ORANGE COUNTY IN BANKRUPTCY : Moorlach Turns Table on Panel, Offers Pointed Criticisms of State

John M.W. Moorlach, who warned of Orange County’s risky investment strategy during last year’s election campaign and now is the Board of Supervisors’ apparent choice to take over as treasurer, Friday gave the special legislative committee investigating the financial crisis an earful of criticism of the state.

Moorlach’s exchange with the committee in the Irvine Council Chambers was testy at times, and left some lawmakers wondering if other candidates should be considered to replace former Treasurer-Tax Collector Robert L. Citron.

“You may score one touchdown in a whole season. But what about the other nine games?” state Sen. William A. Craven (R-Oceanside) asked of Moorlach’s track record.

“I think the Board (of Supervisors) would be well served by talking to more than just one candidate,” he added. “Don’t just take the first one who comes along. That’s like marrying the first girl you meet.”

But Sen. Cathie Wright (R-Simi Valley) said she believes Moorlach is the right man for the job. “I would appoint him. I think he made sense,” she said. “He is a (certified public accountant). He knows about investments and the last thing this county needs is a special election.”

A majority of county supervisors indicated this week they are prepared to select Moorlach to fill the post currently held by interim Treasurer Thomas E. Daxon, perhaps next week. Their support and praise for Moorlach are based on warnings he made about Citron’s risky strategy while unsuccessfully running for the office last year.

Friday, Moorlach turned his signature skepticism on the state in a proceeding where legislators had expected to prod him for answers.

“I’m seeing a lot of criticism, but I’m not seeing a whole lot of sincerity,” Moorlach told senators, who sat through hours of testimony on the crisis before inviting Moorlach to speak late in the afternoon.

*

Moorlach rattled off a list of beefs: The state should be paying off schools that lost money in the county’s collapsed investment pool, he said, and it’s about time the state provided counties with more money instead of taking it away.

“This has been a taking relationship with the state,” Moorlach said. “Isn’t it time now for you to look at your obligation to us? We are at a critical point and it seems to me this should not be a one-way relationship.”

He also said the state should have monitored school investments in the county pool to ensure their safety because, he contended, state law required schools to invest their funds with the county. That assertion is the subject of disagreement among officials involved with the financial crisis.

“My question as a private citizen would be, where was the state auditor? Where was the state treasurer? Where was the state controller? This was a mandate, yet you didn’t provide any oversight of your own,” he said. “It seems to me that the state has an obligation to make the schools whole.”

Friends of Moorlach’s who came to hear him testify said they have no doubts he is the man for the job.

“He’s got the background to do the job. He’s willing to stand up for the principles he believes in, and he’s going to look after the taxpayers’ money,” said Bruce Peotter, an Irvine finance commissioner.

*

In opening statements to the Senate panel, Moorlach listed some of his ideas for financial recovery, but quickly launched into an attack on the state’s record of fiscal oversight.

Sen. Lucy Killea (I-San Diego) questioned Moorlach on his credentials for the treasurer’s job, asking who helped him analyze the county’s now-collapsed portfolio during his bitter and unsuccessful campaign against Citron last spring.

But Moorlach declined to reveal the information, saying that the analysts wanted to stay out of the media glare.

“The Board of Supervisors is ready to anoint you as the new treasurer. It seems to me that if you were not the candidate for the race, wouldn’t you prefer to see this as an open process for which the best available people apply?” Killea asked.

“Have I made any statements to the contrary?” Moorlach snapped.

“Look, sir, I just met you for the first time today,” Killea told him. “You’re a little touchy on this.”

Moorlach apologized to Killea during the proceedings, saying he was “tired.” Later, he added that he has been working extra hard to complete work obligations, in case the board appoints him next week.