ORANGE COUNTY IN BANKRUPTCY : Judges, Lawyers Argue Over Defense of Poor : Impact: Proposed legislation to turn the public defender’s work over to private attorneys prompts bitter exchange.

Orange County judges and attorneys squared off Friday over a legislative bill that would privatize the work of the public defender’s office, highlighting bitter divisions over the use of private attorneys to defend the poor.

In one exchange, Judge Pamela L. Iles of Municipal Court in Laguna Niguel said she was portrayed as a liar by private attorney Charles T. Spagnola, and she responded by calling him a “money-grubbing” lawyer.

“It was one of the most heated discussions I’ve ever heard in my two years here,” said Supervisor William G. Steiner, who attended the meeting, which had been called as a forum to discuss proposed legislation impacting Orange County.

The bitter judge-lawyer dispute ended Friday with both sides expressing hope that a compromise could be found that would use both private attorneys and public defenders to provide the best possible legal defense for the poor, but also at the best possible cost to the bankrupt county.

At issue is a bill offered by state Sen. Quentin L. Kopp (I-San Francisco) that would give Orange County judges free rein to bypass the public defender’s office and appoint private attorneys for a price to be set by the judge, Iles said.

Supporters, such as Spagnola, say it could save the county money and take some of the burden off the overworked public defender’s office. Opponents, such as Iles, say it will end up costing the county more.

Iles said she believes there is an important role for private attorneys in defending persons accused of crimes who are too poor to hire an attorney. But she believes Kopp’s bill would encourage favoritism and corruption.

“You’re going to have attorneys lining up, willing to do whatever they have to, to get these cases,” Iles said.

Orange County Bar Assn. President Gary Pohlson said Bar officials also oppose the bill.

The issue of relying on private attorneys or public defenders is an especially hot topic in Orange County, where the Board of Supervisors ended virtually all contracts with private lawyers to save money after the county declared bankruptcy in December.

The county estimates it is saving $5 million a year by relying on public defenders to handle cases that were being assigned to private attorneys.

But the move has left private attorneys, many of whom built their practices around court-appointed cases, scrambling for their livelihood.

Spagnola, whose court-appointed clients accounted for about a third of his private practice before the bankruptcy, said he was shocked by some of the things suggested at the meeting.

“No one has ever accused us of selling a defendant upriver for a buck,” he said.

The debate is now expected to center on whether limited privatization of defense services can help the county save even more money.

Chief Deputy Public Defender Carl C. Holmes said he believes a viable solution will involve his office surrendering 1,000 or so cases--ranging from murder to misdemeanors--to private attorneys.

Holmes said he opposes Kopp’s bill because “it essentially creates a problem with politics and favoritism and cronyism.”

In early July, the board asked its legislative analysts to conduct Friday’s meeting. After the heated debate, the issue was sent to the county committee overseeing indigent defense services.

“It certainly was a knockdown, drag-out fight,” said Iles, who sits on that committee.

Judges also are divided on the issue. Assistant Presiding Superior Court Judge Theodore E. Millard co-signed a letter expressing support for Kopp’s bill because he believes judges and the county should have the choice if it can save money.

“My position is pretty simple,” Millard said. “I have never been in favor of privatizing the public defender’s office. But I think in some ways private lawyers serve a vital function. The point is to have a choice.”