Gaddi Vasquez to Resign as Orange County Supervisor : Bankruptcy: Panel chairman cites family needs. A onetime rising star, he has been attacked over fiscal crisis.

Gaddi H. Vasquez, chairman of the Orange County Board of Supervisors and once considered among the brightest rising stars in the Republican Party, became the highest-ranking casualty of the county’s bankruptcy Monday when he announced that he will leave office next month.

Saying “the past months have been the most difficult of my professional life,” Vasquez said he would step down Sept. 22, about 15 months before his current term is due to expire.

With a splashy political career that showed boundless potential, Vasquez became California’s highest elected Latino official in the Republican Party when he won his first full term of office in 1988. Then-Gov. George Deukmejian had appointed him to complete an unexpired term the year before, when Vasquez was only 33.

Mentioned as gubernatorial or even presidential material, Vasquez gave a rousing speech at the 1988 Republican National Convention. His speech at the 1992 convention earned him praise from former President Richard Nixon, one of Vasquez’s idols.

But with Monday’s announcement, Vasquez’s once-promising career has come to an abrupt end, at least temporarily, tainted by the county’s financial disaster in which he was criticized for not having done more to prevent the crisis. Although Vasquez had announced in June that he would not seek another term, the supervisor was served with recall papers only three weeks ago.

In a three-page statement, Vasquez recounted the steps that have been taken to help the county out of its unprecedented bankruptcy, but conceded that “every step in the recovery effort has been challenging and, in many cases, painful.”

Vasquez informed Gov. Pete Wilson’s office more than three weeks ago of his plans to resign, and said he would stay on for seven more weeks to help select a permanent chief executive officer for the county and to approve the 1995-96 county budget.

The announcement now turns the spotlight on Sacramento, where Wilson will appoint someone to serve out the remainder of Vasquez’s term and help guide the county through the worst crisis in its history. Vasquez said Monday that he had provided Wilson with his own list of candidates to succeed him, none of whom he would identify.

While many were salivating over his job Monday, Vasquez spoke emotionally of what had led him to resign.

Vasquez said most of the short-term goals he set after the bankruptcy--from achieving a settlement with the public agencies that had billions of dollars in the county’s ill-fated investment pool, to getting a one-year extension for repayment of the county’s short-term debt--had been accomplished.

“Come the end of September, I will have essentially completed the major tasks that one would engage in as chairman of the board--in addition to all of the other things that I’ve had to do for the past eight months, which is live, talk and breathe this recovery since it started, virtually seven days a week,” he said.

But, he said, a key factor in deciding to leave had to do with missing much of his 16-year-old son Jason’s childhood and adolescence, while Vasquez toiled in public service--8 1/2 years as a county supervisor and for two years before that as an appointments secretary for Deukmejian.

“On a very personal side, in recent days and weeks, it has become for the first time very apparent that this entire episode--the time and time away from him--has had an impact on my son,” he said. “He’s 16 now. He needs his dad. And in recent weeks, some of his commentary and observations clearly point to a need for me to focus on his priorities and the needs he has in his life.”

But Vasquez also acknowledged that the barrage of criticism leveled against him during his time in office--particularly harsh after the county became the largest municipality in the United States to declare bankruptcy--had taken its toll.

“Probably if there is one criticism that has been cruel, unjust, unfair and hideous is this perception that somehow this job is regal and is showered with perks. They’re wrong,” he said. “I’m not a guy who spends eight hours here. I’m not a guy who spends six hours here. I wasn’t raised that way.”

Vasquez called the resignation a “hiatus” from public service, hinting that he might pop up in another political job someday. And few were willing to write Vasquez’s political obituary just yet.

“I think that Gaddi, when he was appointed, was seen as a rising star and up until the bankruptcy, people had high hopes for him,” said Ravi Mehta, who worked in the Wilson Administration and is now head of the state Fair Political Practices Commission. “But even though there have been problems with the county, Gaddi’s a fighter and I wouldn’t write him off.”

Others weren’t so sure.

“It’s a tragedy of extraordinary proportions that such a promising career has had this happen to it. It’s very sad,” said Ken Khachigian, a political consultant who met Vasquez more than a decade ago when both worked in the Deukmejian Administration.

“I saw Gaddi as able to win statewide office, and to help the Republican Party bridge its way into an era when Hispanics were going to be gaining in population and influence. . . . For the very near future, at least, his career is over,” Khachigian said.

Vasquez’s announcement was apparently kept quiet to help calm concerns about a county in chaos, especially since county leaders were grappling with the recent resignation of former county Chief Executive Officer William J. Popejoy, who announced his departure one day before Vasquez told Wilson’s office he would step down.

Wilson’s choice of a successor could be influenced by a variety of factors, including the governor’s ongoing presidential campaign, his close relationship with Irvine Co. Chairman Donald Bren, and the political implications of the selection for the continuing battle over the Assembly speakership.

Insiders in the Capitol, including several with close ties to the governor’s office, said it is highly unlikely that Wilson would appoint someone such as Assemblyman Mickey Conroy (R-Orange), who plans to run for the job next year and has put on a full-court press to get the appointment. The sources said Wilson probably would prefer that Conroy remain in Sacramento in the likely event that the Republicans force another vote on the speakership in the narrowly divided Assembly.

Besides Conroy, those actively interested in the appointment are Rancho Santiago College President Pete Maddox and Christine Diemer, executive director of the Orange County Building Industry Assn.

Others frequently mentioned as possible candidates include Wayne Wedin, chairman of the board of the Orange County Business Council; Tom Fuentes, chairman of the Orange County Republican Party; Irvine Co. Executive Vice President Gary Hunt; former Tustin Mayor Donald Saltarelli; Popejoy and Mehta.

Times staff writers Jodi Wilgoren and Peter M. Warren contributed to this story.