A Once-Bright Future Dims at Bail Hearing

There was a defiant bounce in his step as Matthew Raabe strolled through the Orange County Courthouse late Tuesday afternoon, looking for all the world like a picture of nonchalance instead of a man facing 14 years in prison for his role in the county’s bankruptcy.

Gone was the shuffling gait, unkempt beard and downward stare that marked his appearance before a state Senate committee earlier this year. For weeks, dark rumors swirled around the county that Raabe was so fragile, so unstable, that he might not be able to withstand the stress of the investigation into the largest municipal bankruptcy in U.S. history.

But the 39-year-old Raabe tried his best to look like a man prepared to fight for his life as he entered Department 5 of the courthouse to be charged with six felony counts of misappropriating public funds, falsifying records and deceiving participants in the county’s investment pool.

“He’s told me he intends to fight, because he says he’s done nothing wrong,” defense attorney Gary M. Pohlson said after Raabe made his first court appearance.

Tuesday started pleasantly enough for the man once considered by county officials as a rising bureaucrat and trusted aide-de-camp of former County Treasurer-Tax Collector Robert L. Citron, who had handpicked Raabe to be his successor.

Raabe awoke early, and by 10 a.m. had spoken with his attorney three times. He then joined his ex-wife, Sandra, for a workout session at a Newport Beach gym, according to the district attorney’s investigators who were assigned to tail him.

Raabe and his ex-wife later took in an afternoon showing of the movie “Crimson Tide,” during which Raabe, a movie buff, darted out of the theater to again check in with his attorney, according to testimony at his court hearing.

On his way home after the movie, Raabe drove past the turnoff to his house in Santa Ana, driving instead to a nearby shopping center to make a phone call. After getting word that he was ordered to appear in Orange County Superior Court, Raabe drove home and changed out of his T-shirt and jeans and into a black, double-breasted suit and maroon print tie.

Then, he got back into his car, presumably to head to the courthouse.

But investigator Thomas R. Stewart of the district attorney’s office testified in court that Raabe took an oddly circuitous route, and at one point appeared intent on evading the five units assigned to keep a close eye on him.

Raabe ran a red light and several stop signs as he sped through South Coast Plaza and then into Santa Ana, reaching speeds in excess of 50 m.p.h., Stewart said. Raabe even yelled at one point to his ex-wife, who was following him in her car, to stop where she was and “hold up” traffic so he could get away, Stewart said.

Raabe eventually caught up with his attorney at a fast-food restaurant not far from Santa Ana’s Civic Center, and the pair drove on to the courthouse together.

The bizarre behavior was cited by prosecutors who sought to hold Raabe on $1-million bail, arguing that he was a flight risk. But Pohlson claimed Raabe thought he was being followed by the media--not law enforcement--when he was driving erratically.

“Mr. Raabe will tell you he did drive crazy like that, he thought the media was following him,” Pohlson said, pleading with the judge not to let the incident impact his client’s request for a lower bail.

“Most fleeing felons don’t do it this way,” Pohlson said, noting that Raabe ultimately appeared at court on time.

Tuesday’s events were a far cry from the future that lay ahead of Raabe when the Iowa native moved to Orange County with his family in 1960. He got a job with the county in 1984, the year he graduated from Cal State Fullerton with a degree in business administration. He started as an auditor in the auditor-controller’s office but quickly worked his way up in the county’s hierarchy and moved to the treasurer’s office in 1987.

According to numerous interviews with county officials and friends, Citron and Raabe developed a cozy, trusting relationship. By the time he became assistant treasurer, Raabe was universally seen as the heir-apparent to Citron.

To many observers, Raabe already was the treasurer. Citron was a poor public speaker who shied away from crowds, friends said. It was Raabe who made the presentations, drawing potential investors to the county pool Citron managed and assuring them it was a good, safe place for their money.

Raabe was the spokesman during Citron’s heated reelection campaign last June and played a key role in his boss’ success at the polls.

When the county’s financial structure crumbled in early December, it was Raabe to whom desperate county officials turned to help sort it all out. He worked nearly round the clock, often refusing to take the time to shave or change clothes, county officials recalled.

His demeanor was harried, yet observers during the county’s darkest hour say Raabe took to being in the limelight, cherishing the role.

“His attitude was, ‘We’re going to get though this.’ It was like Matt was trying to save the day,” said a high-ranking county official who asked not to be identified.

Citron resigned his post on Dec. 4. The next day Orange County got its first new treasurer in 24 years when Raabe was appointed by the Board of Supervisors to take Citron’s place. A day later, on Dec. 6, the county declared bankruptcy.

Raabe’s ascension did not last long. On Feb. 25 he was fired by newly appointed County Chief Executive Officer William J. Popejoy after an investigation turned up the misallocation of millions of dollars in interest to pool participants. Raabe also repeatedly evaded a subpoena to testify before a state Senate committee on the bankruptcy, county officials said.

Raabe eventually testified, and was scoffed at by state senators, as he tried to portray himself as a Citron dupe who only did what he was told and had no intimate knowledge of county investment operations.

Since then, Raabe has had little peace, as he faced prospect of criminal prosecution. Last month Citron pleaded guilty to six felony charges and named Raabe as an accomplice.

Few among those who know Raabe dispute that he spiraled into depression, suffering from stress. He has been seeing a psychiatrist four times a week and has been taking medication, Pohlson, his attorney, said.

During this period, Raabe turned to religion, seeking guidance from the evangelical Christian men’s group Promise Keepers. Those who know him say this new-found confirmation of faith is taking Raabe through the toughest period of his life.

Buck Murphy of Balboa Island, who knows Raabe through Promise Keepers, said he would send word through a “prayer chain” Tuesday evening so that there will be “hundreds of people praying for him.”

The two men last spoke Thursday night at a prayer meeting at South Coast Christian Church in Irvine. Raabe knew the worst was still ahead, Murphy said.

“He seemed OK. He knew that this was coming,” Murphy said. “He told me that he’s innocent of the charges. He said he was going to plead not guilty. He said he was going to do what’s right.”

But Murphy worried that his new friend would languish in jail, unable to post the bail. Having spent his savings on legal fees, Raabe has recently considered filing for personal bankruptcy and is worried about foreclosure on his Santa Ana home, Murphy said.

At the courthouse Tuesday, Raabe adjusted his tie, held up his chin and looked defiantly at a throng of reporters and photographers.

As the afternoon wore on, the air of confidence seemed to dim. Toward the end of the hearing, it became clear Raabe would be spending the night in jail. He easily stood up, however, and put his hands behind his back to be handcuffed, as he was ordered into custody.

Leaving the courtroom, his step appeared to have less vigor than when he had entered.

At 4:50 p.m., Raabe, seated in the back of a dark gray Buick LeSabre sedan, was driven into the Orange County Jail for booking. Accompanied by three unidentified men, Raabe stared straight ahead as the car passed through gates topped with razor wire and security cameras.

When the car pulled up to the jailhouse curb, Raabe stepped out of the vehicle with his hands cuffed behind him. He bowed his head slightly as he was led inside the jail.

Times staff writers Jodi Wilgoren, Susan Marquez Owen, Mark Platte and Lisa Richardson and correspondent Shelby Grad contributed to this report.