San Bernardino County taxpayers paid $2.1 million too much in
1996 to buy out contracts to operate trash dumps in the local mountains
because of lies that then-County Administrative Officer James Hlawek told, a
county attorney testified Tuesday.
The buyout of
businessman Joseph Harich's trash contracts, as alleged in a county lawsuit,
illustrates how bribes to government officials cost taxpayers millions of
dollars that could have been spent on libraries, roads and other essential
services.
The controversy
over the Harich buyout stems from the county paying $2.1 million that the
county contends should have been paid by its landfill operator, Norcal Solid
Waste Systems Inc.
Harich had the
previous contract to operate the Heap's Peak refuse transfer station and the
Big Bear landfill in the San Bernardino Mountains.
Deputy County
Counsel Robert Jocks testified that he would have raised more questions
about the buyout if he had known back in 1996 that Norcal officials were
secretly paying Hlawek thousands of dollars in cash and credit-card
payments. Norcal operated county landfills under a 1995 contract worth more
than $100 million.
"I would have
immediately gone to my boss and said, 'We've got a big problem,' " Jocks
said. "That would have been a tremendous red flag."
The deal was
detailed in the seventh day of testimony in San Bernardino County's civil
lawsuit to recover millions of dollars from individuals and businesses that
it accuses of bribing officials and defrauding the government. In testimony
Hlawek described the clout of what he called, the "Good Old Boys Network"
that controlled county decisions for many years.
The county case
states that its contract required Norcal to pay the cost of Harich's
contracts or buy him out.
However, Hlawek
agreed in November 1996 with Norcal Vice President James Kenneth Walsh and
Norcal consultant Harry Mays to claim that there was a mistake in the Norcal
contract and that the county had actually agreed in prior negotiations to
buy out the Harich contract, Hlawek testified last week. The resulting
buyout cost taxpayers $2.1 million more than the county might otherwise have
had to pay, the county case alleges.
The county is
suing Hlawek, Mays and Walsh to repay the $2.1 million. Norcal settled out
of the lawsuit in 2000, paying $6.56 million. Harich is not a defendant.
After the buyout
was completed, Harich gave four parcels of land in the Running Springs area
to Mays' company, Bio-Reclamation Technologies, for Mays' role in mediating
the buyout, Mays attorney Randall Waier said.
Hlawek had
testified that Mays told him the four lots were intended to go to Hlawek,
Mays, Walsh and former San Bernardino County Supervisor Bob Hammock, a
Norcal consultant.
In testimony
Tuesday, Hlawek said he did not try to get Norcal to buy out the contracts
under the original 1995 landfill operating agreement with Norcal because of
Harich's friendships with then-Supervisor Barbara Riordan and paving company
owner Martin Matich, a prominent campaign donor to county figures.
"I felt that
because of those relationships with certain people in the county,
particularly those two, that Harich would hold the county up for more than
those contracts were worth," Hlawek said under questioning from Waier.