ORANGE COUNTY IN BANKRUPTCY : He Tried to Tell Them So

Nine months ago, on the first Monday in February, a young Orange County accountant with political ambitions summoned the press to his storefront office. John Moorlach had decided to run for county treasurer. He wanted to open his candidacy outdoors, awash in the morning sunshine. Unfortunately, a hard rain forced the festivities inside. It didn’t matter much. Only one reporter bothered to show up.

Undaunted, Moorlach waded into his script. The tall, bearded 38-year-old told a bit about himself, about his Orange County upbringing, his family, his credentials as a Republican volunteer, his career as a CPA. Then he turned to what would become his central campaign issue--the investment practices of his opponent, longtime incumbent Robert L. Citron.

Moorlach quoted from a newspaper article that had reported that Orange County earned bigger returns on its investments than anywhere else in the land. While this was, on its face, swell news, it also raised--in Moorlach’s view anyway--some serious questions.

“How can this be?” he asked. “You can only achieve the highest interest rates in the nation by taking the highest risks in the nation. Should our reserve funds be in high risk investments? . . . It’s dangerous to rely on the old cliche that ‘if it isn’t broken, don’t fix it.’ How do we know it isn’t broken? Who is keeping the incumbent accountable? What if he is running his investments beyond the motor’s red line month after month? Who is to say we are not headed for problems?”

Excellent questions, it turned out. Excellent questions.

*

As the campaign progressed, Moorlach tightened his focus on Citron’s investment policies. The more he learned, the less he liked. Citron had bet the county pot on low interest rates, and instead interest rates were upward bound. Moorlach obtained a copy of the portfolio and passed it around to half a dozen outside experts. They reported back that the county was headed for a cliff.

“They told me,” Moorlach would recall, “ ‘Don’t win. You don’t want this job.’

“I said, ‘I don’t?’

“They said, ‘No, not unless you want to be the one who rides this thing down to the bottom.’ ”

Still, he persisted. It was a complicated case to make. He introduced Rotary and Kiwanis clubs to such investment esoterica as derivatives and inverse floaters and reverse repurchase agreements. He wrote the Board of Supervisors, warning it to rein in Citron or “expect the worse.” He delivered bundles of documents to newspaper editors, scribbled on chalkboards, and searched without success for a way to break through, for a slogan, a sound bite.

“The best I did was at a big Republican dinner in Dana Point. They gave me 10 seconds to speak. I got up and said, “We have got to take down Citron, before Citron takes down Orange County.’ Afterward, I was told that I needed to change my message, to tone it down. But I said, ‘It’s true. It is going to happen.’ ”

The prophet of doom was treated as prophets of doom have been treated across history. They crushed him. Throughout the campaign, Moorlach was ridiculed as a punk, a know-nothing, a Chicken Little. “The sky is not falling,” Citron would coo at every opportunity--and who wouldn’t want to believe it? In the end, Citron waltzed to reelection. Moorlach slouched back to his CPA practice--and waited for the sky to fall.

It fell.

*

Moorlach had promised, if elected, to unwind the portfolio on Day 1, absorbing a billion-dollar loss, but avoiding the meltdown that is now in full fury. He believes Orange County is headed for 10, 20 years of misery. “I’m not gloating,” he said, “I’ve got kids to put through school, too.”

All last week he stayed at his office late into the night, restudying the portfolio, preparing a salvation strategy should the county ever solicit his help. Journalists called constantly from around the world, wanting to know why his warnings had not been heeded. He did not seem to have a good answer. Here is one he might consider.

Moorlach’s political passage drives straight to the heart of what’s wrong with modern campaigning. Symbolism and sound bites beat substance every time. A campaign built on themes of competence, or policy, or anything at all complicated is a campaign born dead. Better to give ‘em school prayer or abortion or tough talk about hoodlums.

Look at it this way. If Moorlach had revealed that Citron employed illegal immigrants, or chased skirts in the ‘60s, he might have won. Instead, all he brought to the dance was a bleak, complicated--and absolutely accurate--forecast of a coming fiscal crisis, and who has time for that kind of garbage?