11.30.2006

Sac Bee - Lumber firm's out to get me

Boy, the Sacramento Bee reporter sure had the wool pulled over his eyes. Writing about Paul Gallegos as if he is a dedicated, hard working DA - time has shown just how wrong he got it in this story.

***
Humboldt DA: Lumber firm's out to get me
But foes say they're pushing a recall because he's soft on crime
By Sam Stanton, Bee Staff Writer
Sacramento Bee

EUREKA - The Humboldt County Courthouse is closed for the Lincoln's Birthday holiday, but District Attorney Paul Gallegos is there before 9 a.m., putting in another day on the job he loves.

He's dressed neatly: dark pants and suit coat over a knit sweater, shined shoes. And he's very polite as he prepares to return 48 phone messages that undoubtedly will include vitriolic crank calls.

Miles away, in a makeshift office filled with files aimed at destroying his year-old political career, there is another Gallegos on display.

This one comes in the form of a life-size photo cutout of the 41-year-old Democrat. He's dressed casually and is in bare feet. Someone has placed a dreadlock-style wig on his head, and topped it with a floppy hat.

On the wall is a white board where someone has written, "20 days to go. URGENT."

The 20 days are up March 2, when voters will decide whether the district attorney they elected just over a year ago should be recalled from office.

His opponents say the issue is simple: He's soft on crime.

Gallegos says that's hogwash, that there's only one issue at play, a sinister one: The biggest private employer in town, Pacific Lumber Co., wants him out because he had the temerity to sue the company for fraud just after taking office.

"It's an affront to this community," Gallegos said during an interview in his fourth-floor office last week. "It's a national corporation that is immensely wealthy - wealthier than this entire county - and they think that because of their wealth they can come here and either rule the community or ruin it. And they don't care which."

PALCO, which the timber giant now prefers to be called, has an entirely different point of view, insisting that although it has helped move the recall forward, it has done so to help the community, not to get out from under the $20 million lawsuit Gallegos' office filed.

"It has nothing to do with the lawsuit," spokeswoman Erin Dunn said. "We have said that from the beginning. ... It's about safety issues, our community's safety."

The dispute has split Humboldt County, where the timber company employs 800 people and logging has been a way of life for decades.

As the county expands its economic base and Eureka enjoys a renaissance of sorts in its waterfront old town section, there are two distinct camps evolving: those who support PALCO and the economic engine it represents, and those who say the company has had too much power in town for too long.

Gallegos stepped into the middle of the fight in 2002, when he defeated five-term incumbent Terry Farmer after pumping $25,000 of his own money into the campaign.

Initially, he wasn't given much of a chance. He had never been a prosecutor and had lived in Humboldt County only since 1994, when he moved his successful defense attorney practice to Eureka.

His campaign promised "to make Humboldt County a safe place," and to insist "that the limitations of governmental power imposed by the Constitution are honored."

It was hardly a traditional law-and-order theme, but Gallegos won 52 percent of the vote and took office in January 2003.

Six weeks later, he took the step that some believe was political suicide. His office sued Pacific Lumber, charging that PALCO had submitted phony information in 1999 for environmental impact studies that resulted in state approval of a deal that gave the company expanded logging rights in its Headwaters Forest Preserve.

The reaction was instantaneous.

"Sonic boom," Gallegos said. "It's tough to describe to someone who wasn't here."

Talk of a recall began immediately, even though the law required that he serve in his post 90 days before a recall drive could start.

When he showed up at a Board of Supervisors meeting to ask the county to hire an outside attorney to handle the PALCO case, he found the building surrounded by logging trucks and the chamber filled with angry citizens.

"They came before the board and said, 'We're going to recall this DA, and if you appoint this civil attorney, we're going to recall you, too,' " Gallegos said.

Since then, he says, he has heard from other elected officials in the county telling him he should never have filed the suit. "They're afraid," he said. "This is too ugly, too divisive."

Gallegos, the father of three young children, said he has been confronted by citizens at the grocery store while with his kids and has had to ask school officials to ensure that the children aren't harassed because of the controversy.

Meanwhile, television commercials ridicule as lenient his treatment of the tree-sitters who regularly try to keep Pacific Lumber trees from being cut down.

All of this, he says, is the product of PALCO, which pumped $69,347 into the recall committee's bank account between Oct. 1 and Dec. 31. That accounted for about 93 percent of the total the group had raised, a proportion that spurred Gallegos' supporters to ask the state Fair Political Practices Commission last week to require that PALCO's name be included in pro-recall commercials.

Gallegos and his supporters say the massive infusion of cash allowed recall organizers to gather the necessary signatures to force a new vote.

They also claim the money allowed out-of-town petition circulators who were paid as much as $8 a signature to ensure Gallegos would face a recall; and they say PALCO's denial that its support for the recall stems from the lawsuit is laughable.

"What are they going to do, be honest?" Gallegos asked. "Are they going to say, 'We've got to recall this guy because he's suing us' ?"

The situation he faces is reminiscent of the one former Gov. Gray Davis faced last year. Voters will be asked in two weeks whether to retain him in his job, and will be asked in a second part of the ballot which of three other candidates should replace him.

He appears to be in an uphill fight. PALCO won't say how much more it plans to pump into the effort, although one recall consultant vows they will spend heavily on TV ads.

"I'm going to take him out," said Rob Flanigan, a Sacramento-based consultant who arrived in Humboldt County last week to try to finish the job recall organizers began.

Flanigan and others insist the lumber company is not trying to get out from under the lawsuit by getting Gallegos dumped. PALCO did not contribute any money until the recall committee had gathered 12,000 signatures, they note, nearly enough to have forced the election.

And the company has said that, even if Gallegos is recalled, they expect whichever candidate wins to follow through on the lawsuit.

"We want our day in court," said company spokeswoman Dunn, adding that PALCO corrected the documents in question as soon as it realized there was a problem.

Despite Gallegos' insistence that the recall is all about timber, there are other issues being raised in the race.

Recall supporters have seized upon the fact that Gallegos' chief deputy, Tim Stoen, who filed the PALCO suit, once was a principal aide to the Rev. Jim Jones of the Peoples Temple cult that perished in Guyana. Stoen's 6-year-old son died in the Jonestown massacre.

Stoen says he was Jones' political adviser and business manager in the early days of the cult, when he and others believed it was simply a group bent on helping the needy. He broke from Jones when he realized how dangerous he was, Stoen said, and tried to shut the group down before the massacre.

"I told Paul when I filed the case this was going to happen, that the Peoples Temple stuff was going to come up again," Stoen said.

But Gallegos told Stoen, who has worked under six different district attorneys in California, that such history was irrelevant to the case.

Recall supporters say Gallegos' association with someone like Stoen bolsters their argument that he is too soft to be the county's top prosecutor.

He has been criticized for increasing the number of marijuana plants the county allows under the state's medical marijuana law, a move Gallegos said simply mirrors policies in other counties.

Opponents also have raised questions about his treatment of some of the criminals who have passed through his office.

The most controversial involves Pedro Martinez-Hernandez, who early this month was sentenced to 16 years in prison for molesting his daughter over a period of more than six years.

Critics say there was evidence of 1,900 acts of molestation involving the girl, and that the district attorney should have filed a mountain of charges to ensure Martinez-Hernandez stayed in prison for life.

"To us, he's almost on the side of the defendant," said Bob Martinez, president of the Eureka Police Officers Association, which voted unanimously to support the recall.

Gallegos said he agreed to the 16-year sentence to protect the girl from having to make repeated court appearances that could harm her further emotionally.

But Martinez said there were avenues available that could have spared the girl and allowed tougher charges.

Gallegos is reflective about the recall battle, saying that if he loses he can leave the $109,000-a-year job and make much more by returning to his life as a defense attorney.

But he'd prefer to stay, he says, because he feels a duty to do the job right - and that included filing the lawsuit even though he says he knew he would be attacked for the move.

"They clearly live by the philosophy that the best defense is a strong offense, so I had a pretty fair idea they'd be coming after me," Gallegos said. "It's like standing on the edge of a cliff.

"You know if you step off, you're going to get hurt. You just don't know the particulars."

11.28.2006

NCJ - The unraveling of People v. Pacific Lumber and People v. Debi August

Case dismissed: The unraveling of People v. Pacific Lumber and People v. Debi August
by HANK SIMS
July 7, 2005

SITTING IN HIS OFFICE ON THE FOURTH floor of the county courthouse last week, District Attorney Paul Gallegos marveled at the venom of his enemies. Earlier in the month, both the DA's fraud lawsuit against Pacific Lumber and the grand jury's conflict of interest case against Fortuna City Councilmember Debi August had been thrown out of court. His detractors were exultant -- the DA had finally got his comeuppance for hotly pursuing two cases they believed to be rooted more in politics than the law.

"We file tough cases sometimes," Gallegos said in answer to their charges. "That's our obligation. If I said I wasn't going to file a case because it may be tough, or I may lose, I'd be doing an injustice to this community."

There are no regular, scientific opinion polls to gauge the mood of the local electorate, but it would be a fair guess that Gallegos' hypothetical approval rating probably dropped in June, perhaps substantially. Two developments in the last two weeks -- Deputy DA Worth Dikeman's entry into next year's election and a sharply critical assessment of the office from the Humboldt County grand jury -- certainly couldn't have helped him. But the biggest blow to his image was likely the defeats handed to him in the two highest-profile cases his office has prosecuted. Both cases were dismissed before they went to trial, though for very different reasons.

Maybe it was unfair that the two cases consumed so much ink, and so much public attention, when the office continued to prosecute murderers and other violent criminals. But from Gallegos' first days in office, after he filed the Pacific Lumber lawsuit, the public has come to think of him in terms of his sweeping, politically charged cases. Last year's attempt to recall him only cemented this picture. To supporters, Gallegos has been a crusading advocate for the people, dispensing justice even-handedly and cleaning the Augean stables of the local good-old-boy system. To detractors, he's been a showboater, filing dubious legal actions in order to stoke the passions of the environmental community, his political base.

These perceptions will be slow to fade, especially if Gallegos decides to pursue an appeal in the Pacific Lumber case. But the events of the last month feel like the turning of a page. Deputy District Attorney Tim Stoen, the prosecutor whom Gallegos brought with him to office and who led the prosecution in both the Palco and August cases, last week announced that he will be leaving the office effective next Friday to return to a job under Mendocino County DA Norm Vroman  (see "Weekly Wrap"). Despite his protestations, and perhaps partly due to circumstances beyond his control, without the Pacific Lumber case Gallegos seems incomplete. In the coming year, in the long lead-up to what is sure to be another bitterly fought, politically divisive election, he may have to campaign as any of the state's 57 other district attorneys do -- less as a sword of righteousness, more as an effective bureaucrat.

In any case, he is unrepentant.

"Believe me, when you run for office, you realize you will be judged," he said. "If people think I've done wrong, they're going to toss me. That's the way it works."

People v. Pacific Lumber

JUMP TO: People v. Debi August
THE PACIFIC LUMBER FRAUD SUIT WAS FIRST FILED shortly after Gallegos took office. It relied on information provided to the office by Ken Miller of the Humboldt Watershed Council, who had unearthed an irregularity in the 1999 Headwaters deal between Pacific Lumber and the state and federal governments. In negotiations over the company's future logging plans, the company submitted preliminary data that called into question conventional wisdom on the relationship between logging and landslides. The data seemed to suggest that the company could log more, without severely affecting ground stability. Palco then lobbied regulators to allow a greater yearly harvest.

But later, the company submitted the final version of that data, which apparently ended up contradicting the initial study and was much more in line with what geologists had assumed to be the usual effect of harvesting. The final data was submitted to regional offices of the California Department of Forestry and the North Coast Regional Water Quality Control Board rather than to CDF headquarters, where it should have gone. The revised information never made it to the desk of Richard Wilson, then the director of the CDF; Wilson later testified that if it had, he would have waited for additional public comment before approving the final Palco harvest schedule.

On July 14, after pondering the case for many months, Judge Richard L. Freeborn -- a visiting judge from Lake County -- agreed with the company's argument that the DA's lawsuit had no legal merit. Freeborn presented several justifications for the decision in his opinion, but primarily he agreed with Palco's contention that a legal theory known as the Noerr-Pennington doctrine -- which Stoen dubbed the "right-to-lie" defense -- protected the company, as it was at the time exercising its First Amendment right to petition (or "lobby") the government.

One apparent conclusion that can be drawn from the ruling is that Stoen made a huge tactical blunder last year when he undertook a months-long fight to get Judge Christopher Wilson, a member of the Humboldt County bench, removed from the case.

In arguments before an outside judge and a California appellate court, Stoen argued that Wilson had at least the "appearance" of prejudice against him and the case. Stoen cited the fact that Wilson had a "personal relationship" with a relative of Humboldt County Supervisor Bonnie Neely, who he said is a staunch timber supporter, and argued that apparently jocular comments Wilson directed at Stoen during another controversial case -- to the effect that Stoen was "trying to get me to lose my job" -- demonstrated bias. The appellate court ruled against Stoen, but Wilson voluntarily bowed out anyway, handing the case to Freeborn.

Exactly why Stoen was so opposed to Wilson hearing the case -- and why he was willing to risk the approbation of the court and the wider legal community to get the judge removed -- remains something of a mystery. True, in an earlier ruling Wilson had written that the California Unfair Competition Law was an "ill-suited vehicle" for the charges, and added that Stoen would likely have had a difficult time proving the facts of the case at trial.

[Photo at right: Tim Stoen]

Nevertheless, in the same ruling Wilson unequivocally stated that according to his reading, the company was not protected by Noerr-Pennington: "[T]he immunity afforded by the Noerr-Pennington Doctrine does not apply in this case," he wrote. If Stoen had stuck with Wilson, the case would almost certainly have gone to trial.

Asked to comment on this aspect of the case's history last week, Gallegos said only that he didn't dwell on the past. Stoen likewise declined comment. But both said that they believed that Freeborn's ruling is ripe for appeal.

Gallegos said that he believes the ruling is plainly erroneous, and he offered a reductio ad absurdum argument to explain his reasoning. Apply it to someone seeking a building permit from city government, he said; according to Freeborn, the applicant can lie and swindle the building department with impunity, as the First Amendment offers them complete immunity in their "lobbying" of regulators.

"This interpretation, taken to its extreme, is that every interaction with government is quasi-judicial, and therefore `lobbying,'" he said. "So there's no obligation to be truthful."

But his conviction that the ruling is mistaken does not necessarily mean that he will appeal the decision. Gallegos said that the decision on an appeal will largely be made in consultation with his fellow district attorneys, and will likely hinge on whether they want to run the risk of having Freeborn's ruling confirmed at the appellate level -- where it would become binding on everyone.

"Right now you have a ruling that's pretty perverse, or odd," he said. "But it's not a published decision. The question is, do you want a decision like that to be published law? I think all the DAs in the state of California do not want that to be a published decision."

[Photo at left: Paul Gallegos]

Then again, he said, it could be that his colleagues would want to see the ruling challenged. Since the passage of Proposition 64 last fall, district attorneys and the state attorney general are the only people who may bring a suit under the California Unfair Competition Law. If Freeborn were overturned at the appellate level, their powers to bring suit would be more clearly defined.

Stoen, for one, believes that it's worth the risk.

"This case is ready-made," he said. "It's juicy, it's ready to show that the Noerr-Pennington doctrine does not allow lies in the seeking of a permit. If Paul decides to appeal, we can set a statewide standard that every person and every corporation will have to follow."

People v. Debi August

IT WAS PERHAPS A FITTING ENDING TO A CASE that was never far from threatening to devolve from a legal proceeding into a soap opera, or a Shakespearean tragicomedy.

Just as jurors were being chosen for the August trial, Judith Schmidt, the foreperson of the grand jury that investigated and accused August of malfeasance in office, stepped forward with a sheaf of internal grand jury e-mails and other documents that she had squirreled away in her own home office -- fearing, she said, that the day would come in which they would be needed. And they were: Among the Schmidt documents were some that the current grand jury had not provided to August's defense team, despite a court order.

Jury selection was halted while Stoen and August's attorneys, Greg Rael and William Bragg, questioned Schmidt. Then, in response to a motion from the defense, Judge John Feeney threw the case out, ruling that August's rights to due process of law, and the court's own ability to make fair judgments in earlier rulings, had been irretrievably harmed by the fact that the grand jury's official records in the case had apparently been culled.

Gallegos, for one, said last week that he was not sorry to see the case end.

"Frankly, that's a case I would rather not have had, every step of the way," he said. "You know there's going to be a hue and a cry, and there was a hue and a cry."

Feeney's dismissal meant that the charges against August leveled in May 2004 by the grand jury, with Stoen acting as its legal counsel, would never be heard. Likewise, the dual mysteries of how the case came to be and how the Schmidt documents came to be missing from the grand jury's files will probably remain mysteries for some time.

In 2003, the grand jury received a complaint from a Fortuna resident, saying that August was acting inappropriately in regards to a proposed subdivision that was working its way through city government. A real estate broker by trade, she had signed on as "agent" for the project, working with city staff and appearing before the city's planning commission on its behalf. (Though she had initially said that she would "probably" end up selling the resulting lots through her office, she later reversed herself, saying that she would disclaim any financial interest).

After investigating on its own for a few months, the grand jury called in the DA's office to ask about potential legal proceedings that could be brought against August. In addition to the alleged conflict of interest, the grand jury had turned up financial disclosure forms that August had mistakenly filled out when she was a planning commissioner. The grand jury interviewed several other witnesses with Stoen present, then, following his advice, initiated a rare legal proceeding known as an "accusation," which sought to remove August from office.

For several months, the case took several odd turns -- at one point, last August, it was mistakenly thrown out after some paperwork went missing. Taking offense at Stoen's characterization of this premature dismissal as a "major error," Judge J. Michael Brown recused himself from the case, saying he would be unable to remain impartial so long as Stoen was the attorney.

The case -- which Feeney had pruned of everything except the key conflict-of-interest charge -- was set to go to trial when Schmidt stepped forward.

One thing became clear in the aftermath of Schmidt's testimony: There was a deep sense of mistrust between the grand jury and the DA's office, centered mostly on the conflict between August's right to confront her accusers and the grand jury's traditional promise of secrecy to the people who testify before it. Schmidt told the court that the current grand jury foreperson, Darlene Marlow, had ordered her to destroy the documents in her possession. Reportedly, Marlow and other grand jury members were upset that documents had been delivered to August's attorneys, and entered into the public court file.

According to Stoen, this was a result of the grand jury going off half-cocked, initiating an investigation on their own and promising confidentiality to witnesses -- seemingly unaware, all the while, that records of interviews would have to be turned over to the defense if charges were filed.

"If they had come to us, we would have said don't do that. Let our investigators do that," Stoen said.

Gallegos said that the spat between members of the grand jury and his office was largely responsible for the condemnatory report on his office filed by the grand jury last week.

"Darlene Marlow -- she's been upset at us for two years now," he said. "There were disagreements on how the August case was handled, over our obligations. Was our obligation to them, to protect their privacy rights, or was it to Debi August, to protect her due process rights? I know where I would fall every day. Debi August is the accused."

August attorney Greg Rael said that he was preparing to ask Schmidt what had prompted her to retain documents, contrary to grand jury policy, when Feeney decided to dismiss the case. Her answer may have shed some light on how the documents came to be missing from the grand jury file, he said. [Photo at left: Greg Rael]

In any case, Rael is certain that if the case had gone to trial August would have been vindicated. He said that the case law on grand jury accusations, as represented by the 1996 case Steiner v. Superior Court, mandated that such actions must be reserved for truly serious cases of political misconduct. As such, he said, he took lightly claims by Gallegos and Stoen that they were happy to sacrifice the case if August's due process rights had been violated.

"If the DA's office were truly interested in protecting Debi August's rights in this case, then they would have correctly interpreted the leading case on this issue," Rael said.

SEE ALSO: COVER STORY: "The Debi August File" - Sept. 9, 2004

© Copyright 2005, North Coast Journal, Inc.

TS - Stoen's exit a good move

Stoen's exit a good move
By The Times-Standard
Article Last Updated: Friday, July 01, 2005 - 6:15:59 AM PST

While Wednesday's announcement that the district attorney's high-profile prosecutor Tim Stoen was heading back to Mendocino took some by surprise, the handwriting had been on the wall for weeks. And many, perhaps tired of all the varied

"He's been on my wish list. We've discussed our vision, our ability to work together, and without a doubt he is the most qualified person for the job. It's going to be a wonderful thing for this community."

One can only speculate on exactly what went wrong, but Stoen's odd penchant for unnecessarily alienating other attorneys, area officials, the media and even judges appeared to undermine the DA's larger vision for his tenure. For a variety of reasons, it certainly wasn't "a wonderful thing."

On Wednesday, Gallegos appeared weary and almost thankful that the Stoen saga was drawing to a close:

"It was time for Tim to go," he said. "Tim had some other plans and he's gone. Tim's a good prosecutor and he's been a good friend. I know he'll do a good job down there."

Stoen himself was philosophical and realistic, noting that he had become a liability for Gallegos in the DA's expected upcoming re-election run.

"Paul fell on a few swords for me, why shouldn't I fall on a sword for him," Stoen said.

The comment underscores Stoen's basic integrity in holding to his own beliefs, and that's to his credit.

But for one reason or another -- including his actions 30 years ago and much more recently -- Tim Stoen was just a poor fit for Humboldt County. He's better served by heading back to Mendocino.

Paul Gallegos, freed from this particular distraction, can gear up for what's likely to be another bruising election fight. It's unfair that much of his first term -- and whatever he might have wanted to accomplish -- was undermined by the recall attempt.

But that's in the past. His future will be up to Humboldt County's voters.

NCJ - DA'S PALCO LAWSUIT DISMISSED

DA'S PALCO LAWSUIT DISMISSED: The lawsuit that has defined county politics for two and a half years has been thrown out of court. Late Tuesday afternoon, Judge Richard Freeborn upheld the Pacific Lumber Co.'s objections to the fraud lawsuit filed against the company by the District Attorney's office in February 2003, shortly after DA Paul Gallegos and his deputy, Tim Stoen, took office. Essentially, Freeborn agreed with every argument made by Palco in their motion to dismiss the case. Specifically, he agreed with company claims that the alleged deception committed by the company during the negotiations with state and federal agencies over sale of the Headwaters Forest -- even if true -- is protected by the First Amendment, under a legal precedent known as the Noerr-Pennington doctrine. "Plaintiffs can not state a cause of action because PALCO's actions are constitutionally protected by Noerr," Freeborn wrote. The case filed by the DA alleged that the company intentionally defrauded the public by presenting false data on the relation between logging and landslides in late 1998; the company later presented a final, corrected version of the data to a regional office of the CDF -- rather than to the agency's headquarters in Sacramento, as procedure allegedly required -- two days after a final Environmental Impact Report on future management of the companies lands had been released. The company then asked for, and got, the right to log more intensively. In his ruling, Freeborn wrote that at the stage of the process in question, the company could be considered to be involved in "lobbying" -- a constitutionally protected right to petition the government -- rather than undergoing adjudicative review by agencies. Freeborn cited an earlier case to show what is legally allowable under the umbrella of lobbying activity: "Misrepresentations are a fact of life in politics, and lobbying is the sine qua non of democracy." It is not known if the District Attorney's Office will appear the ruling; Gallegos and Stoen could not be reached for comment.

TS - DA Gallegos may appeal Palco ruling

Of course, now we know he finally HAS appealed the ruling...

DA Gallegos may appeal Palco ruling
By John Driscoll The Times-Standard
Article Last Updated: Thursday, June 16, 2005 - 6:16:09 AM PST

The Humboldt County district attorney called the ruling in the Pacific Lumber Co. fraud case "monumental," setting a bad precedent for businesses statewide.

DA Paul Gallegos said Wednesday "there's a good chance" that he'll appeal Judge Richard L. Freeborn's decision to toss out the case, which has marked Gallegos' term in his critics' minds.

Freeborn, while not agreeing with the DA's notion that Palco lied to the government during the Headwaters Forest negotiations, determined that the company was immune while lobbying for a favorable outcome. The ruling came Tuesday.

The DA held that Palco turned in bad data to the wrong state office at the last minute to sway the California Department of Forestry to approve a higher rate of cut over decades, under a sustained yield plan.

"Basically, the judge is saying that people are immune from lying to the government -- that someone can lie for monetary gain and they're completely immune," Gallegos said.

He also disagreed with Freeborn's view that Palco's participation in the negotiations was lobbying. Gallegos said lobbying is petitioning for changes in the law, not advantages under the law.

"I suppose it's not surprising that the other side puts a twist on this," said Palco attorney Edgar Washburn.

Washburn said the DA couldn't even make a case on the facts, and that even if Palco had lied the judge found the case unsustainable. He said CDF had a full record when it acted on the Headwaters agreement in 1999.

Palco was paid by the state and federal governments $480 million for 7,400 acres in the Headwaters Forest and for other smaller groves with old-growth redwoods. The company agreed to a rate of cut over decades -- though that plan was invalidated by a judge two years ago -- and to a plan that allows it to incidentally take endangered species.

Freeborn's ruling perpetuated the same divided feelings that persisted throughout the case. Supporters of Gallegos were dismayed. Detractors were thrilled.

Ken Miller, who provided much of the background for the DA's case prosecuted by Deputy District Attorney Tim Stoen, said there may be merit to Freeborn's opinion that the DA didn't strongly argue the competitive advantage exception to immunity.

"But if a timber company gains more cut -- that's an advantage," Miller said.

Miller said he believes Palco exploited a request from water quality officials to submit the false landslide report.

CDF spokesman Michael Jarvis said the agency wouldn't comment on a suit in which it wasn't named.

Second District Supervisor Roger Rodoni, long critical of the suit, called the ruling gratifying.

"These kinds of contrived cases might be flamboyant in the beginning," he said, "but the truth will kill that kind of approach."

Robin Arkley Sr., who initiated a recall effort against Gallegos that Palco bankrolled in 2003, said he was delighted.

"I think that Mr. Gallegos was out of his mind to even start it," Arkley said. "It cost the taxpayers of Humboldt County a lot of money."

Just how much isn't clear.

Freeborn threw the case out without room to refile it, and awarded Palco its court costs. Those costs are not legal fees, reported in the Santa Rosa Press Democrat as $150,000. Washburn said his firm is still adding up both its legal fees and its court costs, and could not give estimates for either.

The court costs are likely minimal, however, and Washburn said they "won't break the bank."

Gallegos said he and Stoen would have been on the payroll even if the suit didn't exist. The DA, Stoen and private attorney Steve Schectman -- who volunteered his time -- spent hundreds of hours on the suit, Gallegos estimated.

Jill Geist, 5th District supervisor, said the ruling Tuesday shook up the county.

"We have two and a half years of a county at odds," she said. "Now there's a finality and an ability to go forward."

Others held out that there may be more to come. Sharon Duggan, an attorney for the Environmental Protection Information Center, said it appears that the judge has condoned misrepresentation.

"I think it turns the law on its head when an applicant can play fast and loose with information and then when challenged say, "We're protected."

The full ruling can be read at: http://extras.times-standard.com/temp/palco_suit.pdf

San Jose Mercury News

Posted on Wed, Jun. 15, 2005

EUREKA, Calif. (AP) - A Superior Court judge has tossed out a civil fraud case against Pacific Lumber Co. that alleged the company lied to state negotiators in a deal to create the Headwaters Forest reserve.

In a throwing out the case Tuesday, Judge Richard Freeborn, the second judge to review it, concluded that the 2003 lawsuit filed by Humboldt County prosecutors was based upon a series of "contrived" misconducts.

The judge also ordered Humboldt County to cover Pacific Lumber's legal costs, estimated at more than $150,000.

The suit claimed that Pacific Lumber executives had intentionally understated the threat of landslides in logging areas in order to get permission for high rates of logging on Pacific Lumber's 210,000 acres of southern Humboldt County timberland.

Future logging rates were key elements of a joint $500 million state-federal deal with Pacific Lumber to buy and create the 7,500-acre reserve.

Humboldt County Assistant District Attorney Tim Stoen said his office was reviewing the ruling. He declined further comment.

11.27.2006

AP - Judge dismisses fraud suit against Pacific Lumber

Posted on Wed, Jun. 15, 2005
Judge dismisses fraud suit against Pacific Lumber
Associated Press

EUREKA, Calif. - A judge has dismissed a lawsuit brought by Humboldt County prosecutors against Pacific Lumber, alleging the company knowingly submitted false data on landslides.

Humboldt County Superior Court Judge Richard L. Freeborn found Pacific Lumber Co. was immune from prosecution while lobbying during the Headwaters Forest negotiations of the late 1990s.

The ruling was praised by Pacific Lumber officials.

"Hopefully, we go forward and the DA goes in another direction," said company spokesman Chuck Center. "We're just trying to get trees into our mills."

District Attorney Paul Gallegos was not in the office Wednesday. A telephone message from The Associated Press was not immediately returned.

Steve Schectman, a private attorney recently hired to assist the DA's office in the case, told the Eureka Times-Standard he believes the decision should be appealed.

Schectman said the ruling would encourage corporations to lie and put the truth-finding burden on administrative agencies.

In the suit, filed by Gallegos soon after he took office in 2002, prosecutors alleged the lumber company submitted faulty data to get access to timber on steep slopes it would otherwise have been unable to touch.

Soon after the suit was filed, a recall election bid was launched against Gallegos that was heavily funded by the lumber company. However, Gallegos survived the 2004 recall.

In his ruling, released Tuesday, Freeborn wrote that the chain of events leading to submission of the landslide study was not initiated by the lumber company, but by a request from the North Coast Regional Water Quality Control Board.

The lumber company later filed a corrected version of the landslide report, but it was sent to a local agency. The suit alleged Pacific Lumber should have sent the report to the California Department of Forestry's main office in Sacramento.

The judge said the subject of the lawsuit was not whether the decision to allow logging was right or wrong. He said the company is immune from prosecution because of a legal argument based on free speech rights which makes a company immune from liability when lobbying the government to do something.

That doctrine doesn't hold if a company is pulling a sham, for instance, trying to delay a competitor from getting a license. But the judge noted there was no such situation in this case.

Mercury News - Judge dismisses fraud suit against Pacific Lumber

Judge dismisses fraud suit against Pacific Lumber
mercurynews
Associated Press
Posted on Wed, Jun. 15, 2005


EUREKA, Calif. - A judge has dismissed a lawsuit brought by Humboldt County prosecutors against Pacific Lumber, alleging the company knowingly submitted false data on landslides.

Humboldt County Superior Court Judge Richard L. Freeborn found Pacific Lumber Co. was immune from prosecution while lobbying during the Headwaters Forest negotiations of the late 1990s.

The ruling was praised by Pacific Lumber officials.

"Hopefully, we go forward and the DA goes in another direction," said company spokesman Chuck Center. "We're just trying to get trees into our mills."

District Attorney Paul Gallegos was not in the office Wednesday. A telephone message from The Associated Press was not immediately returned.

Steve Schectman, a private attorney recently hired to assist the DA's office in the case, told the Eureka Times-Standard he believes the decision should be appealed.

Schectman said the ruling would encourage corporations to lie and put the truth-finding burden on administrative agencies.

In the suit, filed by Gallegos soon after he took office in 2002, prosecutors alleged the lumber company submitted faulty data to get access to timber on steep slopes it would otherwise have been unable to touch.

Soon after the suit was filed, a recall election bid was launched against Gallegos that was heavily funded by the lumber company. However, Gallegos survived the 2004 recall.

In his ruling, released Tuesday, Freeborn wrote that the chain of events leading to submission of the landslide study was not initiated by the lumber company, but by a request from the North Coast Regional Water Quality Control Board.

The lumber company later filed a corrected version of the landslide report, but it was sent to a local agency. The suit alleged Pacific Lumber should have sent the report to the California Department of Forestry's main office in Sacramento.

The judge said the subject of the lawsuit was not whether the decision to allow logging was right or wrong. He said the company is immune from prosecution because of a legal argument based on free speech rights which makes a company immune from liability when lobbying the government to do something.

That doctrine doesn't hold if a company is pulling a sham, for instance, trying to delay a competitor from getting a license. But the judge noted there was no such situation in this case.

PD - Pacific Lumber case tossed

Pacific Lumber case tossed
Judge says charges in fraud lawsuit 'contrived,' bars D.A. from refiling case
By MIKE GENIELLA THE PRESS DEMOCRAT
Wednesday, June 15, 2005

In a blow to Humboldt County prosecutors, a Superior Court judge Tuesday tossed out a contentious civil fraud case against Pacific Lumber Co.

Judge Richard Freeborn, the second judge to review the high-profile case, concluded that the 2003 lawsuit filed by District Attorney Paul Gallegos' office was based upon a series of "contrived" misconducts.

Freeborn's ruling bars Gallegos and his chief assistant, Tim Stoen, from refiling the fraud case. It also ordered Humboldt County to cover Pacific Lumber's legal costs, estimated to be in excess of $150,000.

Stoen said Tuesday he and Gallegos were reviewing the ruling, which could result in the collapse of a case that's attracted statewide attention. He declined further comment.

The only option left for Stoen and Gallegos is to appeal the court ruling, a decision that could expose the county to even more legal costs and potentially months, if not years, of legal wrangling.

Pacific Lumber attorney Jared Carter on Tuesday hailed the court decision.

"Judge Freeborn cited the same legal arguments that we made to Gallegos and Stoen before the case was filed," said Carter.

Carter said the case not only wrongly accused the company of fraud, but has proven costly to the company and local taxpayers.

"It's one more example of how politically motivated politicians attempt to abuse the legal system by filing inappropriate litigation," said Carter.

The fraud case was filed by Stoen within six weeks after his boss Gallegos took office in January 2003.

At the core of the lawsuit were allegations that the company lied to state negotiators in 1999 in order to get permission for high rates of logging on Pacific Lumber's 210,000 acres of southern Humboldt County timberland. Future logging rates were key elements of a joint $500 million state-federal deal with Pacific Lumber to buy and create the 7,500-acre Headwaters Forest reserve.

Stoen and Gallegos contended that Pacific Lumber intentionally understated the threat of landslides in logging areas.

Freeborn in his 23-page ruling said he could find only one instance of conduct that could be deemed wrongful, and that would be only if the District Attorney's office "could meet its burden at trial of showing its wrongfulness."

Freeborn said he believed at its core the case presented by prosecutors was a "stretch."

ER - Wes Keat promoted to assistant DA

Wes Keat promoted to assistant DA
by Christine Bensen, 5/11/2005

Humboldt County Deputy District Attorney Wes Keat spoke publicly in his new role as assistant district attorney at a Board of Supervisors meeting Tuesday.

District Attorney Paul Gallegos was out of town and unavailable for comment, but Keat said his understanding is that Gallegos changed his title from chief criminal deputy because he fulfills an administrative role in the office, including making filing decisions on felony cases.

“I’ve been doing the administrative things and Mr. Stoen has been going to court litigating cases,” Keat said. “It’s not a big deal. Mr. Stoen will continue prosecuting many of the more important cases, both civil and criminal.”

Stoen said the change has been planned for a while.

“I only gave Paul a one-year commitment to be the assistant DA,” Stoen said. “The reason that I couldn’t leave after one year was because of the recall.”

Gallegos began his term as district attorney in January 2003. In February of that year his office filed a fraud lawsuit against Pacific Lumber Co. Soon after, an effort to recall Gallegos was afoot.

In March 2004, the recall was rejected by voters.

Stoen, who will now be the prosecutor in charge of special cases, said his interest and experience is in special cases that mostly focus on white-collar crime and he plans to focus on that.

Stoen said, Keat does an “extraordinarily good” job in his administrative role.

Keat has been with the office since April 1994 and has worked as chief criminal deputy under Gallegos’ administration. He held a similar position during former District Attorney Terry Farmer’s last term.

ER - Stoen applies for counsel post with Mendocino County

Stoen applies for counsel post with Mendocino County
by Christine Bensen, The Eureka Reporter
5/13/2005

Tim Stoen, the prosecutor in charge of special cases for the Humboldt County District Attorney’s Office, said he submitted an application to become Mendocino’s county counsel, but he is not concerned about whether he is chosen.

“I’ve been solicited to apply and that’s about it,” he said.

In early March, Stoen said Mendocino County District Attorney Norm Vroman asked him if he would be interested in applying for the position.

“I said, ‘OK, I’ll put in an application’ and I told Paul and got his blessing,” Stoen said.

From 1970 through 1976, Stoen said he served as the assistant district attorney in charge of the civil division for Mendocino County, which was equivalent to county counsel at the time.

While serving in that role, he said he helped draft legislation and gave advice to department heads and county supervisors.

“(During) the six years in that job my advice was never successfully challenged,” he said.

If chosen, Stoen said he would want to give a one-year, rather than a four-year, commitment and would still fulfill his commitment to prosecute the case against The Pacific Lumber Co. for the Humboldt County District Attorney’s Office.

“I told Paul, I said, ‘Under no circumstances would I not fulfill my commitment to that case,’” he said.

As a Christian, Stoen said he has faith that whatever is meant to happen will.

“It’s a job I’ve had, it’s a job I enjoyed and it’s a job I was told I did well at,” he said. “If I’m supposed to get the job I’ll get the job. I’m not going to lift a finger to get it besides put in my application.”

“We have known about it for some time,” Gallegos said. “Naturally, he has my full support in whatever decision he makes. We have work for him here and are operating on the assumption that he will remain here.”

TS - Rolling Stoen?

Rolling Stoen? Special prosecutor seeks Mendocino County post
By James Faulk The Times-Standard
Article Last Updated: Friday, May 13, 2005 - 6:15:25 AM PST

EUREKA -- Tim Stoen, for the last two years the right-hand man to District Attorney Paul Gallegos, is looking to become county counsel for Mendocino County.

Gallegos said Stoen told him of his intent to seek the position -- one he's had before -- and Gallegos gave him his blessing.

"He is seeking that post," Gallegos told the Times-Standard Thursday.

Stoen has been handling a number of high profile cases for Gallegos, including the controversial suit against Pacific Lumber Co. and the case against Fortuna Councilwoman Debi August. Since coming on board, he has attracted loads of criticism for the cases he's taken on.

This second chance to serve Mendocino County came out of the blue, Stoen said.

Stoen recently got a recruitment call from a former boss and decided to slip his name into contention. The job, however, is far from a lock. He has some notable competition for the position and for Mendocino County, hiring him would mean taking on a person who has an obvious talent for drawing fire.

The last time Stoen filled that role was in the 1970s, around the same time that Stoen was a rising lieutenant in the church of Jim Jones, who would later kill almost a thousand people -- including Tim Stoen's son -- in South America.

Stoen said he was successful as county counsel at the time and would like to do it again.

Living and working in Humboldt County is a joy, Stoen said, but as a Christian he believes his life is guided by God. Since several factors -- including a seemingly random phone call -- pushed him to seek the job, he decided to move ahead.

The six years he spent as county counsel there in the past were his happiest professionally, Stoen said.

"My temperament is to be an agent of reconciliation," he said.

Stoen's rather long list of enemies in Humboldt County see it otherwise.

Odell Shelton, Fortuna city councilman and outspoken supporter of Pacific Lumber Co., said good riddance.

"That would be great," he said. "What has he done that's positive for the county since he's been here?"

Shelton pointed to the pending suits against Palco and August as examples of his divisiveness.

Stoen said a condition of his taking the job in Mendocino County would be to continue working on the Palco case.

"He's still got that bone in his teeth no matter what," Shelton said.

For that to happen, Stoen said he would have to be deputized out of the Humboldt County District Attorney's office. With Arcata attorney Steven Schectman as a partner on the case, Stoen believes he could come in for short bursts and ultimately the trial to get the job done. Stoen said he crafted the case narrowly, which will help.

The case was actually narrowed for him by a judge.

In May 2004, Humboldt County Judge Christopher Wilson -- who has since recused himself from the case -- issued a split decision in a motion by Palco to have the case thrown out. In doing so, he tossed out Stoen's motion for an injunction on the company's logging and another to make it pay about $300 million in restitution.

In his ruling, Wilson called Stoen's unfair competition vehicle "a rather prodigious stretch." Wilson kept the suit alive, but his instructions to Stoen prompted a significant revision and narrowing of the case.

Regardless, Schectman believes the case could be handled as Stoen described.

"I'm a team player," he said. "If that's how we do it, then great."

The county counsel position could be filled within the next two months. Mendocino County is reportedly looking to find a top administrator before conducting interviews. Even then, the job is still far from being Stoen's.

"It's so iffy," Stoen said.

Gallegos said that the recent promotion of Wes Keat to assistant district attorney had nothing to do with Stoen's application in Mendocino County.

Gallegos said Stoen's leaving would create a hardship, but nothing the department couldn't overcome.

"Truthfully, we don't have the luxury of not getting the job done," Gallegos said.

TS - Stoen seeks Mendocino County post

Stoen seeks Mendocino County post
By James Faulk The Times-Standard
Thursday, May 12, 2005 - 9:58:03 AM PST

EUREKA -- Tim Stoen, for the last two years the right-hand man to District Attorney Paul Gallegos, is looking to become county counsel for Mendocino County.

Gallegos said Stoen told him of his intent to seek the position, and Gallegos gave him his blessing.

"He is seeking that post," Gallegos told the Times-Standard Thursday.

Stoen has been handling a number of high profile cases for Gallegos, including the controversial suit against Pacific Lumber Co. and the case against Fortuna Councilwoman Debi August.

Gallegos said Stoen's leaving would create a hardship, but nothing the department couldn't overcome.

"Truthfully, we don't have the luxury of not getting the job done," Gallegos said.
--

TS - Stoen steps down as assistant DA

Stoen steps down as assistant DA
By James Faulk The Times-Standard
Article Last Updated: Wednesday, May 11, 2005 - 6:11:46 AM PST

EUREKA -- District Attorney Paul Gallegos has named Wes Keat as new assistant district attorney to replace Tim Stoen, who will focus on prosecutorial work.

All sides emphasized that the change in titles is no judgment on the performance of Stoen, who has at times been a lightning rod for controversy for his high-profile cases.

Stoen, brought into the office when Gallegos took over for former District Attorney Terry Farmer, said he was glad to work solely on special prosecutions.

"I'm most pleased to be given the position of my original intention," he said Tuesday. "I told Paul at the outset that I would only be assistant DA for one year."

The one-year cap was never mentioned when Gallegos named Stoen as his right-hand man in 2002. Stoen was the first assistant district attorney to be named since 1993.

"He's been on my wish list," Gallegos said at the time. "We've discussed our vision, our ability to work together, and without a doubt he is the most qualified person for the job. It's going to be a wonderful thing for this community."

Now, Gallegos says both Stoen and Keat are doing a good job but that Keat's gift for administrative duties will free up Stoen to concentrate on other things.

"Tim's got his hands full," Gallegos said. "It was a decision I made and I felt it was appropriate. Tim's got a lot of work on his plate and Wes has great administrative ability. He's been filling the administrative duties for a long time."

Keat agreed.

"I think it's reflective of what it is we've actually been doing," Keat said. "Mr. Stoen's been going to court and trying cases and working on some very important things but not doing the administrative stuff that I've been doing."

In early 2003, Gallegos named Keat to take over as chief criminal deputy. Keat, who at the time had been a deputy district attorney for nine years, became part of the management team, making initial decisions on charging cases, serving as first-line adviser on settlement and technical issues facing prosecutors, and acting for Gallegos and Stoen in their absence.

On Tuesday, Stoen said he was initially brought in as "a loyal sounding board" who could help Gallegos get his administration off the ground. While Stoen said he initially committed to only a year to the job, he stuck it out longer because of the attempted recall of Gallegos in 2004.

Since Gallegos took office, Keat has proven himself to be loyal and effective, Stoen said.

"Wes has shown himself from day one to be an outstanding administrator," Stoen said. "It's a smart decision for Wes to be given a title that's commensurate with his administrative expertise."

As for himself, Stoen said he doesn't regret any of his decisions -- from the suit against Pacific Lumber Co. to the case against Fortuna Councilwoman Debi August -- and that the change in job descriptions does not result from poor performance.

"Titles don't mean anything," he said.

Along with high-profile cases for the DA, Stoen launched a brief, abortive run for the U.S. Senate in 2003. He has also achieved notoriety for his former association with the late Jim Jones. Stoen was a legal adviser to the Peoples Temple founder, and he lost his 6-year-old son, John Victor Stoen, who died in a mass suicide orchestrated by Jones in Guyana in 1978.

Stoen had split from the temple the previous year and was in the process of attempting to extricate his son from Jonestown when the killings occurred.

TS - The heat's off August

The heat's off August
By Kimberly Wear, The Times-Standard
Friday, June 24, 2005 - 6:14:10 AM PST

EUREKA -- It's over.

Judge John Feeney dismissed the sole remaining count in the accusation case against Debi August on Thursday, saying recently surfaced documents impaired the Fortuna councilwoman's due process rights and hindered her attorneys' ability to object to the conflict of interest count and prepare for trial.

Feeney also cited grave concerns about preserving the integrity of the grand jury system.

The case was dismissed with prejudice, meaning August will never again face the roller coaster ride of legal maneuvering that marked the last year, with counts filed, then amended, counts dismissed, then reinstated, only to be dropped again.

August broke into tears after the decision, hugging her sister and her attorneys. She said that she was still numb at the news, unable to believe it was over.

"It has completely changed my life," August said during an emotional interview at her attorney's office. "I am not the same person I used to be. I will never be the same person I was before this started."

Deputy District Attorney Tim Stoen did not object to the defense motion for the dismissal, saying his office was troubled by the new documents appearing during jury selection and he has always worked to protect August's rights.

"The denial of rights to one person is the denial of rights to all," Stoen told the judge. "We acquiesce in the request for dismissal."

For August, the end of her 16-month legal battle is bittersweet. She said her real estate business has taken a devastating hit and her retirement fund went toward her defense. August's attorneys said they've lost the opportunity to prove the charges never should have been filed.

If they had the documents earlier, her attorneys said, the conflict count would have been dismissed last month when Feeney threw out three others that alleged August incorrectly filled out economic interest forms.

"The case is going to be perceived as being dismissed on a legal technicality and to me that really is a tragedy for Debi," said her attorney William Bragg.

Surprise revelations

In the end it all came down to Judith Schmidt.

The latest twist in a series of bizarre events was when the forewoman of the grand jury that brought the accusation case became the person who provided the means for its dismissal.

Schmidt suddenly found herself in the spotlight earlier this month after emerging with a cache of August-related documents.

A slight woman with the air of a librarian who admitted to being a bit of a "pack rat" due to her accounting background, Schmidt spent six days on the witness stand. She testified she kept copies of grand jury documents out of concerns about the district attorney's handling of the case and Stoen's legal advice to the grand jury.

At times she sparred with Stoen over his line of questioning about her perceptions of his actions and her motivation behind keeping the records. Schmidt testified she wrote a letter to the state attorney general requesting an investigation of the District Attorney's Office in relation to the August case. The office declined the request.

Schmidt left the courthouse without comment Thursday, walking away with August, their arms around each other.

"I've never really met her, I never really talked to her, but she had incredible courage," August said later. "I appreciate not only what she did for me and my family but that the justice system can correct itself if there is somebody who's honest."

For the record

August said many things about the development situation that transpired into the accusation case were misconstrued and overblown. She said she was not friends with the property owner Carmen Smith. They were only acquaintances, she said.

Other inconsistencies were representations that Smith is a developer. That's not accurate, August said. Smith is a recently retired kindergarten teacher who inherited the property from her parents. August also said she only attended one of the four Planning Commission meetings in which the project came up.

"The district attorney said that I obtained favors for a developer," August said. "I never obtained favors for her. If I did anything for Carmen Smith, my involvement hurt her. It did not help her."

Her reasoning behind getting involved was to experience what it was like to take a project through the system from beginning to end, Bragg said. The Smith project was a way to learn the ropes and August thought it would be good for Fortuna, he said.

Bragg said she was always upfront and made it clear when she spoke about the project or met with city staff that she was there as a private citizen.

Instead, August said, she hasn't been able help any constituents with the lawsuit hanging over her head.

"I never did what I was accused of doing," she said.

The plea deal

August said the accusation has changed her life. People close to her passed away without seeing a resolution, she said. And for more than a year, she hasn't been able to tell her side of the story.

"I haven't even wanted to go to the grocery store because people look at you differently," she said.

Sitting in a bright green chair, August's emotions ran between tears and smiles as she discussed the case. At times, her anger at the charges showed through. One of those times was when she talked about the District Attorney's Office making a plea offer just before the trial start date.

She was told if she pleaded guilty to malfeasance, the judgment against her would be entered after her term expired in April 2006. Meanwhile, she could run again.

"I don't know anything in my life that made me angrier," August said. "This was not about me staying in office. It was about who I am and my life. What they have taken from me is beyond measure."

Still ahead

August still faces a mountain of legal bills that could climb into the six-figure mark. Her attorneys said they will be going to Fortuna City Council to ask for reimbursement of August's defense costs.

"She was acting in the broad spectrum of her duties and trying to be a good councilwoman," Bragg said.

Still unanswered is why the documents Schmidt provided were not included in the grand jury files originally turned over to the defense. It may never be understood. And, there are several aspects about the accusation process that will not be brought out now.

"We will never know, through this proceeding, what went wrong," August's attorney Greg Rael said in court. "Something went seriously wrong."

Asked what she was going to do next, August answered simply: "I don't know. I'm not going to run for office again though."

She said she does believe she was singled out for taking a stand against the recently dismissed lawsuit the District Attorney's Office filed against Pacific Lumber Co.

Asked her opinion on Stoen's comment that the DA's office treated her fairly, August said she doesn't have the same faith in that office that her attorneys do -- and she would leave it at that.

"The only thing I ever did was try to help a citizen in Fortuna," August said.

TS - 'I didn't trust him'

'I didn't trust him'
'I didn't trust him': Schmidt testifies she held onto August papers due to concerns over handling of case
By Kimberly Wear The Times-Standard
Friday, June 10, 2005 - 3:40:14 PM PST

EUREKA -- A former grand jury forewoman testified Thursday that she asked the state's attorney general to investigate how the District Attorney's Office handled the accusation case against Debi August.

It was the latest in a series of recent revelations by Judith Schmidt, which have sidelined jury selection in August's conflict of interest trial.

When pressed for specifics about her concerns, Schmidt said it was "the manner in which it was conducted as well as the advice provided to the grand jury." She said that advice came from then Assistant District Attorney Tim Stoen, who is now prosecuting the August case.

The Fortuna councilwoman faces removal from office if a jury finds she misused her position when she advocated on behalf of a friend's subdivision.

Schmidt said inconsistencies in direction and instruction changes led her to keep copies of August-related documents.

"I had questions over the accusation process procedure that was followed," she said.

A spokesman for the Attorney General's Office said it received a letter from Schmidt dated July 10, 2004, and sent back a response in August. By late afternoon Thursday, communications director Nathan Barankin said he was still searching for the nature of the response.

The forewoman of the 2003-2004 grand jury also testified that Darlene Marlow, who currently holds the volunteer position, asked her earlier this year to destroy documents she kept at her home office. And, Schmidt said, she had concerns about public comments other grand jurors were making about the case.

Schmidt said that once she left the grand jury she felt she couldn't go to the presiding judge or county counsel to discuss her concerns. Asked if she didn't go to the district attorney because she thought it was against the law, Schmidt answered, "No, I didn't trust him."

Stoen and other attorneys in the case are under a gag order and could not comment on the testimony. Stoen has not yet had an opportunity to question Schmidt.

Schmidt was called to the stand by August's defense attorneys after she came forward last week with previously undisclosed grand jury documents and the accusation against Marlow.

Schmidt said she contacted her attorney Allison Jackson after reading a "My Word" column in the Times-Standard that was highly critical of how District Attorney Paul Gallegos dealt with the loss of grant funding for the victim witness program. Gallegos fired Jackson from her former position as a deputy district attorney.

"That's when I finally found someone who would listen," Schmidt said.

Schmidt testified that Marlow called her in January to discuss concerns about turning over confidential grand jury records in the August case. She said Marlow told her, "You don't have any e-mails."

"I said, 'I do,' and she said, 'You don't understand, you don't have any e-mails,'" Schmidt testified. "It troubled me."

Schmidt said Marlow, who was in the courtroom during her testimony, also faxed her some papers regarding a letter from Stoen referencing the release of August records in the custody of the grand jury, a memo Marlow wrote about concerns over producing the documents and what might have been a court order about the records.

She said Marlow made a follow-up call about a month later "to make sure I had deleted my e-mail."

"I told her, 'No, I had not and I was not going to,'" Schmidt testified.

She said she had concerns about a current grand jury member still being involved in the accusation process because it had been turned over to the District Attorney's Office and was also troubled by Marlow's request to destroy records.

Schmidt's testimony is expected to continue today.

OTHER TS STORIES
Former Grand Jury Forewoman To Testify
New Twist in August Case
Juror Interviews Begin in August Case

TS - August trial sideswiped

August trial sideswiped
By Kimberly Wear The Times-Standard
Wednesday, June 08, 2005 - 6:14:48 AM PST

EUREKA -- The judge overseeing Debi August's conflict of interest trial appointed a public defender Tuesday to represent the current grand jury forewoman following recent allegations that she told a former member to destroy e-mails and other documents related to the case.

Darlene Marlow responded "Yes, please, I would like you to appoint public defender Mr. (Jim) Steinberg" when Judge John Feeney asked if she wanted an attorney to represent her interests. Marlow has not been formally accused of any wrongdoing.

The previous grand jury forewoman, Judith Schmidt, has alleged that Marlow requested she destroy August-related documents earlier this year. Instead, Schmidt kept the documents she had at home and turned over two large accordion files of materials to her attorney Allison Jackson last week.

This latest development has sidetracked the grand jury accusation case against August, who faces removal from her Fortuna City Council seat if a jury finds she had a conflict of interest when she advocated on behalf of a friend's subdivision.

Jury selection, scheduled to be completed this week, has been suspended.

Feeney previously ruled that hundreds of pages of grand jury transcripts, e-mails and other materials were to be turned over to the defense with redactions and other restrictions.

Schmidt's files were given to the judge for review and he said most of the items appeared to be duplicates of information reviewed during discovery, but some were new. It's not clear whether those documents, mostly e-mails, contain any information pertinent to the August case.

August's defense attorneys, Greg Rael and William Bragg, Deputy District Attorney Tim Stoen, who is prosecuting the August case, and Steinberg were expected to gain access to some of the papers late Tuesday afternoon.

They spent most of the morning reviewing with the judge a series of hearings between January and March when Marlow was present during in-chamber inspections or discussions about grand jury documents.

Marlow was recording secretary of the 2003-2204 grand jury, which brought the accusation case against August, and custodian of the records. She also sought legal advice after the District Attorney's Office requested she disclose all August-related items in the custody of the grand jury.

August's attorneys have filed a general motion asking for sanctions resulting from due process and discovery violations. No one specific is named.

Included with the motion was a letter to the judge, saying it had recently come to the defense's attention that some grand jury members, including Schmidt, worked from home and kept records there.

"Unfortunately, we can no longer assume that we have received all of the 2003-2004 grand jury records nor do we know if Ms. Marlow suggested other grand jurors destroy records," Rael wrote.

Steinberg said he may need some time to familiarize himself with the case and any information needed to advise his client.

"If this whole issue has to be resolved before the trial can resume ... I'm going to suggest we're going to need a lengthy delay," he told the judge.

TS - The People vs. Deborah August

The People vs. Deborah August: Conflict of Interest case headed to court
By Kimberly Wear The Times-Standard
Article Last Updated: Sunday, May 22, 2005 - 6:14:17 AM PST

The Players

EUREKA -- The conflict of interest case against Fortuna City Councilwoman Debi August is set to begin Monday after months of accusations and tears, charges filed and dismissed, hundreds of pages of legal papers, numerous hearings, thousands of dollars and a 11th hour appeal to a higher court.

To some it's the story of a politically naive real estate broker and part-time councilwoman who became entangled in the vendetta of a highly placed governmental official for her outspoken beliefs. For others, it's simply the case of an elected official who used her position of power to get special treatment for a friend.

Now a jury will decide if there was a conflict of interest when August advocated for a friend's subdivision in front of the Fortuna Planning Commission. She faces removal from office for the remainder of her term, which ends in April 2006.

One year has passed since the District Attorney's Office filed the accusation case against August following a several-month grand jury investigation.

Charges that August improperly filed required annual financial forms and violated a grand jury secrecy admonition were dismissed last week. Her attorneys went to the 1st District Court of Appeal in San Francisco to have the last count removed, but that requested was denied along with another to stay the trial.

August is facing what is known as an accusation proceeding. The 100-year-old procedure is a rarely used method for removing corrupt government officials from office. The last time it was applied in Humboldt County was 1975.

Her attorneys have argued August may have made some political mistakes, but publicly apologized and did nothing to spur an attempt to remove her from office.

"The whole world could see how miserable she was for making those political mistakes ... that's all she did. She violated no law," defense attorney Greg Rael told Judge John T. Feeney in an unsuccessful bid to have the entire case dismissed earlier this month.

Meanwhile, August has racked up nearly $75,000 in legal costs.

Deputy District Attorney Tim Stoen, who is prosecuting the case, said the accusation was brought by grand jury members who were "citizens good and true who set up the investigation and did a lot of the work."

Stoen has adamantly denied implications he steered the grand jury toward initiating the accusation proceeding in response to strong words August and other members of the Fortuna City Council had for the civil suit he and District Attorney Paul Gallegos brought against the Pacific Lumber Co. The company is one of Fortuna's largest employers.

"The facts in this case show this was a case of special favoritism," Stoen said at the same hearing. "The grand jury in this case decided this was a case of special favoritism."

Defendant

Debi August: The first term Fortuna City Council woman faces removal from office for allegedly giving special treatment to a friend when she advocated for her subdivision project before the Planning Commission.

August, who is also a real estate broker, served on the Planning Commission before garnering her council seat.

Defense attorneys

William Bragg: A well-known local defense attorney, when August was notified an accusation proceeding was being brought against her. He attended the U.S. Merchant Marine Academy for his undergraduate education and graduated from the University of California Hastings School of Law. He was admitted to the bar in 1976.

Greg Rael: Another well-known local defense attorney who has handled several high profile cases in Humboldt County. He attended Stanford University as an undergraduate and graduated from Stanford University Law School. Rael was admitted to the bar on the same day as Bragg in 1976.

Prosecutor

Tim Stoen: Previously, the second in command to District Attorney Paul Gallegos, he was recently returned to the title of deputy district attorney after a reshuffling of positions in the office.

Stoen is handling a number of high profile cases for Gallegos, including August and the controversial suit against Pacific Lumber Co. He was admitted to the bar in 1965.

Grand jury:

The 19-member civil grand jury looks into citizens' complaints and is authorized to investigate county and city government, elected officials, special districts, jails, service districts and nonprofit agencies that receive public money.

At the end of the year, the grand jury submits a final report to the Superior Court and the County Board of Supervisors.

Accusation Proceeding

Government Code Section: Sections 3060-3075 cover the 100-year-old process for removal corrupt officials from office. Any public official subject to the section may be removed for willful or corrupt misconduct in office occurring at any time within six years immediately preceding the presentation of the accusation by the grand jury. The proceeding can be appealed to the court of appeal.

August case timeline

June 1987: Debi August is appointed to Fortuna Planning Commission.

January 2001: August files the first of two Statement of Economic Interest forms for which she is later accused of failing to report income.

January 2002: August submits a second round of Statement of Economic Interest papers, this time in her bid for a City Council seat, which she is accused of improperly filling out. The two counts were dismissed Wednesday by Judge John H. Feeney.

April 2002: August is elected to a Fortuna City Council seat.

March 2003: After District Attorney's Office files civil suit against Pacific Lumber, August attacks legal action at a Fortuna City Council meeting where Stoen, who penned the suit, was giving a presentation.

June 2003: Subdivision application is filed on Carmen Smith's project listing August as agent.

August 2003: Witnesses called to testify before grand jury about August inquiry.

September 2003: August reads a prepared statement at a City Council meeting, saying it has come to her attention that some Fortuna residents believe she has a conflict of interest because of the proposed development and she understands there is a grand jury investigation. August apologizes to any citizen who may have had concerns. She said the city attorney informed her there was no conflict as long as the project was 12 months in the future.

A week afterward she receives letter from grand jury asking for information.

Later in the month, after speaking at a Planning Commission meeting in support of her friend's proposed subdivision, August again apologizes in a letter written the same night to "each commissioner and each member of the public" saying she was "sorry, truly sorry."

December 2003: August questioned by grand jury. Discusses concerns about an e-mail she told the grand jury she would provide with city officials. August is later accused of not following secrecy admonition. Feeney also dismissed that count.

February 2004: August receives letter from grand jury saying it is commencing an accusation proceeding against her for misconduct. Letter states she is not permitted to show the letter to anyone.

May 2004: The District Attorney's Office files accusation case against August following grand jury investigation.

September 2004: Arcata City Councilwoman Elizabeth Conner resigns because of potential conflicts of interest between her spot on the council and her day job as director of the nonprofit Humboldt Bay Housing Development Corp.

October 2004: Ending two weeks of uncertainty, August says she won't resign and vows to fight conflict of interest and other charges against her. At a previous meeting, August said the financial and emotional cost was becoming too difficult.

January 2005: August's attorneys file motion to remove Stoen from prosecuting the case saying Stoen has a vendetta against August because she supported the recall of District Attorney Paul Gallegos and was one of the most vocal critics of Stoen and the suit against Pacific Lumber.

February 2005: Feeney denies the motion saying he found no reason to believe there would not be a fair trial. Stoen called the attempt to remove him a "ploy" to delay August's trial.

April, 27, 2005: August's attorneys file court papers asking for judge to dismiss the four counts against the real estate broker, saying Stoen hadn't shown legal sufficiency for the conflict of interest, failure to properly file economic statements and violation of grand jury secrecy admonition counts.

May, 17, 2005: Feeney dismisses three of the four counts against August, ruling the people did not meet the threshold needed to show August should face losing her seat. Conflict of interest count still stands.

May 19, 2005: August's attorneys ask the 1st District Court of Appeal in San Francisco to direct the trial court to dismiss that last count and delay trial.

May 20, 2005: Both requests are denied.

TS - Attorneys have a few questions for potential jurors

Attorneys have a few questions for potential jurors
By Kimberly Wear The Times-Standard
Wednesday, May 25, 2005 - 6:14:09 AM PST

EUREKA -- The first wave of potential jurors in the grand jury accusation case against Fortuna City Councilwoman Debi August are reporting for duty today and will find themselves with a few small assignments.
First, they'll be asked about their ability to serve on what could potentially be a four- or five-week-long trial. After that, they'll fill out a 13-page questionnaire with 35 queries, which attorneys and the judge hammered out on Tuesday.

The questions range from whether possible jurors participated in a Times-Standard poll on the case to whether they know any of the potential witnesses to whether they volunteered, worked or contributed in any campaign for or against District Attorney Paul Gallegos or August.

Jurors will also be gauged on their opinions of prosecutor Tim Stoen and defense attorneys William Bragg and Greg Rael. Those questions include whether they formed any opinion regarding their defense or prosecution of the case, whether they know the attorneys or any members of their workplaces, if they have watched or read news stories involving the attorneys, and, if they have, what did they read or hear and did they form an opinion.

Bragg said he didn't see the attorney questions as relevant. Stoen said he thought differently.

"I'm not happy to have to bring this up, obviously," Stoen said. "I'm a highly controversial person for a number of reasons."

Judge John Feeney said he expects the trial will end around July 1, although court will not be in session every day and, when it is, only until noon.

"I think it might take as long to pick a jury as it will to present evidence," he said.

Feeney asked the District Attorney's Office to prepare 100 copies of the questionnaire for the jury pool.

August, a real estate broker, has been accused by the grand jury of having a conflict of interest when she advocated on behalf of a friend's subdivision. She faces removal from office for the remainder of her term, which ends in April 2006.

Bragg objected to a written questionnaire, saying it will cause a time delay and many of the issues could be raised during voir dire -- the process when attorneys personally question potential jurors. That is expected to begin late next week.

Feeney said due to extensive media coverage he believed the questionnaire was necessary, and while it may seem lengthy at the onset, it will help move the process along in the end.

Other questions include:

* "Do you or any member of your family work for any local media, including the Times-Standard, Humboldt Beacon, North Coast Journal, television Channel 3 or any other media organization?"

* "Do you know the defendant, any of her relatives, or any of her close friends?"

* "Do you have any religious, philosophical, political, or other personal principle that would make it difficult or impossible for you to serve as a juror in a case such as this one?"

* "Have you, or any member of your family, or close personal friend, ever held a government office or position, whether elected or appointed?"

TS - A blurring of lines?

A blurring of lines?
The Times-Standard EDITORIAL
Wednesday, May 25, 2005 - 6:13:23 AM PST

For many months, the District Attorney's Office has vociferously denied that there's any connection between the accusation case against Fortuna Councilwoman Debi August and the DA's assorted dust-ups with Palco.

But the court appearance this week of a longtime supporter of DA Paul Gallegos -- attorney Steve Schectman -- as part of the DA's team in bringing August to trial may just add more fuel to critics' fire.

Before going any further, let's be clear. This isn't about August, or Palco. It's not even about Schectman, an able attorney with a history of tangling with the timber company and who acted as a spoiler for the DA in PL's ill-fated attempt to recall Gallegos.

Rather, it's about appearances, perceptions and the nagging, troubling criticism that the DA's office would engage in some sort of vendetta, as some claim. We hope and trust that claim has no basis in reality. But those who feel otherwise are probably noting the following points with interest.

* Soon after taking office, the DA lodged a civil case against PL, alleging the company falsified information to get state approval of timber harvest plans; that case is still under way. Shortly afterward, PL helped bankroll a controversial recall against the DA.

* During that process, Debi August was highly critical of Gallegos. Later, after the councilwoman was accused by a grand jury of conflict of interest -- following her poorly thought out move of speaking on behalf of a subdivision before her own city's planning commission -- the DA's right-hand man Tim Stoen filed, at the grand jury's behest, an unusual action to have her removed from office. Stoen is also the point man for the case against Palco.

* Early this year, Steve Schectman, known as an ally of the DA and foe of PL, was brought on board as a volunteer prosecutor in the DA's case against the timber company; Schectman has had success in previous cases against PL.

* The move raised eyebrows, but was found to be perfectly legal. At the time, Gallegos -- denied extra funding by the county to pursue the case -- said that Schectman would provide the civil experience needed in the Palco lawsuit; no mention was made of Schectman working on any other cases.

* This week, Schectman appears in court with Stoen on the first day of the trial of Debi August, to work on jury questionnaires and other issues. Schectman, however, quickly withdraws from the case when Judge John Feeney is about to recuse himself, citing a bias challenge by Schectman against the judge in a former case.

We believe that the DA's office and its attorneys should approach each case impartially; to investigate and charge based on the facts, without even the hint of any other motivation in operating such a powerful agency.

There's no hard evidence that the popular yet controversial DA has done otherwise in its dealings with PL, August, the recall and related issues.

But the elected DA's position is a political one, and subject to perception and appearance. What appearance does it give to have Schectman, a sworn foe of PL, join as a volunteer in the public prosecution of a case where the timber company is a defendant?

And now, the volunteer attorney appears on behalf of the DA in the supposedly unrelated case against August -- a loud critic of the DA on issues related to Palco.

As we said in January in this space:

"Let's hope, for the sake of public confidence in the district attorney, that Gallegos doesn't end up with a staff of volunteers who are using his office to pursue their own agendas against Palco -- or anybody else."

We're still hoping, and trusting, that's the case.

TS - August cites financial hardship

August cites financial hardship
By Kimberly Wear The Times-Standard
Wednesday, May 25, 2005 - 6:14:06 AM PST

A judge denied Debi August's request for a court-appointed attorney after the embattled Fortuna city councilwoman cited a fiscal hardship in the conflict-of-interest case against her.

August's attorney, William Bragg, asked to become her court-appointed representative Tuesday, saying the estimated length of the conflict-of-interest trial would be a hardship for her. Bragg said she had already considered a possible resolution to the case a day earlier out of monetary concerns.

Judge John Feeney denied the request for the time being, saying he would consider it again but asking to see some points and authorities on the subject.

He also imposed a gag order and went over the potential witness list with attorneys.

Bragg's request to become August's appointed counsel came as he, prosecutor Tim Stoen and Feeney were discussing how to question potential jurors in the Fortuna councilwoman's accusation case. Her attorneys have previously said August has spent $75,000 on her defense.

"This is causing a financial hardship," Bragg said, suggesting the prosecution was trying to drag out the case to get August to settle.

August, a real estate broker, is accused of a conflict of interest for advocating on behalf of a friend's subdivision. She faces removal from office under a 100-year-old, rarely used accusation proceeding. Her term ends in April 2006.

If Bragg were to become August's appointed counsel, he would be reimbursed for his attorney's fees.

Stoen responded that he has not been happy with the delays in the case and that burden was on the defense.

One of Bragg's concerns was the time allotted for the jury pool to fill out questionnaires and the voir dire process, which Stoen said was necessary because the case has "saturated the county in terms of publicity."

That also led to Stoen's request for a gag order, which Feeney granted.

The order applies to attorneys, witnesses, law enforcement officials, court employees and others, preventing them from making comments to the press about the case except for factual information.

In other developments, attorneys and Feeney tried to set down a road map for the trial, going over the potential witness list, their estimated length of testimony and various commitments by the attorneys and Feeney.

Stoen said he will not be able to make it to court June 14, when he heads to Mendocino County to interview for the position of county counsel.

Stoen, who is asking Mendocino to change his interview time and offered to make other arrangements, was recently recruited to apply for the post by a former boss.

"This case is more important to me," he said.

Each of the Fortuna City Council members is on the witness list, as are planning commissioners, the city manager, the city planner and former city employees.

The trial proceedings will continue in court today.

TS - August trial begins with a bang

August trial begins with a bang
Stoen asks for gag order, says trial could take two months
By Kimberly Wear The Times-Standard
Tuesday, May 24, 2005 - 6:12:21 AM PST

EUREKA -- One judge was challenged, another nearly recused himself and an assisting counsel withdrew altogether from the Debi August case on Monday.

And that was just the first day of the conflict-of-interest trial, in which officials had just enough time to settle into a courtroom and take care of a few housekeeping matters in the case against the Fortuna councilwoman.

On Monday, Deputy District Attorney Tim Stoen filed a motion asking Judge John H. Feeney to place a gag order on attorneys due to media coverage, and attorneys disagreed over how long they think the trial will last.

"Sounds like we have some varying times," Feeney said after Stoen gave a maximum "safe side" estimate of two months while August's attorney, William Bragg, put the length around two weeks.

August, a real estate broker, was present for the morning's events dressed in a bright pink leather jacket.

The trial is part of an accusation proceeding -- which lands somewhere between a civil and criminal case. August faces removal from office for allegedly having a conflict of interest when she advocated for a subdivision before the Fortuna Planning Commission on behalf of a friend. Her term ends in April 2006.

Feeney, who recently dismissed three other counts against August, will be presiding over the trial after Stoen challenged the original assignment of Judge Christopher G. Wilson. State law allows each side of the case one opportunity to remove a judge.

The trial nearly landed in front of a third judge when Feeney said he felt it was necessary to recuse himself after Steve Schectman, an Arcata lawyer with a private practice who is also a special deputy district attorney on a civil lawsuit against Pacific Lumber Co., appeared in court with Stoen.

Around four years ago, Schectman had challenged Feeney in another case, citing bias. While Schectman said he felt comfortable appearing before Feeney, the judge said that in the interest of justice he would have to step down.

So, Schectman -- who was making his first appearance in the case -- withdrew as an attorney of record. The judge received assurances from Stoen that it would not impede his job.

"I can handle the case myself," Stoen said, adding he had brought Schectman on to help with the preparation of jury questionnaires and other issues.

Bragg objected to Stoen's move for a written jury questionnaire, but Feeney said he thought two would be necessary; one to discuss juror hardship because of the potential length of the trial and the second with more detail questions due to the amount of media coverage.

Bragg said he had some concerns about Stoen's time estimate.

"We could lose a lot of good jurors that way," he said.

The case resumes today with attorneys and the judge discussing questions for jurors, the 30 potential witnesses, the gag order and the trial's timeline.

TS - Three of four counts dismissed in August case

Three of four counts dismissed in August case
Councilwoman still faces removal from office
By Kimberly Wear The Times-Standard
Thursday, May 19, 2005 - 6:12:11 AM PST

EUREKA -- In a ruling released Wednesday, a Superior Court judge dismissed three of the four counts in the accusation proceeding against Fortuna City Councilwoman Debi August, who still faces removal from office on a remaining conflict of interest count.

One of August's attorneys, William Bragg, said he is asking the 1st District Court of Appeal in San Francisco in a writ filed today to direct the trial court to dismiss that last count. Bragg said he is also seeking a stay of the trial, scheduled to begin Monday, until the appellate court can rule.

August, who is also a real estate agent, is accused of conflict of interest for personally advocating for a subdivision plan before the Fortuna Planning Commission on a friend's behalf. The District Attorney's Office is prosecuting the case.

Attorneys for August had sought to have all of the counts dismissed and each side filed legal papers outlining their positions before presenting oral arguments to Judge John H. Feeney on May 9.

In a four-page decision, the judge overruled August's objection to the conflict count, finding there was enough evidence presented to the grand jury, that pursuing the count did not violate the state constitution's Separation of Powers doctrine and that the grand jury proceeding did not violate August's due process rights.

But Feeney also ruled that the people did not meet the threshold needed to show August should face losing her seat for allegedly failing to correctly fill out Statements of Economic Interest documents when she was an appointed member of the Fortuna Planning Commission.

"It would be contrary to law to now subject Ms. August to removal from her elected position on the Fortuna City Council for filing errors, which were not only merely negligent, but also committed outside the scope of duties imposed by the office in question -- member of the City Council," Feeney wrote.

On the final dismissed count of failing to follow a grand jury secrecy admonition, Feeney made a similar finding, writing there was insufficient evidence to establish "serious misconduct or a purposeful failure" to carry out her duties of office.

One year has passed since the District Attorney's Office filed the accusation case against August following a grand jury investigation. If a jury were to find there was a conflict of interest, August would be removed from office for the remainder of her term, which ends in April 2006.

"I have no problem with the ruling," said Deputy District Attorney Tim Stoen, after hearing about the judge's decision. Stoen is prosecuting the case.

"Based on the importance of the charges, this is a 95 percent win for the people," he said.

August's attorneys had argued the conflict of interest count should be dismissed based in part on a 4th District Court of Appeal ruling in another accusation proceeding. There, the judges found the alleged wrongdoing must meet a minimum threshold.

The Steiner v. Superior Court case involved a accusation proceeding brought against Orange County supervisors after that county fell into bankruptcy.

"The procedure must be reserved for serious misconduct ... misconduct that involves criminal behavior or, at least, a purposeful failure to carry out mandatory duties of office," according to the appellate court.

Feeney agreed that three of the four counts against August did not meet that threshold.

August's attorneys are bringing the Steiner argument and issues regarding Stoen's alleged misstatement of the conflict of interest law to the grand jury to the San Francisco appellate court in a bid to have the last count dismissed.