O.C. Tax Collector to Meet 2nd Challenger in 24 Years : Politics: Opponent may make an issue of county investments, annoying incumbent Robert L. Citron.

It was expected to be just another sleepy election year for Orange County Treasurer-Tax Collector Robert L. Citron.

The last time he had an opponent was 24 years ago when he was first elected to the low-key post.

The most recent political fund-raiser Citron held was eight years ago, when there were whispers of an opponent who never materialized. In these days of high-finance politics, holding fund-raisers is just not his style.

But suddenly, Citron, whose office handled 1.1-million property tax bills last year, has a challenger on his hands--one who is promising to make more than a little trouble.

Citron, 68, of Santa Ana received a letter this week from his challenger, John Moorlach, a certified public accountant and financial planner, who is demanding to know how Citron has managed the county’s investments portfolio.

Invoking the state open records law, Moorlach, 38, has submitted a long list of documents he wants released by April 18, detailing where the county’s funds are invested and who the brokers handling the accounts are.

It’s more than a little annoying to the usually soft-spoken Citron, who takes pride in how he aggressively handles a $7.5-billion portfolio for 187 government agencies. Last year, he said, the investments yielded $344 million.

“My reputation is so good as to the types and the quality of investments that I do,” Citron said. “I’m not blowing my own horn here, but I am recognized nationally for my investment ability and by the state of California.”

Moorlach, he said, “is trying to find a basis to say that I am doing risky investments and so on and so forth. That’s fine. I understand politics.”

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As the only Democrat in an elective office in county government, Citron claims the Republicans are trying to inject party politics into a nonpartisan race as pay-back for his involvement four years ago in the bitterly fought election victory of Democratic Assemblyman Tom Umberg of Garden Grove.

Umberg defeated Republican Curt Pringle of Garden Grove, who returned to the state Assembly two years later after winning in another district.

Up until the 1990 election, Citron said, he and Orange County GOP Chairman Thomas Fuentes were friends.

“He’s been mad at me ever since and has been out to get me,” Citron said. “I am not worried, but I am concerned because you never take an opponent lightly.”

But Fuentes says that it was Citron who brought party politics into the county office when he helped Umberg by sending out an endorsement letter that had an imprint of the county seal.

“You know how everyone opens letters from the tax collector like a letter from a lawyer,” Fuentes said. “I think he has brought the fox down on his own house by being such a partisan liberal activist.”

Moorlach, who is the assistant treasurer for the Orange County GOP Central Committee, said he would not be running if he did not believe Citron should be held accountable after running unopposed six times for four-year terms.

“When I looked at this position, you bet I talked to Tom Fuentes,” Moorlach said. “That’s part of the proper etiquette in political circles. Yeah, I was encouraged to look at it.”

However, he added, “I am not some puppet” for Fuentes.

Moorlach said he asked for the investment records so he can publicly debate Citron during the campaign without misrepresenting the facts. He also argued that he is not the only one concerned about Citron’s bullish investments.

Moorlach pointed to a recent article in a trade newsletter published by Institutional Investor Inc., which noted Orange County’s profits from its “gutsy” investments but warned that a rise in the interest rate “could leave the fund with hefty losses.”

Under a complicated financial strategy, the county is basically borrowing U.S. Treasury bonds and then selling them to invest in higher-yielding bonds.

The trade publication states that as long as the county is borrowing at a lower rate than the return on the security in which it invests, the county is on “solid ground.” But a change in the market could turn positive returns into negatives.

Moorlach conceded that Citron may have a contingency plan, but he said what he has heard so far makes him nervous.

“I think (Citron) is taking high risks. I think he’s cavalier,” Moorlach, of Costa Mesa, said. “I think his portfolio, a lot of it, has been sheer luck.”

But Citron wrote the 1980 law that allows local government treasurers across the state to engage in that innovative investment planning.

And his long record for capturing returns has won plaudits from local government officials, including the Orange County Board of Supervisors, which was recently able to finance a $2-million gang prosecution program using proceeds from Citron’s successful investment transactions.

The program funding came at a most uncertain fiscal time for the county, which has seen once-dependable revenue shrink along with the state’s sagging economy.

Citron’s success is a good example of the power of money in Republican Orange County.

“It doesn’t bother me that he is a Democrat,” Board of Supervisors Chairman Thomas F. Riley, a Republican, said. “This is a person who has gotten us millions of dollars. I don’t know how in the hell he does it, but he makes us all look good.”

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The low-key Citron, who is rarely seen on the local political circuit of dinners and fund-raisers, has managed to ruffle some feathers, though.

When he learned that Sheriff Brad Gates would not be joining the gang program, Citron was one of the few county officials to publicly criticize the sheriff.

The comments touched a nerve with Gates, who maintains a close relationship with Fuentes. “The next time he makes comments about me, I will have a heck of a lot to say,” Gates said at the time.

For now, Moorlach is the one planning to take on Citron after he conducts his own informal audit of the county’s financial records.

But Citron warned that Moorlach may be overwhelmed by the task, which is normally handled on a full-time basis by the county auditor’s office.

Citron said he also doubted Moorlach can raise enough money to defeat him.

The latest campaign finance statements filed in the registrar of voters office for the period ending March 17 showed that Moorlach had an ending cash balance of $5,428 compared to $7,237 in Citron’s account.

“I have tremendous name identification (with the voters), which he does not have and is trying to establish,” Citron said. “The Republicans have far more needs for Republican candidates, not only in the county but up and down the state, to try to take away a nonpartisan office,” Citron said.

But Moorlach countered: “I guess time will tell. . . . He might be surprised at what it’s going to take (to win).”

Times staff writer Eric Lichtblau contributed to this report.