ORANGE COUNTY IN BANKRUPTCY : DAILY DEVELOPMENTS

CRIMINAL PROBE: Search warrants served this week indicate the criminal inquiry of former Orange County Treasurer-Tax Collector Robert L. Citron and acting Treasurer Matthew Raabe focuses on whether they warned investors that the county’s portfolio was losing value or how they planned to guard against losses. Investigators have carted off computers and boxes of documents in their search of the treasurer’s office.

GIVING UP PERKS: Orange County’s political leaders began to consider cutting some of their perks--mostly in symbolic gestures. A 10% pay cut for all five supervisors would make only a $50,000 dent in a $2-billion shortfall. Incoming Supervisor Marian Bergeson said she’ll give up the free car normally provided each supervisor, but then she’s not sure how she’ll get around her sprawling district. Activist Bill Ward does: “Take a bus. She can have a free yearlong bus pass.”

PRESSURE ON RAABE: A majority of the Orange County Board of Supervisors said that it’s time for acting Treasurer Matthew Raabe to go. Raabe assumed control of the embattled treasurer’s office three weeks ago. He was initially hailed as a courageous public servant for alerting the county to problems with the fund in early November. But supervisors said Wednesday they could not ignore reports that Raabe continued to aggressively reassure investors of the investment pool’s ability to cover losses until the end of October--while the fund lurched toward collapse.

DEEPER ECONOMIC WOES? Public finance experts are saying an out-of-whack system of taxation and spending--combined with industrial shrinkage--has imperiled the health of many California counties and forced them to dabble in tricky economic investments. They say this continuing financial malaise is a secret culprit in Orange County’s economic downfall.

WASHINGTON CONNECTION: Three congressional panels move to hold hearings on the Orange County financial debacle and related issues next month to explore the causes and possible remedies. In the Senate on Jan. 5 and 6, the Banking Committee will focus attention on risky “derivative” securities and highly leveraged investment strategies--two of the key elements of the Orange County crisis--incoming Chairman Alfonse D’Amato announced.