This Time, Moorlach Is Elected Unanimously : Recovery: Supervisors lavish praise on accountant who forecast debacle, give him one-year term as O.C. treasurer.
After a year that took him from dissident doomsayer to glorified prophet about the fate of the county’s high-flying investment pool, John M.W. Moorlach of Costa Mesa was named Orange County treasurer-tax collector Friday by an enthusiastic, unanimous vote of the Board of Supervisors.
“While it has been a long and difficult road en route to this day, I want to commend you for your patience and enduring desire to serve the people of Orange County,” Board Chairman Gaddi H. Vasquez told Moorlach, 39, after each of the five supervisors lavished him with praise.
“It would have been easy for you to have just walked away from it all, but you didn’t. Instead, you stand here today ready to accept a challenge,” Vasquez said.
Moorlach, who lost a bitterly fought campaign to unseat longtime Treasurer Robert L. Citron in last June’s local elections, will serve just one year before voters will be called upon to elect a new treasurer in March, 1996.
It was during that campaign last June that Moorlach made his first public pronouncements about the risky nature of Citron’s investment strategies and warned that the county-run investment pool had already suffered more than $1.2 billion in losses.
On Friday, the ebullient accountant vowed to start work immediately to restore confidence in the beleaguered treasurer’s office, promising to release a 100-day plan as early as next week, and to follow up with a clear investment policy and monthly written updates on the status of the investment pool.
“Now it’s time to rock ‘n’ roll. Now it’s time to work. Let’s get this thing moving,” Moorlach said. “I guess you can win by losing. It has been a long, strange journey,” he added.
As Moorlach was winning appointment to the position he had openly sought for months, Wall Street delivered another blow to the embattled county: Standard & Poor’s rating agency announced that it would consider a proposed rollover of $1.275 billion in county bonds coming due this summer as a default.
Orange County Chief Executive Officer William J. Popejoy announced a plan Thursday to extend the term of the bonds for another year at the same interest rate in order to avoid default, but Standard & Poor’s said Friday that even if individual bondholders accept the plan, it would hurt the county’s credit rating over the long haul.
At the same time, the rating agency lauded Popejoy’s recommendation earlier this week that the Board of Supervisors place a half-cent hike in the sales tax on the ballot for a special election this June.
“In S & P’s opinion this is a positive step toward developing a plausible work-out plan given the county’s significant budgetary and debt service payment gaps,” the agency said in a statement.
Meanwhile in Orange County, Popejoy had more bad news for the county’s work force, saying that even more layoffs would be necessary to accommodate the supervisors’ recommendations for next year’s budget cutbacks.
Last week, Popejoy presented a proposal to slash 41% from the county’s general fund, laying off 1,040 employees and eliminating 563 other vacant job positions.
During three days of budget hearings this week, the supervisors balked at several proposals affecting the Social Services Agency, the Sheriff’s Department and the Probation Department, sending Popejoy back to find other areas to chop.
“I can almost guarantee you,” Popejoy said Friday, “wherever you cut elsewhere, there will be unhappy people elsewhere.”
After a week of grim news about the state of the budget, the supervisors held their first cheerful meeting in months to name Moorlach to the post from which Citron resigned in disgrace Dec. 4, two days before the county’s unprecedented bankruptcy filing.
The 5-0 appointment came amid widespread criticism of the board’s selection process.
The Orange County Business Council, the Orange County Grand Jury, the president of the California Assn. of County Treasurer-Tax Collectors, Popejoy, interim county Treasurer Thomas E. Daxon, Wall Street bankers and other observers of the county’s ongoing financial saga had all urged the board to postpone filling the position until it could conduct a national search for the best-qualified candidate.
Instead, the board asked its newly formed oversight committee to conduct a confirmation hearing, after which they approved Moorlach’s appointment 4-1 Thursday night.
Sen. Lucy Killea (I-San Diego), co-chair of the state Senate panel investigating the Orange County bankruptcy, said Friday that she still thinks the Board of Supervisors erred by not conducting a nationwide search.
“This has the look of an insider deal and that’s what they have to get away from,” Killea said. “Perception is part of being in public office, and I don’t think the perception on this one is good.”
But the supervisors, Republicans all, showed no hesitation Friday in appointing the unsuccessful Republican candidate to fill the position of Citron, the only Democrat who continued to win a countywide elective office in Orange County in recent years.
“You have certainly earned the respect of all of us who have known you through this ordeal,” said Supervisor Marian Bergeson, who rushed to second his nomination even before Supervisor Jim Silva had a chance to make the motion.
Moorlach, who had joked about being late for the oversight committee hearing the night before, arrived nearly half an hour early for his day in the sun Friday.
From the moment he emerged from his car outside the county’s Hall of Administration, Moorlach was greeted by supporters who showered him with congratulations even before the vote that made his appointment official.
Inside the board hearing room, where he sat hastily writing the comments he would make to the supervisors within minutes, Moorlach was continually interrupted by friends and strangers who wanted to shake his hand.
A Republican activist who for 18 years has done tax work, Moorlach earned only 40% of the vote when he launched the first electoral challenge Citron had faced in more than two decades. And when many of his predictions about problems in the investment pool came true last fall, Moorlach was catapulted into an instant celebrity.
Cars sported bumper stickers reading “Don’t blame me, I voted for Moorlach,” and the accountant became the hottest name on the speakers’ circuit for local conservative clubs.
“I’m not going to say I’m the perfect candidate for the job--I’m not that arrogant,” Moorlach told the board Friday. “We need to restore confidence in this office, not only on Wall Street but here, locally, on Main Street.”
Moorlach named as his “bosses” the taxpayers, the board and Popejoy, and said he would start work Monday.
“First I’d like to see what my office looks like and get to know the employees,” Moorlach quipped. Later, when asked whether he would be paid the $104,000 salary that Citron had commanded, Moorlach said he had never even negotiated salary or benefits.
He said he remains unsure whether he will seek a full four-year term in the election next March, and said he has not yet decided whether to take a leave of absence or sell his interest in the Costa Mesa firm where he is a partner.
During a question-and-answer session before the board’s vote, Moorlach said he would:
* Soon issue an investment policy statement and draft a written job description for himself;
* Pursue Popejoy’s suggestion of finding private firms to manage the investment pool the county runs for itself and local schools, cities and special districts;
* Issue monthly written statements describing the activity in the investment pool--using market values for the securities--for the board, pool participants and the public;
* Consider expanding the Treasurer’s Oversight Committee from five members to 12; and
* Seek new accounting software.
Echoing themes from his failed campaign, Moorlach repeatedly promised complete disclosure, striving to paint a difference between his plans and the practices of his predecessor, Citron.
“There’s not going to be anything secretive or highly complex that only certain people can explain,” he said. “Let’s make it very vanilla, very understandable. Nothing exotic. Let’s make it a kids’ formula.”
Moorlach’s wife, Trina, his 4-year-old son, Daniel, and his parents, Kent and Rita Moorlach of Buena Park, joined him at the meeting and were formally introduced.
The new treasurer’s parents said the months since the bankruptcy have been both exciting and exhausting for their son, and noted that the coming weeks are likely to be no different.
“It’s going to be a big challenge for him, a big job,” Rita Moorlach said. “But he can do it. As a young kid, he was already making his own little math problems--for fun. This is going to be difficult, but he really has a heart for Orange County. He really wants to help.”
Times staff writers Rebecca Trounson in Santa Ana and Eric Bailey in Sacramento contributed to this report.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Profile: John M.W. Moorlach
Full name: Johannes Meindert Willem Moorlach
Hometown: Groningen, the Netherlands
Moved to Orange County: 1960, when he was 4; grew up in Cypress and Buena Park
Residence: Costa Mesa
Family: Married to Trina; three children: Sarah, 12; C.J., 10, and Daniel, 4
Education: Bachelor’s degree in business administration, Cal State Long Beach, 1977
Resume: Certified public accountant and certified financial planner; vice president of Balser, Horowitz, Frank and Wakeling--an accounting firm--and administrative partner of its Costa Mesa office
Attitude: “Now it’s time to rock ‘n’ roll. Now it’s time to work. Let’s get this thing moving.”
Source: John M.W. Moorlach
Researched by REBECCA TROUNSON / Los Angeles Times