Just a Thought: Could Money Be at Root of County Crisis?

Robert Citron had wrapped up his testimony before a state Senate committee, and the hallways outside the hearing room teemed with lawyers and bureaucrats and anyone else with an opinion.

It was time for the postgame show.

I cornered David Commons, a retired Senate aide, consultant and self-described “old man who’s got a lot of experience.”

How did Citron come across, I asked Commons.

“I don’t think there was any venality involved,” he said of Citron’s bungling of the Orange County investment fund. To Commons, Citron sounded like someone who made investment decisions in “good conscience” but who obviously got in over his head.

Because Commons wasn’t intimately familiar with the Orange County situation, I took his opinion with a grain of salt, but then he said something that sounded much wiser:

“The pressures on people who operate large amounts of capital are awesome,” Commons said.

Referring to treasurers such as Citron, who have huge amounts of money at their disposal, Commons said they become very popular figures with all sorts of people, especially Wall Street brokers. They cajole you, they flatter you, and after a while it’s hard to tell if it’s real or it’s Memorex. Can you really be as great as they keep telling you?

Trying to assess what role Citron’s pride and ego has played in all this has been entertaining, because it diverts attention from the otherwise turgid nature of municipal bankruptcy.

Let’s face it, hubris is a more provocative subject than reverse repurchase agreements.

But while musing about Citron’s psyche may make for good soap opera, state Sen. Tom Hayden suggests that it misses the point. “I don’t think psychological explanations of Citron are helpful, because it promotes the idea that he’s a lone bad lemon, which is English for Citron,” Hayden said Thursday, unable to resist a joke. “The interest groups would like nothing better than to blame it on the eccentric behavior of a single individual. That jibes with (Citron’s) legal defense, his ‘aw, shucks’ defense.”

Hayden said he doesn’t put much stock in that: “Everybody’s looking for somebody to behead as the fall guy or scapegoat, when, in fact, attention should be turned directly to the system itself and where the money goes.”

Hayden has introduced a bill that would ban contributions from anyone who gives investment advice or underwriting services to county treasurers or boards of supervisors. The ban would also extend to state legislators, but the bill was drafted specifically in response to the Orange County disaster.

The influence of the bond houses and their law firms has increased significantly in recent years, Hayden said, with contributions going to both political parties “and then being recycled into campaigns at all levels.”

Citron took pains while testifying to portray himself as impervious to Wall Street influences on him. He drew one of his infrequent laughs by telling senators he never went to power lunches with financial advisers in the South Coast Plaza area--”places where politicians and lobbyists go.”

Citron testified to a ballpark figure of about $14,000 for the total campaign contributions from firms doing business with the county. He quickly noted such contributions were legal and added: “I never received a dime from any dealers I have done business with.”

Hayden suggested Thursday that he’s skeptical about that. But even if it were true, “How do we know whether Citron, over the phone or face-to-face, directed contributions to other politicians and enhanced his power and stature?” Hayden said. “Why did he have a fund-raiser, with Willie Brown present, at his home?”

Although Citron is a Democrat, Hayden said Wall Street’s largess is bipartisan. Referring to Citron and Merrill Lynch’s well-documented relationship, Hayden said, “More generally, you have to talk about the impact of Merrill Lynch on the political culture, because you’re talking about tens of thousands of dollars going to Orange County politicians, if you include their representatives in Sacramento, who led the way to deregulating municipal finance.

“You look at Citron, the Board of Supervisors, the Orange County legislative delegation; you add up the Merrill Lynch contributions alone and combine them with their law firm’s, now you’re looking at over $100,000 in the last few years. And that doesn’t count their competitors’ contributions.”

To many people reviewing Citron’s rise and fall, the root of all evil was a runaway ego.

To Tom Hayden, the root of all evil is something much more tangible. And you don’t even need to be a psychologist to figure it out.

Dana Parsons’ column appears Wednesday, Friday and Sunday. Readers may reach Parsons by writing to him at The Times Orange County Edition, 1375 Sunflower Ave., Costa Mesa, Calif. 92626, or calling (714) 966-7821.

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