Orange County’s Counsel to Leave Post : Bankruptcy: Terry Andrus will resign next month. Removal of auditor-controller is also sought by chief executive.

Terry C. Andrus, the county counsel who kept Orange County supervisors in the dark last year when federal authorities first raised questions about the county’s ill-fated investment pool, said Monday that he will step down next month, joining the list of high-level casualties of the fiscal collapse.

County Chief Executive William J. Popejoy said Monday he also is seeking the removal of Auditor-Controller Steven E. Lewis--an elected official who cannot be fired--as part of an effort to sweep from office all the county officials who share blame for the crisis.

After his impending departure was announced by the county’s new chief executive, Andrus confirmed that he would step down and not ask county supervisors to renew his four-year contract when it expires March 21.

But Lewis, whose term does not expire until 1998, has reportedly vowed that he will not leave office without a fight. Lewis was unavailable for comment.

Late last week, Popejoy fired former County Administrative Officer Ernie Schneider and arranged for the termination of Assistant Treasurer Matthew Raabe.

“We’re moving forward with people who are not tainted” by the county’s financial collapse, Popejoy said, adding that the four individuals who have been asked to leave had “varying degrees of culpability” for the county’s problems.

Supervisors Roger R. Stanton, Gaddi H. Vasquez and William G. Steiner are the only top officials who have survived the county’s Dec. 6 bankruptcy filing, the largest municipal financial collapse in U.S. history. Stanton is the target of an active recall effort.

Popejoy said he is cleaning house to restore credibility in the county’s leadership.

“When you have a wound, one of the first things you do is clean it,” he said. “Probably hundreds, if not thousands, of people will lose their jobs because of the actions or inactions of these people. Much of this (financial mess) could have been avoided.

Steiner said he was “not really surprised” by Popejoy’s decision to move against Andrus and Lewis. “I guess these are the new realities. Terry is a good man who will find there is life after county government. The process for Lewis’ removal is outside the scope of the board and Popejoy.”

Andrus and Lewis had come under increasing criticism in recent weeks for their involvement in actions leading to the county’s financial collapse.

Some county officials were angry that Andrus did not inform them of a meeting he had last April with Securities and Exchange Commission officials who were concerned about the risky investment practices of then-Treasurer Robert L. Citron. Citron resigned Dec. 4 after the disclosure of losses in the county’s investment pool that came, ultimately, to $1.69 billion.

Andrus told a state Senate committee looking into the county’s bankruptcy that he did not inform the supervisors of the April meeting because he was worried that leaks about the discussions could cause a run on the investment pool by its almost 200 outside investors.

The county’s top lawyer said he also believed that the SEC inquiry was an outgrowth of last spring’s bitter political campaign for the treasurer’s office, in which Citron’s challenger, John M. W. Moorlach, accused the longtime officeholder of making risky investments. Andrus said he left the meeting persuaded that the SEC was satisfied and that the investment pool was safe.

But his explanations did not sit well with some supervisors--or with Popejoy, the former savings and loan executive hired to restore order to the county’s operations.

“He was counsel to the board, and the counsel does a disservice to the client if they try to protect the client from information,” Popejoy said.

He added that he met with Andrus last week and said they agreed that the counsel’s departure would be in the best interest of the county.

Andrus, who has worked off and on for the county for 20 years, said that his decision was made a week ago and that Popejoy’s opinions were not a factor.

“My wife and I decided last week that I would not ask the board for a new term of office,” Andrus said. “I will stay for whatever period of time is appropriate to facilitate an orderly transition.”

However, Popejoy said, “I’m the one who brought it to a head and talked to him. Terry agreed with me that he should resign. (He) agreed with my assessment that his credibility had been damaged. I very much appreciate the dignity and class that Terry Andrus has shown by making his decision.”

Popejoy said he is having a tougher time persuading Lewis to resign. But the new CEO, noting that he has budget authority over Lewis’ office, said he may use it as leverage.

“I indicated my unwillingness to use the audit operation of Mr. Lewis to audit county operations under my responsibility,” Popejoy said, adding that it would be “irresponsible to use an auditor whose abilities appear to be so seriously flawed.”