The Orange County district attorney's office was right to drop its attempt to retry a former assistant county treasurer who was a key figure on the county's road to bankruptcy.
Matthew Raabe was convicted in 1997 of securities fraud and misappropriating public funds and was sentenced to three years in prison. But an appeals court overturned the conviction, saying the district attorney's office had an "overwhelming" conflict of interest in the case.
The office, then run by Dist. Atty. Mike Capizzi, had been affected by the bankruptcy, as were all county operations. The current district attorney, Tony Rackauckas, decided not to try to put Raabe on trial again after an Orange County judge tossed out the original indictment against Raabe.
The county filed for bankruptcy in 1994 after Treasurer Robert L. Citron made a series of disastrous investments. Prosecutors argued that Raabe siphoned nearly $90 million in interest earnings from local cities and school districts and diverted it to a fund for use by the county government. Raabe denied doing anything illegal and said Citron had assured him that their handling of the county's finances was on the up-and-up.
Citron pleaded guilty and was sentenced to a work furlough. Former county Budget Director Ronald S. Rubino pleaded no contest to one record-keeping violation after a jury deadlocked 9 to 3 in favor of acquitting him of criminal charges. Rubino's deal allowed his record to be erased after a year.
It should have been clear from the start that the district attorney's office had a conflict of interest that would necessitate the state handling any prosecutions.
From the start, Capizzi's office argued that many of the actions that led to the bankruptcy were criminal. Others disagreed, and an appeals court dismissed accusations against two county supervisors that had been brought by the county grand jury. Merrill Lynch paid the county $400 million to settle a civil lawsuit filed in connection with its role in the bankruptcy.
Orange County was fortunate after the bankruptcy to ride the waves of an ever-improving economy. Yet there was fallout from the bankruptcy because of a lack of cash.
Those who chose to look closely would have seen that libraries cut their hours and parks weren't cleaned as often. There were trims in health care. Jail construction was postponed.
The county did overhaul its fiscal policies and it put in place oversight committees to increase the monitoring of the treasurer's office and county investment policies.
The institutional changes should help the county steer clear of risky financial schemes in the future.
As for the Raabe case, it is time to move on.