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Pricey ‘Spin’ for Orange County : PR firm, hired to field bankruptcy questions, pockets huge paycheck.

Before the public relations company hired to help Orange County answer questions about its bankruptcy packs up and returns to Century City--pocketing an incredible $238,000 for three weeks’ work in December and who knows how much money for this month--it is worth repeating the questions that the county still has not answered satisfactorily, even with all the high-priced PR help.

One is why the county filed for bankruptcy last month. Yes, the losses from bad investments were enormous, estimated at nearly $1.7 billion now. The county’s lawyer said there was no choice but to file. There has been some information, but not a full explanation, concerning how hard officials tried to avoid bankruptcy and what other steps were considered. The largest municipal collapse in the nation’s history will cost the county greatly.

Another question is how Robert L. Citron, the treasurer whose investment practices landed the county in the mud, escaped oversight by the Board of Supervisors. Why, after being warned about Citron’s investments last spring, and after rising interest rates continued to hammer the county’s portfolio, did the supervisors let Citron invest as he wished? Maybe county officials think that these questions, which date to the Dec. 6 filing, will vanish.

Sitrick and Co., a public relations firm that specializes in bankruptcies, says it typically bills between $150 and $350 an hour. It justified its bill to Orange County in part by attaching a six-inch-high sheaf of headlines on the thousands of articles written about the bankruptcy. Like the press would have ignored the story without Sitrick and Co. on the job?

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The firm says it handled numerous inquiries from the media and, significantly, from Wall Street investors. It takes credit for keeping erroneous information from being spread. Still, the $600,000 the county quickly earmarked for public relations at the start of the debacle seems awfully high. The county obviously owes the spin-meisters; a deal is a deal. But candor and full disclosure in local government should not be commodities that have to be contracted out.


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