Steiner Fails in Bid to Head Off Grand Jury : Courts: A judge rejects supervisor’s preemptive strike, but will reconsider if action is filed. Steiner said he will appeal today.

A legal preemptive strike by Orange County Supervisor William G. Steiner to head off pending grand jury action against him for his role in the county’s unprecedented bankruptcy was rejected Tuesday by a Superior Court judge.

Judge David O. Carter said Steiner could not challenge either the grand jury or the district attorney’s office on issues of conflict of interest until he is officially charged with an accusation of misconduct.

Carter, however, said that if such an action is filed, which could happen within the next few weeks, he would immediately reconsider Steiner’s motions.

“This [ruling] doesn’t mean that these issues will not be raised later,” Carter said.

Steiner and his attorney Allan H. Stokke said they plan to appeal the judge’s ruling today before the 4th District Court of Appeal.

“I respect Judge Carter’s decision, but I’m disappointed he wasn’t able to stop this effort dead in its tracks,” said Steiner, who did not attend the morning hearing. “I’m firmly convinced that the grand jury is getting advice from the district attorney, who is in a conflict position.”

Steiner, who has been told that he and other county officials are targets of the district attorney and grand jury probe into the bankruptcy, went on the offensive last week to thwart the investigation and protect his reputation.

Stokke filed motions seeking to disqualify Orange County Dist. Atty. Michael R. Capizzi from prosecuting Steiner. Stokke also wanted the court to grant him permission to question the grand jurors to determine if they have any potential conflicts of interest.

According to the motions, Steiner alleges that Capizzi knew as much as any ranking county official about the “questionable or unlawful” investments of former Treasurer-Tax Collector Robert L. Citron and had even received a report from the county’s auditor about the treasurer’s improper practices prior to the county’s Dec. 6, 1994, bankruptcy filing.

Steiner also contends that Capizzi received more than $2 million in Citron’s unusually high interest earnings to fund a gang suppression unit. Furthermore, Capizzi also has a conflict with Steiner and the other county supervisors because his budget was slashed by them as a result of the bankruptcy, court documents contend.

Another argument raised by Steiner was that Capizzi and his investigators may have personally lost money in their retirement plans because of the bankruptcy, creating additional conflicts.

Carter said he did not have jurisdiction to rule on the motions because a complaint had not yet been lodged against Steiner. But, the judge said, if and when charges are filed, he would like the district attorney’s office to be able to respond to the allegations in Steiner’s motions, specifically about the $2 million that funded the gang program and about warnings from the auditor.

Also, the judge asked Stokke to be ready to discuss whether Orange County Superior Court judges might also have conflicts of interest and therefore preclude them from handling the potential cases.

“At least the judge seemed to recognize that there are issues that need to be resolved,” Steiner said.

Attorney Wylie A. Aitken, who is representing Supervisor Roger R. Stanton, said Carter’s ruling was probably correct under the law, but it was nonetheless disappointing.

“It seems sad there isn’t a better system to avoid all this waste,” said Aitken, who attended the hearing but did not join in the motion. “Hopefully, the D.A. will come to his senses.”

Both Stokke and Aitken said they believe Capizzi should recuse himself from the case and that the state attorney general should be brought in as an “independent counsel” to the grand jury.

At one point last June, grand jurors secretly went to the presiding judge of the Superior Court seeking to hire an independent counsel to replace Capizzi. They subsequently dropped that request and the investigation continued. Stokke asked Carter at another hearing Tuesday afternoon to unseal the transcripts of the grand jury’s meeting with the judge. A hearing on that matter was set for Thursday.

Stokke said Carter indicated during the afternoon session that the attorney general notified the Superior Court in June that his office could not work with the grand jury because of potential conflicts. Stokke said the judge did not elaborate.

If the grand jury does issue findings, it must do so before its term expires Dec. 31, officials said.