Sheldon’s Moral to the Story

Traditional Values Coalition leader offers comments, criticism at hearing: ‘We can learn at any stage of our life. Bob Citron didn’t know that.’

Feels like home: Not everyone in the audience at the special state Senate committee hearing in Sacramento this week was a lawyer or bureaucrat. It just seemed that way because of all the yellow legal pads on display.

Case in point: the Rev. Lou Sheldon, head of the Anaheim-based Traditional Values Coalition and outspoken advocate of conservative Christian causes.

Sheldon said he attended the hearing because many people in the churches he represents as a lobbyist work for the county.

His reaction to the county’s debacle: “The Good Ol’ Boys Club is coming to an end,” he said, outside the hearing room. “He (former county Treasurer-Tax Collector Robert L. Citron) was highly indicative of that philosophy and mentality.

“The moral in this story is that we all must understand that we can learn at any stage of our life. Bob Citron didn’t know that. When John Moorlach correctly sounded the alarm, he was boo-hooed because he dared to challenge the good ol’ boy system.”

The story line is a simple one, Sheldon said: “Human greed. Trying to get something fast. A fast buck.”

Sheldon said he hopes the result will be more disclosure on public investments. He also got in a dig at Citron: “With Citron, it was the Peter Principle. He should have been challenged a long time ago, and he became incompetent at the worst level . . . where he could do the most damage.”

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Spinning, spinning . . . : Ever-solicitous members of the Merrill Lynch public relations staff were in attendance throughout Tuesday’s lengthy Senate hearing, eager to provide their version of the county’s fiscal calamity to any reporter who cared to listen.

The Merrill view, patiently intoned again and again in various corners of the hearing room, was that the giant brokerage house, which sold the county most of the riskiest securities in its collapsed portfolio, should bear no responsibility at all for the current mess.

And whenever anyone made a statement that might support that position, the Merrill men did their best to make sure no one missed it.

For instance, when state Treasurer Matt Fong dropped by the morning session and told several reporters he considered Citron’s characterization of himself as a victim of the fiasco “flat wrong,” Merrill spokesman Timothy Gilles hurried up to a reporter a few feet away.

“Did you hear what Fong said?” Gilles inquired helpfully.

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Artful display: The serious tone of U.S. Bankruptcy Court was broken for a moment this week by an illustration that might have been a little too visual.

The chart was designed to show how county funds were transferred to Merrill Lynch for investing. The graphic showed two banks of a river connected by a wood bridge over a gorge filled with dangerous-looking rocks. On one side stood a safe labeled “county funds.” On the other bank was an imposing white-columned building with Merrill Lynch’s familiar bull logo.

The bridge was designed to symbolize the path county funds traveled before being invested. The bridge was labeled with such phrases as “county budgeting” “rev(erse) repos” and “constitutional debt limitation.”

But lawyers at the court hearing joked that the county should get someone to sing “Bridge Over Troubled Water,” the old Simon and Garfunkel tune, while the graphic was being presented.

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Can’t they keep up with the ambulances?: Since the county declared bankruptcy six weeks ago, Costa Mesa officials have received at least five calls from law firms offering to represent the city in a class-action lawsuit against brokerage houses involved in the county investment pool.

City Atty. Thomas Kathe said the firms offered to represent the city for no charge--as long as they received a portion of any financial settlement.

Kathe said the city has no plans at this time to sue anyone in regards to the bankruptcy.

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Dress for success: Mark Petracca, a UC Irvine associate professor of political science and a frequent critic of Irvine leaders, offered a host of suggestions during a public forum Tuesday on the county’s fiscal crisis.

In addition to calling for more public forums and workshops, Petracca expressed concern about the mounting cost of the financial and legal advisers hired by the city.

“There’s no reason why we have to turn this bankruptcy into a full-employment act for attorneys in Orange County,” said Petracca, urging cities to share legal representation and expenses.

Pointing to financial and legal advisers seated next to city officials Tuesday night, Petracca said: “These aren’t JC Penney suits they’re wearing.”

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Conservative approach: Yorba Linda City Councilman Gene Wisner tried Tuesday night to place a moratorium on building projects until the city finds out how much of its $13 million invested in the county pool will be returned.

But his motion died for lack of a second. Instead, the city took a step toward building a $2.5-million gymnasium by approving plans to move a playground located where the gym is to be built.

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Reduced risk: The county has gotten approval from U.S. Bankruptcy Judge John E. Ryan to exchange up to $380 million worth of riskier, interest rate sensitive securities for more stable securities from the Student Loan Marketing Assn., “Sallie Mae,” according to court documents that became available Wednesday. The deal is part of the ongoing restructuring of the remainder of the county’s portfolio into safer securities.

Sallie Mae had requested a hearing on the matter Tuesday to make sure the exchange would be in accordance with Ryan’s wishes. Attorneys for the county have announced that the county is about three-quarters of the way toward restructuring the troubled bond fund.

Compiled by Shelby Grad, with contributions from staff writers and correspondents.