ORANGE COUNTY PERSPECTIVE : A Needed Clean Sweep

The scandal-ridden Santa Margarita Water District is better off without its chairman, Don B. Schone, who resigned Sunday. Schone correctly noted that continued bad news from the district was harming its effectiveness. But it was Schone himself who was at the center of the latest round of disclosures.

The chairman resigned hours after The Times reported that in 1990 and 1991 he stayed in Cabo San Lucas in Mexico as the guest of Robert Bein, William Frost & Associates, an Irvine engineering firm that does business with the water district. Schone did not file the state-required conflict-of-interest forms, nor did he abstain from voting on matters involving the engineering company, as required by state law.

Schone claimed that he did not report the trips because he did not understand fully the reporting requirement. But conspicuously absent was any explanation of why he failed to file amended reports last year, after extensive reports in The Times on lavish spending by the district’s top two executives, who have since resigned. The two, former district General Manager Walter W. (Bill) Knitz and his assistant, Michael P. Lord, are subjects of a joint federal and state investigation of possible conflict-of-interest violations.

It is now apparent that having skeletons in the closet affected Schone’s ability to chastise Knitz and Lord fully. He merely said he probably should have paid closer attention to their expense accounts. In what amounted to mutual back-scratching, Schone approved Knitz’s expense accounts and the general manager approved Schone’s. Thus Schone OKd Knitz’s $245 limousine ride around New York’s Central Park and Knitz signed off on Schone’s $275 bill to take part in an Orange County horseback ride.

Schone was a director of the district for 17 years. He and his fellow directors were far too gentle with Knitz and Lord when their extravagant spending first came to light. One director did resign soon after the initial reports; three others were later defeated at the polls.

Schone’s resignation provides the necessary clean sweep of directors who were in office while the dollars were being so freely spent.

The report of Schone’s excesses demonstrates that the district’s problems were systemic. And there is a larger lesson there for public officials at every level of government. Executives cannot hold their subordinates to a stricter standard than they follow themselves. In public service, the best leadership is by example.

In recent months, the Santa Margarita Water District has taken necessary actions to try to prevent a recurrence of its problems. It rightly instituted one of the toughest codes of ethics of any public agency in California. But the district directors must make sure the code is followed. Lack of oversight in many obscure government agencies like the water district long has been a problem, especially when directors hold office for term after term and become lax in scrutinizing the actions of staff members. When directors join in treating the job as a ride on the gravy train, it’s worse.

There are several studies under way on possible consolidations of special districts in Orange County, and some districts are considering toughening their own ethics codes. Those are hopeful signs that some of the lessons of the Santa Margarita Water District scandal may be sinking in.