MOORLACH UPDATE — LOOK BACKS & Next Year — December 16, 2009

I usually do not provide you with Blog postings.  If I did, then I would never have time to do my job.

But, I believe I owe it to you to explain this entry that was posted during the Board of Supervisors meeting yesterday.

Item 62 was moved to the front of the calendar.  It had two actions.  The first was to waive the requirement that the Board elect its Chair at the first Tuesday of January after the first Monday after January 1, supposedly in order to give the incoming Chair time to be prepared by the Clerk of the Board for his or her new duties.  This would be January 12.  The second action was to vote for Chair and Vice Chair.

I voted against the waiver.  If you need three extra weeks, you probably need three extra months.  As far as I can tell, we have never strayed from following Rule 8 of the Board’s Rules of Procedure.  Indeed, my experience was that the Clerk of the Board does a stellar job preparing the incoming Chair, and it doesn’t take that much time to do so.  Therefore, seeing no pressing need to do it now, I voted in opposition.

After I proposed to my wife, Trina, twenty-nine years ago we decided to take a two-week honeymoon.  My then-fiancé notified me that her boss would only give her one week off.  Traveling, returning, moving her in, opening wedding presents, preparing thank you cards, and all of the rest and two weeks wouldn’t be enough.

After we took our two honeymoon I returned from my first day back to the office finding my bride’s face puffed up as if she had been weeping.  “What’s wrong, honey?”  “My boss yelled at me for taking two weeks off.”  “He ‘yelled’ at you?”  “Yes.”

“Well, you tell the good Doctor the next time he ‘yells’ at you whether he wants one week notice or two weeks.”

The next night I came home and Trina was still distraught.  “How did your day go?”  “He yelled at me, again.” 

Just to clarify, my wife was the office manager of a rather successful practice.

“Did he want one week or two week’s notice?”  “Two.”

Over the next fourteen days my wife explained how her boss was sorry, that he apologized profusely and wanted her to stay.

“Would it be alright if we changed our minds?” 

“No.  My wife will not work for a ‘yeller.’  End of story.  I don’t need to come home to the repercussions and stress of that management style.”

All this to say that Supervisor Nguyen’s management style is to bite people’s heads off.  The list of recipients is quite long, thank you.  The CEO, department heads, heads of related organizations.  If she doesn’t get her way, then she’ll excoriate you.

I did not explain this during the Board meeting as this item was pushed through in a rather hasty manner.  I didn’t get a chance to speak until I had to cast my vote.

But, Supervisor Nguyen made the point for me.  At the conclusion of the meeting she bit my head off.  Thank you, Supervisor Nguyen.

Supervisor Nguyen has a history of demanding that executive managers hire people she demands, and then becoming angry when they do not. Supervisor Nguyen has a history of being unprepared at Board meetings, repeatedly claiming that she never received information from our County staff, when every other office received and reviewed the information, and, if needed, discussed it with the CEO at his weekly pre-Board meeting briefing of each Board office. But, since Supervisor Nguyen cancels her weekly pre-Board meeting briefing more often than not, she misses another opportunity to be educated, and then yells at County staff in public, claiming they haven’t responded to her concerns.

The cornerstone of the County’s management philosophy is the concept of “servant leadership.” Indeed, our management and Board consider this concept so central that we send our managers to a ten-week course at Chapman University, called the Orange County Leadership Academy, where they are inculcated in the culture of servant leadership. This concept stresses that good leaders should first strive to be good servants—that we are there to serve others, not to have others serve us. Janet Nguyen’s management style of yelling, being unprepared, and demanding the hiring of her friends, is the antithesis of servant leadership.

The issue now is how vindictive and true to form will she be?

She could have said, “Supervisor Moorlach, I will prove you wrong in 2010 and show you that I am up to the task.”  Instead, she chose to characterize my restrained concern as “petty politics,” and to characterize my year as Chair of the Board as one characterized by “a lack of courtesy and decorum.”

I have waited the majority of my three years on this Board for Supervisor Nguyen to mature in this role.  It just hasn’t happened.

And no one takes her to task.  Not even reporters, with the exception of OC Weekly’s Nick Schou piece in January of 2008 (http://www.ocweekly.com/2008-01-17/features/dammit-janet/).

The question is not “Why did Supervisor Moorlach vote against Supervisor Nguyen?”

Rotating the chairs through each District is fine.  But, if it jeopardizes the management team and we lose key executives, then rotating the chairs is not fine.

I’ll provide one anecdotal story.  Dean Gialamas, Director of the Sheriff’s Department’s Forensic Science Services, (his resume can be found at http://ag.ca.gov/meetings/tf/pdf/TF_GIALAMAS.pdf) came to our office to brief us on their Unisys mainframe concerns.  He stood before the Board to review the matter.  Supervisor Nguyen bit his head off.  He came back last week with a reasonable alternative.  Supervisor Nguyen bit his head off, again.  A day or two later, Mr. Gialamas notified his department that he had accepted the position of Director of Forensic Science Services for the Los Angeles Sheriffs Department.

I take the time to elaborate because it will provide you with the color of how I fear that 2010 will go.

Regretfully, with our current economy, the shape of the State of California, a vacant Fourth District office for at least five months and a boatload of other issues, we do not need a yeller as our Chair.  We need someone who wants to serve, not someone who demands to be served.

You’ll see what I mean from the Register’s Blog posting below.

Ladies and gentlemen, meet the real Supervisor Nguyen.

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Updated: Moorlach opposes Nguyen for board chairwoman

December 15th, 2009, 10:37 am · posted by Jennifer Muir

Updated at 2:02 p.m. with Supervisor Janet Nguyen’s response.

Implying he lacks confidence in Supervisor Janet Nguyen’s management style, Supervisor John Moorlach cast the sole vote to oppose her appointment as chairman of the county Board of Supervisors next year.

“I wish the chair the best, but I just hope that we have a good approach when it comes to enlightened leadership and servant leadership,” Moorlach said. “And I hope that can be accomplished this year, but I will be voting no. ”

The 4-1 vote also appointed Supervisor Bill Campbell as vice chair. Both posts are ceremonial positions generally rotated among supervisors.

“It’s always been my philosophy that everyone voted by the public should have their turn as chair unless there’s a compelling public reason or some extreme division on the board,” Supervisor Chris Norby said after voting to appoint Nguyen. ” I do respect every one’s ability to chair the meeting. ”

Nguyen responded to what she called “Moorlach’s petty political agenda” during public comments at the end of today’s meeting. Nguyen called Moorlach’s criticism is “ironic in the least,” saying that when he was chairman, Moorlach demonstrated “a lack of courtesy and decorum.”

FIVE-YEAR LOOK BACKS

December 16

1994

Lynn Stevens Hume of The Bond Buyer addressed the national repercussions of the bankruptcy filing in “SEC’s Roberts Believes New Disclosure and Registration Rules Are Not Needed.”  One minor clarification.  Congressman Cox did not “manage” my campaign.  But, he would get the chance, many years later, to “manage” the SEC.

                “I’m not inclined to favor registration [requirements for municipal issuers].  I don’t think that’s necessary,” said [SEC Commissioner Richard] Roberts.

                Roberts remarks come after Rep. Christopher Cox, a Republican who represents Orange County, said he plans to introduce legislation next year that would subject municipal issuers to the same disclosure requirements as corporate issuers, including possible registration.

                Cox managed the campaign of John Moorlach, an accountant with Balser, Horowitz, Frank & Wakeling, who opposed Robert Citron, the county’s treasurer, in the recent election.

But The Wall Street Journal would come out with damning information on the SEC.  Jeffrey Taylor’s “SEC Probed Orange County Investments Just Months Before the Fund’s Collapse” made everyone just want to scream.  Accordingly, missing Bernie Madoff’s escapades should not be a surprise.  (But, having a Federal agency handle your health care should send shivers up your spine.)  This article gave the WSJ a chance to pat itself on the back, because they usually do not report on local races.

                Securities and Exchange Commission investigators interviewed former Orange County Treasurer Robert Citron about the county’s highly leveraged holdings months before the fund collapsed, but decided they had no jurisdiction to intervene or investigate further, SEC officials said.

Last spring, after an article in The Wall Street Journal reported that the fund was investing public money in risky leveraged securities, staff from the SEC’s Los Angeles office launched an inquiry.  They interviewed Mr. Citron, his deputy and the county’s lawyers about the matter, two highly placed SEC officials said.  Mr. Citron admitted using so-called reverse repurchase agreements and derivatives to make a leveraged bet that interest rates would remain low, but said he was entitled under state law to do so, the officials said.

Last week, Orange County Supervisor William G. Steiner criticized the SEC for not freezing the fund’s assets and otherwise intervening, saying the agency wanted a “meltdown” so it could justify asking Congress for additional powers  to oversee the municipal bond market.

Mr. Citron’s aggressive investing strategies were first publicized during his campaign for re-election as county treasurer last spring.  John Moorlach, a certified public accountant who opposed Mr. Citron in the election, made the fund’s leveraged holdings a campaign issue.  “Leveraging public money makes me nervous,” Mr. Moorlach was quoted in an April 15 article in this newspaper.  “When you win, you win big.  When you lose, you also can lose big.”

1999

The Recorder and California Law, a trade publication, addressed the conflict issue in Torri Still’s piece, titled “Orrick Defends Work on Road Deal – Despite claims by Orange County, firm denies it had conflicts on troubled freeway project.”  This article provided for a fun telephone call between me and Orrick partner Roger Davis (who is a great professional to work with).  I was rather incensed that I had to make the call to him.  “Roger, I’ve been in the paper every day, I’ve had a December 10 property tax deadline, among many other deadlines and tasks . . . why didn’t you call me!?!  I don’t need to be patronized.”  He also clarified that his first quote below should have ended with the words “Moorlach’s memorandum” and that he was not personalizing this disagreement.  We still utilize this firm at the county today.

                Orrick, Herrington & Sutcliffe went on the attack Wednesday, trying to deflect allegations that the firm’s involvement with the attempted sale of a toll road in Southern California amounted to a conflict of interest.

Moorlach said his opposition to the deal—and Orrick’s role in it—stemmed from the fact that “it was not structured with the good will of the residents of Orange County involved.  That they were working on a deal to utilize state-approved, tax-exempt bonding at an overly inflated price is disturbing to me.”

Orrick’s [partner, and chairman of the firm’s public finance department, Roger] Davis, meanwhile, said he is “disappointed personally and professionally in John Moorlach.”

“We would have thought that if he had questions [about the transaction], he would have had enough mutual respect to give us a call before impugning our integrity,” Davis said.

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