Blown Coverage

How to keep ignoring the bankruptcy fallout

In 1993, John Moorlach learned three important things about Orange County reporters: they're often lazy, almost invariably frightened of numbers, and usually reluctant to question a public agency or official unless someone else does so first. While still a private accountant, Moorlach was trying-unsuccessfully, as it turned out-to get either the Los Angeles Times or The Orange County Register to investigate then-county Treasurer Robert Citron's shaky investment practices. It was only after Citron's investments in poorly rated bonds led the county into a $1.7 billion hole one year later that Moorlach began to get the media attention he deserved.Today, Moorlach has Citron's job and is probably the most admired public official in the county. He's also the only one who can brag about his success. Today, the county's investment rating is its highest ever, thanks to Moorlach's efforts to return the county's investment pool to far-more-stable investments.On Feb. 4, Moorlach's office leveraged that success and admiration into an all-day conference titled "Orange County Finances: Past, Present and Future." Held at the glassy Doubletree Hotel in Costa Mesa, the conference attracted 135 local officials and financial managers for panel discussions on government investment strategies. While most of the workshop was arcane and technical, the final portions dealt with the media.First up were Jonathan Lansner, business columnist for the Register, and Bill Lobdell, editor of the Times' community coverage and the Newport Beach/Costa Mesa Daily Pilot. Since their panel carried the title "Whoops, So You Screwed Up? Hi, I'm With the Local Paper," there was the clear expectation that Lansner and Lobdell would give attendees tips on how to deal with county reporters.Instead, Lansner told the audience of financial experts that they ought to privatize their money managers-hiring "Wall Street sharpies" instead of civil-service bureaucrats. Lobdell stuck to the topic but fared no better, concentrating his exceptionally brief presentation on the phrase "You've got to be honest and open."Lobdell's statement is obviously true (so obvious, in fact, it terrifies us that Lobdell thought he had to say it), but Moorlach's pre-bankruptcy experiences offer opposing advice. Unless you screw up so badly that the feds come after you, don't worry: reporters rarely stray from the official press release. If a local reporter starts calling, gently reassure him or her that "everything is aboveboard." If the reports persist, offer that the reporter "is oversimplifying the issue."With notable exceptions, reporters are boosters-not investigators. In fact, local governments can often enlist reporters to assist with post-crisis cover-ups.Exemplifying that belief in journalism as superboosterism was Rick Reiff, editor of the Orange County Business Journal and the conference's final speaker. To Reiff, the only thing real about the 1994 bankruptcy is that it didn't happen."All that happened was the county lost $1.6 billion in rainy-day money," Reiff told the quiet attendees. "The money went from the county to Wall Street. That was the only effect of the bankruptcy."Reiff then read from Robert Kaplan's August 1998 Atlantic Monthly article on local governments of the future-an article that serendipitously depended upon Reiff himself. The article exemplified the nominally progressive Kaplan's parachute-behind-the-lines journalism: jump in, visit Fashion Island, Little Saigon, Nixon's birthplace, then do lunch with Reiff at posh Bistango in Irvine. Thus, Reiff's vision of Orange County as Tech Coast, a harmonious society of high-tech firms and happy multiethnic employees, becomes Kaplan's.Kaplan also found it easy to adopt Reiff's philosophy on the county losing nearly $2 billion: "'A blip on the screen-in historical terms, just a rainy day,'" said Reiff, reading his quotes in Kaplan's article. "'Roads are still being paved. No police have been fired. What I'm saying is that the Orange County phenomenon is intact. . . . Historians will look back on the 1980s and 1990s here as a golden age, with the credit crash a minor theme.'"That's the county's spin, the pro-business spin-the spin of those who spent years advocating a county government dominated by right-wing "conservative" Republicans and then had to squirm as that government foundered in the largest municipal collapse in U.S. history. For them, the real lesson of the bankruptcy was clear: county government was too democratic.Hence men like Reed Royalty, head of the Orange County Taxpayers Association and self-appointed shill for corporate welfare, publicly advocating that the elected Board of Supervisors should be more like "a corporate board of directors." Hence powers normally reserved for elected officials-like hiring and firing department heads-now residing with the unelected county executive officer. Hence the fact that 13 of the 15 spots on the 1995 Citizen's Committee that was set up to "reinvent county government" were saved for county politicians, top bureaucrats, real-estate developers, government contractors, and their agents or lobbyists. Hence former OC Common Cause director and 1995 Citizen's Committee member Bill Mitchell lamenting: "I was hoping there would be some kind of revolution. But that didn't occur. The bankruptcy came and went without any real sense of what was happening."By focusing on the maintenance of law enforcement and emergency services, boosters like Reiff can make a claim that the bankruptcy cost nothing. But the past five years have made it clear that residents lost a great deal of their influence over county government. For the county's most powerful, the bankruptcy was a windfall. Someday, the Times and Register might even report that.

 
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