The Orange County district attorney started presenting evidence to the grand jury Monday concerning the role played by Auditor-Controller Steve E. Lewis in the county’s bankruptcy, sources close to the investigation said.
“We’re out there busily working,” said Chief Assistant Dist. Atty. Maurice Evans about the district attorney’s bankruptcy investigation. “Beyond that I have nothing to say.”
Lewis did not return calls to his office Monday, but his attorney said he did not think the auditor was the center of any inquiry.
“I am not aware of any wrongdoing on the part of Steve Lewis,” said attorney Michael Greene. “I have no information that he is the target of a district attorney investigation.”
Lewis, 52, has been under scrutiny since the county’s bankruptcy filing concerning irregular and allegedly illegal transactions carried out for former Treasurer-Tax Collector Robert L. Citron.
Citron, who resigned under fire after being blamed for causing the bankruptcy, pleaded guilty in April to six felony counts of fraud and mishandling public funds. Some of transactions Citron was convicted of were reviewed and approved by Lewis’ office, officials have said.
The grand jury met in secret Monday to hear testimony from workers in Lewis’ office about the auditor’s involvement in the county’s financial collapse, sources said. The grand jury’s closed door proceedings were headed by Assistant Dist. Attys. Jan Nolan and Wallace Wade.
After the district attorney finishes presenting evidence and witnesses to the grand jury--which could take weeks--the 19-member panel could either issue a criminal indictment or determine that no wrongdoing occurred.
“I think Steve has said before, and I agree with him, that he acted appropriately, and I think some of the comments made about him in the past have been inappropriate and incorrect,” Greene said.
Shortly after the bankruptcy, Lewis was praised for having raised warnings about Citron’s risky investments, but he was later chastised for not sounding the alarms loudly enough.
Although he did note problems with the treasurer’s office in two audits prior to the bankruptcy, some supervisors blasted him for failing to bring the problems to light and for approving improper transfers in the now-failed investment pool, which suffered a loss of nearly $1.7 billion.
Lewis, elected last year to a third four-year term, has defended his actions, saying neither he nor his staff had the financial expertise needed to decipher the operations of the former treasurer.
He said his office worked with the documents Citron gave him, and those documents painted a rosy financial picture for the county.
Some county officials, however, said they still thought Lewis should have done more to prevent the county’s financial collapse. At one point, former County Chief Executive Officer William J. Popejoy tried to force Lewis’ ouster but was unable to do so because the auditor is an independently elected officeholder.
After several well-publicized squabbles, Lewis and the Board of Supervisors reached a compromise that kept Lewis in office but stripped him of some of his auditing authority. Lewis, who makes $104,582 a year, also agreed to a salary cut of 7.5%.
Lewis, who has worked for the county since his graduation from college in 1965, is not the only county official who has drawn the scrutiny of the district attorney. Last week, officials confirmed that Supervisor Roger R. Stanton was under investigation for possible misconduct for allegedly disclosing confidential information about the county’s lawsuit against Merrill Lynch. Stanton has strongly denied any wrongdoing.