek $15,000 in cash after the
billboards went up, and McCook paid another $20,000 after the billboards
were sold.
Steward, who at one point was a part-owner of Oakridge, received $250,000
after the billboards were sold.
An indictment contains allegations that a defendant has committed a crime.
Every defendant is presumed innocent until and unless proven guilty beyond a
reasonable doubt.
The conspiracy count and the substantive charges in the indictment carry a
maximum penalty of five years in federal prison; the money laundering counts
carry maximum penalties of either 10 or 20 years in prison.
Eaves and McCook will be arraigned on the superseding indictment later this
month.
Today’s grand jury indictment supersedes an indictment returned by a grand
jury in August 2001, portions of which were dismissed by United States
District Judge Manuel Real in January.
The superseding indictment is the result of an ongoing investigation by the
San Bernardino County Corruption Task Force, which is comprised of the
United States Attorney’s Office, the Federal Bureau of Investigation, and
the San Bernardino County Sheriff’s Department.
Persons with information about government corruption in San Bernardino
County may contact the San Bernardino County Corruption Task Force at (909)
682-7411.
Release No.
02-059 |
