MOORLACH UPDATE — PAD Review — April 14, 2015

Forgive me if this missive sounds as if I protesteth too much, but the editorial in the Voice of OC takes liberty with the facts. One, I worked very closely with Philip Cheng and not only reviewed his reports, but spent hours with him in private briefings to review the findings, ask questions, and offer my own observations.

When the Performance Audit Department (PAD) was established, I participated in selecting the Director. One of the candidates was kind enough to call me and inform me that if he were selected, he would recruit Ian Rudge away from my office. I try to hire the best and the brightest, and I was in no mood to lose Ian.

We selected Steve Danley, another candidate for the position, who promptly recruited Ian away from me anyway. And they both provided excellent reports on various departments in the County. For an example, see MOORLACH UPDATE — Performance Audit Department — January 21, 2012. They were so impactful that then CEO Tom Mauk quadrupled the size of this department in order to review every county department — NOT! He did the opposite; he tried to rein it in.

When my former Chief of Staff, Rick Francis, was recruited away from me to be the assistant to the Costa Mesa CEO (City Manager), I recruited Ian to return to my office to fill this vacancy. Of course, I expected that Ian would occupy the position for some time. I have the same expectation of my new Chief of Staff here in Sacramento.

As you read the editorial, know that I am a big Steve Danley fan. It was my hope that he would become the County’s CEO, but I did not have the votes. I am also a Philip Cheng fan and I know he is getting his sea legs and following a schedule of audits that were agreed to by all of the parties, including the Board, the CEO, and his department.

Using the PAD to make a swipe at the Board, past and present, and CEO Mike Giancola, with a stretch of some facts to embellish the piece, may hurt the credibility of the column. However, if I had had any input, I would have focused it on quadrupling the size of the PAD so that the County could reap the benefits of a more efficient county bureaucracy.

BONUS: Yesterday, the Senate voted 22 to 10 to remove Father Serra from the Rotunda in Washington, D.C., and replace him with former astronaut Sally Ride. I voted in opposition, as Father Serra is a founder of California and along with establishing Mission San Diego de Alcala in 1769 and Mission San Juan Capistrano in 1776, he left the fingerprints of the Spanish missionaries all over the majority of this state. One could argue that the missionaries likely staved off Russian claims to the Pacific coast.

The subtle spiritual reminders Father Serra and his co-missionaries are everywhere. The city of the Angels. The city of the Sacraments. The cities and counties named after saints, both male and female, like San Diego, San Bernardino, Santa Monica, Santa Rosa, and some 30 more similar place names. The Spanish influence is also seen elsewhere, as in the name of the Los Padres National Forest. So the legacy continues.

Some 68 percent of Hispanics in the United States consider themselves Roman Catholic and some 38 percent of Californians are Hispanics. This means that one in four Californians are Roman Catholic, Father Serra was beautified by Pope John Paul II and is widely expected to be canonized this September by Pope Francis. Still, I’m not sure if my office received one phone call or e-mail to suggest that I oppose this matter. I did it as an amateur California historian who respects his West Coast roots, just as those on the East Coast do their founding fathers. With that, go Padres and Angels!

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Keeping Watch: County Government’s Most Thankless Job

By Norberto Santana Jr.

Today, Orange County Supervisors are scheduled to have a very frank – and closed session – discussion with Performance Auditor Philip Cheng about his work.

So far, it’s been a yawner.

Since taking over as Performance Auditor, Cheng has turned over one milquetoast audit after another. His agency website is so plain that it doesn’t even list his name on the About Us page. All of the media coverage from the agency’s Media page ends in 2012.

One housing review he completed last fall made no mention of a year-long District Attorney’s Office investigation into the agency that turned over tons of information on waste and abuse. It’s a situation county supervisors found about from the investigative reporting of Voice of OC reporter Yvette Cabrera just they were scheduled to adopt a Cheng report that concluded the agency was smoothly meeting its marks. This past week, five workers at the agency were let go as a result of official reviews of their work performance.

All this being said, supervisors should have the frank talk with themselves.

Cheng’s milquetoast auditing is a direct result of the environment triggered by the last board majority – which penalized aggressive auditing and rewarded lapdog executives.

Despite their talk about running government like a business, these folks ran the shop with one goal: getting elected to the next higher office.

They were good at that.

We now have three State Senators – Pat Bates, Janet Nguyen and John Moorlach.

The results at the county? Not so good.

Just ask, like I did, to see the raw results of a recent employee survey of county workers. Top execs are still trying to figure out how to break the news to supervisors. They had to send supervisors an update after I sought the original records.

Know why they fear the results?

They’re miserable.

When county executives and workers were asked what they thought about the leader of Orange County, presumably the CEO, the results were a jaw-dropping 29 percent lower than the benchmark for other county governments.

Minus 29.

When asked whether the county of Orange operates with strong values and ethics, the answers from county staff were 20 percent lower than the benchmark for other county governments.

Minus 20.

This is the same CEO who county supervisors were praising last week after he abruptly announced his retirement.

Mike Giancola excelled at telling county supervisors exactly what they want to hear. He took care of their needs.

And they loved him for it.

And he did well.

Guess who didn’t do so well?

The last Performance Auditor, Steve Danley.

Danley – the only top exec to not get a raise in the past five years – was in line to be the next CEO, but couldn’t get the votes from supervisors in closed session because Bates and Nguyen were reportedly offended by the raw nature of his performance audits, which garnered top headlines for years.

His work delved into – and helped to limit – overtime pay for deputy sheriffs. He also did real investigations into the planning and human resources department, county harbor patrol and millions in no-bid IT contracts.

Raw audits expose real problems. They can hurt the brand. They force politicians to work, instead of campaign for higher office, to actually fix things.

Danley didn’t turn out too bad though, eventually getting the job of reorganizing the county Human Resources Department in the wake of the well-publicized Carlos Bustamante sex abuse scandal.

Unfortunately, Danley’s second-in-command, a well-regarded executive named Ian Rudge, never got a chance to follow his boss because he was stuck with termed-out Supervisor Moorlach when Danley left to head up HR. Moorlach refused to let Rudge return to Performance Audit because Rudge had given him a commitment to be his chief of staff.

Rudge eventually left Moorlach’s staff anyway for a job at the Probation Department.

Performance Audit was left to meander and was eventually given to Cheng, who seemingly has no idea of the political hornet’s nest he’s stepped into with a board of supervisors that is formally asking for investigations but doesn’t really want them.

Meanwhile, Danley’s new HR department ran straight into Brian Probolsky, a GOP power broker and elected official at the Moulton Niguel Water District. The trouble started when investigators started asking questions about why Probolsky didn’t take time off to head to water district meetings.

Investigators eventually got threatened with political retribution by Probolsky, but stood firm, issuing a three-day unpaid leave sanction to the political power broker – even listing his threats against them.

Yet after that, Probolsky got hired on as Chief of Staff to newly-elected Supervisor Andrew Do.

Since then, guess who has taken a really aggressive interest in the costs of Danley’s human resources consolidation?

Supervisor Andrew Do.

Orange County’s Internal Auditor Peter Hughes also has had a rocky few years since he uncovered a buried legal investigation into Bustamante, an elected member of the Santa Ana City Council and rising OC GOP Hispanic star who as a County Public Works executive was apparently habitually groping female workers at the office.

When a lawyer looked into the matter, county supervisors – including two women, Bates and Nguyen – signed off on a plan to have Bustamante quietly resign, take a 90-severance check and disappear.

After Hughes fought to have access to the same legal report as part of a hotline complaint, it ended up in an internal audit review that triggered a formal closed session and an automatic referral to District Attorney Tony Rackauckas. Bustamante’s trial is still ongoing.

After the Bustamante scandal, Hughes went looking at how then-Clerk Recorder Tom Daly managed an internal service fund inside his office called 12D. The account turned out to look much like a slush fund – the kind of fund that helps aspiring politicians like Anaheim City Councilman Jordan Brandman campaign for office while getting paid to be a “consultant” and produce reports largely lifted from Wikipedia.

Hughes produced a scathing audit that left Daly in fumes.

When Daly got to the state assembly, one of the first things he did was submit legislation to move Hughes away from the board of supervisors’ purview and back to the Auditor Controller.

That battle is still in play.

Who can blame Philipp Cheng for being milquetoast?

The last guy who pulled that off just got to play CEO for a few years.

Later this week, Supervisors’ Chairman Todd Spitzer has convened a countywide conversation about ethics.

If supervisors want county ethics to get a better rating, than 20 points below their counterparts, they should come out publicly for strong auditing and they should promise their auditors that they wont be retaliated against for delivering bad news.

The brand can stand it.

This e-mail has been sent by California State Senator John M. W. Moorlach.

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