2 Register Managers Lose Jobs; Circulation Audited : Newspaper: Their removal comes as a published report says examination will show numbers were inflated by up to 20,000 copies.

The Orange County Register has removed its two top circulation managers as an independent audit of its circulation figures is drawing to a close.

Patrick Elster, the paper’s vice president for circulation, and Joseph Mertins, his top aide, “are no longer employed” by the Register, Publisher R. David Threshie said Wednesday.

Threshie declined comment, however, on a published report that indicated the two officials were removed because the audit would show that the circulation figures were overstated by as much as 20,000.

Robert C. Hardie, chairman of Irvine-based Freedom Newspapers Inc., which publishes the Register, acknowledged in a separate interview that he was aware of possible circulation problems at the Register. He said he expects to get a full report from Register personnel early next week.

“I’ve heard about it and I’m distressed by it,” Hardie said. “But I do not know the full extent of it. I’m anxious to learn about it.”

The Register originally had put Elster and Mertins on administrative leave. But Threshie left no doubt Wednesday that they were now gone.

Elster, reached at home Wednesday afternoon, said he had not been told that he was out of a job and understood that he was still on leave. He acknowledged that a dispute existed between him and the Register, but would not comment further. He denied reports that he was removed, at least temporarily, because of possible overstated circulation figures.

The Register is “bracing for an embarrassment--a scaling back of its stated circulation numbers by some 20,000”--when an Audit Bureau of Circulations report is released within a month or so, according to an Orange County Business Journal article.

“I have no comment on that,” Threshie said.

Hardie, who also is publisher of Freedom Newspaper’s Appeal-Democrat in Marysville, said “there is something going on,” but said he did not know any details yet.

ABC has been conducting its annual audit of the Register’s circulation figures but has not yet told executives what it has found, he said. ABC officials in Schaumburg, Ill., said Wednesday that they could not comment.

The circulation controversy revolves around the newspaper’s claimed number of papers sold and the number verified by the ABC. Circulation figures are important in determining advertising charges. The ABC is a nonprofit organization that annually audits member newspapers, including the Register and the Los Angeles Times, to verify circulation claimed by publishers.

“ABC’s policy is not to comment on any audits,” said Raymond E. Chalmers, ABC’s assistant manager for media relations.

The ABC is governed by a 33-member board consisting of newspaper and magazine executives from around the country. Threshie is treasurer of the group.

Chalmers said that discrepancies in circulation found in newspapers and magazines are reported in the ABC’s Quarterly Variance Reports. Those reports alert advertisers if there is a 2% or higher variance between what a newspaper claims in circulation and what the audit confirms.

The alleged 20,000 gap in the Register’s claimed circulation would well exceed a 2% discrepancy.

Last March, the Register reported a daily circulation of 372,750 and a Sunday figure of 429,146. The Times Orange County Edition reported 184,648 daily circulation and 262,475 Sunday circulation. The Times’ overall circulation is 1,242,864 daily and 1,576,425 Sunday, the nation’s largest metropolitan daily.

Essentially, “the Register didn’t pass its audit,” contended Taylor Daignault, a Torrance lawyer who represents 18 former independent dealers who lost their delivery routes when the newspaper unilaterally terminated their contracts earlier this year.

Lawsuits filed last spring by Daignault as well as by lawyers representing two other discharged dealers allege that the Register reneged on contracts and agreements, which were worked out mainly with Elster, so that the paper could take circulation in-house and inflate the figures.

Elster, who had been circulation manager at the Long Beach Press-Telegram in the late 1980s, has been with the Register for the past 14 months. After his arrival in spring, 1990, the newspaper initially reported a jump in circulation.

“They didn’t sell as many papers as they said they sold,” Daignault asserted.

The Register, meantime, has switched its lead defense lawyer in the dealer litigation, giving the job to Duffern H. Helsing of Santa Ana, the paper’s longtime lawyer for First Amendment cases.