County Treasurer to Explain Investment in Wounded Utility

The investment strategy of the treasurer-tax collector will go under the microscope today in a hearing before Orange County’s five supervisors, when John M.W. Moorlach is expected to defend a $40-million investment in Southern California Edison’s parent company.

The beleaguered utility defaulted on $600 million in bond payments last week amid several days of rolling blackouts that dimmed large portions of Northern and Central California because of an energy crunch.

Meeting last week with supervisors’ Chairwoman Cynthia P. Coad, Moorlach said his office made two $20-million transactions, on Sept. 28 and Dec. 7, which he told her were “sound investments” based on thorough research.

“He said that when he bought it, it had a good rating and that he did do research,” Coad said. One of the policies that Moorlach instituted after Orange County’s 1994 bankruptcy “was to make sure we had diversified investments as a protection,” she said.

Though Moorlach is generally well regarded, much is at stake for him politically in how he fares before the board. His recent battle with the county’s health care industry over how to spend millions in tobacco lawsuit settlement money ended with the defeat of Moorlach’s Measure G, which would have designated 40% of the money for early payment of the county’s bankruptcy debt.

“We’re not concerned,” said Moorlach spokesman Brett R. Barbre. “There aren’t any questions we’re going to run away from. Everything we do is wide open and public.”

Supervisor Todd Spitzer asked Moorlach to appear today because the board, not Moorlach, is ultimately responsible for investment policy.

“I need to understand in a public forum with all five board members present because you administer the investment pool,” Spitzer told Moorlach. “But it’s the Board of Supervisors which is responsible. . . . “

In a Monday press release, Moorlach quoted an Edison International spokesman as saying that the parent company of the electrical utility would honor its financial obligations.