3 on O.C. Board to Rule on Legal Fees of Accused

Three members of the Orange County Board of Supervisors will soon decide whether taxpayers will pick up the legal expenses for two fellow supervisors and the county auditor, who could spend hundreds of thousands of dollars defending themselves against accusations of misconduct stemming from the county’s bankruptcy, officials said Thursday.

The county’s top lawyer said taxpayers are not obligated to foot the bill for Board Chairman Roger R. Stanton, Supervisor William G. Steiner and Auditor-Controller Steve E. Lewis.

But the ultimate decision rests with Supervisors Marian Bergeson, Don Saltarelli and Jim Silva, who must unanimously favor the expenditure.

Because of conflict-of-interest issues, Steiner and Stanton cannot take part if a proposal to pay their legal fees is put to a vote next week as expected.

So a single “nay” would deny the three-vote majority such a proposal would need to pass the five-member board, leaving Steiner and Stanton to pay their own way--a situation that could prompt either to resign.

Steiner said Thursday that he would not be able to fight the civil accusations leveled against him by the Orange County Grand Jury this week unless his colleagues support a resolution to pay his legal bills.

“I think it would be pretty hard for them to turn their backs on their colleagues,” Steiner said. “I would not be able to continue this fight if I had to assume this financial burden.”

An informal survey of the supervisors Thursday indicated that the issue is still up in the air.

Saltarelli said he hasn’t made up his mind. Bergeson was still studying the “county’s obligations,” and Silva declined to comment.

Saltarelli, however, said he was sympathetic to his colleagues’ situation and concerned about the public policy impact of refusing to pay. “It could have a chilling effect,” he said. “Not defending public officials could make people think twice before seeking office.”

At the same time, Saltarelli said he would understand if some residents felt reluctant about spending taxpayers’ money on the legal bills. “I think there are arguments for and against.”

Saltarelli noted that his two board colleagues don’t plan to seek reelection, and that the grand jury did not find evidence that they engaged in criminal behavior. “Both are men of integrity,” he said.

Bergeson said she is “looking into the county’s obligations” in the matter. But she also seemed concerned about the issue.

“Who would want to go into public office, if every time you make a decision, in 10 years you’re going to have to defend that based on what might happen and you’re not real sure?” she asked.

Steiner, Stanton and Lewis were charged with misconduct in office for “willfully failing” to oversee the operations of former Treasurer-Tax Collector Robert L. Citron, whose risky investments lost $1.64 billion in value and plunged the county into bankruptcy on Dec. 6, 1994.

If the accusations against them are found to be true by a jury, the maximum punishment is removal from office.

The county’s former budget director, Ronald S. Rubino, was indicted this week on criminal charges that he aided and abetted Citron’s misappropriation of more than $60 million in public funds. He could be sentenced to nine years in prison if convicted.

The board may also be called on to consider paying for Rubino’s defense, since the alleged crimes occurred while he was employed by the county. But the board has previously refused to pay the legal expenses of Citron and his top assistant, Matthew Raabe. Both were charged with six felony counts of fraud and misappropriation of public funds.

Citron, who faces a possible 14-year prison term, has pleaded guilty to the counts and is scheduled to be sentenced later this month. Raabe, who has pleaded not guilty, could face the same punishment if convicted.

Because Raabe has been declared indigent, taxpayers are footing the bill for his legal defense despite the board’s decision.

County Counsel Laurence M. Watson said the board is not obligated to pay the legal expenses of any of the officials recently accused of wrongdoing by the grand jury.

According to a confidential county memo obtained by The Times, the board is being told that it must make three findings in order to pay for the expenses:

* That any alleged offense was an “act or omission” that occurred “in the scope of the [accused’s] employment.”

* That defending the accused “would be in the best interests of the county.”

* That the accused “acted, or failed to act, in good faith, without actual malice, and in the apparent interests of the county.”

If the board doesn’t agree to pay the legal fees, the officials could use any excess campaign funds they have, or hold fund-raisers to bring in the necessary cash.

According to the most recent campaign finance documents available, Stanton has $178,343.71, Steiner $23,863.95 and Lewis nothing.

All three officials retained counsel before the accusations were filed, and some legal expenses already have been incurred. Steiner said he has spent $10,000 so far.

Wylie A. Aitken, one of three attorneys representing Stanton, said it is “highly appropriate” for the county to pay the legal bills. He said the board frequently pays the expenses of Sheriff Brad Gates when he or his officers are wrapped up in litigation.

“As a matter of public policy, it is important that we stand behind our elected officials. It will have a chilling effect if we don’t,” Aitken said.

He added that he plans to save the taxpayers’ money by getting the charges against his client dismissed as soon as possible.

“I don’t want to expend their funds,” Aitken said.

Dennis E. Curtis, a professor at USC Law School, said taxpayers usually foot the bill for elected officials facing misconduct charges when the accusations relate to the officials’ responsibilities.

“If I were a betting person, I would put my money on the other supervisors voting to pick up the tab,” said Curtis, a former president of the Los Angeles Ethics Commission. “The question here does not deal with some alleged wrongdoing that they committed outside of their official duties, but the charges are intimately related to their performance as elected officials.”

Some anti-tax activists said Thursday that they oppose using taxpayers’ money to defend Lewis, Stanton and Steiner.

Bill Ward, a leader of the Committees of Correspondence, a government watchdog group, said it didn’t make sense for the county to pay the supervisors’ legal expenses when the whole point of the grand jury’s actions was to drive them from office.

“Why should the taxpayers spend their money to help these supervisors keep their jobs?” Ward asked. “I think the honorable thing at this point would be for them to just resign.”

Times staff writers Davan Maharaj and Tracy Weber and correspondent Shelby Grad contributed to this report.

* QUITTING IS AN OPTION: Steiner plans to fight but isn’t ruling out resignation. A50