IN PERSON : Watergate Figure Sees Past Echoed in O.C. Chaos : Success at Any Cost? Don Segretti Knows Price of Such Policy

It was one of the biggest government scandals of all time: elected officials abusing public office, tape-recorded conversations and a high-profile resignation.

Watergate? No, the Orange County bankruptcy. Since the nation’s largest municipal bankruptcy was declared last December, former County Treasurer-Tax Collector Robert L. Citron has resigned and pleaded guilty to six felonies related to mismanaging the county investment pool. Tapes reveal that his top assistant may have misled investors.

Watching closely has been Newport Beach bankruptcy attorney and convicted Watergate figure Donald Segretti, a man intimately familiar with what can happen when politicians adopt a policy of succeeding at any cost.

Although not part of the now infamous break-in at the Washington hotel, Segretti was part of the larger effort by the Nixon campaign to discredit Democratic candidates in the 1972 presidential election.

He spent about 4 1/2 months of a six-month jail term in Lompoc Federal Prison after pleading guilty to misdemeanor charges of distributing political literature without attribution. He is still allowed to practice law because the convictions were not felonies.

Segretti said he was willing to bend the rules more than 20 years ago because of the pressure to win a presidential campaign. Similarly, he said, Citron’s need to continue his success at investing public funds may have prompted him to take some of the steps that ultimately led to his demise.

“It’s win or lose,” said Segretti, now 53. “There’s never an in-between.”

While Watergate and the Orange County bankruptcy are not mirror images, Segretti says that in both cases, it is the highest elected officials who must take responsibility for steering the ship of government. He doesn’t buy the arguments of county supervisors who have said they should not be blamed for allowing Citron’s failed investment strategy because they were misled.

“They did not do what their primary mandate was. They did not handle the responsibility,” Segretti said of the supervisors. “They must manage the government.”

Segretti was responsible for distributing a phony letter on the stationery of Sen. Edmund S. Muskie of Maine accusing two other candidates in the 1972 presidential race of sexual misconduct. Segretti said it was the type of action demanded by a presidential campaign whose motto was win at all costs.

“I won’t defend it for a minute,” Segretti said of his actions. “I didn’t defend it then, and I don’t defend it now.”

But like county supervisors, candidates must take the ultimate responsibility.

“Individual people must take responsibility,” he said, “but their actions reflect the tone set by the candidate.”

While elected officials such as the county supervisors may not set the tone of the government, Segretti said, they are responsible for properly managing it.

Segretti says that while Citron may have been caught up in the schemes of sophisticated financial brokers, county supervisors were supposed to check and balance his actions. “That’s where the responsibility of the Orange County supervisors comes in,” he said.

In April, Citron pleaded guilty to misappropriating public funds, falsifying documents and misleading nearly 200 government agencies that had entrusted him with their investments. He has not yet been sentenced, and is cooperating with the county’s efforts to help recoup some of the lost money from Merrill Lynch.

Tapes reveal that at meetings of the Orange County Water District, Orange County Assistant Treasurer Matthew Raabe tried to dispel any notion that the investment pool was in trouble. Yet earlier, he had warned his superiors that the pool might have serious problems.

Raabe has pleaded not guilty to six felony counts related to the bankruptcy.

Last month, Board of Supervisors Chairman Gaddi H. Vasquez resigned 15 months before his term ended, citing, in part, pressures related to the county’s bankruptcy.

Despite his own troubles in the world of politics, Segretti says he remains active as a member of the Lincoln Club, an Orange County organization of wealthy and influential county Republicans.

Segretti says he stays involved in politics because it touches everything from the amount of money spent on freeways to relieve rush-hour traffic to money spent on patrolling the borders to stem illegal immigration.

“I was terribly burned by it one time,” Segretti said of politics. “But it has a great effect on all of us, every day.”

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Profile: Donald Segretti

Age: 53

Hometown: Newport Beach

Family: Wife, Liza, and daughter, Gianna

Past political involvement: Part of Republican efforts, broadly known as Watergate, to disrupt Democratic attempts to win 1972 presidential election

Price of political tricks: Convicted of misdemeanor-- distributing political literature without attribution--and served about 4 1/2 months of a six-month jail term in Lompoc Federal Prison

Current profession: Attorney specializing in business and bankruptcy

On the philosophy that causes some to bend the rules: “It’s win or lose. There’s never an in-between.”

Sources: Times reports, voting records, Donald Segretti

Researched by JEFF KASS / For The Times