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Supervisors decide O.C. treasurer keeps investment authority for now

September 12, 2007|Christian Berthelsen | Times Staff Writer

Orange County supervisors balked at a colleague's proposal Tuesday to strip the county treasurer of his investment powers after a series of controversies, giving the plan so little support that it could not even be brought to a vote.

Instead, supervisors voted unanimously to postpone the request while they examine options to impose greater scrutiny and controls on the treasurer's office and get a deeper understanding of the troubles confronting Orange County Treasurer Chriss Street. The board plans to consider the matter again Oct. 16.

The decision was a victory for the beleaguered Street, who has been buffeted by questions and investigations about personal business dealings and official conduct during his nine months in office.

The vote also marked a rare setback for Supervisor John Moorlach, who unsuccessfully asked for Street's resignation before seeking the board's decision to strip him of his authority over the county's $6-billion investment portfolio.

Before Street was elected, accusations emerged that he had engaged in self-dealing through his oversight of a bankruptcy case involving a trailer company. Those issues have since become the subject of an inquiry by federal prosecutors, and federal labor authorities are conducting other investigations.

Orange County prosecutors have also launched an investigation into Street's handling of a contract to redesign the outside of the treasurer's office building, as well as into a tax case involving a Korean church.

Street has also drawn scorn for a remodeling of the treasurer's office that has cost more than $750,000 so far, for items including flat-panel television screens, sleek glass office walls and designer chairs.

Moorlach, the previous treasurer and political mentor to Street who helped get him elected, said he grew weary of repeated questions about Street and lost faith after Street repeatedly assured him there was no trouble, only to have allegations emerge again. Moorlach, usually regarded as a leader on the board on financial matters, said he thought Street's troubles would distract him from the business of managing the county's investments.

Street bolted from the hearing immediately after the vote and declined to answer questions. He later issued a statement saying he was "very pleased with today's result and the board's continued faith in my office.

"I have been completely dedicated to this office since my very first day and will remain focused on my duties," it said.

During the hearing, supervisors said they did not believe that the troubles surrounding Street seemed urgent enough to warrant stripping him of his investment powers immediately. And although they voiced concern about the accusations, they said they worried about doing more harm than good by destabilizing the treasurer's office and changing its supervision.

Under Moorlach's proposal, investments would have been overseen by the chief financial officer in the county chief executive's office.

"I think we need to take a little more time," Supervisor Pat Bates said. "We could do a rush to judgment and suffer for that."

The decision followed pleas from an extensive cadre of Street supporters, including several from the treasurer's office, to leave his powers intact. Street also spoke in his own defense, saying his brief tenure as treasurer had been a "roller coaster of opportunities, mistakes, achievements and learning" and that he would strive to do better in the future. He said he had done nothing wrong in office, adding that his "errors have been more of style than substance."

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christian.berthelsen@latimes.com

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