ORANGE COUNTY IN BANKRUPTCY : Some Support Citron While Others Scoff

Former county Treasurer-Tax Collector Robert L. Citron’s televised testimony before a state Senate committee in Sacramento got mixed reviews in Orange County, with critics scoffing at his explanation he was only following the advice of Merrill Lynch when the investment pool lost $2 billion and some former employees expressing sympathy for their ex-boss.

“Overall, his presentation was very good,” said newly seated Supervisor Jim Silva. “He answered a lot of questions I had about his role in all this. But I was very surprised when he said he didn’t understand what he was doing.”

Costa Mesa certified public accountant John M.W. Moorlach, who was defeated by Citron in June in the race for Orange County treasurer-tax collector, said that his onetime opponent’s television appearance was both “difficult and fascinating to watch.”

“I was proud he testified and was willing to say he went down the wrong course,” Moorlach said. “It’s not an easy thing for someone who had been so brazen to admit. But I had problems when he said he was only a lay person who depended on Merrill Lynch for financial advice. How can someone who invested billions in the bond market for 20 years call himself a lay person?”

William Mitchell, chairman of Orange County Common Cause, said that Citron was echoing “the party line . . . (that) big bad Wall Street took us to the cleaners” when he sought to blame everything on Merrill Lynch.

“If you believe Citron, that it was all Merrill Lynch’s fault, then we’ve been electing idiots who are easily fooled by more sophisticated individuals,” Mitchell said. “He is parroting the county’s first line of defense: Blame others.”

An employee of the treasurer’s office who asked not to be identified said she was “heartbroken” by Citron’s attempt to defend himself. “He’s a good man who is very introverted. He’s not a criminal, and it was very sad to hear him stutter as he tried to explain that he didn’t do anything wrong.”

Supervisor Marian Bergeson said Tuesday’s hearing taught her something about Citron’s character and pointed out the need to reform county government. She said the county treasurer should be appointed rather than elected.

“One thing I did gain was a more personal understanding of Bob Citron,” Bergeson said. “He came across as very contrite in his presentation. I think the fact that he was willing to put himself in that position was admirable.”

In retrospect, Bergeson said, it is clear the county failed to properly oversee Citron’s investments.

“It’s apparent two things could have prevented this: adequate oversight and disclosure to investors,” she said. “There was unquestionably too much trust placed in Citron’s policies and not enough questions were asked.”

Former supervisor Thomas F. Riley, who retired earlier this month, agreed that the board failed to ask the right questions about Citron’s investment policy. But the problem was that nobody except Citron knew what his investment strategy was, Riley said.

“True, we could’ve stopped anything that came up on the agenda. But that’s a very difficult thing to do when you don’t know what’s going on,” Riley said.

Citron’s statement that he ran the investment pool on financial advice from Merrill Lynch brought cries of disbelief from Larry Bales, an auditor and appraiser in the county assessor’s office. Citron blamed Merrill Lynch when in fact all top county officials should share the blame, he said.

“It’s the biggest cover-up in the world,” said Bales, who nonetheless added that he believed Citron’s story that he felt compelled to continue gambling for high returns because of pressure from county officials to generate more revenue.

Longtime employees of the office Citron ran for more than two decades had a generally sympathetic view of their former boss. There were whispered exchanges about what he might have worn to the hearing, and speculation that he left his trademark turquoise jewelry at home.

“Before we were angry because he left,” said Belinda Quam, 40, who worked with Citron for seven years. “But now it’s more compassion and concern for him. We support him.”

Quam said she has taken many angry calls from the public and always comes to Citron’s defense. “I’m always saying to people, ‘Did you forget about the money he made for us?’ ” she said. “He played a lot of smart ball and people forget about that.”

Jeff Gray, an associate of Moorlach, said that watching Tuesday’s hearing, where Citron and assistant treasurer Matthew Raabe were blaming Merrill Lynch and others for Orange County’s bankruptcy, was like viewing a rerun of “Hogan’s Heroes.”

“It was like watching Sgt. Schultz telling Col. Klink, ‘I know nothiiiiing,’ ” said Gray.