Fraud, evidence tampering allegations rekindle California forest fire case

In addition, defense attorneys for Sierra Pacific, the timber company held partly responsible for the blaze, have accused the state fire agency of pursuing deep-pocket defendants like the company because California officials were diverting recovery profits to a secret account, according to court documents.

Attorney Steve Campora, who represented the Botell family after their nine-year-old son was killed by a falling wall at Lassen in 2009, said he believes federal attorneys ignored false testimony in the wrongful death case.

“I wrote to the U.S. Attorney and advised him that I believed there had been perjury committed in the Botell case. I gave him what I thought was proof of the perjury,” Campora told the Washington Examiner.

“He simply referred me to the Assistant U.S. Attorney that was handling the case and, as far as I know, took no action,” Campora said.

The Interior Department’s inspector general is now investigating related allegations that Lassen officials destroyed evidence and lied under penalty of perjury.

Attorney Benjamin Wagner, head of the Eastern District of California attorney’s office, denied that any perjury occurred in the Botell case.

While Wagner said there was an “inconsistent” claim in testimony from a U.S. Forest Service employee and another witness, he said “such disputes are common” in civil cases.

“We consistently took the position that there was no perjury,” Wagner said. The court did not make a ruling on the issue and the case was subsequently settled “for reasons unrelated to that issue,” he said.

In the Moonlight Fire case, a joint investigation by USFS and the California Department of Forestry and Fire Protection, also known as Cal Fire, faulted four parties for the blaze: the family who owned the land, the company that managed the land, the bulldozing firm Sierra Pacific hired to conduct the logging and Sierra Pacific itself.

The U.S. District Court for the Eastern District of California ordered the defendants to pay more than $122 million in cash and land transfers in a 2012 settlement, which the Department of Agriculture called the “largest recovery ever received by the United States for damages caused by a forest fire.”

But the Plumas County, Calif., Superior Court threw the case out in February 2014 and instead ordered Cal Fire to pay the defendants $32 million for legal fees they incurred fighting what was described as a flawed investigation.

Judge Leslie Nichols of the state court faulted Cal Fire for “repeated and egregious” legal abuses, including an “institutional policy of destroying evidence,” in his order sanctioning the state agency.

The case is now back in the same federal court where it was first heard, with defense attorneys asking the government to abandon its previous judgement, given the allegations of fraud.

The Moonlight Fire began on private property in 2007, but quickly swept across 65,000 acres, including 45,000 that were owned by the federal government. Within days, USFS and Cal Fire officials claimed bulldozers hired by Sierra Pacific had sparked the flames by striking rocks, court documents said.

But an October motion from the defendants alleged the joint report left out key details that would have cast doubt on their role in starting the fire.

Chief among their complaints was the report’s failure to note that Michael McNeil, a USFS employee and “suspected serial arsonist,” was possibly present in the area when the blaze began, the motion said.

McNeil was suspected — though never charged — of starting between 60 and 100 fires, said Detective Ed Nordskog, a Los Angeles Sheriff’s Office arson investigator, who has written about McNeil’s history in two books on serial arsonists.

The same Cal Fire investigator who signed off on the report had also harbored suspicions about McNeil when he first arrived in the area and ordered a tracking device be put on his truck, the motion revealed.

According to documents, McNeil was “inexplicably” promoted to battalion chief in the agency’s fire department and transferred to Lassen despite “long-held suspicions” of his arson activities.

McNeil gave his deposition in the Moonlight Fire case from behind bars last year, where he is serving a 19-year, eight-month sentence for making terrorist threats against Sen. Barbara Boxer, Rep. Mary Bono and others, the documents said.

“[McNeil’s] whereabouts the morning and early afternoon on the day of the Moonlight Fire are unknown because the investigators never bothered to look into, before releasing their origin and cause scene, whether McNeil may have been responsible for starting the fire,” the motion said.

Investigators also manipulated evidence to conceal the fire’s true point of origin, the defendants alleged in their motion.

In August 2009, Cal Fire informed the defendants that it had deemed them responsible and demanded they reimburse the state $8.1 million, the motion said.

But instead of requesting the entire amount for the state, Cal Fire sought $7.7 million for California and threatened to file state actions against the defendants if they didn’t pay $400,000 to the “CDAA Wildland Fire Training and Equipment Fund,” the motion said.

The fund was later discovered to be an unauthorized account under Cal Fire’s control, the state court said in its February order.

Judge Nichols said Cal Fire staff were “fixated on the cash flowing in and out” of the illegal fund in his order. He cited documents that showed the Moonlight Fire case manager was intentionally seeking out “high % recoveries” to keep the fund from “being in the red.”

In the October motion, defendants claimed the off-the-books fund “created the motivational context” for Cal Fire “to seek out moneyed defendants.”

Even so, not every prosecutor involved bent to the pressure to bury evidence.

The case’s original lead prosecutor, Robert Wright, told the court he was encouraged to conceal evidence that might have weakened the prosecution’s case. When Wright refused, he was removed from his post and barred from the case, he said in a declaration.

Wright said his supervisor, David Shelledy, had treated him with “hostility” ever since the two clashed over Wright’s attempts in fall 2009 to disclose a document that revealed a $10 million overestimation of the damages the prosecution was seeking in a different wildfire case.

Shelledy removed Wright from the Moonlight Fire prosecution the same day Wright received a commendation from U.S. Attorney Benjamin Wagner, Wright testified.

Wright said the decision came “out of the blue,” and that Shelledy claimed he was banning Wright from the prosecution because “lately we disagreed about almost everything.”

Shelledy declined to comment to the Examiner on Wright’s charges. “We will respond to the accusations in district court, as appropriate,” he said.

Wagner dismissed the defense’s allegations of misconduct among attorneys in his office as “totally without merit.” He noted the federal judge denied defense attorneys’ requests to pause payments on the settlement during the initial district court hearing Nov. 24 and instead asked the defense to submit more evidence to back up their claims.

“We will continue to assert our position before the District Court, as appropriate, rather than in the press,” Wagner said. “I have complete confidence in the attorneys who are handling this matter.”

Whether the defendants will ultimately owe the Justice Department all of the 2012 settlement depends on the outcome of the case now before a federal court.

Next month, defense attorneys for Sierra Pacific will submit a report detailing the alleged fraud they claim took place in the original investigation.

If the court agrees that the evidence in their report would constitute fraud if proven true, then the case could move forward, and the largest forest fire recovery settlement in U.S. history could be reversed.