Orange County Employees Retirement System

Officials who are pressing for creation of a new board to oversee the $1.5-billion Orange County employee retirement fund are engaged in a heavy-handed effort to seize money that does not belong to them, county labor leaders said Friday. "The county has been trying to get ahold of that money for years," said Tim Miller, president of Service Employees International Union Local 787, which represents about 600 county blue-collar workers.

In its first strike against one of Orange County's financial advisors, the Securities and Exchange Commission on Wednesday sued CS First Boston, accusing it of fraud and deceptive practices that hastened the county's fiscal downfall two years ago. The federal regulator charged that First Boston and two of its investment bankers misrepresented or omitted crucial information about the county's shaky financial condition in documents offering to sell $110 million in county bonds.

Contending that his former job as assistant county treasurer left him so stressed out that he can no longer work, Matthew Raabe has asked that Orange County award him a lifetime disability pension. But at the same time, he is asking for that old job back.

Orange County's employee retirement board has placed its controversial top administrator on paid leave after allegations that she charged personal telephone calls to the county and ordered underlings to water her plants and shuttle her to the airport on personal trips.

County retirement officials voted Monday to cut in half the pension checks of two former San Juan Capistrano city officials and said they may seek to recover thousands of dollars the men received in pension overpayments. While reducing the retirement allowance of former city officials James S. Mocalis and E. Phillip Hale, the nine-member County Board of Retirement also voted to postpone for two weeks the case of a third former San Juan Capistrano employee--James S.

By coincidence, Orange County filed for bankruptcy protection in 1994, shortly after borrowing money to keep its pension plan fully funded. Now there's talk of borrowing again, which led Alyson Michie of Newport Beach to ask: "When will American taxpayers realize they live in a house of cards?" ("Bond-Investment Plan Is Insane Economics," Sept. 21).

Reacting to a barrage of criticism, the county employees' retirement board Wednesday adopted sweeping changes in its travel policy that include doing away with pension fund credit cards, limiting the number of out-of-town trips, and prohibiting spouses and other guests from accompanying board members on travels abroad. "It's all a public relations battle," board member Robert Thomas said. "We were losing the battle, but now we're winning it back."

Orange County's public employee unions were dusting off the dirt Wednesday, a day after a countywide election that pitted firefighters against other government workers. Already, a grudging rendition of "Kumbaya" was in the works. Union activists said they foresee growing harmony among state and local employees in the next few months as politicians begin to debate whether it's time to reform public pension systems on the state and county levels.

Orange County supervisors will do more than help county employees if they agree to increase pension benefits next week -- they will fatten their own retirement checks as well. On Tuesday, the board is scheduled to consider a proposal to substantially increase pensions for most of the county's nearly 17,000 workers -- benefits upon which the supervisors' own are modeled. The deal would allow the county to improve worker compensation without spending any money, officials say.

Three years after risky investments sent Orange County spiraling into bankruptcy, extraordinary returns from Wall Street have unexpectedly pumped an extra $220 million into the county pension fund. The windfall means that 6,800 of the county's retirees will get a lump-sum payout that is twice what they were expecting--if the Orange County Retirement System's board votes to disburse the funds at its meeting Monday.