Popejoy Urges Probe of O.C. Supervisor : Bankruptcy: Chief executive officer calls for grand jury investigation of Roger Stanton. Action sparks a political firestorm.

In a dramatic attack on one of his bosses, Orange County’s chief executive officer Thursday asked the grand jury to investigate Supervisor Roger R. Stanton and remove him from office for allegedly undermining the county’s bankruptcy-related lawsuit against Merrill Lynch & Co.

CEO William J. Popejoy said he went to the grand jury because he wants Stanton ousted for publicly suggesting a possible settlement amount in the county’s $2.4-billion lawsuit against the Wall Street firm that the county blames for its bankruptcy. Popejoy said Stanton’s figure of $500 million was well below the county’s expectations of $1.2 billion.

“He compromised our lawsuit against Merrill Lynch and damaged our negotiations,” Popejoy said. “He has undermined the credibility of the county negotiators.”

Stanton, who was clearly surprised by Popejoy’s action, issued a brief statement about the development, but refused to launch a counterattack against the county’s top executive.

“It is my understanding that requests made to the grand jury are privileged,” said Stanton, who has repeatedly denied harming the county’s lawsuit. “If he has made a complaint, then I am confident that the grand jury will be objective in its analysis. I would hope that other people would have the opportunity to disagree with him without being treated in this fashion.”

Popejoy invoked a rarely used government code section to try to prompt a grand jury investigation of Stanton’s alleged “willful or corrupt misconduct in office.” It is believed to be the first time in the county’s history that such an inquiry into a supervisor was requested, county officials said.

Popejoy’s action was his most serious attack against an elected county official. The development sparked a firestorm of controversy and greatly heightened the tension between Popejoy and members of the Board of Supervisors, who are his bosses.

“I think the war between the two just went nuclear,” Supervisor William G. Steiner said. “This takes a difference of opinion to a much more serious level.”

Supervisors Jim Silva and Gaddi H. Vasquez declined to comment. Supervisor Marian Bergeson could not be reached for comment.

The request to investigate Stanton was the latest in a string of highly publicized attacks against supervisors initiated by the county’s popular top executive. Throughout the county’s recovery period, Popejoy has taken supervisors to task, questioning their leadership abilities and political motives.

Political pundits and county insiders were shocked at Popejoy’s move. Many erupted in disbelieving laughter upon hearing the news, claimed speechlessness, then groped for ways to express the unusualness of the events.

“I am absolutely floored,” said political consultant Dana Reed. “I have never seen hardball played like this. This is the hardest hardball I have ever seen. This is war. This is more than war. This is burn the system, this is tear everything down, this is like dropping the nuclear bomb.”

Many observers characterized the move as a last-ditch political ploy, a final attempt to drum up publicity for Measure R, the half-cent increase in the sales tax on Tuesday’s ballot.

“It’s outrageous--but it’s brilliant,” said UC Irvine political science professor Mark Petracca.

Thomas Fuentes, chairman of the county Republican Party and a Measure R opponent, classified it as an act of desperation.

“When you are winning with the facts, you use the facts,” Fuentes said. “When you’re losing with the facts, you use politics. When you’re losing with both facts and politics, you go personal. And that is the desperation of Mr. Popejoy.”

The dispute between Stanton and Popejoy centers on the county lawsuit against Merrill Lynch, which was filed in December shortly after the county declared the largest municipal bankruptcy in U.S. history. In that suit, the county contends that Merrill Lynch was largely responsible for causing $1.7 billion in county investment losses.

Popejoy’s attack against Stanton started last week when the supervisor announced that the county could recover from bankruptcy without a proposed half-cent sales tax if, among other things, it settled with Merrill Lynch for at least $500 million.

Times staff writers Michael G. Wagner and Eric Bailey contributed to this report.