Advertisement
YOU ARE HERE: LAT HomeCollections

Board Wants Moorlach as New O.C. Treasurer : Bankruptcy: Advice to seek other candidates rejected. Accountant who forecast fiscal debacle eager to get job.

March 02, 1995|MATT LAIT and LEE ROMNEY | TIMES STAFF WRITERS

SANTA ANA — Rejecting the advice of top county staff members, a majority of Orange County supervisors said Wednesday they are prepared to appoint accountant John M.W. Moorlach as the county's next treasurer-tax collector, possibly as early as next week.

At a special board meeting, the supervisors dismissed recommendations from acting Treasurer Thomas E. Daxon and interim Chief Executive Officer William J. Popejoy to establish a committee that would launch a comprehensive search for a candidate to replace former Treasurer-Tax Collector Robert L. Citron. Citron resigned Dec. 4, two days before the county declared the largest municipal bankruptcy in U.S. history.

A majority of the supervisors said a search is unnecessary because Moorlach has earned their respect--and the post.

"I personally am looking at one appointee here and that is John Moorlach," said Supervisor Roger R. Stanton. "That's something that, as far as I am concerned, is a given."

Moorlach, who ran unsuccessfully against Citron for the office last June, is credited with sounding the first warnings about the county's risky investment strategy.

Moorlach said he would accept the job immediately if it is offered.

"I'm mentally prepared for the job," he said. "I've been eating, drinking and sleeping Orange County treasurer for a year and a half now."

While supervisors discussed who would lead the treasurer's office, there were other developments in the county's ongoing financial crisis Wednesday.

* Popejoy announced a sweeping reorganization of the former county administrative office, laying off 25 employees and virtually eliminating an entire division dedicated to policy research and planning. He revealed that another 38 positions will either be transferred to other departments or soon eliminated.

The cuts continue the dramatic downsizing of the department formerly headed by recently ousted County Administrative Officer Ernie Schneider from 108 employees to about two dozen. The department also lost workers in a layoff in December.

Popejoy said the budget ax would begin swinging in all county departments Tuesday.

"Knowing that large layoffs are inevitable in county government in the next days and months ahead, I felt it important to set an example by beginning the redefinition of county government with the organization that most closely reports to me," Popejoy said in a prepared statement.

* A day after Popejoy promised to vigorously pursue lawsuits against investment houses the county partially blames for the financial debacle, the county dropped its $1-billion lawsuit against Nomura Securities International, a Japanese brokerage.

The lawsuit, filed in U.S. Bankruptcy court Dec. 9, claimed that the brokerage unlawfully liquidated about $900 million in collateral underpinning the county's reverse repurchase agreements. Voluntarily dismissing the action, county lawyers said that because the investment pools were liquidated after the lawsuit was filed, "the need for these actions has been reduced."

County bankruptcy attorney Bruce Bennett said the county may reinstate its claim against Nomura once the bankruptcy court rules on legal issues in the county lawsuit against Merrill Lynch, which seeks more than $2 billion.

* In Sacramento, state Sens. Tom Hayden (D-Santa Monica) and Quentin Kopp (I-San Francisco) called on a private sector panel advising lawmakers on the investment debacle to toughen a list of recommended changes in state law, saying "the Wall Street practices which sucked Orange County into the black hole of bankruptcy must be addressed."

In a letter, the two lawmakers urged the panel to consider tougher restrictions on risky investments, fuller disclosure to investors in government portfolios and an outright ban on campaign contributions to local government officials from investment banking firms.

Hayden and Kopp said loopholes in current laws allowed Merrill Lynch broker Michael Stamenson to contribute $1,000 to Citron the day before the Board of Supervisors approved a controversial $600-million bond issue underwritten by the firm last summer.

* At a luncheon held by the Orange County Chamber of Commerce, Supervisors Stanton and Gaddi H. Vasquez railed at "critics" who contend they're not doing anything about the county's financial situation.

"Most people I've talked to who have been involved in these types of calamities in the private sector have suggested to me that we have moved with significant speed to address these issues," Vasquez said.

Stanton added that he too had heard from financial experts that the county is moving more quickly than expected. "The fact is, we're moving with great dispatch, but that doesn't seem to be news," he said.

Advertisement
Los Angeles Times Articles
|
|
|