By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
To reasonable observers, this month's fifth anniversary of Orange County's $1.64 billion bankruptcy was a somber occasion. County taxpayers will shell out as much as an extra $90 million per year for three decades to pay bailout costs; residents—including 90,000 children—living in abject poverty now suffer from slashed or eliminated medical-assistance programs.
The only people elated by the bankruptcy and its aftermath are Wall Street investment bankers and local real-estate developers. The former are rolling in debt-bond commissions; the latter received funding for multimillion-dollar government projects essential to the profitability of their private projects while nabbing a 28 percent tax cut.
But the most jubilant Orange Countian has to be county executive officer Jan Mittermeier. In a gut-punching Dec. 5 Orange County Register article, Mittermeier—who has unabashedly credited her own intelligence and foresight for "ending" the bankruptcy—declared the financial mess a positive, useful experience. "[That is] a very realistic argument," she told reporter Chris Reed. "Who wants to go into a bankruptcy? Who thinks that's a good idea? Nobody. But without some kind of catalyst, an organization this size would never have changed as drastically as it did."
At a quick glance, Mittermeier's perspective might seem reasonable—particularly if one ignores the bankruptcy's devastating effects on innocent needy people. But the self-serving wretchedness of the CEO's spin can be fully appreciated only after considering the most drastic post-bankruptcy change in county government: one unelected person, Mittermeier, now likely has more unchecked power than any other county bureaucrat in the nation. In critical areas, only an unprecedented supermajority of the board (four of the five supervisors) can overrule her unilateral decisions.
It's odd even by Orange County standards that a bankruptcy caused in large part by a lack of meaningful oversight would produce a government with even less public accountability. But that's exactly what has happened. Mittermeier has used her expanded powers to sign millions of dollars in contracts with private firms, effectively gagged department heads who might go public with unpleasant news, and acquired the right to hire and fire those department heads without so much as a nod in the direction of the Board of Supervisors. Anyone who has ever requested access to detailed records of Mittermeier's financial maneuvers understands the CEO runs her $3.8 billion government in a paranoid style reminiscent of the Nixon White House.
Mittermeier's cheery outlook on the real meaning of the bankruptcy probably isn't hurt by the fact that in the midst of the financial crisis, she boosted her public salary by $20,000 to $160,000 per year and finagled a sweet private-sector-sized benefits package.
How could this happen—that the anti-democratic forces that created the December 1994 disaster are now heralded as the prescription for recovery?
Anything is possible when you have the unflinching support of a powerful newspaper. Time after time, the Orange County edition of the Los Angeles Times has supported the CEO's power grab as a necessary post-bankruptcy reform.
Take, for instance, the paper's treatment of a real political reformer, 3rd District Supervisor Todd Spitzer. Spitzer is the only supervisor to routinely challenge Mittermeier's behind-the-scenes deals. But in a Dec. 12 slap at him, the Times editorial staff pathetically claimed Spitzer is "perhaps more confrontational at times than necessary."
No, when it comes to Mittermeier's rise in post-bankruptcy politics, the Times much prefers accommodation to the horror of confrontation. In the same Dec. 12 editorial attacking Spitzer, the Times turned for Mittermeier's defense to Mark Baldassare. A UC Irvine professor, Baldassare has long provided academic cover for the real-estate development community, boosting the merits of toll roads, housing developments, and the campaign for an international airport at El Toro. Citing Baldassare's 1998 book, When Government Fails: The Orange County Bankruptcy, the Times wrote that the bankruptcy was really caused by "pressures" beyond Orange County "and from the high expectations of residents for services." Outsiders and greedy citizens—too much democracy—caused the bankruptcy.
In citing Baldassare, the Times entered the looking-glass world of local politics and the media. Though he works occasionally for the Times OC (as a pollster), Baldassare is regularly quoted by the same paper as a credible political observer who just happens to think Mittermeier is grand. And it was Times editorial-page editor Stephen Burgard whose praise for Baldassare appears as a jacket blurb on the professor's book cover ("A cautionary tale . . . of the California Dream in the 1990s").
Far from a cautionary tale, Baldassare's book-length prescription for avoiding future bankruptcies might have been written by Nikita Khrushchev. That would make it perfectly suited to the Times, Mittermeier and her supporters in the real-estate community, for whom the real problem in government is excessive democracy. "[L]ocal officials need to be more wary about citizen pressures," Baldassare warns, and the open-government requirements embodied in California's Brown Act "should be suspended during fiscal emergencies."
It's no coincidence that those two "reforms" actually were instituted by the triumvirate governing Orange County in the dark early days of the bankruptcy: Irvine Co. executive Gary Hunt, real-estate developer George Argyros and insurance mogul Tom Sutton. Stepping in for the county's shell-shocked elected supervisors, Hunt, Argyros and Sutton laid the groundwork for the ascension of Mittermeier, who has emerged as the county's most powerful official. No wonder the CEO—absurdly named "Public Official of the Year" in 1998 by the feckless Governing magazine —joyously celebrated the anniversary of the county's financial collapse.