ORANGE COUNTY IN BANKRUPTCY : Popejoy Picked to Lead County : Corporate Community Turns Up Heat On Supervisors : Choice: The former savings & loan chairman, who offered his services to the county for free, is praised for his corporate experience and local ties.
The embattled Orange County Board of Supervisors, under pressure to choose an interim chief executive officer without further delay, turned Friday to William J. Popejoy, a former American Savings & Loan chairman who offered his services to the bankrupt county free of charge.
The selection of Popejoy, 56, of Newport Beach, was announced late in the day by the supervisors, who said they were impressed by his corporate experience, his “head-on” approach and his Orange County roots.
Charting a course for the county’s recovery “won’t be easy,” Popejoy said afterward in a telephone interview. “I know there will be frustrations, but I know it can be fixed.” He said he had already begun to set up weekend meetings with senior county staff members.
The selection followed a lengthy interview process that prompted critics to accuse the board of being indecisive at a time when the county is in urgent need of strong leadership to help it weather the Dec. 6 bankruptcy. The new chief executive is to have broad new powers to reorganize county government and slash budgets.
The supervisors’ unanimous choice of Popejoy, who is also a former president of the Federal Home Loan Mortgage Corp., surprised county insiders and others who had watched the board appear to veer in recent days toward first one candidate and then another.
Until nearly the final hours, sources said, Popejoy had ranked behind two other candidates for the high-profile, four- to six-month job: corporate turnaround specialist Sanford C. Sigoloff and B.J. Rone, a corporate rescuer from Dallas.
After the decision, Board of Supervisors Chairman Gaddi H. Vasquez said Popejoy’s Orange County residency and knowledge of the county had helped tip the scale in his favor.
“We evaluated the factors of experience, knowledge and in particular his knowledge of Orange County,” Vasquez said, adding that Popejoy has “extensive corporate background” in the county.
Popejoy’s offer to work at no cost was “not a factor,” Vasquez said, although Sigoloff’s rate of $500 an hour had raised eyebrows. Rone had said he would charge $275 an hour for his services.
Legally, Popejoy said, the county is required to pay him a salary, but he plans to donate that amount back to the county. Supervisors said the token salary would be minimal.
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Although Popejoy’s contract will not be finalized for several days, Vasquez said, the position is likely to come with greater authority than that granted to former County Administrative Officer Ernie Schneider, who was demoted last month after supervisors complained of his lack of leadership during the crisis.
Schneider could not be reached for comment.
Tom Uram, who has been serving as interim county administrative officer in the weeks since Schneider’s demotion, will return to his job as director of the county Health Care Agency, officials said.
Unlike Sigoloff and Rone, who had both said they would need to bring in outside help to assist them in the formidable task of reorganizing the county, Popejoy told the supervisors he believed there was enough “talent within the county government” to accomplish the task, said Vasquez.
If he decides he needs outside help, Popejoy said, he would ask for volunteers from Orange County corporations.
“I’m volunteering, and I think local corporations can volunteer some talent,” he said. “However, I’m highly confident that we have the talent here.”
“I liked his overall style,” Vasquez said. “He approaches things head-on.”
Supervisor William G. Steiner, who had held out in recent days against a growing board majority for Sigoloff, said Popejoy “presented us with a strategic plan that was impressive.”
“In the best of all worlds, the selection of a CEO should be done with deliberation, not desperation,” said Steiner, adding that the latter, however, “was the sort of atmosphere we were working from.”
Supervisor Marian Bergeson said, “I think everyone knows my choice was Sigoloff, (though) I think (Popejoy) was the consensus candidate. He has a strong background and understanding of the problem here.”
Bergeson read off Popejoy’s resume, listing his executive roles with Western Financial Printing Co. of Santa Fe Springs and other companies, and then added, “He has an extensive background in financial issues and CEO experience.”
It is those skills, Bergeson said, that can help the county work with a vast number of attorneys assigned to sort out the collapsed county investment pool, and also help with impending budgets.
Steiner also noted Popejoy’s Orange County connections, saying that they had figured in his selection. The new interim CEO, he said, “is committed to Orange County. He’s home-grown. His motives are pure.”
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When the county first plunged into its unprecedented financial crisis in early December, Popejoy said he was upset by the news and followed developments closely. At first, when the county announced the need for an interim CEO, he did not think about applying, he said.
“Then I started reading about the qualifications, and those fell right in my back yard,” he said. “I have the corporate experience, the financial background, I’ve dealt with litigation . . . and I even have some experience in labor relations.”
Popejoy said he believed the county’s complex financial problems can be “substantially under control in six months. The job won’t be done but everything should be in place. The goal is to have a process in place that will have broad grass-roots support in the county.”
“What we need is the community at large behind us,” he added. “If we have that, and I think we will because people here are bright and understand we have a problem, we will then have solutions in place, though they may take more than six months to conclude.”
Regarding the volatile issue of a tax increase, which has been endorsed by business community members in recent days, Popejoy said “taxes are not on the table,” at least for the moment.
“I’m not going to get involved with a discussion on a tax increase until we make the cuts we need to make and sell assets, . . . privatizing the services that are appropriate,” Popejoy said. Any decision on a tax hike will be made later, he said, and only after county officials first try to “save money and generate funds within the county.”
According to a draft job description, the new CEO will supervise all county offices, departments and special districts under the Board of Supervisors’ authority.
The CEO will have broad powers, including the authority to hire, fire, discipline and set salaries for certain non-elected department heads. The CEO will also be in charge of all the county’s administrative matters, as well as all county budgets.
Supervisor Jim Silva said Popejoy’s offer to work without pay was “not a big factor” in the selection. “In big bold letters, I think the fact that he’s not taking a salary means we will be able to keep about eight employees on board, which is very commendable,” he said.
Supervisor Roger R. Stanton said he was impressed that Popejoy knew about the crisis from top to bottom.
“He seemed to have a total grasp of the problem . . . and the roots of the problem . . .” Stanton said. “He understood the (breakdown) with the treasurer and the auditor and the crony relationship those two had. He talked about the need for privatization . . . and he didn’t--I don’t remember him using the ‘T’ word. I think most people realize this board has a negative position on new taxes.”
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The appointment met with heavy sighs of relief among county department heads and employees, who had expressed fear about what appeared to be the imminent appointment of Sigoloff, a corporate turnaround specialist with a reputation for slashing budgets and work forces.
Sigoloff was widely viewed as the front-runner until midweek. According to county sources, at least three supervisors were prepared to vote for him at that point but demurred because they hoped to find a candidate they could support unanimously.
However, tired of two weeks of wranglings with the county, Sigoloff sent a letter Friday to Bergeson, saying he would withdraw his name if a decision wasn’t made by 5 p.m.
“The delay, coupled with the continuing absence of a job description . . . have raised new concerns for me!” Sigoloff said in the letter. “Thus if no definitive word is received from the Board of Supervisors by 5 p.m. today, I intend to withdraw my name from consideration.”
In the letter, Sigoloff also expressed concerns about the county’s “bureaucratic structure” and doubts about whether the CEO would have the authority, staff and tools to complete the job successfully.
“I am very sensitive to the cost constraints the county faces and will, of course, act accordingly,” he wrote. “I will not however, participate in a project where the tools necessary to do the job are not available.” Sigoloff could not be reached for comment.
But Gary Segall, a former managing director of Sigoloff & Associates, said, “We just got tired of waiting and said forget it.”
Rone, when told of the county’s decision by a reporter, responded, “Oh, great. I think he’s a good choice, he lives there. And he has a lot of experience.”
Rone, a corporate work-out specialist, said he would be available if the county finds it still needs additional assistance.
“If they need any help, I’m still available,” said Rone. “I wish the Board of Supervisors and every citizen in Orange County the best of luck. I hope this can be solved with as little pain as possible.”
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Social Services Agency Director Larry Leaman said that with Popejoy’s appointment, the county can finally get on with the difficult task of coping with the crisis.
“It’s another hurdle in the process that’s now been jumped,” Leaman said. “The decision’s been made and the speculation can now stop. . . . I’m glad the board made a decision, and let’s get on with it.”
Dist. Atty. Michael R. Capizzi greeted the news of Popejoy’s appointment with enthusiasm. “Wonderful!” he said. “. . . I personally think it was an excellent choice based on everything I know about Mr. Popejoy. I had had some indication of that. Now it’s official.”
Capizzi, who sat on the management council that has recommended sweeping county budget cuts, said he is impressed with what he knows about Popejoy’s tenure at American Savings and Loan and his “success in the banking industry.”
“I had heard real good things about him, so I’m enthused and looking forward to working with him,” Capizzi said.
The decision will help speed the county’s recovery, he said.
“The sooner we can continue this march to recovery, the better off everybody will be,” he said. “I think we’ve made very impressive strides in the mere two months since the bankruptcy was declared. . . . Hopefully, with Mr. Popejoy, we’ll continue on that rapid road to some semblance of order and normalcy.”
The business community, which has watched the lengthy interview process with impatience, also greeted the selection with applause.
“I’m just delighted they made a decision,” said Todd Nicholson, president of the influential Orange County Business Council. “We felt it was very important the county create a chief executive position. This is a very positive step forward.”
“He’s by far the best choice,” said Merrill Butler, longtime business associate and friend of Popejoy who lives in Newport Beach and is a former builder-developer. “He has the exact combination of both public and private work experience. He is a remarkable man who has the great talent to get along with people. But he can make the tough decisions about layoffs and cutbacks.”
In other developments Friday:
* The Board of Supervisors Friday approved a $450,000 outside audit of county management to help streamline government and rid it of waste. Supervisors also approved an ad hoc committee that will meet to define the scope of the audit, but their selection of committee members enraged some members of the public.
The management audit, proposed by Bergeson, will explore the way the county contracts out services, and the chain of command between supervisors and department heads, among other issues.
* A financial consultant whose role in the Orange County fiscal crisis is under investigation by a state Senate committee has earned $4.1 million in gross revenues since 1990 for his work for the county and three other local agencies, according to documents filed with the committee.
Jeffrey Leifer, president of Leifer Capital, earned $2.03 million for the consulting he did for the county alone in the past two years, according to a letter released to the Senate Special Committee on Local Government Investments by his attorney, David Siegel.
State Sen. Quentin Kopp (I-San Francisco), who serves on the committee, which is investigating the bankruptcy, said the volume of cash “gives the lie” to statements made by Leifer at the committee’s hearing last month, when the financial adviser claimed he wasn’t offering financial advice. Kopp said the money collected indicates that Leifer’s role in the debacle was greater than he acknowledged before the committee.
Times staff writers Lee Romney, Debora Vrana, J.R. Moehringer, David Reyes and correspondent Shelby Grad contributed to this report.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
County Gets New Chief
The Orange County Board of Supervisors has named William J. Popejoy as the county’s new interim chief executive officer. Popejoy has been a senior executive with several large financial institutions.
The Man
* County resident since 1980 * First president of Federal Home Loan Mortgage Corp. * Currently owns Western Financial Printing Co.
The Deal
* Popejoy starts work immediately * Six-month commitment to county * Will receive unspecified salary but donate it to the county * Supervisors will launch immediate search for permanent CEO
The Buzz
“Mr. Popejoy has excellent skills and background, and, as a resident of Orange County, has a personal stake in what is best for the county during these difficult times.”--Tom Uram, county’s acting chief administrative officer.
Source: Times reports
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Profile:
William J. Popejoy
Age: 56
Home: Newport Beach
Family: Married, two children
Education: Bachelor’s degree, 1961, and master’s degree, 1962, Cal State Sacramento; School of Mortgage Banking, Northwestern University; Mortgage Banking Advanced Income Properties School, Michigan State University; completed executive education program, “Oversight of Derivatives,” Harvard Business School
Experience: Chairman and owner of Western Financial Printing Co., 1993 to present; Partner, Butler Popejoy Group, 1992-93; principal, Castine Partners, director of American Savings Bank, New West Savings & Loan, and the American Real Estate Group, 1989-92; chairman and CEO, Financial Corp. of America and American Savings and Loan Assn., 1984-89; president and CEO, Financial Federation Inc., 1981-83; president, Far West Savings and Loan Assn., 1980-81; president, American Savings and Loan Assn., 1974-80; president, Federal Home Loan Mortgage Corp., 1971-74
Attitude: “I think the situation can be substantially under control in six months. The job won’t be done, but everything should be in place.”
Sources: Times reports, William J. Popejoy
