Rick Reiff On John Moorlach and Chriss Street

Rick Reiff, executive editor of the Orange County Business Journal and creator/host of Inside OC, penned this trenchant editorial on May 29 on the critical nature of the 2nd Supervisorial District and OC Treasurer races:

TO QUOTE YOGI BERRA, IT’S LOOKING LIKE DÉJÀ VU ALL OVER AGAIN.

On a June 6 ballot filled with competitive local races, none are more important for sound and fiscally responsible county government than the two contests involving the current county treasurer and the man who wants to be his successor.

Flash back to 1994. A CPA named John Moorlach was running for county treasurer. Moorlach, with assistance from a Newport Beach money manager named Chriss Street, warned that the investment practices of incumbent Robert Citron were leading the county toward financial disaster.

Political leaders rose up against Moorlach. Citron won handily and the reckless investment practices continued unabated. Within months the county, having lost $1.6 billion, filed the biggest municipal bankruptcy ever. There were cutbacks, layoffs and prosecutions. The county is still paying interest.

Fast forward to today. Moorlach, who replaced the disgraced Citron and served as treasurer with distinction for the past 11 years, is running for county supervisor. His tag-team partner again is Street, who is running to succeed Moorlach as treasurer.

They are again warning that the county is risking a billion-dollar financial debacle, this time over lavish public-employee pension benefits.

Moorlach is leaving the virtual lifetime security of his present job to seek a lower-paying, term-limited gig so he can bring financial discipline to the board of supervisors. Street, who recently retired from the investment business, wants to carry on Moorlach’s legacy while putting his own stamp on the treasurer’s office.

Chastened political leaders now are behind Moorlach. But as in 1994, he has formidable opposition—this time from the county’s powerful public employee unions.

The unions, apoplectic over the prospect of having to negotiate wages and benefits with a Moorlach-driven board of supervisors, are expected to pour the better part of a million dollars into ads ripping Orange County’s most upright politician.

A hit piece claims that Moorlach is “an anti-union radical who will destroy your pension” Phone calls wildly insinuate that Moorlach is in cahoots with Citron’s enabler, Merrill Lynch.

A new mailer scrounges up an innocuous technical violation from 1996—Moorlach’s name appeared on a department brochure three times instead of the permitted one—twists the facts, omits that Moorlach himself reported the oversight and imputes a scandal: “How can we trust Moorlach now?”

Moorlach has terrific name-ID, about $400,000 for the campaign and a pushover opponent, schoolteacher and Stanton Councilman David Shawver.

The unions have an uphill battle. But they have been zeroing in on Moorlach and assessing members for campaign funds, so a Moorlach victory can’t be considered a sure thing. And even if they lose against Moorlach, the union bosses will send a message to other politicians who might be inclined to challenge sweetheart pension deals—don’t mess with us.

A Street victory would be a blow to the unions, too, as he would move into the pivotal treasurer’s seat on the Orange County Employees Retirement System board.

However, unless the unions decide to siphon money away from the Moorlach attack, the mostly self-funded Street should easily outspend an opponent who is even more obscure than Moorlach’s—Pat Desmond, an employee in the county assessor’s office.

But Street lacks Moorlach’s name recognition and his cockiness can be off-putting. His demonstrated financial savvy from years in the Wall Street game is an impressive asset for a treasurer candidate. But Street also brings baggage from his days in the rough-and-tumble world of corporate workouts, in the form of a battle over his management of the bankrupt Fruehauf Corp.

A bankruptcy filing by Street’s successor at Fruehauf, Daniel Harrow, accuses Street of mismanagement, lavish spending and conflicts of interest that damaged the company and its pension plan. Street has rebutted all of the points, maintained that his work benefited both creditors and pensioners, and sued Harrow for defamation.

Still, some politicians have pulled their endorsements of Street and DA Tony Rackauckas has launched an investigation.

What to make of it all? If Street is right, the allegations are groundless. If Harrow is right, Street played fast and loose with Fruehauf.

Even accepting the latter scenario, Street comes out ahead after you weigh his investment experience and his public service—at Moorlach’s side in warning of Citron, and then in helping Moorlach to reform a problem-plagued county pension board—against the slim credentials of an opponent who suggests there is no pension problem.

So there you have it: On one side, union interests. On the other side, the two guys who 12 years ago correctly warned the voters that Orange County government was headed off a cliff, and now are warning the voters again.

This time, will the voters take heed?

Comments

A typically well written and carefully reasoned editorial from Reiff. Moorlach and Street have made low-key and factually based arguments regarding the pensions that the County offers it's employees. All that they have suggested is that these pensions mirror the retirement systems used in the private sector. The public employee unions have reacted with hysterical and factless screeds that show their true colors. We can only hope that the voters see through this blather and vote for fiscal responsibility.

Oh save us Saint John! Save us from the very people who work for us. Who risk their lives for us. Save us from all that is not decided at the OC Central Committee by Saint Baugh and Pope Carona.

Reiff is nothing more than another political hack carping for the establishment. Moorlach got lucky once, ten years ago and that is all he has ever done. If he is so upset with the pensions than publicly state he will donate all of his to some worthy charity and let Greenhut choose the charity.

A sincere thank you to the public employee who made the 12:38 post. It proves the point of the prior post. A simple suggestion that public and private sector employees have comperable retirement vehicles elicits an irrational rant.

Who hires these simple minds?

[John Mardahl]

Once again, why does a millionare banker (Street) have any interest in the position. A seemingly low paying, unrewarding job for a man of his stature.

I have spoken to the folks at Dorsey trailer, one of the companies Street hosed. The talk of an arrogant outsider, buying Cadilacs for management, flying first class to and fro SNA, spitting in the face of the workers troubles. THIS GUY STINKS.