Judge Rejects Key Charge Against O.C. Supervisors

In a setback for prosecutors, a judge dismissed a key civil misconduct charge Monday against two Orange County supervisors stemming from their roles in the county’s bankruptcy, but let most of the charges stand.

Los Angeles County Superior Court Judge John W. Ouderkirk ruled that Supervisors William G. Steiner and Roger R. Stanton are immune from prosecution over their alleged failure to investigate before voting to borrow millions of dollars used to make the risky investments that caused the bankruptcy.

Ouderkirk ruled that the supervisors’ votes on the borrowing--or failing to research the issue--are shielded from review by long-standing legal doctrines separating branches of government and granting lawmakers protection for their votes.

“The votes of Supervisors Stanton and Steiner . . . were legislative acts,” Ouderkirk said during an hourlong hearing in Orange County Superior Court.

But Ouderkirk let stand three misconduct allegations that Stanton and Steiner failed to oversee management of the county’s ill-fated investment pool, which collapsed in 1994 and prompted the nation’s largest municipal bankruptcy. He said those were executive functions and did not fall under the immunity covering lawmaking.

The Los Angeles judge, named to preside over the case when the Orange County bench was disqualified, also left intact separate misconduct charges against Auditor-Controller Steve E. Lewis.

All three elected officials face ouster from office if the grand jury indictments are found true during a jury trial. The three supervisors who served with Stanton and Steiner at the time of the bankruptcy have left office.

Stanton, whose term expires this year, expressed satisfaction with the ruling.

“I’m pleased that rationality has prevailed,” he said after a board meeting Monday.

Defense lawyers for Stanton and Steiner contended that the ruling “guts” the prosecution’s case and said they will ask a state appellate court to throw out the remaining charges.

“There is a long history of legislative immunity. The legislators are elected by the people to perform legislative functions. That’s what they were doing,” said defense lawyer John D. Barnett, one of Steiner’s attorneys. “It’s not up to the district attorney to say, ‘We don’t like the way you’re doing your job.’ It’s up to the voters.”

But a prosecutor said the decision affects only one of four charges alleging that the supervisors failed to carry out their responsibilities. The three remaining counts center on allegations that Stanton and Steiner failed to supervise former Treasurer-Tax Collector Robert L. Citron and other officials in charge of the investments.

“They’re not just legislators,” Assistant Dist. Atty. Wallace J. Wade said of the supervisors. “Their primary duty is not to legislate--it’s to supervise.”

Ouderkirk said the U.S. Constitution protects lawmakers from prosecution for their speeches or votes, as long as corruption is not involved. There were no allegations of corruption in the Orange County case.

The judge drew a line between malicious acts and those “which might constitute willful misconduct, but not necessarily corrupt misconduct,” Wade said. “He’s not saying there was not willful misconduct. He’s saying there was not corrupt misconduct.”

Vincent J. La Barbera, an attorney for Steiner, said it was not a supervisor’s responsibility to know the minutiae about whether other officials were doing their jobs properly. He said Dist. Atty. Michael R. Capizzi had available the same information as the supervisors but did nothing to avert the financial collapse.

“The district attorney has certain duties. One of his duties is public prosecutor. We’re doing that duty,” Wade said. “The duty to supervise is clearly in the [government] code. [It] belongs to the Board of Supervisors.”

The three accused officials also plan to challenge whether the grand jury had enough evidence to make the charges. Ouderkirk has yet to rule on a separate bid to remove the district attorney’s office from the case.