‘Mystery’ Broker Calls Role Limited : Inquiry: Dean Witter’s De Spirito says he merely gave Citron technical help and occasional opinion on direction of interest rates.

The mystery broker that former Treasurer-Tax Collector Robert L. Citron called for advice each morning said Thursday that he gave Citron nothing more than technical support and occasional opinions on interest rates.

“If Mr. Citron considered me a financial adviser, he never told me,” Albert J. De Spirito told a special state Senate panel investigating Orange County’s financial collapse.

De Spirito, a vice president at Dean Witter Reynolds, first emerged as a possible key figure in the crisis during a previous Senate hearing Jan. 17. Both Citron and Merrill Lynch stockbroker Michael G. Stamenson, who peddled the majority of high-risk investments to the county, evoked De Spirito as Citron’s “adviser of longstanding.”

But De Spirito said Thursday that though he had known Citron since 1974, his advice consisted mainly of computer financial data.

“Mr. Citron called on me to get (securities) quotes,” he said.

De Spirito said Citron did not have a computer terminal capable of displaying certain financial information so the treasurer typically called him each morning between 7:30 and 8:30 to get the opening and last trades for federal funds and the discounted rates and yields on short and long-term U.S. Treasury bonds. Sometimes, he said, they also spoke about rates on reverse repurchase agreements, which are complex investment used by borrowers to buy additional securities with borrowed money.

De Spirito said Citron periodically asked him whether the Federal Reserve Board would raise or lower interest rates--usually around the time he had to deliver a report to the Orange County Board of Supervisors.

“I’d tell him what I thought was the proper answer at the time,” De Spirito said. “I would give him my opinion and I would only be 50% right.”

De Spirito said he was not a “Fed watcher,” but was “very friendly with several economists” and felt qualified to give an opinion. But, he said, he assumed Citron wasn’t relying solely on his perception.

But state Sen. Quentin Kopp (I-San Francisco) said he believed De Spirito had played “a more important role than (he) had attempted to portray” to lawmakers.

“If Mr. Citron, in his mind because he had a lot of respect for me, thought of me as a financial adviser, then I’m not going to dispute it,” said De Spirito, who lives in San Marino.

In the past, Dean Witter had sold Orange County approximately $690 million worth of securities and loaned it about $100 million in reverse repurchase agreements. De Spirito said that as a salesman he also dealt with Judy Jacobson, a staff member in the treasurer’s office, who was given the power to make investments.

But he pointed out that he was not Citron’s chosen broker and, in fact, the treasurer often bought the opposite of what he was offering after interest rates began to rise last year.

“I would say I was offering securities more resistant to interest rate rises,” De Spirito said. “Mr. Citron wanted yield more than safety at that point.”

De Spirito said he and Citron rarely discussed the fund’s investments or strategies and he didn’t know how leveraged the fund was until after the crisis was detailed in news accounts.

“I was shocked at what I read in the papers: $600 million, $800 million. You can’t believe some of those things are going on.”