NEWS

From the County of San Bernardino

FOR IMMEDIATE RELEASE

July 25, 2000

For more information, contact

County Public Information Officer David Wert

(909) 387-4082

dwert@cao.co.san-bernardino.ca.us

County to collect more than $6.5 million in settlements

More than $6.5 million will soon be deposited into San Bernardino County coffers as the result of a settlement the county Board of Supervisors reached today with Norcal Waste Systems Inc. in a lawsuit filed by the county on June 8.

The county today also entered into a separate agreement with the law firm of Hinshaw & Culbertson, in which the firm will pay the county $25,000.

The $6.561 million settlement with Norcal in itself represents a substantial stride in the county’s effort to resolve the claims outlined in the June 8 lawsuit and more than recoups the cost of the county’s investigation and litigation.

Former Norcal/San Bernardino Inc. vice president Kenneth James Walsh and former Norcal consultant Harry M. Mays, a former county administrative officer, are named and remain as defendants in the county’s June 8 lawsuit. Norcal has also stated that it intends to seek damages from Walsh and Mays, and today’s settlement calls for the company to pay the county half of the net proceeds it recovers from them.

“This is a major step forward in the county’s effort to recover from this scandal and win back the people’s faith in county government,” said Board of Supervisors Chairman Jon D. Mikels. “We have a lot of work left to do, but these settlements show that the county is serious about putting itself back on the right track.”

Norcal has also agreed not to bid on a new county landfill contract for at least five years. The county has agreed to dismiss Norcal from the suit and to give Norcal/San Bernardino Inc. employees an opportunity to interview for jobs with the new landfill operator or the county’s Waste System Division.

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Norcal Settlement

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The settlements with Norcal and Hinshaw & Culbertson come less than seven weeks after the filing of the lawsuit, which could take at least two years to come to trial. The length, expense and uncertainty inherent in this type of litigation were among the factors that shaped the terms and timing of the county’s settlement with Norcal.

The agreement with Norcal was also crafted with the realization that the company and the county must and will continue to work together to serve the residents of San Bernardino County for about another 12 months as the search is conducted for a new landfill operator.

The settlement with Norcal covers the county’s action against both Norcal Waste Systems Inc. and its local affiliate Norcal/San Bernardino Inc. The county expects Norcal’s payment to be made within 30 days. The county acknowledges Norcal’s extremely valuable cooperation and voluntary assistance.

The county also settled with the law firm of Hinshaw and Culbertson. The firm has agreed to pay the county $25,000 -- $15,000 to cover trips one of the firm’s partners, John Larson, provided to various county employees and officials as described in the Eighth Cause of Action in the county’s suit, and $10,000 toward the cost of the county’s internal investigation.

The county has agreed to dismiss Hinshaw & Culbertson as a defendant in the suit, and acknowledges that the law firm cooperated in the county’s investigation and intends to cooperate further if necessary. The county also agreed that the settlement would not be construed as an admission of wrongdoing by Hinshaw & Culbertson. Larson was also named in the county’s lawsuit and remains as a defendant.

Attorneys for the county and Hinshaw & Culbertson began talking soon after the county filed its lawsuit on June 8 in San Bernardino Superior Court. The suit named 22 defendants and stemmed from an internal county investigation undertaken in December by the Board of Supervisors and the County Administrative Office.

The county’s internal investigation has gone further than probes conducted by any other agency to root out and expose the corruption that touched areas of county government during James Hlawek’s four years as county administrative officer ending in August 1998.

“Conducting this internal investigation and following through with these lawsuits has been very important for the county. It has allowed us to make positive changes and make progress toward recovering our losses and restoring the public’s trust,” Mikels said.

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