People v. Sobel

• Decision Date: 31 July 1974
• Docket Number: Cr. 24534,25504
• Citation: People v. Sobel, 115 Cal.Rptr. 532, 40 Cal.App.3d 1046 (Cal. App. 1974)
• Court: California Court of Appeals
• Parties: The PEOPLE Plaintiff and Respondent, v. Stewart Mortimer SOBEL, Defendant and Appellant.

Page 532

115 Cal.Rptr. 532

40 Cal.App.3d 1046

The PEOPLE Plaintiff and Respondent, v. Stewart Mortimer SOBEL, Defendant and Appellant.

Cr. 24534, 25504.

Court of Appeal, Second District, Division 4, California.

July 31, 1974.

As Modified Aug. 6, 1974.

Rehearing Denied Aug. 20, 1974.

Hearing Denied Oct. 10, 1974.

Cy H. Lemaire, Los Angeles, for defendant and appellant.

Evelle J. Younger, Atty. Gen., Jack R. Winkler, Chief Asst. Atty. Gen., S. Clark Moore, Asst. Atty. Gen., Norman H. Sokolow and Lawrence P. Scherb II, Deputy Attys. Gen., for plaintiff and respondent.

JEFFERSON, Acting Presiding Justice.

Defendant Stewart Mortimer Sobel was charged by information in one count with violating Government Code section 1090 and section 1097, provisions prohibiting conflict of interest by public officials and employees. ¹ It was charged that defendant 'being at all times, during the period alleged, a County employee, to wit, a deputy purchasing agent, on or about and between July 13, 1970 and April 18, 1972 at and in the County of Los Angeles, State of California, did wilfully, unlawfully and feloniously have a financial interest in contracts made by the said (defendant) in the official capacity of the said (defendant) and because a vendor at purchases made by the said (defendant) in his official capacity.

Defendant pleaded not guilty. Trial by jury was waived. Pursuant to stipulation, the case was submitted on the testimony contained in the peliminary hearing transcript, each side reserving the right to offer additional evidence. Such evidence was received, and defendant was found guilty as charged. His motion for a new trial was denied. The trial court suspended criminal proceedings and granted defendant probation for a period of three years, on condition that he pay a fine of $1,000. Defendant appeals the judgment (order granting probation) which we affirm.

Waldo A. Perez, Head Deputy Purchasing Agent for the Los Angeles County Department of Purchasing and Stores, testified that defendant was assigned to the department on January 30, 1969, as a trainee. His duty was to assist more experienced personnel in performing the departmental function, that of negotiating on behalf of Los Angeles County the purchase of all necessary supplies at the lowest possible price. Shortly after defendant commenced this assignment, the department underwent reorganization in an attempt to streamline the purchasing operation and cope more effectively with the ever-increasing volume of purchasing required. One aspect of the new plan was the delineation of particular areas of purchasing by subject matter, and the assignment of particular personnel exclusively to those areas with the hope that the concentrated, specialized experience gained thereby would produce a better long range competitive bidding situation for Los Angeles County.

In August or September 1969, Perez testified defendant was assigned to the book buying section as a purchasing agent, and he remained there until his departure from county employment in April 1972.

Perez provided the trial court with a general description of how books are purchased. Large volume purchases are made subject to a formal bid procedure. Solicitation for bids is made to a compiled list of vendors bythe purchasing agent, as the person responsible for actual negotiation. An important responsibility of the agent is to maintain and expand the vendor list to include as many sources as possible, in order to encourage. Competitive bidding. Sealed bids are received from the vendors, and the low bid is ascertained. This step is also within the province of the purchasing agent. While it is standard operating procedure to accept the low bid, it is impossible for the agent to substitute another vendor if he decides the circumstances warrant it. In addition to formal bids, other methods are used. Sometimes it is deemed more expedient to solicit bids from only two or three vendors who are known to have available the particular merchandise needed. Small or unusual purchases are often made by contacting a prticular vendor by telephone. All of the resulting purchase orders, which are submitted to supervisory personnel by the agent for final approval, unless he has authority to act without such approval, show the method used by the agent to obtain the quoted price, I.e., by telephone or letter, and such orders are further identified by a numbered sequence which shows whether formal or informal bid procedure has been used.

Perez explained that the purchasing agent has considerable discretion in selecting vendors and in arranging financial terms. Standard operating procedure in the department, however, requires that deviations from ordinary practice, such as the selection of other than the low bid or acceptance of a discount arrangement, are expected to be submitted for approval by the agent to his supervisor but, again, in practice such submission results from the exercise of discretion by the agent. When an agent completes a transaction, it may be submitted as a purchase order for approval by a supervisor; however, the review of the transaction, particularly when negotiated by an experienced buyer, is largely perfunctory. Because of the tremendous volume of business done by the department every year, it is virtually impossible to employ supervisory staff to scrutinize every individual transaction as it occurs. In short, it is necessary for the department to rely on individual agents' skill, honesty and loyalty.

Perez testified that defendant performed the functions of an agent described above from the time he was assigned to the book buying section, at first under supervision and later with increasing autonomy. Defendant expanded the vendor list used in his section considerably. He and another employee devised a prepayment plan, whereby the vendor was to be paid at the time the order was placed and in return for advance payment the county was to be given a two percent discount on the order. The intended objective was to obtain a price advantage for the county but, as will be seen, the prepayment plan was also of direct benefit to one particular vendor, the Eola Book Service, Inc.

The prosecution introduced into evidence numerous purchase orders, negotiated by defendant as a purchasing agent, with the Eola Book Service, Inc. from July 1970 to December 1971. Some had been approved by superior, and some had not. Gerald Costa, head of management service for the purchasing department, testified that he had found nothing in his fiscal records showing that Eola had done business with Los Angeles County in 1969, but that Eola had done a dollar volume of business with the county totalling $269,977 in 1970--71, and had increased the volume to $361,249 in 1971--72. Perez testified that Eola's substantial volume of business was unusual for a concern that did not have a long history of transacting with the county. He also testified that Eola was the only vendor who had received prepayment in return for giving the two percent discount, the procedure formulated by the defendant. In addition, subsequent audit on some of the formal bidding contacts defendant had negotiated with Eola established that Eola had been awarded the contract when another vendor had actually turned in a lower bid.

The People introduced into evidence two signature authorization cards for bank accounts established by Eola, one in Nevada and another in California. The cards showed that the persons authorized to draw on the accounts were Lois Eola, who subsequently married defendant, and a certain 'M. Stewart.' Other evidence established that county warrants for payment of book purchases were deposited by Eola in the California account; certain checks were introduced showing payment to defendant from that account either by Lois Eola or 'M. Stewart.' One such check was used by defendant to pay off a balance owed to his stock broker.

Stock broker Chronis testified that while he was employed by a brokerage firm in 1971, defendant had dealt with him, opening a joint account in his own name with Eola Book Service, Inc.

Laurence W. Sloan, a handwriting expert in the office of the District Attorney, gave his expert opinion...