Supervisors’ Darkest Day Began Early

The day began inauspiciously at 2:55 a.m. when Supervisor William G. Steiner, asleep at his home in Orange, was awakened by a telephone call summoning him to the Hall of Administration in Santa Ana.

About the same time, Emma Jane Riley was startled out of deep slumber by the ringing telephone next to her bed. A woman’s voice asked for her husband, Board of Supervisors Chairman Thomas F. Riley, also urging his presence in Santa Ana.

A while later, Orange County sheriff’s deputies were dispatched to the homes of Supervisors Roger R. Stanton and Harriett M. Wieder. County staffers had been unable to reach them by telephone because they had left on their answering machines.

“First of all, I thought it was either somebody who was drunk or playing a prank,” said Wieder’s husband, Irv, especially because they live in a gated community in Huntington Beach.

Thus began one of the darkest Tuesdays in county government history, a prelude to Orange County’s filing of the largest municipal bankruptcy ever.

Riley, 82 and a diabetic, could not simply rush out. After dressing in coat and tie, he ate a quick breakfast and took some insulin before heading out the door.

Given the mounting financial crisis facing the county, Emma Jane Riley said her husband was not that surprised by the pre-dawn call. Nor was she.

“Don’t forget. I’m a military wife,” Mrs. Riley said, referring to her husband’s other title as a retired Marine Corps brigadier general. “He’s used to crises. . . . He was just concerned that it was necessary to go.”

The sentiment was shared by Elaine Vasquez, wife of Supervisor Gaddi H. Vasquez. “My husband was woken up for the Laguna fires, so we’ve been through these things before.”

Top county administrators, meanwhile, had spent the night in their small, boxlike government offices within the maze of high-rise public buildings at Santa Ana’s Civic Center. The crisis managers--County Administrative Officer Ernie Schneider, County Counsel Terry A. Andrus, acting Treasurer Matthew Raabe and Finance Director Eileen Walsh--had worked around the clock without sleep.

In what has become the most unusual and serious crisis to face Orange County government, the top officials were hastily shoring up their defenses for another day filled with uncertainty. At that point, they did not know which way the looming financial disaster would turn.

Stung by a dramatic $1.5-billion loss in the value of the county’s investments portfolio, they were scrambling to prepare for--and then react to--the opening of East Coast financial markets at 7 a.m. Pacific Standard Time. Schneider--the point man directing the county’s response--had made the decision to call in the supervisors.

By 4 a.m., all five supervisors had arrived at the Hall of Administration.

They were escorted to the third-floor offices of the county administrator, but were carefully sequestered in separate areas. Schneider wanted the lawmakers there for close consultation, but knew he would have to keep them physically apart in order to avoid violating the Brown Act, the state open-meetings law that prohibits more than two supervisors from gathering at any one time when the public has not been notified in advance.

The early morning session took on the appearance of a “war room” as staffers shuttled between supervisors for more than five hours with regular updates.

With routine county business to conduct, the supervisors adjourned to their meeting chambers on the first floor for their regularly scheduled session.

Usually, their meeting agendas are dispatched with the speed of a pit crew at an auto race. But on Tuesday, after spending about an hour on regular, mundane items, the board went into a closed-door special session.

“I had 2 1/2 hours of sleep last night,” said Wieder, who appeared exasperated as she plopped in her brown leather chair in the board’s meeting room after the lunch break. The supervisors were about to go behind closed doors for a second time Tuesday to discuss the status of the county’s finances.

By now, word on the street was that the county was considering filing for protection under federal bankruptcy law.

During one of the sessions, Schneider passed a note to Steiner asking him to step outside the board room and take a call from Gov. Pete Wilson.

Since the news broke last week that the county’s investments portfolio was in trouble, the supervisors have said very little publicly. They have neither offered explanations nor made excuses. And Tuesday was no different.

Following the midmorning sessions, they had ducked questions from the crush of reporters as they slipped into a room behind the dais, emerging briefly to announce that they would reconvene at 3 p.m.

County staffers, inundated with calls from the media as well as a few from the public, claimed they also had little information.

“Very few people know anything, and those who do know don’t feel it’s prudent to discuss it until they have a handle on it,” said Peter Whittington, an aide to Vasquez.

During their brief afternoon break, some of the supervisors returned to work and others simply retreated.

Vasquez stretched out on his office sofa for a nap. Steiner attended a criminal justice seminar, and the three other supervisors holed up in their offices.

About 2:30 p.m., Steiner arrived back at his office, reviewed some papers, and awaited another call from the governor.

Board members had also placed calls to other prominent officials, including U.S. General Services Administrator Roger Johnson, and California’s U.S. senators, Dianne Feinstein and Barbara Boxer, as well as top officials with the Securities and Exchange Commission.

About 3 p.m., the supervisors again went into what would be their final closed session of the day. When they emerged at about 5:30, the official silence was broken.

They announced what had been rumored all day. The glitzy county known for the power of its money, had declared bankruptcy.