ORANGE COUNTY IN BANKRUPTCY : Schneider Sees Self as Scapegoat : Demotion: He defends his performance, denies responsibility for county financial crisis. He blames former treasurer Citron.

Ernie Schneider was once asked what he thought of his counterpart, Richard B. Dixon, the former chief administrative officer for Los Angeles County, who was criticized for wielding too much power.

“I’d feel uncomfortable with that kind of authority,” said Schneider, Orange County chief administrative officer since 1989. “That’s the kind of stuff that gets you in hot water.”

Now it is Schneider in hot water.

He was removed from his post and demoted Monday, amid financial disaster and soon after the discovery of an $85-million rainy-day account he helped establish as a hedge against future budget shortfalls.

While the Board of Supervisors met privately to decide Schneider’s future, the 48-year-old career government worker ate a sack lunch in the county’s Hall of Administration and seemed uncharacteristically nervous.

Speaking freely with reporters for more than 90 minutes--another departure from character--he discussed the crushing stress of the past seven weeks, while defending his performance and denying responsibility for the budget debacle that has brought the county to its knees.

Schneider portrayed himself as a classic scapegoat, bitterly blaming former Tax Collector-Treasurer Robert L. Citron for everything.

“I blame Citron,” he said. “I trusted him. . . . I believed Bob and took Bob at his word. . . . I’m not a finance person.”

Regardless of who is at fault for plunging the county into bankruptcy, Schneider’s 24-year career in Orange County has earned him many admirers.

“He’s a person of strong character and shouldn’t be vilified and mocked for his many, many years of service,” said County Clerk-Recorder Gary L. Granville. “Ernie really is a straight arrow, and he doesn’t know how to duck a question.”

Bill Reiter, longtime county public works operations manager, said he has known Schneider since Schneider was an aide to former Supervisor Bruce Nestande and throughout his climb in county government. Schneider, he said, never forgot or ignored the people below him.

“I thought he was a very people-oriented person. . . . He was not a person to be distant,” Reiter said. “When I walked into a room, he always made a point of saying hello. I’m very saddened to see what’s happened. I think the world of the man.”

Lisa Williams, a 29-year-old employee in the auditor-controller’s office who was put on administrative leave two weeks ago because of county cutbacks, said she doesn’t see the sense in removing Schneider.

“I don’t understand why they’re firing all the higher-ups,” she said. “Firing him is like firing one of us. He was just an employee. He was just doing his job.”

Shirley Grindle, a former county worker who is now a political activist, said the county is behaving shabbily.

“I think that one of the smartest things the board ever did was put Ernie Schneider in the position he has held the last few years,” she said. “He has always had the reputation--and from personal experience I know him to be--one of the most capable county employees they ever had. . . . I think they’re overreacting to a perceived public need to ax somebody over this thing and I think now is not the time to be demoting people and firing people. Now is the time to use the talents of everyone to solve the problem.”

Schneider’s slick, Pat Riley-styled hair and his love of surfing belied his reputation as a tireless worker, someone who won awards for distinguished public service and made people forget his $140,940 salary, one of the highest among all government workers in California.

Perennially fit and tanned, Schneider said the budget crisis has forced him to abandon his schedule of running and weightlifting and kept him from spending time with his wife and son.

The career-threatening crisis has also made him more of a fatalist.

“If this is the way it has to end, so be it,” Schneider said with a shrug, just hours before the supervisors voted to demote him. “Whatever happens, happens.”

Schneider earned a bachelor’s degree in political science and a master’s in public administration, both from Cal State Fullerton. He was born in Bad-Kissingen, West Germany, and his father fought under Erwin Rommel in World War II.

Schneider praised the employees he came to know in his tenure with the county and said it was for them that he didn’t resign when people tried to blame him for the crisis. “I owe it to them to stay,” he said.

As for the supervisors, Schneider was not as given to praise. He said he was disappointed that board members didn’t tell him they were planning to discuss his status; instead, he learned from reporters that he was in jeopardy. “I think common courtesy would be that you would tell somebody first.”

Then again, he knew when he took the job that there was little security. “Three votes and see you later,” he said.

Times staff writer Leslie Berkman contributed to this story.

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Schneider’s Downfall

Orange County Chief Administrative Officer Ernie Schneider was demoted Monday from the top county government position he held for five years. A look at his fall from grace:

* Fast track: At 37, he became chief executive assistant for then-County Supervisor Bruce Nestande.

* Leapfrogging: At 39, he took over the Environmental Management Agency, the county’s planning department and largest, most powerful bureaucracy; he beat out four rivals for the job.

* Top assignment: In 1989, appointed CAO by the Board of Supervisors.

* Crossroads: In November, 1994, Schneider was one of first people in county government to heed warnings about the threat to the investment pool from rising interest rates after Orange County Assistant Treasurer Matthew Raabe confronted him and said he would quit because of problems with the portfolio. Schneider formed a management team to review the $20-billion portfolio, but by then it was too late.

* Crisis management: When investment fund collapsed, Schneider helped make decisions about potential cuts in personnel, county services and projects. He also briefed cities, utility districts and schools that had invested in the county bond fund. At the direction of the Board of Supervisors, he went to then-Treasurer-Tax Collector Robert L. Citron’s home Dec. 4, 1994, and demanded his resignation.

* Who he faults: “I blame Citron. I trusted him. . . . I believed Bob and took Bob at his word. . . . I’m not a finance person.”

Source: Times reports