Both sides in the Los Valientes civil default case are talking
about an end to one of the most divisive issues in San Benito
history
The civil default case that has pitted the D.A. and former
elected officials and government workers against a once-anonymous
group could be nearing an end. After a lengthy discussion with
special state prosecutor Nancy Battel, Judge Harry Tobias said in a
court hearing Wednesday that it was not likely he would rule in
favor for the defendants in the case, Los Valientes, since they had
defaulted on civil charges of extortion and violation of civil
liberties. The defendants defaulted when they failed to show up for
a court appearance.
Both sides in the Los Valientes civil default case are talking about an end to one of the most divisive issues in San Benito history
The civil default case that has pitted the D.A. and former elected officials and government workers against a once-anonymous group could be nearing an end.
After a lengthy discussion with special state prosecutor Nancy Battel, Judge Harry Tobias said in a court hearing Wednesday that it was not likely he would rule in favor for the defendants in the case, Los Valientes, since they had defaulted on civil charges of extortion and violation of civil liberties. The defendants defaulted when they failed to show up for a court appearance.
Nine victims are named in the D.A.’s civil suit alleging extortion, including the group’s main target, former Supervisor Richard Scagliotti. The group made allegations of widespread county corruption in late 2003 and filed a lawsuit against Scagliotti, other members of the Board of Supervisors and the county. The suit was later dropped and refiled under a new plaintiff, Juan Monteon.
However, Tobias pressed Battel on the state’s definition of extortion, and explained that he wanted to see physical proof that it occurred. Battel said that because the victims were in fear of the actions and threats of the anonymous group, that covered the statute. But Tobias didn’t buy it.
“I’m not going to be a rubber stamp for the D.A.’s office,” Tobias said firmly. “If that were the case, you wouldn’t need judges.”
Tobias said he would further study amended declarations filed just before Wednesday’s hearing by Battel, he made it clear Battel and D.A. John Sarsfield would have to bring forth specific evidence of extortion against the victims.
Soon after that, Los Valientes attorney Michael Pekin said he was willing to accept “broad and stern restraining orders” on the Los Valientes members, and added that the group had “disbanded” two years ago. Battel did not say if she would accept that. The next hearing on the matter is March 10 at the San Benito County courthouse in Hollister at 1:30 p.m.
Just a week before, Pekin lost a motion to dismiss that he filed on behalf of Dennis Madigan. In that hearing Tobias argued long with Pekin, saying he did not agree with Pekin’s claim that Sarsfield was exerting a discriminatory prosecution against him and the others now named in the D.A.’s civil lawsuit as “associates” of Los Valientes.
Dennis Madigan is a former planning commissioner, appointed by Supervisor Reb Monaco, whom the previous Board of Supervisors fired after they discovered he was inappropriately using county letterhead in ads he placed in the local newspapers soliciting complaints against the planning department when former planning director Rob Mendiola was still at its helm. Madigan is named as being “associated” with the Los Valientes. Others named by the D.A. and the state as Los Valientes associates are District 3 supervisor candidate Richard Place, rockery owner Dave Grimsely, Supervisor Jaime De La Cruz, local restaurateur and 28th Assembly candidate Ignacio Velazquez, contractor Vince Pryor, and Pekin himself.
Money trail
A deposition recently filed in the case reveals some of the money used to finance the suit claiming countywide corruption, filed on behalf of the group by Pekin. It was Pekin who dubbed them “Los Valientes” in the lawsuit filed in late 2003.
According to his testimony in a deposition taken last month, former private investigator Dave Henderson said under oath that he met with unnamed parties at Place’s townhouse, although he did not go on to say that any funds changed hands. In another interview with Henderson’s partner, John Bohannan, the District Attorney’s office learned that the two investigators also picked up $1,500 from Grimsley in his “rock yard” on Hillcrest Road in the fall of 2003, which also was delivered to Pekin.
“I do recall receiving the cash,” Henderson said in his deposition before special state prosecutor Nancy Battel and Pekin, taken in Merced County on Jan. 20, “and I do recall transferring that money to Mr. Pekin. That’s my recollection and that’s my testimony. The meeting in the townhouse was with Place, not [Dennis] Madigan.”
Place, along with candidate for Assembly Ignacio Velazquez and District 5 Supervisor Jaime De La Cruz, fervently denied being members of Los Valientes in phone interviews with The Pinnacle two weeks ago. Place has acknowledged talking with Henderson about his concerns over county government on two occasions.
The group, revealed in the state’s amended brief, changed the face of San Benito politics through a pile of lawsuits – and, according to the state and the D.A., threats of extortion – against the county, former slow-growth supervisors Richard Scagliotti, Ruth Kesler, Bob Cruz and current Supervisor Pat Loe, and other members of the community starting in late 2003.
Other details on the Los Valientes money trail are revealed in an interview with investigator Bohannan, Henderson’s former partner in a business called Central Coast Investigations, based in Salinas. According to a report written in Jan. 2005 by the D.A.’s office, Bohannan accompanied his partner Henderson to Grimsley’s rockery in 2003. A copy of the report was attached as an exhibit to the amended brief filed by Sarsfield and Battel.
In the interview with former D.A. investigator Andy Simpson, Bohannan said that he and Henderson had two meetings “with people either belonging to or actual members of Los Valientes.”
“One meeting was in the late summer or early fall of 2003, when [Bohannan] and Henderson met with Dave Grimsley, at the ‘rock yard’ in Hollister,” Simpson wrote in the report. “At that meeting Henderson received $1,500 in cash from David Grimsley. It was [Bohannan’s] understanding, based upon what Henderson said, that this money was going to Pekin for legal expenses.”
Grimsley did not return phone messages for this story, but in news accounts elsewhere has denied making the payment.
Complaints sent to FBI, state agencies
Sarsfield and Battel have been busy amending a “prove-up hearing brief” for damages in a civil lawsuit the state won against Los Valientes last year, when the then-anonymous members did not show up in court or respond to the civil charges of extortion and unfair business practices against them. The two prosecutors are asking $75,000 for each of the nine “victims” in the civil suit, whom they say were subject to extortion and threats from members of Los Valientes. The victims named are Scagliotti, Kesler, Cruz, Supervisor Loe, District 4 candidate and former Pinnacle publisher Tracie Cone, Bob Cain of San Benito Tire Inc., county waste management director Mandy Rose, San Juan Bautista slow-growth activist Rebecca McGovern and former planning director Rob Mendiola. Last year, Mendiola was fired by the new board “without cause” after an independent investigation conducted by the Santa Clara County Counsel’s office concluded he had committed no wrongdoing during his 24-year tenure in the position. The investigation cost the county $20,000.
The Los Valientes lawsuit was dismissed in early 2004, when Pekin tried to piggyback it onto a case involving the slow-growth initiative Measure G. However, Pekin found a new plaintiff for the lawsuit: Hollister resident and bail bondsman Monteon. Pekin refiled the massive suit against the county, which included a two-volume 1,000-page report compiled by Henderson.
The pages were mostly made up of car repair receipts from San Benito Tire Inc. and Autoworks, the latter owned by Pekin client Don Kelly. One of the allegations of corruption Pekin claimed was that Scagliotti awarded a county vehicle maintenance contract to a supposed business associate, Bob Cain of San Benito Tire. The entire board approved the contract for San Benito Tire, which was the second to the lowest bidder; the lowest was Hollister Tire and Battery, but the board chose to stay with Hollister Tire because of past satisfactory performance, according to the minutes of the meeting.
It was also discovered that Cain was not a business partner of Scagliotti’s at the time the contract was awarded. At one point Cain considered buying a property of Scagliotti’s, but didn’t. The contract between Scagliotti and Cain was a simple note, written and dated on June 7, 2001, an agreement that offered a fixed selling price for the parcel to Cain for one year. Cain never took the offer and it expired a year later. Two months after it expired, Scagliotti voted along with the other board members to renew the county vehicle maintenance contract with Cain.
In his deposition, Henderson said that the Los Valientes complaint and investigative report was forwarded to the Fair Political Practices Commission, the FBI and the state Attorney General, shortly before the complaint was filed against the county when D.A. Sarsfield decided to not take action on it. Henderson also said that as far as he knows, none of those agencies have taken action against the county for any of the allegations. Sarsfield and Battel have confirmed that none of the agencies have taken action on the Los Valientes complaints, but that the FPPC’s investigation of the matter has yet to be closed.
Biased information?
Sarsfield said Place’s involvement in the saga now implicates Mainstreet Media, the publishing company that owns The Pinnacle, Free Lance, Gilroy Dispatch and the Morgan Hill Times. Place was on the editorial board of the Free Lance when that paper called for Sarsfield’s resignation and supported a failed recall effort against the prosecutor during the time when Los Valientes was most active.
Place removed himself from the Free Lance editorial board late last year when he announced he was running against Supervisor Pat Loe in District 3.
Meanwhile, Sarsfield said he now questions why Supervisor Anthony Botelho has repeatedly made public calls for his office to stop the state prosecution against Los Valientes. Botelho is closely affiliated with Place; he was Place’s appointed planning commissioner for four years, and many county watchers believe Place was a political mentor to Botelho in the years leading up to Botelho’s election to District 2.
But Botelho says his relationships to both Place and De La Cruz have nothing to do with his calling for an end to the Los Valientes prosecution.
“That’s absolutely false,” Botelho said. “I was a political person even before I knew Richard Place. Earlier in the year I was requesting that the D.A. allow us to reach resolution with the Monteon lawsuit before pursuing the identities of the Los Valientes, and whatever the outcome, at that point it would be reasonable to decide if it’s worth pursuing. All this does is delay that and it’s costing the county money.”
“De La Cruz has denied to me personally that he is a Valiente,” Botelho added. “Richard Place has too. Either they’re big time liars or something’s wrong here. I hope they’re not lying. I’d be deeply hurt and disappointed. We can’t move forward until this is put behind us. This is a tragedy for everybody in the county.”
County won’t pay for defense
Place and Supervisor De La Cruz, threatened to sue the county if officials do not agree to pay for their defense in the civil prove-up hearing.
After conducting a closed session on the matter Tuesday, county supervisors voted unanimously against the demand. De La Cruz recused himself from the discussion and voting, but the rest of the board also demanded that Supervisor Pat Loe recuse herself from the session because she is named as an alleged victim of Los Valientes. Loe did.
Bill Marder, attorney for Place and De La Cruz, sent a letter to County Administrative Officer Susan Thompson last week demanding that since Place has been named as a member of the Los Valientes, the county must defend him in the state’s civil lawsuit against the group.
Marder sent a similar letter to the county on behalf of De La Cruz. His next move is to seek a court order.
When asked last week if his clients were LV members, Marder said, “Absolutely not. Richard and Jaime are absolutely not LV members and had nothing to do with any of that stuff. But rights can be lost due to delay. So if any of these folks being accused don’t act promptly, they can lose the opportunity to prove they’re not part of Los Valientes.”
District Attorney John Sarsfield said the LV method of threatening to sue is standard procedure for the group.
Alleged acts of extortion
Now Battel and Sarsfield are adding more fuel to the political firestorm; they are making public several letters Pekin had sent to county attorney Nancy Miller in 2004 threatening unorthodox actions if Sarsfield were to attempt to indict his clients, De La Cruz and Velazquez, for election fraud during the March 2004 primary.
Through a California Public Records Act request made to the D.A.’s office, The Pinnacle has obtained copies of faxes and responses dated between May and November 2004, allegedly sent between Pekin’s office and the attorney representing the county in the Monteon case, which has been put on hold until the state’s civil matter can be resolved.
On May 20, Pekin had apparently called county attorney Nancy Miller and had left an anonymous message, but she said she recognized Pekin’s voice.
“Mr. Pekin stated that he was planning on filing a motion this morning for the recusal of the San Benito County District Attorney in any [matter] involving charges before the Grand Jury related to the March 2004 election,” Miller had written in a fax sent to D.A. Sarsfield.
Pekin had faxed her a sampling of a brief he intended to file, with instructions that Miller re-fax it to the D.A. It was an incendiary allegation against Sarsfield – written in legal format – claiming he was having an extramarital affair and that his office was co-opted by members of the local chapter of the League of United Latin American Citizens.
Miller responded to Pekin’s fax with one of her own:
“[Y]ou indicated in a telephone call to me that if the criminal grand jury hearing on June 1 through June 3 was not disbanded, or cancelled, by the District Attorney, you would file the proposed writ in an attempt to embarrass the District Attorney…” Miller wrote in the fax to Pekin. “…I am authorized to tell you the District Attorney has agreed not to take the election investigation to the Grand Jury. However, you need to be advised that…the District Attorney and I now believe that your actions this morning are so serious that they may be cause in and of themselves for legal action to be taken against you, and any other person on whose behalf you may be acting.”
Pekin faxed back a message the next day, that read, “The slightest act of aggression, any further derogatory remarks by Mr. Sarsfield, yourself, or anyone associated with your positions will cause us to respond immediately and let the community judge our conduct.”
Miller and Sarsfield forwarded the faxes from Pekin to the FBI and the state Attorney General’s office. Neither office has taken action on the matter.
Another incident of alleged extortion, according to records obtained from the D.A.’s office, occurred when Pekin sent a letter by fax dated March 18, 2004, to the attorney of San Benito Tire proprietor Bob Cain. In it, Pekin told attorney Harry Damkar that if the long-time car repair shop owner didn’t relinquish the county vehicle maintenance contract, he was “going after Cain.”
“This theory for Monteon and me to go after Cain is tempting because we are ‘private attorney general’ and we stand to split any recovery from Cain with the County,” he wrote to Damkar. Pekin then stated that if Cain were to give up the contract, Pekin would not sue him for the amount of money he has made for having the county contract.
On Nov. 30, 2004, Pekin once again told Miller that if she didn’t agree to certain legal terms, he would follow a “scorched earth” plan to the press. In the Monteon case, Pekin demanded that depositions with county employees be postponed, that the trial be moved to an unspecified date and that the two have a case management conference – presumably to settle the case out of court.
Miller turned him down.
Regret for past ‘sins’
In his deposition, Henderson expressed regret at being involved in the Los Valientes saga.
“[W]e would all like to unring the proverbial bell or stand the dominos back up,” Henderson said. “We can’t do that. We are left to live with what we did in a time – fixed in a time in the past.”
Special state prosecutor Battel said to Henderson that the Los Valientes claims and his investigative report on the matter had led to much litigation and had had “a detrimental effect on many people’s lives….”
Henderson responded, “Exactly. I think what I’m doing is I’m clarifying my intent, and the original sin, if you will, of this two-volume compilation of information.”
There were also moments of levity. At one point, Battel was questioning the former investigator about a conversation he had had with former Pinnacle publisher Cone during the course of his corruption-finding mission.
“Excuse me, does Mr. Pekin’s snoring interrupt your train of thought?” Battel asked him. Then she turned to the apparently napping Pekin and said, “Mike, do you want some coffee?”
“Just keep going,” Pekin said.
Many of the nine named victims in the civil case have said they intend to give any monetary damages they win to local charities, including Supervisor Loe, Cone, Scagliotti and former Supervisor Kesler.
“I am so pleased I’m not on that board anymore,” Kesler said. “At first it kind of broke my heart that people didn’t want me.”
Kesler said she plans to give any damages she receives to local schools.
