Criminal Cases in O.C. Bankruptcy Appear Over

SANTA ANA — The lengthy criminal investigation into the causes of Orange County’s historic bankruptcy all but ended last week when the state attorney general’s office filed a motion saying the case against Auditor-Controller Steven E. Lewis should be dropped.

In a 17-page motion filed Friday, Senior Assistant Atty. Gen. Gary W. Schons asked the Los Angeles judge with jurisdiction over the case to dismiss the charges against Lewis “in the furtherance of justice.”

With the state saying it no longer wants to prosecute Lewis, the dismissal appears to be a foregone conclusion.

Lewis was the last of six current and former county officials hit with bankruptcy-related charges to have his case resolved.

The 55-year-old auditor had been charged with willful misconduct in office for failing to properly scrutinize the operations of former Treasurer Robert L. Citron, whose $1.64 billion in securities trading losses caused the fiscal calamity.

Lewis issued a prophetic warning about Citron’s reckless investment practices more than a year before the bankruptcy, but was severely criticized for not calling attention to problems his office uncovered during an audit and for doing virtually nothing to follow up on the warnings.

The state’s decision not to take Lewis to trial marked yet another setback for the Orange County district attorney’s office. Similar civil accusations against William G. Steiner, the current chairman of the Board of Supervisors, and former Supervisor Roger R. Stanton were thrown out last year by an appeals court.

Citron, who was charged with multiple felonies, pleaded guilty to falsifying records and violating state securities laws. In October, he finished serving what turned out to be an eight-month sentence in a work-release program that allowed him to spend nights at home.

His assistant, Matthew R. Raabe, was convicted on six felony counts and sentenced in October to three years in prison for his role in helping divert interest income from other investors into the county’s general fund. He is free on bail pending an appeal.

Former budget Director Ronald S. Rubino was charged with falsifying public records. A jury deadlocked 9-3 in favor of acquittal. He then pleaded “no contest” to a single felony charge under a deal that reduced the charge to a misdemeanor and will allow the judge to wipe his record clean after one year.

Orange County Dist. Atty. Michael R. Capizzi said Friday he was “very pleased” with the outcome of the whole bankruptcy investigation.

Friends of Lewis said the threat of prosecution has been a major hardship on him while his wife is seriously ill. Still, Lewis said Friday that he held no ill-feeling toward Capizzi.

“I don’t know what his motives were,” Lewis said. “But I think he was wrong in his accusations. I think he believed this whole thing was a conspiracy from the start.”

Lewis said he is unsure whether he will run for reelection next year, but doubted that the decision to drop charges against him would totally rehabilitate his image with the public.

“I can’t expect them to fully understand all this,” he said.

A hearing on the motion in the Lewis case is scheduled for 11:30 a.m. Wednesday before Los Angeles Superior Court Judge John W. Ouderkirk.