BLINDSIDED / ORANGE COUNTY’S FINANCIAL CRISIS : What Now? : Experts on finance and government provide prescriptions for change and lessons for the future. : Governance

The Issues: Was Orange County’s financial calamity caused by a mechanical failure in the structure of government? Or was it pilot error?

Even those who blame the problem on former Treasurer Robert L. Citron say they expect that the government machinery will be overhauled. The only question is how substantially. But can the changes prevent such a problem from happening again?

Should there be more oversight of the financial process? Should committees of citizens or experts be created to monitor government investments? Or should officials simply improve their methods for internal communication?

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Marian Bergeson

Former Republican state senator from Newport Beach and Orange County supervisor-elect:

Bergeson says there is a need for greater accountability and oversight. “There needs to be a special analysis to the Board of Supervisors, some independent fiscal expert,” she says. “There is an assumption that these are elected representatives and they are given a good deal of control of their areas.

“Much can be done internally (rather than with state-level corrections). This calls for leadership. That leadership will provide whatever avenues are needed. . . . I’d like to see Orange County really take a look at becoming a charter county,” under which the county would write its own charter, allowing it to reorganize its governmental structure.

“Oversight would have (provided) an earlier alert. After you’ve had a situation like this, it’s a great learning experience. Out of this will come a far different approach to public investment practices.”

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Zeke Hernandez

State director of the League of United Latin American Citizens in Santa Ana:

“Apparently what really went wrong was there was a failing of the checks and balances, if there was ever a checks and balance system in place.

“Now is not the time for the county government to hide behind closed doors. The level of confidence has to be re-instilled and renewed. And the only way you are going to do it is doing everything publicly.”

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Buck Johns

Newport Beach developer and prominent Republican activist:

“I’m an anti-government person, so anything that smacks of bureaucracy I have a dim view of.” Government cannot “put enough belts and suspenders on somebody who is irresponsible. Eventually, something is going to go wrong. There are no amount of laws and rules and checks and balances that you can put on versus what you can do when you entrust people. Those boards and people have failed to discharge their responsibility.”

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Shirley Grindle

a community watchdog and author of Orange County’s campaign finance law:

Citron was the primary author of a bill that allowed him to do what he did, Grindle notes. “The first thing I am sure that is going to come out of this is that they’ve obviously allowed them too much latitude, they meaning government.

“I’ve known Bob Citron since the early ‘70s. Over the years he gained a reputation for making tons of money. The Board of Supervisors doesn’t have as much financial knowledge as Citron does in his little finger--and rightfully so. He made money for the county and he was looked up to in this regard. However, the more he succeeded, the more self-righteous and arrogant he became. . . . The (supervisors) can’t be accountable. That would be like asking a 5-year-old kid to invest bonds.”

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Dwight Stenbakken

Legislative director of the League of California Cities in Sacramento:

Stenbakken says the Orange County debacle was a case of bad judgment. “I don’t know how you legislate against bad judgment. . . . I think it was an individual decision that was the problem. Obviously it was a big problem and a lot of people got burned on it. But there are lots of decisions made every day about investments in California and most of them tend to be good.”

Stenbakken expects that “there will be some reporting requirements that will be beefed up. . . . There will be restrictions and reporting requirements and prohibited investments when the Legislature is done. But still, there is somebody there investing the money . . . and it is a little bit of a crapshoot.”