Officials Would Rather Diffuse Pool Power : Investments: Two supervisors and CEO express concerns about giving Moorlach sole management of $3.4-billion portfolio, as predecessor Citron had. Treasurer asks chance to prove himself.

Several Orange County officials, including two supervisors, voiced concerns Thursday about letting Treasurer-Tax Collector John M.W. Moorlach take over sole management of the county’s $3.4-billion investment portfolio.

Supervisors Marian Bergeson and William G. Steiner said they would prefer to safeguard the portfolio by sharing responsibility for the funds with other money managers. And a member of the Treasury Oversight Committee resigned after expressing doubts that Moorlach is capable of handling the fund.

Management of the fund remains a touchy issue for county officials, who are leery of again entrusting investment powers to a single person.

Longtime Treasurer-Tax Collector Robert L. Citron had sole control over the portfolio when he took a gamble on a risky investment strategy and lost nearly $1.7 billion, triggering his resignation and the largest municipal bankruptcy in U.S. history.

“It’s nothing personal against the treasurer, I just feel that the bankruptcy has shown that the portfolio should not be managed in the hands of one person ever again,” Steiner said.

The concerns followed a decision Wednesday by the treasury oversight committee to let Moorlach start investing up to $500 million of the county’s investment pool, with the ultimate goal of handing over 75% of the pool.

Since the bankruptcy, the Wall Street firm of Salomon Bros. has been managing the county’s financial investments. Currently, it is charging the county about $140,000 a month for its services.

Steiner said Wall Street firms have more experience and research capabilities than the treasurer to make the most sound investments. He said the fee that asset managers charge is made up for by increased yields.

Bergeson said she supports “divesting” from Salomon and giving Moorlach a portion of the funds. But she would like to hand over most of the money, at least temporarily, to a state-run investment pool, which is currently outperforming the yields of Salomon Bros.

“This would be an advantage because it would give additional time for Mr. Moorlach to become more comfortable in the job, as well as give us the advantage of additional revenue,” Bergeson said. “I think the timing is right to cut loose from our high-priced consultants even though they’ve done a good job.”

Meanwhile, Gary A. Pulford announced his resignation Thursday from the Treasury Oversight Committee, citing personal and philosophical conflicts with Moorlach. He is the third member of the advisory group to resign from the panel since it was formed January by supervisors.

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In his resignation letter to Supervisor Roger R. Stanton, Pulford said, “While I have attempted to impart my many years of investment experience on Mr. Moorlach, he obviously feels that he already has all of the knowledge necessary to handle the county’s . . . investment pool.”

Earlier in the week, Pulford sent Moorlach a letter, saying, “I’m sure that we both realize that money management experience is not a talent which you profess to have.”

Moorlach said he does not support Bergeson’s proposal and said she was not “comparing apples to apples” when she compared the yields of the state-run pool against Salomon’s. He said Salomon officials have been investing in much shorter-term investments to ensure liquidity, while the state is putting money in longer-term securities.

Moorlach, however, said he is not opposed to sharing investment responsibilities with money managers besides Salomon.

“All I’m saying is, let us have an opportunity to invest some of the funds and show what we can do,” Moorlach said. “Then we can make a decision.”

Moorlach, who is a certified public account and a certified financial planner, said he has a good financial background and is capable of handling the county’s portfolio.

He acknowledged, however, that he has no experience in managing a multibillion-dollar fund.

Moorlach said he won’t start investing the $500 million until the Board of Supervisors approves a proposed investment policy for his office, which could take at least two weeks.

Even as the Treasury Oversight Committee on Wednesday expressed confidence in Moorlach to manage the fund, members said that private investment houses, such as Salomon, might be used to manage longer-term investments that the county wants to participate in with a portion of the pool’s funds.

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Board Chairman Gaddi H. Vasquez said he wants to study various investment strategies, including giving the money to various money managers. Supervisors Stanton and Jim Silva refused requests to be interviewed on the issue.

County Chief Executive Officer William J. Popejoy said Moorlach is a “nice, bright” individual, but noted that the new treasurer is still learning on the job. He stressed that he was not being critical of Moorlach, but said the county needs to be careful with its investment pool.