O.C. treasurer won’t quit

Saying that federal and local investigations into Orange County Treasurer Chriss Street have tainted his reputation and made it difficult for him to do his job, Supervisor John Moorlach has asked his former aide to resign or lose control over the county’s $7-billion investment portfolio.

Moorlach said he and Street met Wednesday, and Street refused to step down. Moorlach said it broke his heart to ask him to quit, but Moorlach said he told him it didn’t “make sense” for him to stay in the job.

Neither Street nor his attorney returned calls Friday seeking comment.

Moorlach, who tried to warn officials of the looming financial crisis that resulted in the Orange County bankruptcy in 1994 and later became county treasurer, left that job last year to join the Board of Supervisors.

While still treasurer, he appointed Street as his assistant. Street was elected to the post last year.

The district attorney opened an investigation last year into allegations that, as a trustee in a Fruehauf Trailer Corp. bankruptcy case, Street had diverted money for personal use. That probe was turned over to the U.S. Justice Department.

The district attorney then began investigating claims that Street had intervened in a county contract on behalf of an Irvine-based architectural firm. A June 22 memo signed by Street appears to backdate the bidding process for $18,000 in work. But Ware Malcomb’s first offer didn’t come in until later, leaving county officials with many questions, said Mario Mainero, Moorlach’s chief of staff.

The probe is continuing, a spokeswoman for the district attorney said Friday.

Street’s dealings with Ware Malcomb and Fruehauf showed a pattern of problems, Moorlach said. Ware Malcomb did not return calls seeking comment.

In addition to the Justice Department probe and the upcoming Fruehauf bankruptcy trial in October, where the allegations against him could be aired, Street is also under investigation by the U.S. Department of Labor stemming from the Fruehauf bankruptcy, Mainero said.

Street and Moorlach were among elected officials who in June spent $1.1 million to renovate their offices with flat-screen televisions, $1,200 chairs and designer furniture. Street spent nearly $50,000 on 90 office chairs from the high-concept Herman Miller design line.

At their Wednesday meeting, Street was shaking but kept his emotions in check, said Moorlach’s chief of staff Mario Mainero, who was at the meeting.

“He was adamant that he would not step down because he felt it would ruin his life and damage his chances in the Fruehauf lawsuit,” Mainero said.

With so many distractions from his office duties, Moorlach said, Street would have his hands full just providing updates of the court case and investigations to the board.

“I told him, ‘I don’t get it,’ ” Moorlach said. “If we respect the job and really want to serve the taxpayers, it doesn’t make sense to me because we’re going to get daily revelations like in the [Phil] Spector trial.”

County supervisors have oversight over Street’s budget. One of the board’s jobs, Moorlach said, is to authorize the treasurer to manage and invest funds, which the board can revoke or not grant.

The supervisor has asked county counsel to review the board’s authority.

As treasurer-tax collector, Street’s duties include managing the county’s portfolio, collecting property taxes and sitting on the county retirement board.

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david.reyes@latimes.com