ORANGE COUNTY IN BANKRUPTCY : Auditor Refuses to Resign; Group Vows Recall : Politics: Steve E. Lewis rejects calls to step down because of his alleged role in the county’s fiscal crisis. Popejoy ‘disappointed.’

SANTA ANA —  Facing increasing political pressure from Orange County’s top administrator and an activist group, Auditor-Controller Steve E. Lewis vowed Wednesday to remain in office until his term ends in 1998.

Hours after Lewis, 52, issued a statement promising to continue “to work for the benefit of Orange County,” members of a vocal anti-tax organization, the Committees of Correspondence, vowed to launch a recall campaign against him.

“It’s time for him to go,” said Bruce Whitaker, a member of the group. “Mr. Lewis: Which part of ‘stand down now’ don’t you understand?”

Earlier this week, interim County Chief Executive Officer William J. Popejoy called on Lewis to resign because of his alleged role in the county’s financial disaster.

But Lewis, who has worked for the county since his graduation from college in 1965, staunchly stated Wednesday that he will not step down.

“My office fulfilled its responsibilities and was neither the cause of nor responsible for the actions of the treasurer’s office or the investment loss,” Lewis said in his three-paragraph statement. “In this critical time, the county needs people with background and knowledge of county finance, and it needs county officials to work together.

“I fully intend to do my job and to cooperate with Mr. Popejoy and the Board of Supervisors,” Lewis added. “I am hopeful that we can find a way to work together for the benefit of the county.”

Popejoy said he was “disappointed” in Lewis’ announcement and renewed his pledge to pressure Lewis to resign by slashing his department’s budget and refusing to use its audits.

“I had hoped he would do the right thing and leave. The drumbeat will not be reduced. It will be picked up,” Popejoy said. “I sure hope he sees the light.”

“The audit operation of Mr. Lewis’ either failed to identify the reckless practices of (former Treasurer-Tax Collector Robert L. Citron’s) office or worse,” Popejoy added. “That’s not the kind of audit operation that I, as a chief executive officer, can allow.”

At a meeting Wednesday night at Orange City Hall, the Committees of Correspondence made Lewis its first official recall target in the aftermath of Orange County’s unprecedented bankruptcy filing.

Supervisor Roger R. Stanton has already become the target of a recall effort by other activists.

The Committees of Correspondence also urged two supervisors attending the group’s monthly meeting--William G. Steiner and Jim Silva--to officially censure Lewis, whom members accused of failing to adequately monitor county investments.

A recall campaign against Lewis cannot begin until April, after he has served 90 days of the four-year term that began in January. Because Lewis is an independently elected official, neither Popejoy nor the Board of Supervisors can fire him.

At Wednesday night’s meeting, more than 60 people listened as Popejoy, Steiner and Silva provided updates on the county’s financial crisis. Popejoy said the county is working to find the money to make $1 billion in bond payments due this summer.

Group members greeted the three officials warmly and reaffirmed their opposition to raising taxes as a way to help the county out of its financial crisis.

Lewis, who started as a bottom-rung accountant in the auditor-controller’s office and rose to the top job in 1984, has been the target of increasing criticism over the past several weeks for weak oversight of the treasurer’s office. He has run unopposed in three elections since assuming his current post.

Though Lewis noted problems with the treasurer’s office in two recent audits, county supervisors and other observers have blasted him for not sounding a louder alarm and for approving improper transfers within the now-failed investment pool.

“He’s part of the top echelon in the county. We really need to clean house and get new people,” said Bill Mello, a member of the Committees of Correspondence. “When you have this kind of a big disaster at a major company, they replace all the top people.”

Whitaker, who led last year’s successful recall of three Fullerton council members, said that the Committees of Correspondence will spend the next month planning the recall campaign against Lewis. To force a recall election, the group must collect about 110,000 signatures, 10% of the county’s registered voters.