From Obscurity to Major Player : Paul Nussbaum Answered Call, Quickly Became CEO’s ‘Alter Ego’

He was first viewed as a glorified secretary-gatekeeper to William J. Popejoy, Orange County’s powerful chief executive officer.

“Everybody immediately thought, ‘Who is this guy and why should he matter?’ ” one supervisor’s aide said of Paul S. Nussbaum, Popejoy’s top adviser.

But that initial impression quickly faded. Now, Nussbaum is arguably one of the most influential officials in county government, a vital player in the county’s efforts to recover from the largest municipal bankruptcy in U.S. history.

“He started out in a behind-the-scenes role, but he has certainly emerged as Bill Popejoy’s alter ego,” said Supervisor William G. Steiner. “He’s certainly played a central role.”

Nussbaum, who stepped into his volunteer post Feb. 25, is still pulled aside by county power brokers as he strolls through the Hall of Administration. But instead of asking for an audience with “the Pope”--as some refer to Popejoy--it’s Nussbaum whom officials often turn to when they want something accomplished.

The 38-year-old financial expert, who has been on paid leave from Wells Fargo Bank in Irvine, will return to the private sector June 28 to manage a $150-million portfolio for a handful of commercial and real estate clients. He will leave behind a vacuum that Popejoy, a longtime friend and mentor, says will be difficult to fill.

“I don’t know what I’m going to do without him,” Popejoy said. “He’s just been a tremendous talent through all of this.”

“Unfortunately, sometimes that’s been overlooked,” Popejoy said. “He’s been called my adviser. But he’s more than that. He’s a partner and this is a partnership.”

Nussbaum was part of the group of officials that concluded that a sales tax was needed to help the county recover from bankruptcy and was instrumental in slashing Orange County’s operating budget by nearly 41%. He oversees the county’s precarious month-to-month cash flow and directs county staffers who deal with bankruptcy issues.

Popejoy calls his handpicked adviser an “unsung hero” for shepherding a slate of bankruptcy recovery bills through the Legislature.

It’s all been an eye-opening experience and a harsh civics lesson for Nussbaum--one that has left a permanent mark on the Newport Beach resident and father of two young sons. While his work hasn’t sparked an interest in public life, Nussbaum is determined to remain involved as a “citizen activist,” a role he says he should have taken up long ago.

“Frankly, I’m embarrassed that I haven’t been involved before this,” Nussbaum said. “I’ve considered myself a news junkie. I always closely monitored news events around the world. But I never really paid attention to what was happening in my own back yard.”

Before the bankruptcy, Nussbaum would have been hard-pressed to name the county’s top elected officials or describe how the government operates. He didn’t even know where the supervisors held their meetings.

The son of Hungarian refugees who faced discrimination overseas, Nussbaum was born and raised in the United States with a reverent respect for democracy. But there is no pride in his voice when he acknowledges that, like so many others, he has taken it for granted.

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“That’s why I bear some responsibility for all this--as does every citizen of this county--for not paying attention to what was going on,” Nussbaum said. “I’m not saying that if I were involved I could have prevented [the financial crisis].

“But I elected these people. . . . I gave my proxy to these people. But I didn’t pay attention to what they were doing with it.”

All that changed shortly after the shocking bankruptcy. As a banker and Orange County homeowner, Nussbaum was keeping close tabs on the developments when Popejoy began considering the CEO’s job. Nussbaum said he was reluctant when Popejoy asked him to come on board.

“My first thoughts were, ‘I’ve got a house. I’ve got a wife and kids. I can’t jeopardize my job,’ ” Nussbaum said. But upon closer reflection, Nussbaum said, he came to realize that he felt a sense of responsibility and a duty to lend a helping hand.

“I’m passionately troubled by the prevailing mood in the country today, which is being exhibited now in this county, of people abdicating their responsibility for the acts of their leaders,” Nussbaum said.

Even as a conservative businessman in a conservative enclave, Nussbaum knew there would be controversy over Measure R, the proposed half-cent sales tax increase that goes before county voters June 27. But he has been stunned by the extent of the opposition.

“I knew people weren’t going to be excited about it, but I thought most people would realize the situation that the county is in,” Nussbaum said. “We have no alternative.”

Measure R opponents dispute that assertion as a “scare tactic” and say the county can make ends meet with further budget cuts, asset sales and other cost-saving steps. But Nussbaum believes voter anger is driving the opposition, and tries to tap into those sentiments when making his Measure R pitch to community groups.

“I acknowledge the anger that they have, but I tell them, ‘This is not the vehicle to change government,’ ” he said.

Some believe Nussbaum, a UCLA graduate who holds a BA in international relations, and Popejoy are trying to hijack county government and force their business philosophy on residents.

“They’ve just come in and are trying to do it the way they want to do it. They don’t care what the people want,” said Carole Walters, of the Orange Taxpayers Assn. and an outspoken critic of the tax.

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While Popejoy has the supervisors’ approval to assert control over the financial crisis, critics note that Nussbaum has no such portfolio. Nussbaum, who has privately been referred to as Popejoy’s “henchman,” stepped on a few toes recently when he attended a meeting of the Management Oversight Committee, a panel appointed to supervise an audit of county government.

Nussbaum tried to persuade the panel to scrap a $450,000 audit as a waste of precious dollars.

“If I were one of the supervisors, I’d be disturbed at that,” said Bruce Whitaker, a committee member and a leader of the effort to defeat Measure R. “He has his point of view, but the board told us to do this.”

But more often than not, Nussbaum is applauded for his work.

He was originally scheduled to leave his county role May 15, but frantic calls to Nussbaum’s boss bought him more time at the county.

“He knows where all the parts to the solution are and we’ll be sorry to see him go,” said developer George Argyros, a prominent supporter of Measure R, who made one of the calls to keep Nussbaum at the county.

Irvine Co. Executive Vice President Gary Hunt, who also made a call on Nussbaum’s behalf, said Wells Fargo should be applauded for doing “more than its share” in lending Nussbaum to the county.

Popejoy took a young Nussbaum under his wing when the pair worked together at American Savings and Loan, struggling unsuccessfully to resuscitate the troubled thrift. They have been close friends since.

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Popejoy said Nussbaum has played a critical role in dealing with the county’s bankruptcy, and that after more than a decade of friendship, they almost always know what the other is thinking.

“We’re the proverbial odd couple in a lot of ways,” Popejoy said. While he tends to focus on the big picture, he said, Nussbaum is often occupied with the details, which Popejoy contends is the more difficult job.

Nussbaum’s wife, Laurie, said she is proud of her husband’s determination to make a difference, but fears the future if Measure R fails.

“I just know he’ll take it personally,” she said, adding that her husband is already torn by the sacrifices his family has made while he works 16-hour days and on weekends. “He’s spent many sleepless nights worrying about what will happen to the county.”

If Measure R passes, Nussbaum said, he wants to be a member of the committee that will oversee its implementation. He hopes to be involved in repealing it when the county’s finances become more stable.

“I’m certainly going to take from this experience a higher level of diligence,” Nussbaum said. “I’m not sure exactly what form it will take, but I’m not just going to sit back and abdicate responsibility ever again.”

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Major-Domo Called everything from “henchman” to “unsung hero,” Paul S. Nussbaum, chief adviser to County Chief Execuetive Officer William J. Popjoy, is leaving his volunteer post June 28 to return to the private sector. A look at the man who has played a central role in Orange County’s efforts toward financial recovery: Age: 38 Home: Newport Beach Personal: Married, two sons. Education: UCLA, bachelor’s degree in international relations. Career: Financial, credit analyst, Dun & Bradstreet,1980-83; financial relations consultant, Donald Reynolds Associates, 1983-84; executive vice president, American Savings and Loan Assn.,American Real Estate Group, 1984-89; consultant to Popejoy, 1989-92; consultant, HomesteadSavings and Loan, 1992-93; vice-president, risk asset review, Wells Fargo Bank, 1993-94; vice president, commercial banking group, Wells Fargo, 1994- present. Outlook: “I’m certainly going to take from this experience a higher level of diligence. I’m not sure exactly what form it will take, but I’m not just going to sit back and abdicate responsibility ever again.” Source: Times reports