ORANGE COUNTY IN BANKRUPTCY : Political Posse Is Looking Everywhere for Someone to Blame for Crisis

It was not 24 hours after Orange County had declared bankruptcy and already everybody south of Seal Beach seemed to be lining up to audition for the role of Pontius Pilate. If half the political Establishment was busy running for cover, the other half was rounding up a posse.

“We’ve gotta fix the responsibility . . . and certainly there should have been more oversight at the county level,” said Rep. Dana Rohrabacher (R-Huntington Beach).

There are a lot of confusing facts in this case, much fiduciary mumbo jumbo about bonds and derivatives that the average voter does not pretend to understand. But one thing is crystal clear--there will be political hell to pay for this one, and for a long time coming.

There is already talk of lawsuits. An anti-tax crusader demanded that the county supervisors “resign summarily.” Republicans seized on the fact that now-resigned Treasurer-Tax Collector Robert L. Citron was a Democrat. The Democrats seized on the fact that Citron was supervised by a five-member board that is 100% Republican.

The only thing longer than the list of creditors may be the list of people who “should have known.”

“How about the county chief executive officer? Shouldn’t he have known?” one prominent politico mused.

“Why didn’t the governor do something to keep everybody calm?” another wondered.

“They better find out if they have insurance against misfeasance in office because they might have made themselves personally liable,” Tom Rogers, San Juan Capistrano rancher and co-founder of Citizens Against Unfair Taxation, said of the county supervisors. “This is an unholy mess. These people are thugs.”

For about 20 years, Citron’s investment wisdom made money for the county and others who dived into his investment pool, and everyone raked it in without question. When the train crashed, all the wrath at first was aimed at him.

But stunned observers are looking further: “Who let this happen?” is on everybody’s lips.

“You let one Democrat in office and he screws it up for everybody else,” Rohrabacher said.

He added: “And pardon me. Shouldn’t the Orange County Register and Los Angeles Times have seen this coming?”

“What was Citron, a financial dictator?” Mark Petracca, associate professor of political science at UC Irvine, retorted sarcastically. “In a county where the Republican Party can do anything it wants, they put a Democrat in sole charge of this enormous pot of money? . . . Where the hell was the oversight?”

Dissecting Citron’s actions appeased the angry mob for about a day. Then he resigned. “He did the honorable thing,” Petracca said. “For the first time in a quarter-century an elected official resigned without the posse behind him.”

But with Citron out of the way, the wrath of the masses has to go somewhere and plenty of politicians are scurrying for cover.

Jeff Frapwell, assistant director of budget and finance for Kern County, pooh-poohs the finger-pointing, saying the blame belongs to everyone who happily lapped up the profits for years.

“The thing I find most remarkable is that people (in the fund) can’t believe the treasurer was investing in all this stuff,” he said. “If they didn’t know, they should have. His pool has been outperforming every other pool in the state of California for years, and the only way you do is that by going into risky investments.”

The scariest part of all this may be less the bankruptcy than the microscopic look it provides at what is actually done with taxpayers’ money--invested in arcane funds later denounced as high-risk.

These kinds of financial details are almost never disclosed to the public and when they are it is like discovering that the Magnificent Oz is really just that little old guy behind the curtain. It’s more than the citizens want to know.

One political pundit said: “They might as well have bought lottery tickets. But as long as they were winning, nobody cared.”

Republicans are investigating why Citron used Merrill Lynch for all his business and whether money was being funneled to the Democratic Party.

Some believe that the Republicans on watch when it happened will pay dearly at the polls next time around. Others predict that deep party loyalty will save their political hides in Orange County, hearth and home to the GOP.

One prominent Democrat said: “Around here, nothing ever happens to the Republicans (at the polls). It’s a tradition.”