Secret Meetings Heighten Frustration in O.C. Crisis : Bankruptcy: Officials say pending suits make closed sessions necessary. Critics insist public needs information.

On the fifth floor of Orange County’s Hall of Administration, the bankruptcy war room--where legions of lawyers, accountants and county leaders hold marathon meetings daily--is sequestered behind doors marked “Employees Only.” A cop, gun at his hip, is stationed at the reception desk to keep the public out.

Although California law requires elected officials to hold most of their meetings in public, the Board of Supervisors has had two dozen closed-door sessions in the two months since the fiscal fiasco began, spending a total of 34 hours and 40 minutes in private huddles for which no minutes are required.

And in the same week that the supervisors responded to public outcry over inaccessibility by holding their first night meeting in a quarter of a century, they also met in secret three days in a row.

“The public doesn’t need to know everything, but I think some broad parameters should be made public. There’s a lot of frustration that’s beginning to congeal, and I don’t think that bodes well for the county,” said Bill Mitchell, a Newport Beach lawyer and chairman of Orange County Common Cause.

“If there was some plan, or some road map, the public would have assurance that there would be a positive solution,” Mitchell said. “Right now we’ve got the worst of both worlds: no road map and lots of closed meetings.”

County officials insist that the secret sessions are crucial because of the unprecedented magnitude of the crisis and the barrage of lawsuits pending against them. Besides the bankruptcy filing, the county also is the subject of more than a dozen lawsuits by taxpayers, bondholders and employees and is itself suing several large brokerage firms in an effort to recoup the lost $1.7 billion.

“It’s not the public that anyone’s trying to keep information from, it’s the litigants,” said County Counsel Terry C. Andrus. “If there was some way to give the information to the public without giving it to the adversaries, we’d do that.”

“I don’t know how to navigate between the rights of the county--which is also the rights of the people--to keep its money, and the rights of the people to know what’s going on.”

Enacted four decades ago and revised last year, California’s Ralph M. Brown Act requires elected officials to give the public 72 hours notice before meeting and to post what they plan to discuss. Meetings of more than a quorum of any governing body must be open to the public, although there are exemptions for pending litigation and personnel matters, among other topics.

Experts said that the massive litigation swirling around the county provides wide latitude for private meetings of the board, and Andrus and others say the closed-door sessions have dealt strictly with the array of lawsuits officials face, or the high-level staffing changes that came in the wake of the crisis.

But even if county leaders are following the letter of the open-meeting law, some activists--and representatives of the 186 local agencies with money at stake--have become increasingly frustrated by the slow flow of information out of county leadership.

“I think the biggest damage is it gives rise to speculation that there are things going on that can’t be discussed in public,” said Costa Mesa City Manager Allan L. Roeder. “Every time you go into closed session, it simply heightens that sense of suspicion.”

Though the elected board is restricted on when and how it can meet privately, county staff and private consultants hired to sort out the financial mess are not governed by the Brown Act. They have racked up thousands of hours of secret sessions, most behind the “Employees Only” sign on the Hall of Administration’s top floor.

Each morning at 8:45 a.m., Board Chairman Gaddi H. Vasquez is briefed by his special crisis management team: Andrus, county bankruptcy attorney Bruce Bennett, financial advisers Thomas W. Hayes and Paul Sachs, acting Treasurer Tom Daxon, interim County Administrative Officer Tom Uram, Dist. Atty. Michael R. Capizzi and Sheriff Brad Gates. Others are invited on occasion.

Lately, Uram meets daily with individual supervisors. Before bankruptcy, he met one-on-one with board members only biweekly.

Uram, Gates and Capizzi--the trio of county leaders tapped to help the supervisors manage the crisis--held their own series of closed-door sessions with other department heads in December to orchestrate about $40 million in immediate budget cutbacks.

Board members have spent several Saturdays at the Hall of Administration in round-robin sessions with the crisis-management team--during those weekend sessions, the elevator is programmed to prevent the public from getting up to the fifth floor.

“To manage the crisis, you have to have information. That’s why you have lots of these meetings,” Vasquez said.

In the past few weeks, some of the county’s legal and financial consultants also have been negotiating secretly with representatives of the county’s creditors, and having private talks with the Orange County Business Council, a coalition of prominent executives that have volunteered to help with the rescue effort.

The pool participants also have had several closed-door gatherings. Although organizers have been careful not to allow a quorum of elected officials from any one agency, which would violate the Brown Act, the meetings create the unprecedented situation of more than 100 government leaders assembling in one room without public access, a public agenda or public record of what is said.

Experts said that if those gatherings are used to brainstorm solutions and devise recommendations, the group could be considered an advisory committee that also would be governed by the Brown Act. Organizers, however, insist that they are simply information sessions.

“Everybody is scared to death that they don’t do something or say something that’s going to get them into some legal hot water. All of us are being told by our legal counsels that there are certain things we shouldn’t talk about,” said Irvine City Manager Paul O. Brady, a leader of the pool participants committee. “With the number of attorneys floating around watching this thing, one just has to say the wrong thing, somebody remembers that, cuts out the clipping and can use it against them.”

But even as Brady explained his own need to keep meetings secret, he contends that supervisors should be more forthcoming. “I don’t think they’ve done as much of this in public as they should, or probably could,” he said.

The Board of Supervisors held its first closed, special meeting to deal with the investment bond pool on Dec. 5, the day before the county filed for bankruptcy protection.

Since then, the supervisors have adjourned that special meeting from one day to the next, often using the same emergency agenda and simply changing the date. Sometimes they emerge from closed session and immediately take a vote to hire a consultant or suspend a staffer.

About half a dozen regularly scheduled board meetings also have been conducted during that time, most including closed-door executive sessions.

On the day of the unprecedented bankruptcy filing, the supervisors were individually sequestered before dawn in various sections of the Hall of Administration, trying to make crucial decisions to respond to the impending crisis but unable to meet as a group because they had not notified the public.

Shirley Grindle, a longtime critic of county government, defended the board’s crisis-management performance. Discussing the problem in public, she said, would be “the first way to get nothing done.”

Grindle, however, agreed with several other activists that even if legal strategy must be kept under wraps, county officials should lead public discussions of recovery options.

“It appears as though they’re just reaching out to the usual players. I haven’t seen any evidence that they want to reach farther or deeper than that,” said Connie Haddad, president of the local chapter of the League of Women Voters. “(The supervisors have) been very receptive to us going there and asking them questions, but that’s not what the average person is going to do. They’re just not that accessible.”

Jean Askham of Fullerton, another leader of the voters league, noted that The Times has planned a public forum on the bankruptcy for Tuesday, and several cities have organized town meetings to discuss the crisis--and suggested the supervisors do the same.

“If they took the approach of sitting together and thinking it through while the public was able to listen there would be less anger and perhaps more ideas,” she said. “As a body, they don’t seem to be able to sit down and publicly talk about what options they think are viable options, and I think the public deserves that.”

Supervisor Marian Bergeson begged for the public’s patience.

“Nobody has all the answers. Everybody feels we should know more,” Bergeson said, insisting that the Brown Act had not been violated. “I do agree that the public needs more information, and that information should be forthcoming.”

Another source of frustration has been the slow and sometimes incomplete release of documents in connection with the crisis.

County officials have delayed dozens of requests for records, often claiming that they cannot find the material.

In part, that is because the district attorney’s office--one of several agencies investigating the crisis--seized 196 boxes of documents from the treasurer’s and auditor-controller’s offices Dec. 19. Chief Deputy Dist. Atty. Maury Evans said officials are still sorting through the documents, but will soon make them available.

The county’s creditors and some residents have requested public records, as have local and national news organizations. The district attorney’s office is also providing documents for accountants poring over the county’s books, and other law enforcement agencies probing the crisis.

“We’re getting to the point where we’re getting so many of these requests they all have to be postponed,” said John Abbott, a county attorney. “We’re doing our best. No one I’ve talked to has said, ‘Hide that from them.’ I think we’ve been real responsive.”

Under the California Public Records Act, government agencies must respond within 10 days to any request for records, and are not allowed to use that time simply to delay access. Like the Brown Act, this law also contains exemptions for personnel matters and litigation.

Some of the most controversial items in connection with the bankruptcy have been the most difficult to obtain.

For example, The Times asked for a copy of a draft audit of the county’s finances by KMPG Peat Marwick during the week after the bankruptcy filing. Officials first denied that the document existed, then said it was not a public record, then finally released it last week--nearly two months after the initial request.

A second set of key papers, 17,000 pages of financial data from the treasurer’s office, still has not been released to the public.

The county’s creditors were given the massive package of documents Jan. 17, but were required to sign a confidentiality agreement to get a copy. Several people who have reviewed the material, however, say it is all public record: reams of financial statements and correspondence between the treasurer’s office and local agencies that invested in the county pool.

Robert Moore, an attorney for the creditors committee, called the confidentiality agreement “absurd.” John Schotz of Saybrook Capital Corp., the financial advisers for the pool participants, termed it “ridiculous.”

“We’ve been getting the stuff in dribs and drabs,” Schotz said, echoing the frustration of many officials at school districts and cities, as well as members of the public. “They drag their feet. They’re controlling the information. If they’re fighting with us about things, how can we fight if we don’t have the information?”

Bennett, the county’s bankruptcy attorney, agreed Friday that most of the 17,000 pages probably are public records, and said he insisted on the confidentiality agreement “to get out a lot of documents very quickly without reviewing each and every one of them.”

In general, Bennett said negotiations between the county and its creditors must remain private to be productive.

“It would not even enter my mind that there would be any deal or agreements concluded in private,” Bennett said. “I just think that the process of formulating a structure for solving these problems can and should be conducted in private.”

The waiting, however, may be part of the problem.

“There are a whole lot of people who frankly don’t care whether or not the supervisors are meeting in closed session, they just want action,” said UC Irvine Prof. Mark Petracca, an expert in local government.

“A lot of people are angry not about how the supervisors are making whatever minor decisions that they may be making, but that the supervisors haven’t done anything (major) after two months,” Petracca said. “What are they waiting for?”

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