Grand Jury Withdraws Request for Independent Counsel : Probe: Panel resolves concerns that county counsel, D.A. had conflicts of interest in bankruptcy investigation.

The Orange County Grand Jury withdrew its petition Thursday to hire an independent legal counsel to help the watchdog panel investigate the county’s bankruptcy.

“We listened to the district attorney and the county counsel and withdrew our application without prejudice,” jury foreman Mario Lazo Jr. said.

The grand jury went to court last week seeking to hire Richard A. Stavin, a Century City lawyer and former federal prosecutor, arguing in a two-hour hearing before presiding Superior Court Judge James L. Smith that the district attorney and the county counsel had conflicts of interest.

Both Dist. Atty. Michael R. Capizzi and a representative from the county counsel’s office met with grand jurors earlier this week, said Assistant Dist. Atty. Wallace J. Wade.

“They did meet with Mike,” Wade said, “and discussed their concerns and resolved them.”

Lazo said he could not elaborate on the meetings or the issues that prompted last week’s court filing.

The grand jury is hearing the criminal case being presented by the district attorney. On May 16 it returned the six-count indictment of former Assistant Treasurer Matthew Raabe.

Sources said some members on the panel felt they needed to hire their own lawyer because the district attorney could not answer questions that related to the grand jury’s civil investigation.

Although the grand jury’s proceedings are secret, it is known that the panel has interviewed numerous county officials about their role in the events that led to the bankruptcy filing last Dec. 6.

The 19-member panel usually meets for one year, then issues a report on the operation of county government. Earlier this year, it had its term extended until December so it could complete its civil inquiry into the bankruptcy.