A bill drafted by state Sen. Lucy Killea (I-San Diego) is already one of the most provocative measures aimed at helping Orange County out of bankruptcy, but it's having a tough time getting introduced in the Senate.
The measure, which would allow Orange County voters to strip the Board of Supervisors of all financial powers and install a special authority to run the county's fiscal affairs, has drawn interest from both sides of the political aisle. But it will probably be at least a week before the bill is formally debated in the special legislative session now underway to deal with Orange County's bankruptcy.
The reason: Killea handed her bill over to the Senate clerk Monday, but it arrived too late to appear before the Rules Committee when it met in the afternoon. The Rules Committee's next scheduled meeting is next week, meaning debate on Killea's legislation--and the June 6 election it proposes to decide the supervisors' fate--will have to wait a while.
Popejoy to Present Plan
The county Board of Supervisors will hold its second night meeting tonight, when Chief Executive Officer William J. Popejoy is scheduled to outline a new recovery plan, complete with a timeline and lists of potential cutbacks. He will also discuss privatizing some services and selling some county assets.
The meeting begins at 7 p.m. at the Hall of Administration in Santa Ana.
Bondholders Expand Suit
Expanding the scope of an earlier class-action lawsuit, Orange County bondholders Monday moved to sue other investment firms and financial advisers who made money off Orange County, lawyers said.
The original suit filed Jan. 27 in U.S. District Court in Santa Ana had named former County Treasurer-Tax Collector Robert L. Citron, other public officials and investment banking giant Merrill Lynch for helping to perpetuate a high-risk investment strategy.
But calling the financial crisis in Orange County a "massive fraudulent scheme by defendants . . . to offer and sell debt securities of the county and the pool participants to an unsuspecting public," bondholders filed an amended complaint Monday naming other firms.
The added defendants are: PaineWebber Inc. of New York, Lehman Brothers of New York, Donaldson, Lufkin & Jenrette of New York, Kidder Peabody & Co. of New York, Stone & Youngberg of San Francisco, Rauscher Pierce Refsnes Inc. of Dallas, Leifer Capital of Santa Monica, Fieldman Rolapp & Associates of Irvine, CGMS Inc. of San Francisco, and O'Brien Partners of New York.
Investors who bought billions of dollars of Orange County bonds are angry because the value of their investments have plummeted since Orange County reported a $1.69-billion loss and filed for bankruptcy.
"Our investigation shows that the net is much larger than just Mr. Citron," said Joseph W. Cotchett, a lawyer for the bondholders. "Clearly, there are a number of people who need to be held responsible for this."
U.S. Judge Linda McLaughlin is expected to hold a hearing on the case March 15 in Santa Ana.
Compiled by Shelby Grad with Eric Bailey and Debora Vrana.