It’s fitting to speak of mirages when the Valley gets this hot.

The political mirage of the week, in the wake of former Merced County DA Gordon Spenser’s spectacular fall that ended in Bear Creek a week (just before a mysterious fire in the DA department’s offices), was the set-to between developer Greg Hostetler (Ranchwood Homes) and Supervisor Deirdre Kelsey at Tuesday’s Board of Supervisor’s meeting, exhaustively detailed below by the local press.

There is nothing like a juicy scandal. However, the whole thing was inevitable and is probably not the biggest political scandal waiting to unfold in Merced County.

All this drama, and the press and political obsession with making it all personal and a matter of integrity and reputation, is a waste of time and nothing but a scintillating diversion from the problem.

When urbanization comes, farming goes. It is a cold-blooded, ruthless process driven by the long-range planning of one small group, developers, and their profit taking. Everything else, including the reputations of particular developers and particular politicians, so engagingly showcased in this case, is a sideshow. Yes, it is flamboyantly Merced that the DA and the sheriff would have been partners in a deal to buy an advantageously placed land parcel from an inmate of the county jail indicted for attempted bribery of a police officer, who ended up serving six months instead of nine years. Yes, the peculiar blend of arrogance, stupidity, greed, and possibly actionable behavior is what we have come to have a perfect “right” to expect from “leadership” in Merced County.

Furthermore, we are not holding our breath in expectation that either Spenser, Pazin, Hostetler or any other members of the Bellevue Partnership (purchasers of the inmate’s land) will ever be indicted for anything, by Attorney General Bill Lockyer or the newly appointed DA, Larry Morse, II. Lockyer’s connections with Merced and Spenser are deep -- for instance, he has appointed two not one but two former Merced law enforcement officials to the top investigative position in the state Department of Justice -- and Morse has his own political career to look after. It is even a question how much further this investigation will go, if any further at all, because of what else might be found and who else, among the county’s “good old boys and girls” would be implicated in backroom land deals.

When the county “leadership” committed itself and the rest of us to becoming home to the University of California, Merced campus, it set in motion a speculative real estate boom that has laws of its own, not all of them legal, if you get the distinction.

There used to be another such informal law, in politics, that was pretty widely observed between the end of WWII and the election of Ronald Reagan as governor, and even the Reagan people mostly observed it. The idea was that the people would accept an ambition for political power and they will accept an ambition to get rich, but they will not – at least would not – accept an ambition for both in the same politician. The combination was felt to violate the public taste, which can lead to disasters now befalling Spenser and perhaps others soon to follow here in Merced County.

Another informal law from that bygone epoch was that an office holder was expected to be able to drink with people attempting to influence his vote, accept their political contributions and even their prostitutes, and vote against them the next morning.

Today, it is nauseatingly obvious here in the big speculative land boom that the loyalty of local, state and federal legislators representing Merced County has been sold to developers. You see it week after week in local land-use decision after decision, at the state level in the new Valley partnership for growth, and in Congress Rep. Dennis Cardoza, Shrimp Slayer-Merced, has introduced three bills in three years tailor-made to streamline the sale of farm and ranchland to developers and urbanize this area over the dead body of the Endangered Species Act and the species it is designed to try to protect.

All the protestations of personal insult, damage to reputation, even allegations of danger to a supervisor in the board chambers (because Hostetler called her out on her own profound conflicts of interest), are nothing but a Punch and Judy show. Anyone who has ever articulately opposed a board of supervisors’ or city council’s position in Merced County has received worse abuse from supervisors and council members than Kelsey received from Hostetler. One recalls grimly, former Supervisor Cortez-Keene’s McCarthyite interrogations, for example. More recently, board chairman Mike Nelson’s nasty response to any criticism and supervisor John Pedrozo’s belligerence toward it are equally fondly recalled. So, the public doesn’t buy Kelsey’s political vapors anymore than it buys Spenser’s memory loss.

The law in Merced County is that the most aggressive developer wins, period, whether it’s done crudely, as the scofflaw Hostetler does it, or more smoothly as larger, richer competitors of Ranchwood Homes do it, or with the elegant disdain of UC Merced, which steadfastly denies it is a developer at all while being the largest developer in the county. What is called “planning” in the county amounts to accommodation to development. Political competence consists of making sure developers agree to pay all legal expenses the county might incur as the result of lawsuits arising from their land-use decisions, which frequently violate aspects of the California Environmental Quality Act and laws of public process.

“Planning” in the county is a complete joke. The county has not updated its General Plan since before UC Merced was even contemplated and has chosen the route of simply amending it whenever necessary. It’s present face reminds one of members of Davy Jones’ crew in Pirates of the Caribbean. Now, with the university launched and the speculative boom gyrating out of control, local land-use jurisdictions are planning new general plan and community plan updates here, there and everywhere.

Even this tardy diligence is grudging and is planned to take about as long – as best it can be guessed – as the boom itself continues to its bust. The best thing for the public interest that could be done is to have a building moratorium while these updates, particularly the county general plan, are being done. When confronted with a public statement, signed by a coalition 15 local and regional groups, urging a moratorium, the supervisors voted for business as usual.

Whose interests do they represent?

Bill Hatch

Coalition Statement on Merced County Planning Process

We call for a moratorium on County General Plan amendments, variances, minor sub-divisions changes to existing projects, zoning changes, and annexations of unincorporated county land by municipal jurisdictions, MOU’s and developments with private interests and state agencies, until a new County general Plan is formulated by a fully authorized public process – and approved locally and by the appropriate state and federal agencies.

The continual process of piecemealing development through amendments, willfully ignoring the cumulative impacts to infrastructure and resources, for the benefit of a small cabal of public and private special interests, is illegal and reprehensible conduct on the by elected and appointed officials of local land-use authorities.
We also call for a permanent moratorium on indemnification of all local land-use jurisdictions by private and public-funded developers.

Indemnification is the widespread, corrupt practice in which developers agree to pay for all legal costs arising from lawsuits that may be brought against their projects approved by the land-use authority — city or county. Without having to answer to the public for the financial consequences of decisions made on behalf of special interests, local land-use authorities can be counted on to continue unimpeded their real policy: unmitigated sprawl, agricultural land and natural resource destruction, constant increases in utility rates, layering of school and transportation bonds on top of property taxes, and the steady erosion of the county’s infrastructure.

Adopted 2006

San Joaquin Raptor/Wildlife Rescue Center
Protect Our Water
Central Valley Safe Environment Network
Merced River Valley Association
Planada Association
Le Grand Association
Communities for Land, Air & Water
Planada Community Development Co.
Central Valley Food & Farmland Coalition
Merced Group of Sierra Club
Citizens Committee to Complete the Refuge VernalPools.Org
California Native Plant Society
Stevinson Citizen’s Group
San Bruno Mountain Watch
San Joaquin Valley Chapter of Community Alliance with Family Farmers


Central Valley Safe Environment Network is a coalition of organizations and individuals throughout the San Joaquin Valley that is committed to the concept of “Eco-Justice” — the ecological defense of the natural resources and the people. To that end it is committed to the stewardship, and protection of the resources of the greater San Joaquin Valley, including air and water quality, the preservation of agricultural land, and the protection of wildlife and its habitat. In serving as a community resource and being action-oriented, CVSEN desires to continue to assure there will be a safe food chain, efficient use of natural resources and a healthy environment. CVSEN is also committed to public education regarding these various issues and it is committed to ensuring governmental compliance with federal and state law. CVSEN is composed of farmers, ranchers, city dwellers, environmentalists, ethnic, political, and religious groups, and other stakeholders.
P.O. Box 64, Merced, CA 95341

Merced DA under fire for 2004 land deal
He, 7 other investors made deal with a man facing bribery charge
By Chris Collins
Merced Sun-Star

Last Updated: July 9, 2006, 05:20:05 AM PDT
California Attorney General Bill Lockyer has launched a third investigation into Merced County District Attorney Gordon Spencer, this time examining whether Spencer committed a crime when he and a group of local investors bought a piece of property from a man who was sitting behind bars and facing charges from the district attorney's office.

The latest investigation comes on top of an ongoing criminal probe into Spencer's potential embezzlement of public funds and an inquiry in December that found Spencer had impersonated an investigator.
The attorney general now is looking into a 21-acre lot on Bellevue Road that Spencer, Sheriff Mark Pazin, Ranchwood Homes owner Greg Hostetler and five other prominent locals bought in 2004.

The owner of the farmland, former Merced College police chief Richard Byrd, was arrested in March 2004 for bribing a sheriff's deputy. His bail was set at $500,000.

Byrd said his imprisonment forced his security company to go out of business and prompted his daughter to sell his land to help pay for attorney fees and other expenses.

Prosecutors in Spencer's office were working on a plea deal with Byrd in May 2004 when Spencer and the other investors pitched their offer to buy the land, according to public records and property sale documents Byrd provided.

Investors close deal

The investors, organized under the Campodonica Trust led by Merced real estate agent Carl Campodonica, closed the $1.3 million deal on the land July1, 2004. Byrd was released from jail 15 days later.
Frank Dougherty, the Merced County Superior Court presiding judge, said he has looked into the case and found that Spencer was "intimately involved" in pressing felony charges against Byrd.

It also is clear from property sale records that Spencer knew he was buying land from the man he was prosecuting. One document shows Spencer's and Pazin's signatures next to Byrd's name.
When the purchase went through two years ago, it drew little attention. But concerns about the deal have resurfaced in the wake of multiple investigations launched by state and local agencies examining Spencer's use of grant funds and county dollars.

The attorney general's investigation of the land deal could lead to extortion charges against Spencer.
Robert Weisberg, a Stanford law professor who specializes in white-collar crime, said Spencer's decision to pursue the land deal while prosecuting Byrd was "unbelievably bad."

"If the district attorney said to the defendant, 'I'm going to charge you with crime X, but if you reduce the price on your land, I'll give you a better deal,' then, boy, you could talk about extortion," Weisberg said.
Byrd said he never was approached by anyone from the district attorney's office while he was in jail. But he said he originally was told through his lawyer that he was facing nine years in state prison.

Byrd gets sentence reduced

After Byrd's daughter accepted the Campodonica Trust's offer to buy the land, Byrd was offered a plea deal that reduced his sentence to six months of county jail time.

Byrd also said he wonders why his $500,000 bail never was reduced.

Spencer did not return calls last week seeking comment. His Merced attorney, Terry Allen, said the attorney general's investigation is based only on "speculation."

"I assure you Byrd wasn't coerced into doing anything and Gordon wasn't doing anything to gain some advantage over him," Allen said.

Most of the other seven investors who were part of the Campodonica Trust either didn't return calls or said they didn't want to comment.

Hostetler, a local developer, said he joined the investment group at the last minute to help provide a little extra money needed to seal the deal. He said he didn't know Byrd was the seller.

Sheriff regrets joining group

The attorney general's office won't acknowledge it's investigating the land deal, but Pazin and Chief Deputy District Attorney Larry Morse II said two investigators and a deputy attorney general have interviewed them as witnesses about the property purchase.

Pazin said that, at the behest of Dougherty, he sent a letter to the attorney general a few weeks ago asking his office to look into the land deal.

The sheriff said that when he joined the Campodonica Trust he didn't see a problem with entering the land deal. But he said he now regrets joining the investors.

Pazin said he didn't realize he was buying land from Byrd, who was in the custody of the Sheriff's Department at the time, until the final stages of the deal.

"Is there anything neglectful that I did? The answer is no," Pazin said.

"But is there a perception issue? Yes. And I accept that."

News that Spencer bought the land from a man he was prosecuting has roiled some county supervisors.
"The whole thing sounds like a real bucket of rotting fish," Supervisor Deidre Kelsey said.

"I'm surprised that a transaction like that would occur."

Merced Sun-Star
Land deal rhetoric flares up...Leslie Albrecht
Tension about recent press coverage of former District Attorney Gordon Spencer's land deal with Merced County Sheriff Mark Pazin and other prominent locals boiled over at the supervisors' meeting Tuesday when Ranchwood Homes president Greg Hostetler harshly criticized Supervisor Deidre Kelsey. Hostetler is one of the investors who bought land from a man while he was in jail being prosecuted by Spencer. During the meeting's public comment period, Hostetler leaned over the podium and read a statement that first refuted information in the Sun-Star story, then accused Kelsey of making "uncalled for comments." Hostetler said a Merced County civil grand jury investigation into Kelsey's family mining business five years ago left Kelsey in no position to pass judgment on others. This isn't the first time Hostetler and Kelsey have clashed. In March a voicemail message reportedly left by Hostetler was posted on the Web site Badlands Journal. In the message Hostetler accused Kelsey of using county staff members as her "personal pit bulls" to attack his employees.

Kelsey fires back in strongly worded letter to chairman
By Leslie Albrecht
July 21, 2006

The fire of controversy ignited when developer Greg Hostetler publicly criticized Supervisor Deidre Kelsey is heating up.

Kelsey fanned the flames with a letter to board chairman Mike Nelson saying that she felt afraid for her safety when Hostetler read a statement about her during the public comment period at Tuesday's supervisors meeting.

"I am extremely disappointed that NO ONE intervened appropriately to stop the personal attack coming at me from the podium," Kelsey wrote in her letter to Nelson.

Kelsey's letter also says Hostetler used the "county forum as a means to personally attack me and my family."

Hostetler called Kelsey's letter a "mischaracterization" of what happened at the meeting.

"It would be my opinion that Deidre has overreacted, is acting childish, and is spinning the truth," said Hostetler.

He called for Kelsey to resign immediately because of the findings of a 2001-2002 Merced County civil grand jury report that investigated a complaint about Kelsey's family's mining company.

Hostetler's comments at the Tuesday meeting were a response to a Sun-Star article about a land deal Hostetler made with former District Attorney Gordon Spencer, Merced County Sheriff Mark Pazin, and other prominent locals.

Hostetler, Spencer, Pazin and others bought the land from a man who was in jail awaiting prosecution by Spencer. The State Attorney General's office is investigating the deal.

Kelsey was quoted in the article saying, "The whole thing sounds like a real bucket of rotting fish."

At Tuesday's meeting Hostetler called Kelsey's comments "inflammatory and unprofessional."

He held up a copy of the 2001-2002 grand jury report -- which investigated a complaint about Kelsey's family's mining company -- and said that Kelsey had engaged in "unethical conduct."

The jury's report accused Kelsey of having a conflict of interest involving her family's mining business. Kelsey told the Sun-Star in 2002 that the report was the work of "a good-old-boy network" upset because she did not bow to economic special interests.

Kelsey said Nelson, as chairman of the meeting, should have stopped Hostetler's speech because he was harassing and haranguing her and "looking with hostility directly at me" and "leaning forward towards the dais."

"I demand to be provided with a safe workplace and I believe the law provides for the safety of elected officials while engaged in county business," the letter said.

Kelsey's letter asks that "this issue be resolved either through some action of (Nelson's) or through the collective actions of the Board policy immediately."

Nelson met with County Counsel Ruben Castillo on Thursday and asked him to provide a legal opinion about whether the supervisors can restrict public comment.

A state law called the Brown Act governs how elected bodies like the Board of Supervisors run their meetings, said Castillo, so any county policy would have to be in line with that law.

"I have a constitutional right to speak at a public forum," said Hostetler. "The government may not silence speakers on the basis of their viewpoint or the content of their speech.

"I will not be silenced. I live in America, not in Baghdad."

Nelson's seat on the supervisors' dais has a button that controls the microphone on the public podium. He said his role as chairman is to turn the mic off if a member of the public becomes disruptive.

"If I thought any member of the public was getting out of hand I would have asked for the sheriff to step in, but that wasn't the case," said Nelson.

Kelsey also faulted Sheriff Pazin and Undersheriff Bill Blake -- who were both in the audience during Hostetler's comments -- for not intervening during Hostetler's speech.

But Blake said he and the sheriff attend supervisors' meetings as participants, not police.

"I don't know what she wants us to do," said Blake. "I can't arrest him for being mean to the Board of Supervisors."

He added, "He didn't swear, he didn't threaten, he didn't yell ... I can't get up and say 'Greg you're breaking the law', because he's not. In fact, I would be afraid that a civil libertarian would think I was infringing under color of law on his free speech."

Kelsey said Hostetler's comments at the meeting caught her totally off-guard.

The meeting's original agenda included a ceremony where Kelsey was to receive a pin honoring her 10 years of service on the board, but the ceremony was postponed.

Instead, Kelsey found herself on the receiving end of Hostetler's criticism.

She said all elected officials can expect criticism, but Hostetler chose the wrong setting.

"That's the elbows and knees aspect of being in politics," said Kelsey. "However, in a public meeting doing county business is a different matter.

"There's a different set of expectations when I'm out and about in the community than when I'm sitting as a supervisor on the dais."

Reporter Leslie Albrecht can be reached at 385-2484 or lalbrecht@mercedsun-star.com.

Controlling speech at meetings and the Brown Act

A state law called the Ralph M. Brown Act governs how elected bodies like the Board of Supervisors run their meetings. The California First Amendment Coalition's Web Site includes this question and answer about limits on public comments.

Q: How far can an elected body go in controlling what speakers say in their comments?

A: In creating an opportunity for citizens to address a legislative body, the Legislature has created what is described in First Amendment jurisprudence as a limited public forum.

It is limited in the sense that speakers may be held to subject matter relevant to the meeting (or at least the agency's role) and may also be restricted by reasonable rules of time limitation and good order.

But, concluded the U.S. Ninth Circuit Court of Appeals, the First Amendment would not permit officials presiding in a public forum of even this limited scope to outlaw comment simply on the basis of its being offensive -- "personal, impertinent, slanderous or profane."

What they may do is react to actual disruption, which in the context of a government meeting can mean simply wasting time to the detriment of all others present.

Board of Supervisors transcript

To view or listen to the meeting, check the Board of Supervisors Web site: web.co.merced.ca.us/bos/archive.html

HOSTETLER: Good morning, everyone. My name is Greg Hostetler, 2000 M Street, Merced, California.
I am here today because of my concerns about recent events. I would like to say several things this board and public should know.

I am speaking for myself and not the Bellevue Partnership.

The real estate transaction involving Sheriff Mark Pazin and District Attorney Gordon Spencer was negotiated, signed and agreed to between two business professionals and the seller Mr. Byrd and his daughter.

Neither Mr. Spencer and Mr. Pazin had any negotiations as to the price, terms, and conditions of the purchase from Mr. Byrd. If anyone of the Board of Supervisors would like to see the contract I would be more than happy to show you.

I believe that the purchase contract was professional and ethical.

The property was listed with a Merced real estate company and placed on the MLS, Multiple Listing Service, for approximately 30 days or longer for all members to sell, which is around 700 sales people in the Merced area.

One offer was received for $1.1 million from a potential buyer. The seller countered, Mr. Byrd, with a $1.4 million counter offer. The counter offer was declined by the buyer.

The next offer was received for $1.3 million was presented to Mr. Byrd by two Merced professionals, and it was accepted by Mr. Byrd. Subsequently portions of the buyer's interest were sold to other individuals in Merced, including the sheriff, including myself and a number of other partners and the district attorney. Because the seller wanted an all-cash transaction at $61,000 an acre, which is in the county. The property adjacent to it, two months earlier, sold for approximately $36,000 an acre. It has been reported that the land was annexed and rezoned. That is incorrect.

Several local investors and business professionals felt it was not a good enough investment so they declined to purchase a share.

I think hypothetical comments without the facts about the transaction are uncalled for such as those made by Stanford law professor and comments made by Deidre Kelsey.

They are inflammatory, unprofessional, and do not show the leadership qualities this county needs.

I think Deidre Kelsey's conduct is unethical on a number of issues. One being the operation of the mine of the Kelsey property in Snelling which has been the subject of a former grand jury investigation and it was reported that it had been operated for at least six years and failed to pay county road taxes ...

NELSON: Mr. Hostetler ...

HOSTETLER: ... and operating in a fishing business without county ordinance permitted ...

NELSON: Mr. Hostetler.


NELSON: I would ask you to confine your comments to not attacks on board members please.

HOSTETLER: It's open public I can talk about the grand jury investigation ....

NELSON: I understand that ...

HOSTETLER: ... and I'm going to talk about it.

NELSON: Well you have a minute and four seconds.

HOSTETLER: That's fine. And I understand that. There's an ongoing investigation I understand to the operation of the mining there now and hopefully it will not go unenforced like the last time according to the grand jury report. Thank you.

(Kelsey left the chamber during Hostetler's comments. After Hostetler was done, she returned and sat down.)

KELSEY: If people bring things up that pertain to myself or my family in this forum I will recuse myself from the public forum at that time. And you can see I did leave and I have now come back.

(At the end of the meeting, each supervisor makes a report. Nelson's included the following comments.)

NELSON: I have nothing to report necessarily, but I did want to say, you know we always welcome people to come make comments during public opportunity to speak, but it's nice when people don't make personal attacks. It's just not, really, it's just not appropriate. That's all I have to say.

DA still in hospital
By Scott Jason
Last Updated: July 13, 2006, 01:38:01 AM PDT

The Merced County district attorney remained in the hospital Tuesday night with short-term memory loss after a rollover crash Monday night, his attorney said.

Terry Allen, Gordon Spencer's attorney, said he called Spencer as a friend to check his condition.

"He can't remember anything from two to three days ago," Allen said, adding Spencer can't recall the circumstances surrounding the crash.

Spencer was taken by his wife to Mercy Medical Center Merced after the wreck. He could not be reached for comment.

The California Highway Patrol is continuing its investigation into the crash, though it doesn't look like any charges or citations will be filed, Public Information Officer Shane Ferriera said.

The district attorney, who was wearing a seat belt, was driving alone on South East Bear Creek Drive at about 5 p.m., Ferriera said.

Spencer was a mile east of McKee Road when he apparently didn't follow a left curve and plunged his truck into the creek.

He did not appear to be under the influence of drugs or alcohol, Ferriera said.

A 35 mph sign is posted just before the turn. The CHP is not sure if Spencer was speeding, Ferriera said.

A man who lives near the crash site, Dan Smith, and his two children found Spencer and helped him call his wife. Assisting people who drive their cars into the creek is nothing new, Smith said.

"We treated him and did for him what we've done for a dozen other people," Smith said.

Smith's 9- and 12-year-old sons were tubing down the creek when they found Spencer's truck upside down at 5:30 p.m. Only the wheels and undercarriage were visible above the water.

They told their dad, who thought the truck was abandoned because people have stolen cars, stripped them and dumped them in the creek, he said.

When the two boys went back to get the Ford F-150's license plate number, they saw Spencer waist-high in the creek leaning against the bank.

Smith's 12-year-old son asked if Spencer needed help, and said the district attorney mumbled he didn't.

The son went home and told his dad there was a man in the creek.

After seeing the kids, Spencer crossed the creek and started walking toward Smith's home, about a quarter-mile from the crash, Smith said.

Spencer, wearing khaki pants and a button-down shirt, told Smith he was OK, and that he was driving, missed a turn and wrecked his truck.

There weren't any signs the district attorney was drinking or under the influence of drugs, Smith said.
"He acted like someone who had been in an eye-opening wreck," he said.

Smith recognized Spencer as the district attorney and brought him to his house to make a call.

"He was fine and talking with no apparent injuries, except an abrasion on his face from an air bag," Smith said.
Spencer called his wife from Smith's phone, and she took him to the hospital at about 6:30 p.m. She reported the crash to the CHP at 8:10 p.m., Ferriera said.

Leaving the scene and seeking treatment, as Spencer did, is not uncommon in single-vehicle wrecks with minor injuries, Ferriera said.

"It's not like it was a hit-and-run," he said.

The investigating officer interviewed Spencer at the hospital and tested him for driving under the influence.

Ferriera said the test includes looking for the smell of alcohol, slurred speech or red, watery eyes.

Ferriera said he did not know if Spencer was given a breathalyzer test.

The Merced County Sheriff's dive team checked the truck to make sure there weren't any other people in it. After 11 p.m., tow trucks removed Spencer's truck from the creek.

Timeline of the wreck

5 p.m. -- District Attorney Gordon Spencer rolls his Ford F-150 truck into Bear Creek.
5:30 p.m. -- A neighbor and his kids find Spencer and let him use their phone to call his wife.
6:30 p.m. -- Spencer's wife picks him up and takes the district attorney to Mercy Medical Center Merced.
8:10 p.m. -- California Highway Patrol officers are called about Spencer's crash. The investigating officer goes to the hospital to interview Spencer and test him for driving under the influence.
11:15 p.m. -- Tow trucks remove Spencer's pickup from the creek.