Silent Coup

Secret meetings, shady deals: Life before & after the Orange County bankruptcy

The sight of a 5-foot-3-inch, 48-year-old Mission Viejo housewife wearing a navy-blue pantsuit would not normally terrify 40 businessmen and high-ranking local-government bureaucrats. But Gail Reavis pulled off the trick at 7:30 a.m. on Nov. 20 inside the Anaheim Marriott's Grand Ballroom. It was Reavis' presence--not her size--that scared the breakfast gathering of the Orange County Business Council, a lobbying group that includes officials of such local corporate giants as the Irvine Co., George Argyros' Arnel Development, and Freedom Communications, owner of The Orange County Register. Carrying nothing more threatening than an invitation, Reavis walked into the banquet room 15 minutes before Jan M. Mittermeier--the county's most powerful unelected government official--was to give an 85-minute "special briefing" on plans for a controversial international airport at the soon-to-be-evacuated El Toro Marine Corps Air Station. Reavis poured a small cup of coffee, grabbed a blueberry muffin, and sat at an unoccupied table at the rear of the room. As she waited, she thumbed through the meeting's handouts, including one lamenting that first-term Supervisor Todd Spitzer had yet to be held "accountable" for opposing the proposed airport. Her entrance had not gone unnoticed. Courtney Wiercioch, a top Mittermeier lieutenant, stood in another part of the room, chatting with bystanders. The two women momentarily locked eyes. They had met months earlier at a public meeting where Reavis voiced her opposition to the government's El Toro International Airport plan. Within minutes, a no-nonsense Julie Puentes--the business council's vice president for public relations--approached Reavis and asked her to identify herself. Puentes then abruptly walked back in Wiercioch's direction. "It was becoming obvious that they were not comfortable with me in the room," Reavis said. With a hotel representative in tow, Puentes returned and told Reavis to follow them to a hallway. According to Reavis' version of events, Puentes said, "This is an invitation-only meeting."

"Yes, I know. I have one," said Reavis. "That must be a mistake," Puentes said. "You are not on my list."Reavis showed her the invitation. A clearly legible fax stamp proved the business council had sent her the invitation two days earlier. Puentes was unmoved: "This is a private event. You represent the opposition. It is not appropriate for you to be here."

"I have an invitation, and I very much want to stay," said Reavis. "The county's CEO is going to be discussing the public's business here. What are you so afraid of me hearing? What are you people hiding?"

Puentes clasped her hands tightly and asked: "Are you going to leave with some class? Or will you need some help?"As soon as a startled Reavis left the Marriott, Mittermeier--a 23-year government employee with a base salary of $140,000--appeared behind closed doors and talked strategy with corporate lobbyists and political insiders.Reavis' experience at the Anaheim Marriott reveals how little has changed in Orange County politics since the county government's bankruptcy three years ago this month. County officials still gather in secret to plot with local corporate officials and lobbyists, still limit outside scrutiny of the public's business, still approve public subsidies of private business ventures--like the proposed El Toro International Airport. And, of course, they can do that because the same group of people are in power. You could walk into just about any meeting of county officials these days and swing a bat randomly without worrying that you might strike the innocent.

There was a moment, just after the bankruptcy, when it seemed things would turn out differently--when there might even have been a revolution in Orange County. A loss of $1.7 billion in taxpayer funds coupled with the rare, nauseating glimpse of politicians at work infuriated tens of thousands of normally apathetic citizens. A government ruled entirely by die-hard conservatives had failed and become the butt of jokes around the world. Contrite local leaders found themselves pleading for--of all things--state assistance from the then-assembly speaker, Democrat Willie Brown. Two unofficial but powerful troikas--one composed of top developers and another composed of bureaucrats, including Sheriff Brad Gates and District Attorney Michael Capizzi--proposed increasing the local sales tax, a move voters soundly rejected. To pay off the bankruptcy loss, the county eventually borrowed $800 million from Wall Street--a curious replay of the strategy that landed the county in trouble to begin with. Poll after poll showed citizens countywide overwhelmingly favored drastic, corrective government reform. A daily barrage of hate mail arrived for the supervisors. Several people spoke of lynchings--we presume figuratively. Supervisor Gaddi Vasquez--the Latino face of the new Republican party--went suddenly silent, ultimately resigned, and disappeared from the harsh glare of formal politics. His voluble colleague Tom Riley served out his term with a whimper. Roger Stanton had been talking about a run for U.S. Congress; he's said nothing of that ambition since. Harriett Wieder vanished. The bankruptcy seems to have turned William Steiner, once the county's most obvious defender of abused and neglected children, into a political eunuch, incapable of pointing out even the most glaring deficiencies in the county's Children and Youth Services Agency.

As frightened as the supervisors were of public reaction, their anxiety did not surpass that of the power brokers--influential real-estate developers and lobbyists who, for decades, quietly guided county government behind-the-scenes and directed millions from sweetheart deals into their own pockets--the multibillion-dollar toll roads being the most obvious example. An angry citizenry demanding answers and real change threatened to unravel the staggeringly lucrative and cozy relationship between business and government. The Register reported that developer Argyros told Irvine Co. developer Gary Hunt: if we don't handle the situation, we're going to suffer. The power brokers skillfully diverted public outrage away from their own corrupting influence, defining the terms of reform debate and putting their allies in key government posts. It was a silent coup. The people's revolution never had a chance.

Enter Mittermeier. Of all the high-profile but specious reforms since the debacle, Mittermeier's rise to county CEO exemplifies how very little has really changed in Orange County. As one of its last major acts, the bankruptcy-tarnished Board of Supervisors appointed the standoffish Mittermeier to the CEO job in September 1995. Mittermeier's supporters marketed her as a model of businesslike efficiency, a strong woman for a tough job. Her arrival was heralded as a reform in and of itself. In fact, during her 21-year career, Mittermeier had already established her bona fides as an insider. Since 1990, she had been trusted to run the government's most lucrative cash cow, John Wayne Airport. At John Wayne, Mittermeier honed the skills that have been so useful to her at the County Hall of Administration: keep cash flowing in, and limit public scrutiny of airport finances and operations. Several high-level sources said her appointment to CEO was first privately approved by developers and lobbyists eager to maintain easy access to the county's massive annual budget--$3.82 billion for the 1997-98 fiscal year. No one doubts Mittermeier's skills and intelligence, just her loyalties. Despite her talk about openness and honesty in government, Mittermeier remains the friendly--and female--face of corporate lobbyists and developers. That's not how Mittermeier describes it, of course. Shortly after taking office, she told reporters: "A lot of people think we're bottom-dwelling, scum-sucking bureaucrats, feeding at the public trough. I think they are just going to have to watch what happens." Reavis tried to watch, but she was thrown out of the room.

From the moment the bankruptcy was announced, the political insiders' goal was to convince the public that they intended to clean up their act. "We're leaving no stone unturned," said then-Supervisor Vasquez. Supervisor Stanton, who now teaches business at Cal State Long Beach, guaranteed those responsible for the debacle would be brought to justice. Sheriff Gates boasted, "Government's probably going to be reinvented here." It did not take long to proclaim victory. Only nine months after the bankruptcy, the Orange County edition of the Los Angeles Times declared the problem fixed: "historic" action by supervisors had "drastically altered the way county government is run." Then-Supervisor Donald Saltarelli--a former Irvine Co. lobbyist who was appointed by Governor Pete Wilson to replace a resigning Vasquez--didn't hold back his enthusiasm in May 1996. "Orange County is back," he said. "We are vibrant, strong, healthy and doing what needs to be done." In this year's State of the County address, board Chairman Steiner said: "Many lessons have been learned. . . . Local government [has been] inextricably altered. What emerged is a stronger county where there is more involvement in the political process [and] more accountability." Such impressive-sounding rhetoric elicits a hearty laugh from Tom Rogers. Last week, the outspoken Republican and lifelong observer of local politics said: "[Mittermeier] is running the county with an iron fist for the developers. It's just pitiful. They certainly talked a lot about serious reform, but it was really never more than a clever smoke screen."

SID, a waitress at Costa Mesa's Memphis restaurant, placed a steaming bowl of down-home gumbo in front of Bill Mitchell, but he stared straight ahead. Mitchell--a private attorney by day and vice chairman of Orange County's all-volunteer, post-bankruptcy Government Practices Oversight Committee--remained silent as Sid noisily slid his turkey half-sandwich plate onto the table. "I was hoping there would be some kind of revolution," he said. "But that didn't occur. The bankruptcy came and went without any real sense of what happened." Under immense pressure in February 1995, the supervisors established Mitchell's oversight committee with a directive to collect information and "evaluate and generate proposals for change in local government." Then-Supervisor Marian Bergeson--who has since resigned to accept a bureaucratic post in the Wilson administration--promoted the committee as a "sweeping audit by outside eyes." Mitchell's group was also billed as a "citizens' committee." But the roster read like a Who's Who of the county's power brokers, including Mittermeier--whose role as interim CEO was to monitor the group. Thirteen of the 15 original committee slots belonged to county politicians, top bureaucrats, major real-estate developers, government contractors, lobbyists or their agents. Mary Ann Schulte of Sukut Construction Inc.--a government contractor--headed the committee. When some in the community balked at the committee's composition, the supervisors added Mitchell, who has directed the nonprofit Orange County Common Cause (an independent grassroots organization), and Bruce Whitaker, a conservative activist with the Committees of Correspondence.

In the oversight committee's first meeting, the Irvine Co.'s representative, Hunt, suggested that the group use what would become an 18-month investigation to focus on "six key questions." Each of the questions concerned privatization, restructuring, downsizing and bloated bureaucracy. The point seemed to be that big government--not corporate-domination of county politics--had caused the bankruptcy. It was a deft move on Hunt's part--a bait and switch in which the bait was a favorite Republican target (big government). What got lost in the sleight of hand was the real cause of the bankruptcy: systemic political corruption in which people like Hunt and Argyros wield tremendous influence. Hunt's committee of insiders declined even a cursory probe of routine closed-door meetings, generous campaign contributions, rampant favoritism and pronounced hostility to public accountability. Mitchell concedes the oversight committee was stacked with insiders, but he's adamant that its 127 recommendations would have nevertheless improved county government. "You can look at the committee and see that we were not a group of bomb throwers," he said. "And yet we still couldn't get any of our reforms through Mittermeier." In a September memo to the board, the CEO claimed the 15-month-old oversight suggestions remain under study. Mitchell doubts it, figuring it's more likely the committee's 145-page final report is collecting dust. "I don't think Mittermeier likes scrutiny," he said.

Late last month, Todd Spitzer was driving home from the gym and talking to a reporter on his car telephone. "One of the things I hate about our county government is that we ask people to volunteer their time, and then we blow them off if we don't like their suggestions," he shouted over a weak phone connection and the sounds of passing traffic. "That's absolutely irresponsible." As passionately as Orange County's newest and youngest supervisor, 37, tackled each question, you'd wonder if he was paying attention to the road. "To use a Marine analogy, I see it as my job to take back the territory, to help lead, to ask tough questions and get honest answers," said Spitzer, a former deputy district attorney who trounced ex-Assemblyman Mickey Conroy in 1996. "The board can't continue to do things like we did in the past." In a Dec. 11 guest editorial in the Register, Spitzer wrote, "The power structure in this county continues to operate with an insider's mentality." Make no mistake: Spitzer casts himself in the role of white knight and Mittermeier as the reform-crushing villain. It promises to become an epic battle on Civic Center Drive. He likes to ask questions; she recoils at inquiries. Spitzer said: "She does things in secret. She has lied to me, and she thinks she is running the county." Nevertheless, on Dec. 9, Mittermeier--who didn't return the Weekly's calls for an interview--walked out of an unprecedented two-hour, closed-door job-performance review relatively unscathed, despite receiving an "unacceptable" rating from Spitzer. "I can only speculate that the power structure is so entrenched that most board members are afraid of the risks of holding county officials accountable," he said.Spitzer doesn't rule out a future showdown. "I know there are important people looking out for Jan. Time will tell. Given my style, will they come out and try to crush me?" Spitzer asked. "I can promise you that I will continue to chip away. I'm not giving up, and I am not getting tired."The battle has moved faster than expected. On Nov. 10, South County Supervisor Tom Wilson sent the CEO a memorandum requesting monthly travel and meeting schedules of county employees working on the El Toro Airport Master Development Plan. It was a no-brainer: a supervisor (the people's representative) asked the CEO (a county employee) to provide him with information about important public business. But Mittermeier's terse, high-handed response sent a shock wave through the halls of county government and sparked a media frenzy that has not subsided."I have reviewed your . . . request, [and] I will not be providing you such a schedule," Mittermeier wrote to Supervisor Wilson. "[Your] involvement is unnecessary for the formulation of good policy decisions." Spitzer came swiftly to Wilson's side: "Who in the hell does she think she is? She can't censor information to an elected official." Wilson said the insubordination "confirms the perception that the CEO is indeed in control of the Board of Supervisors." Supervisors Jim Silva, Chuck Smith and Steiner rushed to her defense, arguing that Mittermeier had their permission to withhold records from the two anti-airport supervisors. Nine days into the fracas, with Wilson and Spitzer exploring disciplinary possibilities, Mittermeier partially backtracked, blaming her insubordination on exhaustion. Bull, said Rogers, the former GOP head: "She was doing exactly what the establishment and the developers wanted her to do. They want her to be strong because she is not accountable to the public." Shirley Grindle has been trying to clean up Orange County politics and government since the 1970s. The Orange resident and retired engineer has studied campaign contributions to the supervisors, lobbyists' activities and how the county's lucrative procurement system works. In the late 1980s, Grindle tracked the county's largest contracts and came away with definite opinions. "The whole system stinks," she said. "Orange County's procurement system is the most corrupt in the state. We've been trying to get them to clean it up for years, but it's just stall, stall, stall." Connie Haddad, a past president of the local League of Women Voters, agreed. "If there is one thing they know how to do," she said, "it's drag their feet." Grindle is particularly incensed that county contracts are not automatically awarded to the "best bidder" as determined by a neutral selection process. At present, supervisors choose winners from lists of the top three bids; it's a system, Grindle said, that is open to corruption. "The lobbyists need to be taken out of the process," she said. On Jan. 27, the supervisors are scheduled to consider procurement reform. But don't hold your breath. Mittermeier will make her own recommendations, all of which result in additional power for her office. Under current policy, the CEO can approve consultant deals worth less than $25,000 without board permission or knowledge. Mittermeier wants the threshold raised to $100,000. She also wants more flexibility to ignore competitive-bidding procedures. But Mittermeier may not have waited for board permission to covertly increase her own authority. County records also show that the CEO made at least one deal for $24,999, or $1 below the amount necessary for board approval. During the last fiscal year, she also circumvented the board by unilaterally awarding a contract for $21,000 and later approved a "change order" for $256,290. During the 1996-97 fiscal year, she authorized $2.64 million in change orders for 26 contracts. "The CEO has been a real stumbling block for reform," said Grindle, who acknowledges that Mittermeier supported at least one post-bankruptcy reform: restrictions on campaign contributions to supervisors from financial advisers like Merrill Lynch. "It is very difficult to get information out of her," Grindle said. "Outsiders like me who get involved have been cut off, and I think there have been times when she has deliberately given out erroneous information." Spitzer said handing Mittermeier more unchecked power would be negligent: "You would hope we learned from the bankruptcy that there is a problem with giving someone a blank check of authority. That would be the epitome of proving nothing has changed."At the board's Nov. 25 night session, Chairman Steiner was absent. Silva presided. Mittermeier--who sits in front of and below the wooden half-moon-shaped dais where the five supervisors sit--was giving a long-winded explanation concerning some bureaucratic nuance. When she finished, Silva--who usually avoids extemporaneous speaking in favor of reading note cards word for word--said, "Thank you, Madam Chairman." The audience moaned. Spitzer didn't say a word.

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