Advertisement

ORANGE COUNTY IN BANKRUPTCY : In a Tense Day, Few Are Willing to Accept Fault : Hearing: Grilled by state senators, key figures try to deflect the responsibility of county fiasco onto others.

TIMES STAFF WRITER

There they all were, the major players in Orange County’s extraordinary plunge into bankruptcy, shoulder to shoulder with a few of the victims, an army of attorneys, a crowd of reporters and a handful of bystanders, all jammed into a wood-paneled Capitol hearing room.

But oddly enough, not one of those present was responsible, at least according to witness after witness who each claimed that nearly everyone else in the room was at fault in the county’s fiasco.

There was Robert L. Citron, the benign-looking 69-year-old former county treasurer, shifting uncomfortably on the hot seat Tuesday through nearly three hours of grilling by a panel of state senators, the reassuring hand of his lawyer resting occasionally on his gray-suited back. For his part, Citron said, he was an unsophisticated investor who relied heavily on his financial advisers, notably Merrill Lynch.

There were the two veteran Orange County supervisors, Gaddi H. Vasquez and Roger R. Stanton, nervously awaiting their turns at the witness table, their attorney sandwiched between them, their brows furrowed as the senators heaped blame their way.

Advertisement

With an unusually aggressive bunch of lawmakers questioning their actions, Vasquez and Stanton sought to deflect blame to financial experts, to county staff, to the former treasurer.

All the while, the supervisors insisted that they were now in control of recovery efforts and will use the opportunity to remake county government. They told the senators that they did not want a state bailout, saying the county was going to work itself out of its financial mess.

Near an aisle--the better for easy access to members of the press aligned against a chamber wall--was the six-member public relations team from Merrill Lynch, the brokerage house that sold the county many of the riskiest securities in its ill-fated investment pool. During even the briefest of breaks, the Merrill men deployed through the room, quietly, insistently repeating their spin on the financial crisis: “We did not direct or control the investment strategy; we are not responsible.”

On a raised platform were the 10 state senators, with several clearly relishing the opportunity to be the first investigators to interrogate those at the center of the biggest municipal bond debacle in U.S. history. Sens. Quentin L. Kopp (I-San Francisco) and Tom Hayden (D-Santa Monica) fired short, quick and often pointed questions, relinquishing the microphone each time with evident reluctance.

Advertisement

And scattered throughout the chamber and jostling each other in the hallways outside were some 40 reporters and photographers. At one point, several of the media hovering outside the chamber door Tuesday morning mistook the graying, bespectacled Sen. William A. Craven (R-Oceanside) for the graying, owlish star witness.

“It’s not him,” a television reporter growled to his photographer, then turned back toward Craven. “You want to be Citron today?” he joked to the veteran senator, co-chairman of the special state Senate Committee on Local Government Investments.

“No,” Craven replied, grinning.

Almost certainly, neither did Citron, who made his way into the room through a side entrance, nearly unnoticed.

Advertisement

Inside, as the beleaguered former treasurer, in an occasionally quavering voice, answered question after question, fewer and fewer bystanders remained.

One woman, who said she works on political campaigns, skipped out well before noon, confessing that she found the talk of derivatives, “reverse repos” and other financial terms less than riveting. “I know it’s the hottest thing going on in the Capitol, but it’s so boring,” she said, a bit apologetically, as she made her way toward the door.

Finally, the vanquished ex-treasurer himself left the hearing room flanked by his attorney, David W. Wiechert, and two Capitol security guards.

Half a dozen television camera operators and another dozen reporters awaited him in the hallway, tossing out questions on everything from the prospects for interest rates to the prospects for his prized USC football team’s next season.

Advertisement

Citron ducked into an elevator. Once inside, he remained silent. He declined to offer a message to the taxpayers of Orange County. Finally, asked how he felt, Citron said simply: “I feel fine.”

As the hearing neared its end, Hayden offered a parting shot at the witnesses. “I have never seen so many proud and successful people converted so rapidly to humility,” Hayden said, shortly before leaving for an earthquake memorial event in Los Angeles. “I have never seen so many bright people turned into Forrest Gumps.”


Advertisement
Advertisement