ORANGE COUNTY IN BANKRUPTCY : Popejoy Picked to Lead County : Corporate Community Turns Up Heat on Supervisors : Crisis: Those who held office at time of bankruptcy are urged to resign or publicly declare they won’t seek reelection. Taxes are an issue.

Some of Orange County’s most powerful business leaders are subtly pressuring three members of the Board of Supervisors to resign or publicly declare that they will not seek reelection.

The movement to dump the supervisors who held office when Orange County went bankrupt Dec. 6--Gaddi H. Vasquez, Roger R. Stanton and William G. Steiner--stems from a growing belief among business people, particularly developers, that they are an obstacle to solving the county’s financial mess, largely because of their refusal to consider tax increases that the financial community deems essential to any recovery.

The Orange County Business Council, which hammered out the settlement plan offered to participants in the county’s failed investment pool and accepted by the supervisors earlier this week, discussed the removal of the three supervisors during a meeting last Monday, according to business leaders who spoke on the condition that they not be named.

One business executive said the council’s membership has become increasingly concerned that the supervisors will remain adamantly opposed to tax increases, even if that is what is needed to keep the county government running. He questioned whether they could be effective at all if they are constantly “looking over their shoulder” at real or imagined political opponents.

Board Chairman Vasquez confirmed to The Times Friday that Gary H. Hunt, executive vice president of the Irvine Co., telephoned him Thursday afternoon to tell him some members of the business community were unhappy with the supervisors.

Hunt, one of the three Business Council members who announced the investment pool settlement plan, was out of town Friday and unavailable for comment.

The Business Council’s 18-member Special Task Force on Government Finance includes prominent developers George Argyros and Santa Margarita President Anthony Moiso, Carl Karcher Enterprises Chairman William P. Foley and Walt Disney Co. board member Ray Watson, as well as the top business executives of the Times Orange County Edition and the Orange County Register.

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Vasquez said he is ignoring the pressure and instead “focusing” on getting the county out of bankruptcy. He said that speculation about him resigning “gets silly after awhile,” adding that his “patience is running a little thin.”

Stanton, already the target of a recall campaign that got underway a week ago, reacted even more strongly, declaring that “narrow, financial, special interest” groups were trying to bully the supervisors into imposing a tax increase.

“It’s not up to boardroom executives to decide who’s in office. It’s up to the public, and that’s where I’ll put my faith.”

Steiner, expressing outrage at pressure from the business community, complained that “these are the same people who have been telling me that they want to be partners with us in working through the fiscal crisis.”

“We have promised our constituency that we would look for all sorts of alternatives other than a tax increase,” Steiner said. “Now, apparently some business leaders are calling for us to resign so they can move their own agenda forward--an agenda that increasingly looks like a tax increase by people who would be appointed by the governor and not accountable to the voters.”

Stanton and Vasquez are up for reelection next year, while Steiner, elected last year, just began a new, four-year term in January. The two whose terms expire at the end of 1996 say they currently plan to seek reelection. Steiner remains undecided.

Some business leaders say the supervisors’ careers are over even if they don’t resign.

“The realities of political life are not lost on these folks. They know what the game is,” said Doy Henley, president of the influential and conservative Lincoln Club. “It’s no use hurting anybody’s feelings by stating the obvious.”

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Ever since the county’s bankruptcy declaration, the supervisors have walked a political tightrope. Grass-roots citizen groups have threatened to launch election recalls of any supervisor supporting a tax-increase, while well-financed business organizations have demanded that the supervisors consider boosting taxes to avoid loan defaults.

“This creates an impossible double bind for us,” Steiner said.

Nonetheless, it has become apparent that some business leaders are trying to impose their will on the Board of Supervisors.

Members of the business community “do not believe those people can juggle a reelection campaign, and do the (county government) reorganization plan, and then have the freedom to make the best decisions for the county and not themselves,” said one source familiar with the concerns being expressed by business leaders.

“There’s a lot of talk that one of the things that would be helpful (in resolving the bankruptcy) is if the supervisors would just say they will not stand for reelection,” said another business leader. He added that the idea of new taxes may not be received well by the public because “there’s this great skepticism about giving new resources to the same people that got us into this mess.”

The council considered making the removal of the supervisors a part of the settlement plan they unveiled on Tuesday, but some members opposed publicly pressuring the supervisors to step aside, according to business leaders. Rather than take attention away from their settlement proposal, the council participants informally agreed to privately convey their concerns to the three supervisors, the sources said.

“There were just a whole lot of options that were talked about at that meeting. I think I would rather not talk about any options that were not talked about in the final (settlement proposal) recommendation,” said Wayne Wedin, a Business Council member who heads the Orange County Chamber of Commerce and Industry.

Although the political standing of the three supervisors has become a source of rampant speculation since the bankruptcy, members of the business community said there is a growing lack of confidence in the board members ability to make politically tough decisions.

At first, the movement to dump the three supervisors was being attributed to the Lincoln Club, but that was denied Friday by Henley, the group’s president.

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Buck Johns, a Lincoln Club board member, acknowledged that the group was indeed frustrated by the supervisors’ reluctance to name Sanford C. Sigoloff as the new county executive officer.

Sigoloff--who at one point had three of the five votes needed for appointment--ran into political trouble when his reputation for ruthlessly cutting budgets and employees circulated throughout county departments. On Friday, the board elected William J. Popejoy, a former savings and loan executive, to the job.

While the retirement of the supervisors “is not exactly a bad idea,” Johns said, it also is not a good idea to seek their resignations immediately, because that would only add to the chaos in county government.

He said there are too many important decisions that require immediate attention.

“This fiddling while Rome is burning is not going to get it,” Johns said.

Lait reported from Santa Ana and Martinez reported from Washington.