ORANGE COUNTY IN BANKRUPTCY : O.C. Doomsayer Transformed Into a Visionary

TIMES STAFF WRITER

He doesn't seem like a prophet of doom, especially not when he's wearing his Mickey Mouse "Leader of the Club" tie--as he was on his birthday last week--and driving his gull-winged Bricklin to a triumphal speech at the local Rotary Club.

In fact, John M. W. Moorlach seems almost giddy as he steps to the podium to remind his appreciative audience that he warned them during the spring that Orange County's treasurer was taking enormous risks with the public's money.

"I couldn't believe how right I was," Moorlach says, hunching toward the microphone and reflecting on an interview he gave just before the county declared bankruptcy Dec. 6.

What's more, he said, after rereading an eight-page, doomsday letter he sent to County Board of Supervisors Chairman Thomas F. Riley on May 31, he realized that his dire prediction about the county's future "wasn't just kind of close. It looked like I wrote it yesterday!"

Nearly three weeks after Orange County's extraordinary plunge into bankruptcy, Moorlach's personal and political stock is soaring on the strength of how right he was. He is pondering his suddenly bright future as a candidate for office and fielding nearly nonstop phone calls from reporters, friends and admirers across the country.

Should Moorlach run for the state Senate seat being vacated next month by Marian Bergeson? Or should he hope that the Board of Supervisors will decide next spring to replace disgraced former Treasurer Robert L. Citron with Moorlach, who predicted Orange County's financial collapse?

Although Thomas L. Daxon, a former Oklahoma finance director, was appointed last week to an interim, four-month term as treasurer, Moorlach, 39, makes no secret that he still wants the job--but with conditions.

"I want to be part of the rehabilitation plan, but I want to play a key role," he said. "If it's just a little role, I've got a better life. I don't need that."

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Heady times, indeed, for a certified public accountant and Republican Party activist who was so little known in February that almost no one showed up when he announced his challenge to longtime incumbent Citron--and who lost the June election to Citron by a 61%-39% margin.

During the campaign, Moorlach was first dismissed by Citron and his allies, then accused of sparking baseless fears among the county's investors. Prominent Republicans such as Bergeson withdrew their support. Finally, Moorlach was ridiculed by Citron as Chicken Little, witlessly foretelling disaster.

To be proved right so quickly after such a resounding defeat feels pretty good now, even as Moorlach expresses sadness about the impact of the financial debacle on the citizens of Orange County.

"There is a God," he told his fellow Rotarians during his nearly hourlong speech last week. "To be vindicated within six months is pretty amazing to me. But this is not the way I wanted it."

Local Republican politicos are almost gushing about the opportunity that awaits him.

"I think (Moorlach) is the most sparkling star in the Orange County Republican galaxy at the moment," said Tom Fuentes, the local Republican chairman.

Even those who have occasionally opposed Moorlach before concede that the biggest municipal bankruptcy in history has jump-started his political career.

"Being right on something like this has a tendency to put you in a good political position," said Costa Mesa City Councilwoman Mary Hornbuckle, who supported Moorlach's campaign but has often quarreled with him on issues affecting the city where they both live.

Bergeson and Jim Silva, the two supervisors-elect who will take their seats next month, have joined Supervisor William G. Steiner in saying they would support Moorlach's appointment to the treasurer's job. Riley, who is retiring from the board next week, declined to comment on the issue Saturday, noting that he was unlikely to be in office when the decision is made. Other supervisors could not be reached for comment.

The financial crisis has so burnished Moorlach's reputation that many who once opposed him decline to criticize him, at least publicly.

Frequent Moorlach critic Peer Swan, the Irvine Ranch Water District chairman credited with forcing revelations about the fund's $2-billion loss, declined to be quoted. In May, Swan castigated Moorlach's campaign tactics, comparing his behavior to "a guy who runs into a theater and yells 'Fire!' "

Hornbuckle also begged off, pleading the Christmas spirit. Moorlach, she said, is "thoughtful, he studies the issues, and he's an honest man. I won't say that he's humble, but I won't get more critical at the moment, not over the Christmas holidays."

Another critic said Moorlach's problem in the election was not his message, but his method. If Moorlach had taken his careful research of Citron's portfolio, marshaled his political support and quietly approached each supervisor with his concerns, they might have listened, he said.

"Instead, the thrust of the campaign was to go to New York and cause concern among some of the financial press to lower the credit rating of the county and try to force a change," he said.

Fearful that the political attacks might cost the county money, its Republican leadership closed ranks around the veteran treasurer, who was then the county's only Democratic elected official.

Not surprisingly, Moorlach's friends and political allies are easier to find, and more open, than his critics.

"He's probably one of the most honest, well-grounded people I know," said Jeff Thomas, a Tustin City Councilman and close friend. "He has a real good sense of himself. He's a very spiritual kind of guy. . . . I'd walk over nails for the guy."

"He has done just an outstanding job for the whole community," said Karl Kemp, general manager of the Mesa Consolidated Water District.

Moorlach, whose full name is Johannes Meindert Willem Moorlach, was born Dec. 21, 1955, in Groningen, the Netherlands. When he was 4, his family moved to the United States, living first in Cypress and then in Buena Park.

Even before he graduated from Cal State Long Beach in 1977, where he earned a degree in business administration, Moorlach began working for an accounting firm. He joined his current firm--Balser, Horowitz, Frank & Wakeling--in 1978, and is now a vice president.

He is a workaholic, according to his wife, Trina, whom he met at a Bible study when they were both 23. Although Moorlach's days since the crisis began have sometimes stretched to 20 hours, it does not seem much different than usual, Trina Moorlach says.

"He's always come home for dinner and gone back to the office or to meetings," she said. "For me, this is like a regular routine still."

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In what little spare time he has, Moorlach, a history buff, enjoys photographing bronze historical markers, camping, hiking and tinkering with his beloved, pumpkin-colored Bricklin, whose license plate reads "DULL CPA."

For many years, he has also been active in local politics. A conservative Republican, Moorlach holds two posts with the Orange County GOP: assistant treasurer and chairman of the party's precinct advisory committee, a job that makes him head of its volunteer effort.

For all Moorlach's current political cachet, at least one political consultant says it may be difficult for him to move into any job but county treasurer--the post Moorlach says he really wants.

Because Moorlach has said he does not relish a move to Sacramento or Washington, and he lives in Costa Mesa, which has a new county supervisor in Silva, consultant Harvey Englander believes Moorlach has fewer immediate political choices than his backers claim.

"Moorlach is in a position where he's got a golden opportunity, but really no opportunity other than becoming the treasurer," Englander said. "It's sort of like playing Monopoly and he's got a get out of jail card, but he never lands in jail."

Still, it might be difficult to discount the prescience of Moorlach's warnings, particularly those laid out in the clear, forthright letter he wrote to Riley six months before the bond crisis erupted.

His major concern, Moorlach wrote, was "interest rate risk," the likelihood that rates would continue to rise, at odds with Citron's investment strategy of using the county's U.S. Treasury bills and bonds as collateral for short-term borrowing at low interest. The borrowed money, in turn, was reinvested in securities that paid a higher rate of return.

* BANKRUPTCY COVERAGE

Related Orange County stories inside. A3

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