Rubino Case Prosecution Is Admonished

The presiding judge interrupted the trial of former County Budget Director Ronald S. Rubino on Friday and later admonished the prosecution about introducing “hearsay evidence” implicating him in the illegal diversion of money to a county treasury account.

The judge’s ruling was a potential setback for prosecutors who are trying to link Rubino to the illegal diversion of millions of dollars from the investment pool accounts of cities, school districts, and other government agencies.

Rubino is charged with two felony counts of aiding and abetting former County Treasurer-Tax Collector Robert L. Citron in diverting the money. He has denied the charges, saying he was simply a mid-level county manager who was following established county policies. Rubino’s lawyer has stated that his client was not even aware of any diversion scheme.

Citron has pleaded guilty and is expected to testify against Rubino next week. Citron’s assistant, Matthew Raabe, who identified Rubino to the Orange County Grand Jury as an architect of the diversion scheme, has pleaded not guilty to the same charges.

But Raabe, whose trial is expected to begin in September, has served notice through his attorney that he will decline to testify at Rubino’s trial, invoking his right against self-incrimination. And the judge has already ruled that Raabe’s grand jury testimony is inadmissible in Rubino’s trial, as long as Raabe is available to testify in person.

On Friday, Assistant Dist. Atty. Jan J. Nolan sought to introduce evidence that Raabe told a small group of county officials to remain tight-lipped about the treasurer’s office reaping more interest earnings than investment pool participants were being told.

*

Nolan asked a witness, former budget coordinator Pamela Leaning, to provide details about a Sept. 28, 1993 meeting at which Raabe revealed the surplus interest.

Leaning said Raabe provided a spreadsheet to her and two other county managers, showing the treasurer’s office was going to earn significantly more interest than expected.

The prosecution contends that Citron and his top assistant wanted to divert interest earnings from the investment pool, because they worried that outside pool investors might have been alarmed by the excessive interest Citron was getting at one point. The high yields might have provoked questions about the riskiness of his investments.

When Nolan asked Leaning to explain some handwritten notes scrawled on the spreadsheet, defense attorney Rodney Perlman objected, saying they were hearsay. The notes indicate Raabe told Leaning and others to keep the revised interest earnings confidential.

Superior Court Judge J. Stephen Czuleger dismissed the jury for the day and asked the prosecution to submit legal arguments on why the notes should be admitted.

Friday afternoon, Assistant Dist. Atty. Brent F. Romney argued that admitting the handwritten notes was important to show that a conspiracy existed between Rubino, Citron and Raabe.

Among the many bits of evidence pointing to such a conspiracy, “the most damning are the handwritten notes” that Leaning and other officials took, Romney said, adding that it showed the officials conspired to shift the funds to an account that would earn interest for the county.

But Czuleger said the prosecution did not need to prove a conspiracy, because Citron would testify “mea culpa. I did it. [But] you do have a problem proving Rubino did the crime, if you cannot prove knowledge and intent. . .,” the judge said.

“Let’s face it,” Czuleger interjected at one point. “You don’t have Raabe’s testimony, and you want Raabe’s testimony.”

The judge later ruled that he would admit the spreadsheet into evidence, but not the handwritten notes, saying they were not of “sufficient quality,” and he was concerned that Rubino would not have the opportunity to cross-examine Raabe about the alleged statement.

*

Before dismissing jurors Friday morning, Czuleger told them that the prosecution plans to close its case next week. That came as a surprise, considering the trial was scheduled to last three months.

The shorter trial is probably due to a stipulation eliminating the need to call about 140 witnesses. Those witnesses were pool participants who, if called, would have testified that they did not consent to have their interest earnings diverted into the county’s Economic Uncertainty Fund. They would also say that they had no contact with Rubino and that Citron had a good reputation as a financial manager, according to the stipulation.

In another development, Czuleger denied Nolan’s request late Thursday to treat several prosecution witnesses as hostile.

Nolan made the request after defense attorney Perlman unsuccessfully moved for a mistrial, saying the prosecution was introducing evidence seeking to incriminate county Auditor-Controller Steve E. Lewis and the Board of Supervisors, but not his client. Lewis and Supervisors William G. Steiner and Roger R. Stanton face civil accusations of willful misconduct. Their trials are pending.

“The prosecution is purposefully prejudicing this jury,” Perlman said.

Nolan retorted, “I should take all of these witnesses as hostile,” indicating that some witnesses had been less than helpful to the prosecution.

Czuleger, a Los Angeles County judge named to handle the case after the entire Orange County bench was disqualified, denied the request.