When a county official was exposed as a partner in a billboard company while
overseeing the county's approval of that company's sign project, then-county
chief James Hlawek managed a coverup to save the man's career, Hlawek
Hlawek told of writing a 1996 memo that exonerated his
employee, Tim Kelly, of any wrongdoing. He gave the testimony during the
third day of San Bernardino County's civil trial against the individuals and
businesses it accuses of defrauding taxpayers of millions of dollars.
Kelly, 58, of Newport Beach declined to answer questions
under oath Tuesday, invoking the Fifth Amendment.
administrative officer James J. Hlawek testified Tuesday
in the gifts-for-influence bribery trial.
Hlawek said he and Kelly spoke often from 1994 to 1997
about Kelly's receiving free hotel stays and other things of value from
billboard company owner William S. "Shep" McCook.
The incident illustrates the county's case that in the
mid-1990s, some top county leaders used their official positions to line
their own pockets and that some elected county officials, including
Supervisor Jerry Eaves, knew about some of the conflicts of interest.
The county lawsuit seeks the $4.4 million that McCook
received when he sold the billboards near the interchange of Interstates 10
and 215 to Eller Media. To make the sale, McCook needed the supervisors'
permission to assign his lease of the county Flood Control District land on
which the billboards stood to Eller.
In 1994, the Board of Supervisors approved the initial
lease of land for nine billboards on county-owned land near the freeway
interchange in Colton.
A 1996 newspaper report revealed that Kelly, who then
supervised the county's Flood Control District and Real Estate Department,
had filed a 1994 statement of economic interest form indicating he was a
stockholder and director of McCook's Oakridge Corporation.
Such a relationship is not permitted under the Fair
Political Practices Act, which requires public officials to refrain from
involvement in their agencies' decisions if they might make money on the
Kelly denied any conflict then, stating that he owned
Oakridge stock from Dec. 20, 1992, through March 9, 1994, and that he did
not own any by the time lease talks began in April 1994.
He blamed his secretary for mistakenly including the
information on his disclosure statement.
Hlawek supported Kelly in his memo to the Board of
Supervisors. He wrote that the newspaper reports were inaccurate and that
Kelly had no conflict. What Hlawek was concealing, he testified Tuesday, was
that he, Kelly and Supervisor Eaves had all accepted free trips to Las Vegas
from McCook and that each knew about the others' trips.
Hlawek said McCook confided that he had given free stays
at the Stardust Hotel in Las Vegas to Kelly, Eaves and former Supervisor
Marcia Turoci during a time when McCook's billboard deal was under
consideration by the board between 1994 and 1998. McCook took the stand
Tuesday and declined to testify.
Hlawek said he did not inform other county supervisors of
the stays because "I knew that Mr. Eaves and myself and Tim Kelly would be
in trouble. I believed the free stays were inappropriate. Mr. Eaves
indicated to me that he had not reported it (on his statement of economic
interest) so I presumed that there would be severe consequences."
Eaves pleaded guilty in January to engaging in a
conspiracy with McCook involving the billboards and free hotel stays and
McCook's billboards along Interstate 15 to Las Vegas
advertise the Stardust Hotel and Casino, and part of McCook's payment was in
the form of hotel credits.
When Hlawek stayed there in January 1997 with his wife and
in-laws, they used the Presidential Suite at McCook's expense, Hlawek said.
Later that year, McCook gave Hlawek $35,000 in cash and
nine marijuana cigarettes.
Hlawek said he wasn't surprised by the payments because
McCook had told him, "that there would be a bigger load of fish if I helped
Kelly had worked for the county from 1972 to January 2000.
It was in late 1999 that the federal prosecution of Hlawek, his predecessor
Harry Mays and others revealed widespread bribery incidents involving top
county officials and some of San Bernardino County's largest contracts.
The Board of Supervisors decided not to sue Kelly with the
others when the case was filed in 2000 because county lawyers had not
amassed enough evidence, Chief Deputy County Counsel Michael Sachs said.
Eaves, a no-show for his expected appearance in court last
week, is scheduled to testify today, cutting short a Wyoming vacation to
comply with the county's subpoena, Sachs said.