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Day of Pride, Humility for Erstwhile Wizard


SANTA ANA — For a golden moment Tuesday, Robert L. Citron wowed a room full of novices with tales of financial wizardry.

It was almost like old times.

Citron, testifying for the prosecution against former Budget Director Ronald S. Rubino, described to a crowded courtroom the absurdly complicated financial mechanisms he used to turn million-dollar gambles into $4-million payoffs.

Jurors stopped taking notes.

The judge rubbed his chin.

"Beyond me," defense attorney Rodney Perlman remarked.

Citron--disgraced, humbled and awaiting a jail sentence--allowed himself a moment of vanity.

"I was very proud of what we were doing," the 71-year-old said. "I was always very proud of the interest returns I was earning for everybody."

Citron's two-hour discourse brought Orange County's financial calamity back to the fore again. And it offered a glimpse of the quiet, gray man who started it all.

Two years ago this December, Citron guided the county into the worst municipal bankruptcy in history. Then he retreated into privacy and stayed mostly mum. He pleaded guilty to fraud charges and is cooperating with prosecutors.

He is scheduled to be sentenced later this year.

Citron came before the Rubino jury self-deprecating and contrite. Where he once dazzled the financial world with his success, he conceded Tuesday that he never really understood what he was doing.

"I have never had any classes in accounting," Citron offered at one point.

"I have no training," he said at another.

"I didn't graduate," he said of his college years.

And where Citron once enjoyed the accolades of his peers nationwide, on Tuesday he slumped in his chair and offered his answers without emotion or flair. He spoke slowly, between pauses. During breaks, he stared into a blank television screen.

At the same time, Citron hardly seemed like a man suffering from "dementia" and "psychological maladies," as claimed by his defense lawyer, David W. Wiechert.

Wiechert, who said he was under a gag order and unable to comment, is making that argument in hopes of keeping his client out of jail.

Citron's answers, while occasionally halting, were direct and to the point. He recalled the dates of 3-year-old meetings and telephone calls. He described complicated financial dealings with ease.

Here, for example, was Citron explaining a "reverse repurchase agreement," a complex investment arrangement in which the county had invested heavily at the time of the bankruptcy:

"It is when the Orange County treasury takes a government security that it owns outright, lends it to a dealer . . . then the dealer lends back to the treasury--at a specified amount and at a specified rates of interest," Citron testified.

"We would then invest in another security [paying] a higher rate of interest," Citron continued. "We were playing the spread. It's called arbitrage."

Still, it was Citron's frailties that drew the most attention. Defense attorney Perlman probed Citron's state of mind in the days when Citron's investments were booming--before the county's risky investment strategy led to $1.64 billion in losses.

"You thought were doing the right thing?" Perlman asked.

"Yes," Citron replied.

"And you were earning tremendous returns?"

"Tremendous," Citron replied. "Off the boards."

"And people were grateful for what you had done?"


"And you thought you had perfected this thing? That you were able to do this without risk?"

"Yes," Citron said. "That's correct."

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