SEC Probing Orange County Officials : Bankruptcy: Investigators subpoena supervisors and aides. They seek to determine if financial firms were asked for campaign donations in exchange for county contracts.

The U.S. Securities and Exchange Commission has subpoenaed more than a dozen current and former Orange County officials, including supervisors and their aides, to testify as part of a broad investigation into whether financial advisers, bankers, underwriters and brokers may have been solicited for campaign contributions to obtain county contracts.

SEC investigators are especially interested in the activities of Supervisor Roger R. Stanton, who has played a major role in deciding who gets public investment contracts and has received more contributions from the public finance community than any other supervisor over the past five years.

An aide to Stanton said Thursday that the supervisor had not received a subpoena to appear before the SEC.

But Board Chairman Gaddi H. Vasquez, Supervisor William G. Steiner and former supervisors Thomas F. Riley and Harriett M. Wieder confirmed that they have received subpoenas to testify before the SEC later this month. Steiner is scheduled to appear May 31 and Riley on June 2. Vasquez said he did not know the date of his appearance, and Wieder said her attorney told her she will have to appear in late May.

Former County Administrative Officer Ernie Schneider and Eileen Walsh, the county’s former finance director, appeared before the SEC in Los Angeles last month. They declined comment Thursday about their appearances on the advice of their attorneys.

Auditor-Controller Steve E. Lewis on Wednesday completed two days of testimony with the SEC. Lewis, the embattled official who has been under intense pressure to resign because county supervisors believe he failed to provide adequate warning of the risky investment dealings of former Treasurer-Tax Collector Robert L. Citron, did not return a call for comment.

Some of those who have already appeared before the SEC were asked about their relationships with numerous underwriters and brokers, such as Michael G. Stamenson of Merrill Lynch & Co., one of Citron’s chief brokers. Investigators also asked about Jeffrey R. Leifer, Citron’s longtime financial adviser, who earned more than $2 million arranging the county’s annual borrowings.

Chuck Hulse, chief deputy auditor-controller, said he was subpoenaed by the SEC in late April. He said he was asked, among other things, about the relationship between county officials and financial firm executives.

“I told them I didn’t know about that phase of it,” Hulse said. “They led off with a list of about 15 names and asked if I knew any of the people . . . or had ever dealt with any of them. The only name I recognized was Stamenson.”

Some of those subpoenaed were asked specifically about Stanton, the senior supervisor, and whether he steered campaign contributions from financial firms to himself and others in exchange for his help in obtaining lucrative contracts to arrange bond deals.

Such an arrangement, known in the world of municipal finance as a “pay-to-play” system, has been strongly criticized by Arthur Levitt Jr., the SEC chairman.

Stanton has strongly denied using his influence to award contracts in exchange for campaign contributions to his chief executive assistant, Robert L. Richardson, a Santa Ana councilman, and Jim Silva, the freshman supervisor Stanton supported in last year’s election. Richardson and Silva have denied any impropriety.

A Times computer-assisted analysis done in January shows that Stanton received at least $19,243 from the public finance community over the past five years, more than any of his colleagues. At the same time, Richardson received $12,368, almost as much as any of the other supervisors who were in office last year. Silva received about $6,000 from financial underwriters, brokerages and financial advisers, more than twice that collected by his challenger in last June’s election.

“They’re looking very closely at the pay-to-play practices and specifically the 1st District’s role in that,” said one county official interviewed by the SEC and questioned about Stanton, who represents that district.

“They have a long list of specific (bond) deals they’re interested in,” the official continued, adding that investigators had numerous questions about deals in which Merrill Lynch and Smith Barney served as underwriters.

Another county official said he was quizzed for seven hours about a range of issues, from the county’s note borrowings in 1994 to the procedures for picking underwriters and financial advisers.

The agency’s investigation of Orange County apparently has been divided among four or five different teams, each responsible for specific areas, such as the pay-to-play system and the role played by Merrill Lynch and other financial firms, said another source familiar with the investigation.

The SEC’s investigation is one of three probes into the county’s bankruptcy, which was precipitated by the collapse of the county’s $7.4-billion investment pool. The portfolio eventually lost $1.7 billion in all. Citron, who oversaw the pool, has pleaded guilty to six felonies, including misappropriating public funds. He faces a maximum of 14 years in state prison and a $10-million fine. The district attorney’s office and the U.S. attorney’s office are still investigating.

In the SEC inquiry, sources said that attorneys have asked at least two county officials whether they knew about a relationship involving Stanton, former financial advisers and investment brokers to get business with the county.

Elaine Cacheris, regional director for the SEC in Los Angeles, said, “We don’t comment on aspects of the investigation. It has been reported that we’re investigating this matter and that’s accurate.”

Calls to Gerald Boltz, a lawyer representing the supervisors and their aides, were not returned. Boltz was regional administrator for the SEC’s Los Angeles office from 1972 to 1979.

According to sources close to the proceedings, the SEC also has subpoenaed Stanton aide Richardson, Steiner aide Dean Olsen, Vasquez aide Tiffany Kretzschmar and former Wieder executive assistant Pam St. Pierre.

The SEC has recently subpoenaed documents from the Student Loan Marketing Assn. and the Federal National Mortgage Assn., two government-sponsored enterprises that issued billions of dollars of securities bought by Orange County’s ill-fated investment pool.

Officials at the agencies, known as Sallie Mae and Fannie Mae, respectively, have said that the SEC was simply seeking information from them regarding the bonds purchased by the county and that the issuers are not targets of the SEC probe.

Two other government issuers whose securities were popular with the county--the Federal Housing Finance Board, which supervises the Home Loan Bank System, and the Federal Home Loan Mortgage Corp.--have received requests for information from the SEC, but have not been subpoenaed.

Times staff writer Jodi Wilgoren contributed to this report.