ORANGE COUNTY PERSPECTIVE : Warning About the Limousine Life

The man who was general manager of the Santa Margarita Water District for more than 17 years is now an admitted lawbreaker, having pleaded guilty to criminal conflict-of-interest charges. Big spender Walter W. (Bill) Knitz once hired a limousine to take himself around New York’s Central Park for $245 and charged the cost to the district; now he will spend more than a week picking up trash along the roadside or performing some other public service.

Knitz also must pay $20,000 in restitution to the water district. Finally, and importantly, under the terms of the plea bargain undertaken in court Monday, Knitz is barred from working for a water district for three years and from lobbying any state, local or county agency for four years.

Some critics who would have preferred jail time emphasized the “bargain” part of the plea bargain. Probably a stiffer fine or more community service could have been justified. Still, the sentence should send a message that crimes do bring punishment. The prosecutor noted that Knitz was not an elected official who embezzled public funds but rather had charged off unallowable expenditures to a quasi-public agency. He also violated state law by voting on matters affecting companies from which he had taken money; that was wrong, but less serious than betraying the public trust through theft of tax money.

Knitz is 62, and the sentence clearly will deprive him of his normal manner of earning a living for a substantial period. Before Knitz’s plea, worked out with the Orange County district attorney’s office, two other district employees settled civil lawsuits alleging conflicts of interest and paid fines of $10,000 each.

The sentences are important, to punish wrongdoers and deter others. But perhaps more important for the long run are the actions the district has taken for badly needed systemic reform. Knitz and his former assistant have left office. All the board members have been replaced. The method of electing new members has been changed.

One turn of events before the plea bargain was that California-American Water Co., a private firm that wants to buy the water district, hired Knitz as a consultant after he had left Santa Margarita and was awaiting disposition of criminal charges.

Though Knitz is barred from such employment now, at the time there was nothing illegal about the job; California-American said it hired him just for one task, to help explain the district’s operations and finances. But in associating itself with Knitz, the company may have added an unintended additional barrier to showing that water district customers really will be better off down the road with new, private ownership than with continuing as a public agency.