By Steven Greenhut

The registrar hadn’t even certified the results on the Orange County supervisor election, when winning candidate Todd Spitzer declared that he already is seeking another office — that of district attorney. This is from the end of the Orange County Register story from last night: “Spitzer said he planned to focus on public pension reform as supervisor. He also confirmed that he plans to run for Orange County district attorney if the office is open in 2014.”

His focus on pension reform is funny given that he, more than any other O..C official, created the pension mess and he has no history of trying to reform that system. But the shocking thing is that he already announced his bid for DA in 2014, which confirms what his critics have said all along. Spitzer apparently doesn’t want to be supervisor. He just wants a paycheck and a high-visibility office while he plans his run to become the county’s top prosecutor.

O.C. politicos do and should fear Todd Spitzer in the DA’s office. Many have warned me over the years about the perils of putting this ambitious, publicity-seeking, cop-union ally in this powerful role, where he can potentially target political enemies and focus on press conferences rather than justice. That’s the fear, and it’s well warranted given his long record of expanding government power, dissing civil liberties and carrying water for public-safety unions.

But these O.C. Republicans have been quiet since he has rebuilt his career following his firing from the DA’s office. Are they trying to gain favor or do they simply fear him?

By Steven Greenhut

Well, you can’t win them all, and Todd Spitzer’s strong but expected win to the OC Board of Supervisors proves that there sometimes is no price to pay for doing terrible things. Spitzer practically tripped all over himself retroactively increasing pensions for public sector unions in 2001, an action that dramatically increased the county’s unfunded pension liability.

As Fullerton voters recalled three council members who they viewed were complicit in the attempted cover up of a police beating, county voters put back into office a man who is the cat’s paw for the law-enforcement unions, someone who opposed even the most modest reforms designed to hold abusive police officers accountable. In the Assembly, Spitzer portrayed anyone who opposed the cop lobby as a friend of criminals.

Typical of the OC GOP scene, most of the same people who have warned of the problems with giving a power-hungry, publicity driven authoritarian subpoena power, gladly jumped on board his campaign to win back a seat on the board when it became obvious that he would win. In OC, Republican leaders seem more interested in currying favor than they do in standing up for principle. Perhaps they want to be on Todd’s good side knowing that he eventually will get back to the DA’s office. A scary thought — and one that would be less likely if there were any courage left in the OC GOP. Sadly, there isn’t, and probably nothing will stop Spitzer’s disturbing rise to the DA’s office.

By Steven Greenhut

If you wonder why the GOP is having such hard times, one need only look at the goings-on in Orange County, where Republican Party Chairman Scott Baugh is pulling out all the stops to ensure the election to the board of supervisors of Todd Spitzer, the former Assemblyman who is a close union ally and someone who proudly increased pensions for his deputy sheriff union friends and then stood by that action right until he started getting political heat for doing so.

Baugh declared that no Republican who gets union support will get his or the party’s support, yet he is lending much support to Spitzer who continues to funnel past union money into his current election account. That technicality is enough for Baugh to turn a blind eye to a candidate who spent his career doing all the things that Baugh rails against. Baugh likes Spitzer and dislikes his board opponent, Deborah Pauly, so he is helping Spitzer.

But hypocrisy and lack of principle have a way of backfiring. Baugh recently sent out a letter to the GOP Central Committee making this case in another race:

“There has been significant activity in the 74^th Assembly District where our endorsed incumbent Allan Mansoor is running for re-election.  … It seems that Allan’s opponent, Leslie Daigle, has not been honest with us or the voters.  Do you remember when she came to our party asking for an endorsement for her city council race in Newport Beach?  At the time, she represented that she did not vote for 3@50 in Newport Beach, and she said that she supported defined contribution plans – not defined benefit plans.  Interesting . . . we actually learned that she voted for retroactive 3@50 defined benefits plans for firemen!  That wasn’t enough for her.  She turned around and then gave the same retroactive 3@50 defined benefit for lifeguards.  That’s right – two different votes supporting 3@50.  …”

Certainly, I agree with Baugh that Daigle is a liberal, tax-hiking, pension-spiking candidate and Mansoor is a pretty solid guy. But how can Baugh be so angry at Daigle for doing something even less egregious than that done by his close ally, Todd Spitzer? After all, Daigle voted for non-retroactive pension increases and Spitzer led the charge for a county-wide retroactive pension spike. Spitzer, by the way, is atrocious on civil liberties issues, a law-and-order, big-government guy with at least as much baggage as Daigle, although they are nightmares in different ways.

The OC Register editorial board noticed this as well. (Although I write a column for the Register and have written occasional editorials, I did not have anything to do with this one.) Wrote the Register:

“It is reassuring, after so many years of sounding alarms about the looming carnage pensions can inflict on government budgets, that more people are holding elected officials accountable for misguided votes, but the criticism should be consistently applied.”

Actually, Baugh is not being unprincipled, he seems to be applying this basic principle: If he likes you or dislikes your opponent, he will forgive any past votes and even current indiscretions. If he dislikes you or likes your opponent, he will hold you to a very high standard.

Welcome to the modern OC GOP.

MAY 20, 2012

Steven Greenhut

The Jarvis group is the major taxpayer group in the state, and Spitzer has been hostile to Jarvis in the past and is something of the Anti-Taxpayer candidate given his retroactive pension-spiking deal and pro-union activism. At least some conservatives are expressing principle and not just going along with the candidate they think is going to win. Ironically, Spitzer was speaking at a TEA Party rally this week. I was going to make a snarky comment, but this seems to speak for itself.

APRIL 17, 2012

By Steven Greenhut

If a politician has based his career on advocating a set of policies, and has always been aligned with a group of special interests, only a fool would believe that he has suddenly seen the light just at the time when those past policies and alliances are causing him some political grief.

Yet Orange County Republican Party Chairman Scott Baugh last weekend compared supervisorial candidate Todd Spitzer — a Republican with a long track record in the DA’s office, as an Assemblyman and previously as a supervisor and local school board member — to the adulterous woman at the well whom Jesus forgave. This implies that Spitzer has seen the light and is now a reformed man. I think Baugh is being as loose with his endorsements as the woman was with her partners.

Baugh, writing a rebuttal to an Orange County Register editorial that I had penned blasting his decision to headline a fund-raiser for Spitzer, argued: “It’s a good thing that Register editorial writers did not meet the woman at the well mentioned in the biblical book of John. The fact that she had five previous husbands and was living with a man who was not her husband would have doomed her to a life not worth living. Instead, the woman met Jesus, and she became a great messenger for changed lives.”

If we’re talking about a person’s heart, and a religious conversion, then I see what Baugh is talking about. When people change in those ways, I would never question it. That is, as the cliché goes, an issue between a man and his God. But my Register editorial pointed to Spitzer’s long-standing association with the public employee unions and the way that Spitzer led the charge for a 2001 retroactive pension increase that has put Orange County in a deep fiscal hole.

Baugh became well known for his “manifesto” declaring that the party will not give any support to politicians who take donations from unions. Baugh said in a speech trumpeting his edict that it is not enough for Republican politicians to avoid taking such cash. He expects them to be proactive and create solutions to the mess caused by excessive public-employee compensation.

Pension spiking

As I wrote in the Register editorial:

“Mr. Spitzer was the lead advocate on the Board of Supervisors for a 2001 pension increase for deputy sheriffs that retroactively increased their pensions to the unsustainable ‘3 percent at 50’ formula — guaranteeing a pension of 90 percent of a 50-year-old employee’s final year’s pay after 30 years of work.

“Mr. Spitzer since has said he was wrong on that vote but mainly he blames others for not warning him, which suggests that he won’t provide the kind of pension-reform leadership that Mr. Baugh previously said he was expecting from politicians. In the Assembly, Mr. Spitzer was the cat’s-paw for the public-safety unions. He is smart and hardworking, but he epitomizes everything Baugh and the party said it would stand against.”

I recall Spitzer changing his tune about that increase — at one point saying he didn’t know it was retroactive, at another saying he knew it was but believed the deputies deserved the extra taxpayer cash — and remember him defending it to me right up until the point that it became a political liability. Spitzer has publicly talked about a religious conversion he has had, but we’re talking here about a political conversion — and there’s no actual evidence he really has had one.

‘Trust, but verify.’

Ronald Reagan famously said that the United States should “trust, but verify.” He was talking about arms-reduction talks with the Soviet Union. Baugh recently told me that “I’ve had my conversation with Todd and he is a changed man on this issue and many others. He now admits to me that the vote is wrong . … He has committed to me that he will work to reform the system in the same way as [OC Supervisor] Shawn Nelson and others have done.”

But where is the verification? Spitzer has a long history of saying whatever needs to be said to advance his political career. Most politicians do that, but Baugh is one of those people who over the years had warned me about Spitzer and his union alliances and opportunistic ways. The verification would come in some sort of policy decisions, yet there’s little evidence that he has pushed in the right direction not only on the pension issue but on the civil liberties issues that Baugh and others care so much about.

Even in defending Spitzer, Baugh told me that he is bothered by Spitzer’s positions on civil liberties issues. In the Assembly, Spitzer was the lead Republican voice for police-union-backed policies that made it nearly impossible to do anything about those officers who abused their power. When Spitzer was fired from the Orange County District Attorney’s Office, he held his press conference at the deputies’ union headquarters.

He told a colleague of mine that I don’t like him because he was a police officer. That’s right out of the police union playback. If someone disagrees with his views on expanding police pensions or protecting bad-apple officers, then that makes the critic a “cop hater.” I recall an outrageous floor speech Spitzer gave suggesting that supporters of a minor good-government reform were friends of criminals. That type of toxic rhetoric defines Spitzer as well as everything that’s wrong in Sacramento.

Conviction…or convenience?

Sensible people could conclude that Spitzer’s political conversion is one of convenience, not conviction.

And it’s obvious that Spitzer is conforming to the letter, but not the spirit of Baugh’s manifesto. As I wrote in the Register, “Mr. Baugh said that Mr. Spitzer has complied with the manifesto — i.e., he is not taking union money for this race. But Mr. Spitzer has received large amounts of union money over the years. And as his opponents note, he still operates an old political account holding money collected well before Mr. Baugh drew his line in the sand.”

According to former Republican Assemblyman Chuck DeVore, who was running against Spitzer but bailed out after accepting a new job in Texas: “Donations to county office are limited to $1,800 per person or business.  But, Spitzer also has an account for Orange County Republican Party Central Committee — an account that allows unlimited donations.  Spitzer is also his own treasurer for this account, meaning that there is no oversight on how he spends his Central Committee cash.  This Central Committee account Spitzer uses to finance everything from Internet costs, to gasoline, to paying off his credit card, to fancy restaurant meals, to an XM Satellite Radio subscription, and even a trip to Las Vegas.”

DeVore then argued that “Dozens of checks from Big Labor totaling some $54,000 that were listed in Spitzer’s 2014 D.A. committee vanished.  Rather than detail the union money in his 2012 Board of Supervisors account, Spitzer hides it, then shifts it into his unlimited Central Committee account from his, serving as his own treasurer, he can use it to pay for virtually anything, including inappropriately underwriting his current campaign for O.C. Supervisor.”

In other words, he is still using union money, although that money is hidden from view. Spitzer criticized DeVore for pointing this out, telling the OCWeekly, “Chuck needs to learn how to read campaign finance reports.” Spitzer also said, “I’m adhering to [Orange County Republican Party boss] Scott Baugh’s manifesto and will not take any union contributions for my supervisor’s campaign. What Chuck is saying is frivolous. All of my money is traceable.”

But DeVore added that “[W]hen Spitzer thought no one was looking on the eve of the Labor Day weekend, he filed a 519-page amended campaign finance report.  This report contains 189 missing pages of information that Spitzer was legally required to report last month … detailing dozens of Big Labor donations of the type Spitzer denied accepting just a few weeks before.”

Spitzer did not return my call to his home seeking an explanation. Baugh admitted that Spitzer is still using union money, but that Spitzer is indeed following his edict because this is past money. According to Baugh, it would be impossible to hold candidates to the same standard for past financial contributions, but in my view he could insist that they not spend money from labor unions for current campaign-related expenses.

As DeVore told me via email, “Every Californian pays $1,105 every year to support state and local retired government workers — more than double the burden in Texas. Spitzer made this burden worse in his years on the board and in the state Assembly. Spitzer’s talking a good game now, but it will take years of discipline to make up for past mistakes.”

Spitzer is almost certain to win the election. It will be interesting to see what Baugh will have to say if Spitzer reverts to his ways and advocates policies that benefit the unions. I hope Spitzer did indeed have a political conversion, but I think Baugh’s comparison to the adulterous woman at the well might be more apt than he thought, but for less noble reasons.

MARCH 6, 2012

BY CHRIS REED

Overwhelmed by enormous unfunded liabilities for retired employees’ pensions and health care, local governments throughout California are increasingly contemplating what once seemed unthinkable: declaring Chapter 9 bankruptcy to hold off creditors, to buy breathing time to reorganize and to attempt to reduce costs by any legal means necessary.

This fiscal crisis is outwardly downplayed or dismissed by the state’s public employee unions, who insist that claims of strained finances at all levels of California government are either exaggerated by alarmists unfamiliar with the ebb and flow of pension investment portfolios or the fabrications of anti-government ideologues.

But that these same unions know the crisis is real is manifest in their successful push to get the Legislature to pass Assembly Bill 506, by Assemblyman Bob Wieckowski, D-Fremont. Gov. Jerry Brown signed it into law on October 9, 2011. It ends local governments’ ability to unilaterally declare bankruptcy. Instead, it requires that they first go through a mediation process or hold a public hearing at which they would declare a state of emergency and certify that they will be unable to meet their obligations within 60 days.

This obstacle may make some local officials think twice. But in an era in which San Jose Mayor Chuck Reed — a liberal Democrat — openly speculates about his city being forced to switch to a volunteer fire department, crushing financial pressures are certain to prompt many governments to consider Chapter 9. In so doing, many will look to the most famous municipal bankruptcy in U.S.history: Orange County’s Dec. 6, 1994, declaration that it could no longer pay its bills.

Does Orange County’s Chapter 9 adventure raise any red flags for local governments considering bankruptcy?

Not a one.

But is the county’s highly positive experience truly instructive for local governments in general?

That’s another matter entirely, because Orange County’s story is an unusual one.

Speculative Gambles

The bankruptcy was triggered after failed speculative gambles by county Treasurer Robert L. Citron resulted in a $1.64 billion loss in county investment pools. The immediate reaction was one of shock and dismay, with grave warnings of profound long-term damage to Orange County’s quality of life.

Transportation officials feared crucial highway projects would have to be postponed or cancelled, yielding gridlock in fast-growing south Orange County. A portfolio manager at Scudder Funds said what “the future residents face [is the] cannibalization of every county service.” The executive director of the Associated General Contractors of Southern California said the bankruptcy’s impact was “like a nine on the Richter scale.”

Instead, a mix of new and old county leaders, working with former state Treasurer Tom Hayes and a Salomon Brothers team, stabilized the county’s fiscal picture in fairly short order. They persuaded creditors to hold off a year, froze salaries, put off infrastructure projects, pared services (particularly social services) and reduced the county work force from 18,000 to 15,000, primarily through attrition and dropping vacant positions, not layoffs.

Critics of these moves said county leaders had consistently insulated the middle class and rich from the effects of the bankruptcy, showing a cruel indifference to how cuts in social services hurt the poor. But perhaps because progressives had been making this same argument long before the bankruptcy, it barely resonated beyond the pages of the alternative OC Weekly newspaper. 

No Serious Disruption

“There wasn’t any kind of serious disruption over the long term for the residents of the county,” Mark Baldassare, author of “When Government Fails: The Orange County Bankruptcy,” said in a recent interview. “It was shocking, it was surprising, it was something that caused a lot of frustration, but for the average county resident, it didn’t matter that much.”

County leaders made one misstep: asking county voters to raises the sales tax by a half-cent for 10 years to bring in $1.35 billion. Portentously described in a Los Angeles Times headline as a “Referendum on O.C.’s future,” Measure R was rejected on June 27, 1995 in a landslide — 61 percent to 39 percent — by voters incensed that county leaders expected them to pay for a mess they didn’t create. This led to stark warnings from Wall Street credit-rating firms and familiar media complaints that voters wanted services but didn’t want to pay for them.

Soon, however, voters were vindicated, as the county and local agencies that had invested heavily in the county’s investment pools — the biggest creditors — worked out a complex deal. Under the deal, transit and other funds were diverted on an emergency basis and promises were made to give to pool members initial proceeds of lawsuits against Merrill Lynch and other county investment advisers.

On May 15, 1996, a bankruptcy judge gave the go-ahead to the county’s recovery plan. On June 5, 1996, the county was able to sell $880 million in long-term bonds to cover its short-term debts. This allowed county officials to emerge from bankruptcy on June 12, 1996, prompting a jubilant celebration on the steps of a Santa  Ana courthouse. On Feb. 27, 1997 — just 814 days after the bankruptcy declaration triggered an avalanche of sky-is-falling warnings from the media, politicians and Wall Street — Fitch Investors Services gave its highest rating, AAA, to Orange County’s investment pools. And on Feb. 24, 2000 — after unexpectedly successful litigation yielded $865 million from the Wall Street firms that worked with Citron on his speculative gambles — the 200 agencies that had invested with Citron were made nearly whole, given checks or wire transfers that brought their recovery on their investments to from 94 percent to 97 percent. 

Soft Landing

In March 2011, at an American Enterprise Institute forum on municipal debt, Pat Shea, an attorney representing 175 of the cities, water, school and sewer districts with investments, reflected on the outcome: “Five years afterwards everyone, at least on my side — within government, within the family of government — every one of them would say this worked out as well as it possibly could for every member of government.”

The long-term cost to Orange County taxpayers of repaying the $880 million in bonds, of course, has been vast. But even on that front, the news has not been all bad. In June 2005, Orange County’s supervisors OK’d a plan under which the bankruptcy debt would be repaid by 2016, 10 years ahead of schedule.

Yet in reviewing Orange County’s history to determine what lessons it offers, those lessons may not be quite the tidy package that the county’s rebound would suggest.

The circumstances of how the county lost its way are nearly without precedent in U.S. history, having relatively little in common with the retirement benefits crises now bedeviling so many local governments. Citron for years managed to generate above-average returns in the county’s investment pools, with a key strategy to gamble on derivatives that would yield high returns if interest rates remained low. Even as Orange County became, by one report, Merrill Lynch’s biggest customer and its heavily leveraged investment holdings topped $20 billion, Citron continued to operate with little or no scrutiny.

A 1985 Orange County Grand Jury report warning of the risks posed by such an informal investment arrangement was ignored. In spring 1994, warnings by Newport Beach CPA John M.W. Moorlach that Citron and the county risked disaster if interest rates continued to rise were largely disregarded by the media and dismissed by county supervisors and bureaucrats. With Moorlach a candidate to replace Citron as treasurer, the assumption was that his warnings were driven politically. Moorlach’s simple explanation — that Citron’s above-average returns were driven by unusually risky investment strategies — went largely unexplored in the media, who were as shocked as county residents by the December 1994 bankruptcy.

Strong Economy

Soon after, with Citron forced out of office, Moorlach appointed to replace him, and new sobriety driving decision-making, the county began to turn the corner — but with immense help from a source unlikely to help current local governments on bankruptcy’s brink. That source: a sharply rebounding Orange County economy.

Venture capital investments tripled in the first quarter of 1995 compared to 1994, and a huge building boom quickly gathered steam. Entrepreneurial high-tech firms, especially in software, aerospace and telecommunications, helped the county move out of the shadow of Silicon Valley and sharply grow international trade. By December 1997, the county unemployment rate was down to 2.7 percent. That year, Orange County had $2.6 billion in annual exports to Japan, South Korea ,China and Taiwan alone. Tax revenue grew steadily, helping push up the county’s total budget from $3.45 billion in 1995-96 to $4.01 billion in 2000-01.

In a 2004 symposium on the 10th anniversary of the Orange County bankruptcy, Moorlach acknowledged the central role of the economic recovery in minimizing the county’s pain.

“Only a county like Orange County could have come back from such a dramatic loss,” he said. “We’re just a dynamic economic powerhouse. Some other counties — I don’t know if they would have fared as well.”

This sharp boom helped the county to escape bankruptcy with relatively modest downsizing of government. Similar bonanzas seem unlikely to come to the rescue of many ofCalifornia’s struggling government agencies.

Unique Situation

“Orange County was very unique,” said Baldassare, now president and CEO of the Public Policy Institute of California. “It doesn’t really have much to do” with the present straits facing other local governments in the state.

This doesn’t mean Chapter 9 is a bad choice for local governments overwhelmed by red ink — just that their path back to stability isn’t likely to be as clean and straightforward as Orange County’s.

But there is a powerful lesson to be learned in how Orange County’s leaders behaved after the county emerged from bankruptcy. That lesson: Even after as wrenching an event as a bankruptcy declaration, leaders can’t be counted on to be fiscally responsible. The bankruptcy fiasco was still a very fresh memory when Orange County supervisors and top bureaucrats put the county back on the path toward severe financial problems of a more conventional sort.

The bankruptcy did trigger the changes and cutbacks discussed above. But by July 1999, when I began a two-year stint covering the county government for The Orange County Register, county leaders increasingly showed the same old casual attitudes about spending and oversight — accompanied, incongruously enough, by a vast sense of accomplishment and enormous self-regard.

Bad Habits Return

County Executive Officer Jan Mittermeier, hired in 1995, was a huge improvement over the feckless executives of the pre-bankruptcy era. But the accolades coming her way — including her November 1998 selection as one of Governing Magazine’s Public Officials of the Year — as well as to county supervisors for the county’s rapid rebound produced an insufferable climate at the Hall of Administration. There was a self-congratulatory subtext to interviews, events and board hearings that was impossible to miss. And it continued even as supervisors made decision after decision that treated taxpayer funds cavalierly.

In 1998, the Performance Incentive Program (PIP) was initiated for county workers, billed as an easy, smart way to incentivize superior performance. But an Orange County Grand Jury report in 2003 detailed how PIP amounted to disguised bonus program in which at least 95 percent of employees were being given annual 2 percent raises.

In June 2000, county supervisors voted unanimously to give themselves a 6 percent raise for a third straight year. They also gave nine senior county administrators a 14 percent raise.

But the most devastating decisions involved pensions.

Pension Spiking

In December 2001, supervisors Jim Silva, Todd Spitzer, Tom Wilson, Cynthia Coad and Chuck Smith — all Republicans who claimed to be fiscal conservatives — approved a 50 percent retroactive increase in the pension formulas for 2,000 sheriff’s deputies, allowing them to earn up to 90 percent of final pay in retirement.

“It’s a mind-blower,” Moorlach said in a recent telephone interview. “Not one of those supervisors called me up [in his role as a member of the county retirement board and as county treasurer] to ask if it was a good idea.”

The pension boost was passed so quickly and with so little fanfare that it didn’t even make the pages of The Orange County Register or The Los Angeles Times. The Nexis news archive shows no contemporaneous media coverage of any kind.

A subsequent pension proposal — to provide a 62 percent retroactive increase in the pension formulas for more than 14,000 county workers — drew far more advance attention. But it was nonetheless enacted in August 2004 on a 3-2 board vote, with the support of self-styled Republican fiscal conservatives Silva, Wilson and Bill Campbell. Their fig leaf: a requirement that affected county employees had to pay more toward pension costs when funding lagged.

Even with that concession, however, the unfunded liability for the Orange County Employees Retirement System soared from $85 million in 1999 to $3.7 billion on Dec. 31, 2009, the most recent figures available on the OCERS website. In the process, the pension system went from being 98 percent funded to 69 percent funded.

‘Funny Money’

Moorlach, who left the county treasurer job in 2006 to replace the Assembly-bound Silva on the county board, expresses amazement at how quickly Orange County’s rebound went sour.

Supervisors didn’t “seem to treat money like it’s real. It’s all funny money, and it will keep coming” was their attitude, he told me.

Moorlach believes the county is now well-managed, with appropriate safeguards and smart long-term planning. But he described how difficult it was for county leaders to replace $48 million in vehicle license fees taken by the state government in June 2011. And he noted that, in the next fiscal year, additional pension costs alone will be $53 million.

As in 1994, he said, “We are dependent on what the investment markets will do.” That year, when Citron’s offbeat investments tanked, bankruptcy became inevitable. “Now, we have to place all our bets on the stock market [portion of the county’s investment portfolio] doing 12 percent a year” — for the indefinite future.

Moorlach’s conclusion: By themselves, board members Silva and Wilson “caused more financial havoc” than the county boards which failed to oversee Citron.

And so in short order, Orange County went from being a nationally recognized model of smart governance to just another California government in which elected officials and top bureaucrats blithely showered taxpayer funds on public employees.

Spending Every Tax Dollar

Chriss Street is an Orange County investment banker who succeeded Moorlach as county treasurer from 2006-2010 and who also voiced alarms about Citron’s strategy before it went haywire. Street has a particularly astringent view of the relevance of Orange County’s second self-created fiscal debacle.

Even in a county buffeted by a recent bankruptcy, “Governments and politicians by their nature will try to find a way to spend every dollar possible and push the liability for that spending into the future, either through borrowing or creative accounting,” Street said in a phone interview.

Far from acting prudently with taxpayer funds, Street said, government officials instead work overtime to enable their spending schemes by crafting narratives that depend on “false impressions of spendable cash flow.”

In other words, they lie now and let the public pay later.

Orange County’s experience in the 1990s does show a Chapter 9 municipal bankruptcy filing can help local governments when it comes to the “pay later” part of this disastrous public policy one-two punch. But the blithe way the county government created a fresh fiasco illustrates a larger truth about the need for citizens to show perpetual and eternal vigilance in monitoring their leaders.

“One of the common failings among honorable people is a failure to appreciate how thoroughly dishonorable some other people can be, and how dangerous it is to trust them,” Thomas Sowell once observed. In less than 20 years, Orange County’s citizens learned this painful lesson twice.

Reed is an editorial writer for The San Diego Union-Tribune, former KOGO talk-show host and editor of Calwhine.com.

———————–

CalWatchDog.com’s Special Series on Municipal Bankruptcy:

Broke Municipalities Look to Bankruptcy Option

Bankruptcy Didn’t Make the Sky Fall In Orange County

Local Governments Face Bankruptcy Quandary

Bond Holders Seek Governmental Transparency

Spitzer is one of the least fiscally conservative Republicans around. He practically tripped all over himself as he retroactively increased pensions for deputy sheriffs. Spitzer only seems to take the pro-taxpayer argument, or the pro-civil liberties argument for that matter, after he stuck his finger in the wind and saw that his newfound position is blowing in the right direction. Even worse, he is a shameless demagogue.

Spitzer has functioned in the Assembly and previously on the board as the cat’s paw for the public sector unions, especially for police and fire unions. He has been a dedicated foe of the taxpayer where it really counts (pensions, light rail, prison spending, etc.) and an enemy of personal liberty, as one would expect from a full-on advocate of law enforcement unions. He in fact stands athwart most of the principles that Norby seems to have advocated in his career.

What’s up with that? I’ll try to find out.

FEB. 16, 2012

“No matter whether the country follows the flag or not, the Supreme Court follows the election returns,” is a famous saying by humorist Finley Peter Dunne. He was speaking about the U.S. Supreme Court. But the it applies applies to the California Supreme Court.

And California Supreme Court also follow the battles over pensions, because its own pensions are affected.

So the following, as reported in the Orange County Register, is not surprising:

The County of Orange’s years-long fight to overturn the its generous “3 percent at 50″ pension plan for sheriff’s deputies came to an abrupt halt Wednesday when the California Supreme Court refused to hear its appeal.

The contentious case had stretched into its third year of litigation. A win by the county could have saved as much as $500 million, according to Supervisor John Moorlach, who pushed the lawsuit to a final legal answer.

Losing the fight means the county will now have to pay its own $2 million-plus legal bill and may be on the hook for the deputies’ legal bills as well.

The deputies’ union has pledged to “vigorously” pursue having the county pay their legal costs to fight the suit – meaning the county could be liable for nearly $5 million in costs.

“John Moorlach owes a lot of people apologies, starting with his colleagues on the Board of Supervisors for allowing Mario Mainero to present a legal argument that was flawed from the start (and) that cost the taxpayers $2.5 million,” said Wayne Quint, president of the Association of Orange County Deputy Sheriffs.

Moorlach also owes the retired deputies who have had the legal challenge hanging over their heads for the past several years, Quint said. “Most importantly he owes an apology to the taxpayers.”

Actually, it’s Quint and the other union bosses who owe taxpayers an apology for gouging them out of an incredible $500 million in undeserved pension costs that allow county workers to retire in Lucullan luxury. The costs well could push Orange County into another bankruptcy should the national economy slam into another recession.

The whole mess occurred a decade ago when the O.C. Board of Supervisors, all Republicans, goosed pensions an unsustainable amount to make happy local government-worker unions and their employees — the taxpayers be damned.

One of the pension spikers was Supervisor Todd Spitzer, later an assemblyman, who now again is running for supervisor. He’s running against another former assemblyman, Chuck DeVore. As I noted last month, DeVore is making the Spitzer pension-spiking vote the central campaign issue.

Despite this obviously biased and venal state Supreme Court decision, the pension issue isn’t going away. These pensions will be cut — as will all other pensions, including those of the “justices” — because there simply isn’t enough money to pay for them.

March 27, 2011

John Seiler:

For Republicans, at least, the state and local pension crisis now dominates races. Those in the past who backed pension spiking are going to be blasted for it.

You might remember Chuck DeVore (top pciture) from the U.S. Senate race last year. He lost in the GOP primary to Carly Fiorina. I have some big disagreements with him on foreign policy. But in his six years as a California assemblyman, he was stellar on fighting for budget prudence. DeVore now is running for supervisor in Orange County.

He’s running against former assemblyman and Orange County supervisor Todd Spitzer (bottom picture).

In Orange County, although the positions are nonpartisan, all supervisorial races essentially are between Republicans.

I’m on DeVore’s email list from last year. Below is DeVore’s email letter announcing his candidacy. It’s almost all about Spitzer and pensions.

Expect to see this in GOP races all across the Golden State.

For his part, Spitzer is emphasizing his experience and support for public safety. This is from his Web site:

Orange County is facing some of the most serious and difficult financial and public policy issues in its history.  My experience and background to solve problems while working with all those individuals and groups who are dedicated to resolving issues together is needed in our county now more than ever.  I have been a County Supervisor, State Assemblymember and School Board Member; I have Chaired the Orange County Transportation Authority, Orange County Fire Authority and the Transportation Corridor Agency.  My decision to run for County Supervisor is based on my belief that my past leadership and practical experience will allow me to hit the ground running without wasting time on a learning curve when difficult issues need solutions now.  I believe that I can bring valuable experience, insight and commitment to the Orange County Board of Supervisors.

What follows is reprinted verbatim from DeVore’s email letter, including the italics:

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Dear John,

$600 Billion.

That’s how high California’s unfunded government employee pension liabilities could be, even as I write this. For context, California’s current deficit stands at about $25 billion.

Sadly, this isn’t just the Democrats fault. Republicans, including former Governor Arnold Schwarzenegger, helped make this problem worse.

Many Republicans have talked a good game, but when government union bosses asked for gold-plated pensions, they caved and voted to give them your money… and your children’s money.

This is unsustainable. We can do something about this.

I am preparing to run for the Orange County Board of Supervisors.

You can join my campaign today- click here to send a donation to help me fight for Fiscal Conservatism in Orange County.

My likely opponent, former Supervisor Todd Spitzer, is the father of Orange County’s pension crisis. 10 years ago Todd Spitzer voted to give billions of your tax dollars to government unions – retroactively. He says he now regrets his vote.

The trouble is that when Spitzer served for six years in the State Assembly he voted with the union bosses time and time again, putting you on the hook for billions more while raking in tens of thousands of dollars in donations from those same government union bosses. The battle to end the era of Big-Government Republicans starts right here, right now, in Orange County.

Soon, voters in Orange County will have a choice: returning to office a Republican who works for the union bosses; or voting for a proven fiscal conservative.

But, to get elected, I need your help. Former Supervisor Spitzer has a warchest of just over $1 million – money left over from years and years of generous government union donations.

To beat Spitzer and safeguard Orange County taxpayers, I don’t need to match him dollar-for-dollar, I just need to raise enough to get the word out about his Big Government Republican votes.

I’m urgently counting on you to help me defeat the union bosses and their favorite Republican politician.

You’ve helped me before. I’m a father, a husband, an Army veteran, a proven vote winner, and a rock solid Conservative who won several “Legislator of the Year” awards.

Please don’t hesitate. Click here to send a contribution of $25, $50, $100, $250, $500, $1,000 or more back to me right now!

Sincerely,

Chuck DeVore

Fiscal Conservative for Orange County Supervisor

P.S. Will you help me defeat the union bosses and the Republican they most love in California? I can win this race. But I need your help today. Please send a contribution of at least $50 back to my campaign before the end of this week. Many thanks!