A watchdog group monitoring the treasurer's office decided Wednesday to allow Treasurer-Tax Collector John M.W. Moorlach to begin investing up $500 million of the county's $3.4-billion investment portfolio.
Committee members voted 4 to 0, with one member absent, to let Moorlach invest a small percentage of the fund, with the ultimate goal of giving him control of 75% of the pool. The remaining portion would continue to be managed by an outside investment firm to serve as a benchmark to judge the county's operations.
Since the county declared bankruptcy last Dec. 6, the Wall Street firm of Salomon Bros. has been investing the county's money. The firm currently is charging about $140,000 a month.
Moorlach has been eager to bring control of the money back to his office, saying he can save taxpayer money. Officials from Salomon Bros. said they have the research and market experience to most effectively invest the money.
After presentations Wednesday from both Salomon officials and Moorlach and his staff, the committee members engaged in a lengthy debate. They concluded that they have confidence in Moorlach's ability to invest the money but have some concerns about the installation of a new internal bookkeeping and accounting software system that will track investments.
They said they wanted to phase the money back into the treasurer's office to allow Moorlach and his staff time to work out any glitches in the new system.
The topic has stirred heated debate among members of the Treasury Oversight Committee for several weeks.
Gary A. Pulford, a committee member who did not attend the meeting, wrote a critical letter to Moorlach, saying he did not think the treasurer had the capability to invest the county money.
Moorlach, who was quoted in a Times article Wednesday calling Pulford "a jerk," told committee members that his comments were misinterpreted. He said he actually was referring to himself in a "self-deprecating manner."
Committee members, however, were less troubled about Moorlach's comments than they were about Pulford's writing the letter to Moorlach and making it public.
Jeffrey M. Thomas, the chairman of the committee, said Pulford's letter was inappropriate. Furthermore, he said, he might seek to have Pulford removed if he continues to skip committee meetings.