ORANGE COUNTY IN BANKRUPTCY : DAILY DEVELOPMENTS
RILEY AND WIEDER: Supervisors Thomas F. Riley and Harriett M. Wieder expressed remorse over the financial crisis in their final board meeting before retiring. Riley, 82, a former Marine general, is a 20-year board veteran. Wieder has been on the board for 16 years.
ANGRY CITIZENS: More than a dozen speakers criticized supervisors for lack of oversight and leadership. The supervisors, who have been meeting often in closed session, faced their most vocal and bitter crowd since the county declared bankruptcy Dec. 6.
AUCTION ROLLS ON: The county kept auctioning off its investment portfolio. Salomon Bros. sold $1.24 billion of notes and foreign-issued certificates of deposit; perhaps half the proceeds will pay off loans made by Merrill Lynch.
SCHNEIDER SUBPOENAED: The county’s top administrative officer, Ernie Schneider, was subpoenaed by the Securities and Exchange Commission for documents relating to his dealings with the leading underwriter of Orange County bond issues. He joins other county officials, including all five supervisors, who have received subpoenas.
THE COST OF RECOVERY: Getting out of the fiscal fiasco will cost a bundle. The county has already paid Salomon Bros. $500,000, and the firm will receive $150,000 a month for at least another six months. The Wall Street firm is expected to collect more than $1 million in fees, plus commissions and a percentage of the now-bankrupt investment pool that could exceed $5 million.
THE GOOD NEWS: The Federal Reserve did not raise interest rates at a scheduled meeting. Another hike in interest rates would have further devalued the county’s battered investment portfolio.
THE DOCUMENT HUNT: Investigators continued poring over documents at the treasurer’s office. SEC and Orange County district attorney’s investigators copied documents on microfilm as they seek to determine whether anyone broke the law.
