MOORLACH UPDATE — Voice of OC — June 18, 2013

We enjoyed another long Board meeting today. One of the Public Hearing items was discussed before the meeting by the Voice of OC below. The item passed, although the answers to my questions were a little evasive. If I were to paraphrase, “a SSO can attend the academy and become a Deputy Sheriff.”

BONUS: Former Orange County Librarian John M. Adams, now director emeritus of the Orange County Public Library, always had an interest in Egyptology and was going to write a book after he retired. Waiting for me in my mail box after today’s meeting was “The Millionaire and the Mummies – Theodore Davis’s Gilded Age in the Valley of the Kings.” It’s a hardback, with dust jacket, first edition. Better yet, it’s autographed! “To John Moorlach – See? I told you it would look good on the flyleaf! Thanks – John Adams.” Check it out on Barnes & Noble: or Amazon: Congratulations, John! And, thanks!!

Sheriff Seeks Greater Arrest Powers for Special Officers


Orange County Sheriff Sandra Hutchens is recommending that the board of supervisors grant sheriff’s special officers limited powers of arrest.

It’s the latest development in an ongoing battle between the special officers and department management, largely centered around officers’ ability to carry concealed weapons off duty and also featuring questions about pension implications for taxpayers.

Under Hutchens’ proposal, scheduled for hearing Tuesday before the Board of Supervisors, special officers — or SSOs as they are called — would have the authority to make arrests for misdemeanor crimes they witness.

Despite Tuesday’s outcome, the battle between the two sides is expected to escalate, with the SSOs’ union challenging a recent department decision to strip their powers after a critical state audit.

“We don’t believe that the sheriff can unilaterally take away the power of the SSOs,” said Jennifer Muir, assistant general manager of the Orange County Employees Association. The union is suing the Sheriff’s Department over the issue.

Sheriff’s spokeswoman Gail Krause didn’t return messages seeking comment.

Supervisor John Moorlach said that at Tuesday’s hearing he’ll be seeking more information than is given in the sheriff’s staff report.

“I’m worried if it creates new problems,” said Moorlach, questioning whether granting greater arresting powers will increase the officers’ pension rates.

“I don’t want to be guilty of voting on one thing and then actually starting the ball rolling on something else,” said Moorlach.

OCEA disputed that notion, saying such a move would not boost pensions.

The nearly 300 SSOs patrol mainly John Wayne Airport and Orange County jails, courts and government buildings and for nearly 20 years have been considered peace officers and permitted to carry concealed weapons.

But last May, an audit by the California Commission on Peace Officer Standards and Training (POST) found that the special officers don’t meet state requirements for peace officers, because they don’t receive the necessary training and fail to report officer assignments.

As far as training, the commission wrote that the officers need to complete POST’s regular basic course before carrying out peace officer duties.

Orange County sheriff’s officials chose not to comply with the POST recommendations, essentially removing their “peace officer” designation and forbidding the officers from carrying concealed weapons off duty.

That sparked a forceful response earlier this year from OCEA General Manager Nick Berardino, who pointed to the Christopher Dorner cop-killing rampage and argued that SSOs’ lives were in danger without concealed firearms.

After negotiations with the union, county staff say Hutchens now considers the SSOs to be “public officers,” also known as “sheriff’s security officers,” under Penal Code Section 831.4, which reads in part:

The duties of a sheriff’s or police security officer shall be limited to the physical security and protection [of government buildings] or necessary duties with respect to the patrons, employees, and properties of the employing county, city, or contracting entities. …

These persons may not exercise the powers of arrest of a peace officer, but may issue citations for infractions if authorized by the sheriff or police chief. …

The department’s staff report states Hutchens made the decision “based on all the information she has received, and after consulting with all interested stakeholders.”

OCEA, meanwhile, insisted that SSOs should have full peace officer status.

“We disagree that she could take away the peace officer power of SSOs in the first place,” said Muir.

You can reach Nick Gerda at ngerda, and follow him on Twitter: @nicholasgerda.


June 16


The price for having been a fiscal consultant or advisor to the County of Orange at the time of the bankruptcy filing was a steep one. The January 3, 1996 edition of the LA Times had an article titled “Echoing in Transcripts Is One Name: Costanza – Inquiry: State, federal prosecutors are looking at whether O.C.’s bond counsel violated securities laws. County may sue her.” Here are portions of the opener to the piece: “As Orange County prosecutors searched for culprits in the nation’s worst municipal bankruptcy, the name of a little-known securities lawyer came up again and again. Witness after witness testified before a grand jury that it was attorney Jean M. Costanza who gave the legal green light to hundreds of millions of dollars of questionable financial deals. It was Costanza, they said, who told them they didn’t have to reveal the county’s precarious finances. And it was Costanza who helped keep the lid on the shocking secret that Treasurer-Tax Collector Robert L. Citron, the county’s vaunted financial whiz, was consulting a psychic. Federal and state prosecutors are now trying to determine whether Costanza, a partner with the New York firm LeBoeuf, Lamb, Greene & MacRae, may have violated securities laws by failing to disclose crucial information to potential buyers of county bonds. As bond counsel, Costanza was responsible for disclosing vital information about the county’s finances.” Prior to the bankruptcy filing, the only Costanza that I was familiar with was George Costanza of the television sitcom “Seinfeld,” but this character provided the necessary mnemonic to still recall Jean’s name to this day.

Jean O. Pasco of the LA Times provided the background and an update with “Anaheim to Be Asked to OK LeBoeuf Work.” I fully understand the bitternesses, as I had to spend some time in depositions with LeBoeuf’s lawyers, too. Here is the piece in full:

The Anaheim City Council will be asked tonight to hire retroactively a law firm that recently paid $45 million to settle a malpractice lawsuit over its role as bond counsel in the Orange County bankruptcy four years ago.

The council will be asked to approve payment for the work done by LeBoeuf, Lamb, Greene & MacRae–authorized by the city attorney–in handling a wrongful termination case brought against the city.

LeBoeuf’s settlement with the county in the nation’s biggest municipal bankruptcy resulted in one of the largest malpractice payments by a law firm. The firm represented the county before its December 1994 loss of $1.64 billion in public funds through risky investments.

Anaheim City Atty. Jack L. White said he authorized Richard Terzian, an attorney in LeBoeuf’s Los Angeles office, to begin work May 8 representing the city and a supervisor in the wrongful-termination suit brought by an Anaheim Convention Center employee. The suit was recently settled.

"I don’t disqualify someone just because of something that happened in the past," White said.

But Orange County Supervisor William G. Steiner, the remaining board member from pre-bankruptcy days, said any firm involved enough in the county’s financial collapse to pay a $45-million settlement shouldn’t expect public business from Orange County any time soon.

"Have they lost their minds?" Steiner said of Anaheim officials. "For those of us in the eye of the storm, I would never want to work with these firms again. My concern is that people have short memories."

LeBoeuf attorneys provided legal counsel to Orange County for more than $1 billion in borrowings used by convicted former Treasurer-Tax Collector Robert L. Citron to gamble on some of Wall Street’s riskiest securities.

Terzian said he shouldn’t be blacklisted because of the involvement of other attorneys. He said he joined the firm in 1995.

"The only thing that should be an issue is who is capable of doing the job," said Terzian, who charged $225 an hour for his work on the lawsuit.

Treasurer-Tax Collector John M.W. Moorlach, who replaced Citron, said Monday the firm has paid its penance.

"There has to be a time when we say it’s over, let’s move forward," he said.

June 17


Ronald Campbell and John McDonald of the OC Register provide an update on a contentious issue with “Court: No jury secrets for Merrill – Bankruptcy: Judges say details of the Merrill Lynch probe must go public to ensure faith in the grand jury system. An appeal is planned.” Orange County District Attorney Michael Capizzi tried to seal the Grand Jury transcripts, which did not sit well with the media or with 4th District Court of Appeal judges William W. Bedsworth, Presiding Justice David G. Sills, and Justice Thomas F. Crosby, Jr. The piece included a sidebar, “The Merrill Lynch Case So Far,” that provided a timeline:

JUNE 1994: Citron is re-elected after opponent John Moorlach attacked his investment policy as too risky.


The OC Register investigative report on Sheriff’s Department overtime (see MOORLACH UPDATE — Begets — June 15, 2014) would beget additional media activity. Norberto Santana, Jr. and Natalya Shulyakovskaya of the OC Register would follow up with “County supervisors want to test sheriff’s overtime theory – Supervisors plan today to order their chief performance auditor to ‘drill down’ on multimillion-dollar overtime budgets.” Here is the piece in full:

County supervisors said Monday that they will order their performance auditor to conduct an in-depth study of the Orange County Sheriff’s Department overtime spending, which has soared beyond the $41 million mark in recent years.

The supervisors were reacting to an Orange County Register investigation that revealed mismanagement of the department’s overtime budget. The story showed how more than 100 sworn officers used overtime to boost their pay to more than $150,000 per year.

"This continues the evidence of mismanagement of (former Sheriff) Mike Carona," said County Supervisor Bill Campbell. "Just as we found out from the grand jury report on the jails, I don’t think he and his most senior people were paying attention to running the organization."

Campbell said the increasing costs of overtime at the Sheriff’s Department reinforced his interest in exploring cheaper jail workers, such as correctional officers.

"This just gives us one more reason," Campbell said of the overtime payouts. "It cries out for using correctional officers."

Supervisors Chairman John Moorlach said he discussed the issue with supervisors’ Vice Chairman Pat Bates over the weekend and the pair agreed to have the county’s performance auditor investigate whether overtime and the "three-12" workweek is being abused.

"In fairness to the department, it would be nice to have our performance auditor to do some analysis and see if it’s the best route to take and whether it needs any improvement," Moorlach said. "We don’t have bad people. We have bad systems. And the systems need to be fixed."

"We need to drill down on this," Bates agreed.

A new department report obtained by The Register contains new details of the department’s use of overtime, based on the most recent pay period for 28 officers who exceeded the department’s limit on overtime hours.

Despite assertions by sheriff’s officials that a lot of overtime comes from officers finishing up arrests, investigating hot cases or testifying in court, the report shows that these reasons are responsible for only about 13 percent of overtime.

The main bulk of overtime, or nearly 40 percent, was generated covering vacancies. Fifteen percent came from covering shifts for officers in training; an additional 10 percent was related to vacations. Special events were the fourth largest generator of overtime, at 7 percent.

One fifth of all overtime hours were generated working shifts away from the officers’ primary department.

Sheriff-Designee Sandra Hutchens issued a statement Monday, through a departmental spokesman, saying she wants to analyze the use of vacant positions; ensure overtime is being properly tracked; and establish a policy that provides accountability and transparency.

Acting Sheriff Jack Anderson and officials from the deputies’ union could not be reached for comment Monday because they were participating in their annual golf tournament at the Coto de Caza Golf Club.

The 2008 Memorial Golf Tournament was promoted as "honoring our fallen heroes."

The Long Beach Press-Telegram would have a strong editorial, “Out-of-hand overtime – Sheriff’s deputies average $100,000, and many make more in Orange County.” Here is their piece in full:

Who would disagree with paying decent salaries to police or firefighters? Certainly not politicians.

That’s part of the problem in state and local government, where elected officials look to public employees to help finance their political careers. It accounts largely for a growing list of jobs that pay six figures or more.

That growth has extended now into entry-level ranks. For example, a recent investigation by the Orange County Register shows that sheriff’s deputies last year earned an average of $102,377, and more than 100 made more than $150,000. Four deputies made between $191,840 and $208,745, and one investigator managed to take in $220,869.

The primary reason for the big numbers was overtime, which averaged 20 percent throughout the department, and in a few cases doubled deputies’ earnings.

Officials in the Sheriff’s Department brushed off the $41 million in overtime costs as being a bargain, compared to hiring more deputies. But that’s false reasoning, based on top-range salaries, rather than including lower-paid recent hires.

Also, the Register showed, staffing county jails more efficiently could save $10 million a year. Obviously nobody is trying very hard to save money, no doubt partly because the excesses benefit everybody.

Except taxpayers, of course. And even in wealthy Orange County, most taxpayers make much less money and have much smaller pensions than the public employees they support. The mean annual salary for males is about $50,000, and most lower-income workers have no pension at all, compared to 90 percent of salary for a sheriff’s deputy with 30 years on the job.

Orange County has another inefficiency that increases costs of managing its Sheriff’s Department, which is the work schedule, meaning deputies work six 12-hour shifts and one eight-hour shift in two weeks, then every two weeks get seven days off, thus creating more overtime opportunities.

Correcting those inefficiencies is not a liberal-conservative political issue, as conservative Orange County politicians have demonstrated clearly by endorsing them. One exception has been Supervisor John Moorlach, who has expressed a willingness to confront compensation excesses and other political sacred cows.

Long Beach City Hall also has shown recently it is willing to take on police overtime as an issue of both budget control and more efficient policing.

Then there is the ultimate control over taxpayers’ destinies. That will be when voters wake up, go to the polls and act in the best interest of themselves and the community.

A famous Huntington Beach personality weighed in with a “Letter to the Editor” to the OC Register, titled “The glass ceiling,” on the major theme of the day, the hiring of Sheriff Hutchens (see MOORLACH UPDATE — Budget Hearing — June 12, 2013; note: the electronic headline on occasion differs from the dead-tree version).

Frank Mickadeit’s column [“Do women still confront the glass ceiling?,” Local, June 12] implied that only small cities in O.C. have appointed women to the top position. In Huntington Beach, the third-largest city in the county (population 200,000), the City Council selected Penny Culbreth Graft as city administrator, a position she held from June 2004 to January 2008, when she left by her own choice for an even larger city. The men on the City Council joined in the unanimous vote to hire Mrs. Graft. My conclusion: Huntington Beach certainly does not have the gender hiring problems that Mickadeit describes. It appears that Supervisor Moorlach has no gender hiring hang-ups, either.

Dave Sullivan, Huntington Beach former mayor

June 18


It wasn’t easy being County Treasurer. In June of 2003 the County’s school districts were putting the proceeds of some $375 million of Tax Revenue Anticipation Notes into the Treasurer’s investment pool. Some cities were showing an interest in investing at the same time, as the state’s investment pool was generating a discomfort level, due to the State’s precarious financial circumstances (which would lead to the recall of the second Governor in U.S. history). As a result, a request to provide a “fast track entry, between now and August, for investment deposits from cities and other local agencies,” was submitted to the Board. The Treasurer’s Department had a great reputation, but it still was not appreciated or understood by three of the County’s Supervisors. The OC Register had a graphic: “Orange County Board of Supervisors – June 17 session – ACTIONS.”

Should the board refuse Treasurer John Moorlach’s request to accept investment deposits from cities and other local agencies? PASSES: 3-2 (with Supervisors Campbell and Norby voting against)

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