Teamsters Hurl Charges Directly at Merrill Lynch : Protest: Local invades Santa Ana office accusing brokerage of profiting from county’s loss. Firm sees a union vendetta.

It would seem ironic that the International Brotherhood of Teamsters, long known for its own corruption scandals, would now be a watchdog of morality in the ongoing financial crisis involving Orange County government officials and their Wall Street brokers.

But for days now, the labor union has doggedly pushed for federal investigations into the relationship between county officials and Merrill Lynch and Co., the county’s investments broker--at times, turning up its own leads.

And on Thursday, about 40 members of the union’s Local 952 marched through the firm’s Santa Ana office, loudly accusing the company of profiting from the Orange County financial debacle. Their shouts were punctuated by the placards they carried, including two which read: “Merrill Grynch is stealing our Christmas,” and “Little kids shouldn’t pay the price for Merrill Lynch’s bad advice.”

Teamster leaders say their members could become innocent victims in this drama. The Orange County Transportation Authority, one of the largest contributors to the county’s investment pool that crashed last week, employs 1,073 teamsters.

“We are here on behalf of every man, woman and child in Orange County,” said Robert Hahn, an official of Teamsters Union Local 952, after storming into the Merrill Lynch offices. “We are mad. We are angry. And we are tired of the bull,” a reference to the company logo.

But Merrill Lynch said the pickets and other Teamsters activities in Orange County have nothing to do with the county’s financial problems.

“The Teamsters union has an ongoing vendetta against Merrill Lynch,” said company spokesman James Wiggins in New York. “This has nothing to do with matters in Orange County. The media is being hoodwinked.”

The cause of the Teamsters’ interest in Orange County, Wiggins said, is a stretch--part of an ongoing labor dispute between the union and North Carolina-based Pony Express Courier Corp., a subsidiary of a company with investment funds managed by Merrill Lynch.

The union and the delivery service are embroiled in a bitter dispute over working conditions and wages of nearly 4,000 workers nationwide. Wiggins said Merrill Lynch has no management role in Pony Express.

“It’s true, that’s one of our motivations,” said Bart Naylor, a Washington, D.C.-based corporate affairs officer for the union. However, that does not take away from the union’s interest in representing its Orange County members, he added.

Soon after the county declared bankruptcy, the Teamsters urged the Securities and Exchange Commission to investigate whether Merrill Lynch employees violated federal policy when they gave--or urged others to give--campaign contributions to then-Orange County Treasurer-Tax Collector Robert L. Citron.

This week, Naylor met with agents of the National Assn. of Securities Dealers and with staffers of the Senate Banking Committee to discuss proposed legislative reforms for securities dealers.

Thursday’s protest in Santa Ana came one day after federal investigators issued subpoenas of the Board of Supervisors seeking their dealings with Merrill Lynch. The SEC is investigating Merrill Lynch and at least one other firm for possible influence peddling.

“Merrill Lynch played Mr. Citron for a patsy,” said Hahn, the local Teamsters official, who was among those who had crammed into the small lobby of the firm’s Santa Ana office. “We believe Merrill Lynch thinks they can play the citizens of Orange County as patsies and that’s just not going to happen.”

In a terse response to the Teamsters pickets, a Merrill Lynch spokesman stated: “The Teamsters are distorting Merrill Lynch’s relationship with Orange County. Merrill Lynch has never served as the county’s financial adviser.”

The union members arrived unannounced at the Merrill Lynch office about 11:30 a.m. with the media at their heels. After failing to get a conference call with the firm’s Chief Executive Officer Daniel P. Tully in New York, a local company official faxed to the corporate headquarters a list of the union’s demands, including one that the firm return to the county all profits from county bond sales.

The demonstrators denied they had any other motive except to turn a spotlight on Merrill Lynch and to blame the firm for allegedly helping create the financial turmoil. The result, they added, may be cutbacks at local schools that had invested money in the county’s fund.

“I came because I’m concerned about my kids,” said protester Denise Vandeusen, 27, a clerical worker from Brea. “Just because Merrill Lynch gave bad advice, we can’t allow the kids to suffer.”

Police eventually dispersed the demonstrators after the 90-minute protest. No arrests were made.

Martinez reported from Washington, and Miller reported from Santa Ana.