MOORLACH UPDATE — JWA CUPPS — September 1, 2010

The Board agenda item that required the most deliberation yesterday morning was the approval of the CUPPS (Common Use Passenger Processing System) vendor at John Wayne Airport (JWA).  The selection was between three competing bidders.  The bidder with the best score failed to meet one significant component of the Request for Proposal before submitting its bid.  Therefore, staff recommended the second highest bidder.  The third place bidder came to the meeting to add to the excitement.  Snyder Langston, the winning bidder, is located within throwing distance of JWA and is committed to providing the best quality service for the County.  Here are some brief bullet points that were provided to the media on the matter:

  • The Board awarded of a design-build contract to Snyder Langston for $23,728,786, to install CUPPS in Terminals A, B, and C.
  • The CUPPS project provides for design and construction of a turnkey system that utilizes the industry’s latest technology and is a key component of JWA’s Airport Improvement Program.
  • The CUPPS project will replace the existing passenger processing systems currently used by airlines and will result in better utilization of Airport gates, ticket counters and baggage claim.
  • CUPPS eliminates duplicative equipment at gates and provides a sleeker, more modern and streamlined appearance. Once installed, CUPPS will centralize JWA airline operations and provide backup capability in the event of a system failure. The project also calls for new millwork (cabinetry) to be installed at Terminal A and B ticket counters and gates. Terminal C millwork will be completed as part of McCarthy Building Companies contract for construction of Terminal C.
  • CUPPS is being funded through airport revenues and a portion of a $4.50 Passenger Facility Charge.
  • All construction on the CUPPS project will be completed alongside existing operating equipment in order to maintain regular airline operations, and minimize impacts to passengers.
  • Terminal A and B gates are slated to be the first portion of the project to get underway.
  • The CUPPS project includes replacement of the flight information display boards that show arrivals and departures, as well as the baggage information displays at the baggage carousels.

The Daily Pilot covered all of this material in the brief article below.  I’m also sending this Update to my JWA e-mail tree.

The second article is the OC Register’s update on Todd Spitzer’s journey to become the next District Attorney.


JWA upgrades computer systems, ticket counters

By Mike Reicher,

John Wayne Airport will modernize its computer systems and ticketing counters in a $24-million project approved Tuesday by the County Board of Supervisors

It’s part of the larger airport improvements underway that include the construction of a 280,000-square-foot terminal, the third at the airport.

This technology upgrade will allow airlines to access flight and passenger information at any of the gates and any of the ticket counters; currently they’re limited to specific computers.

"It gives us a lot more flexibility in moving the airlines around," airport spokeswoman Jenny Wedge said.

For their part, passengers will get new flight monitors and new self-service kiosks that work for any airline. Currently passengers have to check in at their specific airline’s location.

The renovation’s competitive-bidding process ended in controversy when the least expensive bidder was disqualified for lacking a required license. Instead, the next qualified construction company, Snyder Langston, was awarded the contract for $23.7 million, which was about $750,000 more than the original winner.

"Maybe we’re getting a little more quality for the bid," said Orange County Supervisor John Moorlach, who represents the airport area.


Former Asst. D.A. Spitzer: Firing had political motive


Ousted Assistant District Attorney Todd Spitzer claims Susan Kang Schroeder, the district attorney’s chief of staff, colluded with her boss Tony Rackauckas to get him fired in the hopes of derailing Spitzer’s plans to be the next Orange County District Attorney – and to move Schroeder herself a step closer to getting the job.

Schroeder, reached by telephone while on vacation in Hawaii, said nothing could be further from the truth. However, she said a confidentiality agreement prohibits her from discussing the details of Spitzer’s 18 months at the District Attorney’s Office and his firing.

“I think when someone gets fired, it’s common for them to blame everyone on the planet and come up with these wild conspiracy theories,” Schroeder said. “Todd is ranting and raving and trying to blame everyone else for where he is at right now.”

She urged Spitzer to waive his confidentiality agreement.


Once that’s waived, Schroeder said, “we’ll be happy to discuss it in full detail."

Spitzer said he was unaware of a confidentiality agreement, but "he is happy to allow anybody to look at my personnel file to prove there is absolutely nothing to these allegations. There is nothing to these made up allegations that have been fabricated after the fact."

Spitzer, who was an at-will employee, says he was fired Friday afternoon by former mentor Rackauckas, who accused him of “inappropriate contact” with the county’s Public Administrator/Guardian’s Office. Spitzer says his inquiry to that office was a legitimate part of his effort to track down details in a case.

The reason for his firing, he believes, was not about his call to the Public Administrator/Guardian’s Office, but rather about politics.

Schroeder – who is married to Rackauckas adviser and behind-the-scenes political player Mike Schroeder – wants to become the next district attorney, Spitzer claims, and this was an excuse to get Spitzer out of the way without having to explain why.

“Susan Schroeder will use anybody and anything to advance her own self-interest,” Spitzer said. “It’s just sickening.”

Since Saturday, the former county supervisor and former state Assemblyman has been on a non-stop publicity campaign to give his side of his ouster.

Being fired “has been like a shot of adrenaline,” Spitzer told us, vowing run for the District Attorney’s Office as planned in 2014. Only now it appears he will be running without the backing of Rackauckas.

Susan Schroeder again told us that she is not running for District Attorney in 2014, adding that “Tony will be the DA as long as he wants.”

Rackauckas previously told us that he expected to step down in 2014. He described in carefully crafted language something of a provisional endorsement of Spitzer.

Spitzer’s recent actions have only reinforced qualms many people had about bringing Spitzer into the District Attorney’s Office, Schroeder said.

“The misgivings about Todd have been that he would misuse his role as a prosecutor and recklessly disregard facts for political reasons,” Schroeder said. “His rantings and recitations of the facts are false.”

The night before Spitzer was fired, he handed Rackauckas a beer at a $500-a-plate fundraiser for Sheriff Sandra Hutchens as they chatted about bass fishing.

They sat next to each other at the head table, Spitzer said, dining on Italian food and smiling and shaking hands with Hutchens’ supporters. From all accounts of the Villa Park bash, including Spitzer’s, everything was business as usual for the veteran district attorney and Spitzer. Many, including Spitzer himself, believed he was the heir apparent to the District Attorney’s Office.

The next day, Spitzer would be escorted out of the county offices at 401 Civic Center Drive, after he was fired by Rackauckas.

There was no investigation by the District Attorney’s Office into Spitzer’s contact with the Public Administrator/Public Guardian’s Office, Spitzer said. He was never interviewed about the contact by anyone in the District Attorney’s Office. His emails or his voicemails pertaining to the public administrator case were never reviewed by anyone in the office to see if the claims of inappropriate contact could be verified, he said.

Unbeknown to Spitzer, the same public administrator case Spitzer had been looking into had been brought to the attention of Supervisor John Moorlach’s office more than a week earlier. And that Assistant Public Administrator Peggi Buff had been corresponding with Moorlach’s office.

Buff also happens to be Rackauckas’ fiancé.

Rick Francis, Moorlach’s chief of staff, confirmed that he sent an e-mail to Public Administrator/Guardian John S. Williams on Aug. 16 asking about the status of the case.

Francis also confirmed that he received an email the following day, on Aug. 17, from Buff informing him that there was an investigation and that investigation was confidential.

At that point, Moorlach’s office stopped looking into the case, Francis said.

About a week later Spitzer began asking questions about the case after being told of a domestic-violence victim may have been targeted inappropriately for prosecution by the county’s bad check program. Once he was told there was an investigation underway, he said he called the citizen back and informed her of the ongoing investigation.

On Saturday, the citizen – Teddi Alves – said Spitzer called her to tell her he had been fired.

"He said ‘you must have been on to something,’" Alves said. "They fired me."

When asked if she wrote or participated in a press release issued Saturday morning by the Public Administrator/Guardian regarding Spitzer’s contact with the office, Schroeder said the confidentiality agreement bars her from discussing it.

"What does that have to do with my confidentiality?," Spitzer said. "Either she wrote it or she didn’t."

Spitzer told Total Buzz he is not surprised about being fired. The longtime politician, who began working in the District Attorney’s office 18 months ago, acknowledged that he knew he was going in with his eyes wide open.


September 1


Kedric Francis of the OC METRO wrote “A Rainy Day in Irvine – An examination of one city’s losing bet that pushed it onto the bankruptcy’s center stage.”  It was a lengthy examination into the background, history, and consequences of some poor financial decisions made by the Irvine City Council seated at that time.  Here are a few selected paragraphs to give you a feel of this work (which should also be a good history recollection for those new to the Update).  I do want to make one declaration:  I did have “hard evidence.”  What I didn’t have was how much further interest rates would rise and how quickly they would rise.

How could Irvine, a bastion of enlightened conservatism and planning, fiscal and otherwise, have borrowed $62 million last summer to invest in the Orange County Investment Pool?  How could Irvine’s stake in the OCIP have risen from 2 percent of its investment portfolio in 1990 to two-thirds of the portfolio, or $208 million, at the time of the bankruptcy?  No Orange County city invested more.

Irvine officials, including City Manager Paul Brady, claim they were misled by Citron and Wall Street brokers; leaders of a recall effort insist that the three council members who voted for the 1994 loan and investment were too reliant on Brady and then-City Treasurer Jeff Niven, while ignoring warnings that the OCIP was in trouble.  The recall effort is in part designed to get Brady removed.

                Whatever the reason for the debacle and regardless of who ultimately takes the blame, the image of Irvine as a city immune from the problems of other Orange County communities is likely lost forever.

                The idea seems simple enough.  Borrow money at a low interest rate and invest it in a pool that has historically earned high interest rates.  At the end of a year, pay off the loan and pocket the profit.

                And that’s just what Irvine did in 1993, when the city borrowed $60 million, invested it in Citron’s pool and walked away with a cool $2.2 million.

                But in 1994, the OCIP, which was dependent upon low interest rates for its profitability, was in trouble.  In February, the Federal Reserve began the first of several interest rate increases.

John Moorlach, who was running against Citron for the Orange County treasurer post, warned prior to the June election that the OCIP was in danger of collapse.  But, despite these warnings, the city borrowed $62 million and threw it in the pool with previous investments by the city, raising the city’s total ante to $208 million.

On Nov. 29, Niven and other city treasurers were told by Citron that the pool assets were being frozen.  On Dec. 6, the county declared bankruptcy, the largest in U.S. municipal history.

The Irvine Recall Committee hopes to gather enough signatures by the Oct. 3 deadline to qualify the issue for the March ballot.  Gary Kingsbury, the IRC’s leader, claims to have gathered more than 7,000 of the 8,445 signatures needed per candidate – they are Mayor Michael Ward and council members Barry Hammond and Paula Werner.

Councilwoman Christina Shea is not a recall target for one reason:  She voted against the 1994 plan, a reversal of her 1993 vote, when she supported the investment scheme.

“A lawyer I talked to in San Francisco gave me advice that burned into my memory:  If interest rates are going up, then be very cautious with the investment.  Well, in 1994 rates were going up, so to me the investment didn’t make sense.”

What fuels the ammunition of those who seek new faces in city government is the sense that the buck has been passed.  Money was lost, yet no one’s taken the blame.

·         The “everybody else was doing it” defense:

Brady:  “If it was only Irvine or Anaheim or just a handful of us that got caught up in this, that would be one thing.  But you have over 200 investors in the OCIP.”

·         The “we didn’t know what we were doing” defense:

Brady:  “What Mr. Citron was doing was so sophisticated that the financial experts couldn’t even figure it out.”

Ward:  “I don’t think anyone understood the investments.”

·         The “he made us do it” defense:

Brady:  “We relied on what the experts told us and we were lied to.”

Ward:  “Citron pleaded guilty to six counts and one of those was lying to investors.  We didn’t know he was lying.”

·         The “nobody told us not to” defense:

Ward:  “We had no public testimony saying don’t do this.  Nobody, including the people now who are out there calling for a recall, argued against the loan at the 1994 meetings.”

Brady:  “Even with Mr. Moorlach when he was doing his campaign, he didn’t have any concrete evidence to bring forward to any of us when the questions were asked, ‘Well, show us what you have.’  There was no hard evidence that the pool was in trouble.”


The OC Register’s lead editorial was titled “Good marks go to Measure G.”  The OC Register’s editorial board “got it.”  Here are selected paragraphs:

But despite Measure H’s mom-and-apple-pie appeal, we’re concerned about its fiscal prudence.  And we’re disturbed to watch the medical community – despite its legitimate concerns over certain funding needs – embrace a take-no-prisoners political campaign that could have the side effect of reducing a great profession to just another interest group.

We have long viewed the tobacco settlement as ill-gotten gains – the use of state power to shake down a legal industry in order to boost government coffers.  But given that the money had no strings attached, we saw the county plan [to pay off the bankruptcy debt and meet its mandate to provide additional jail space] as a prudent one.

Measure G was drafted by Treasurer John Moorlach, who has been an honest broker throughout the ordeal.  He spoke out against the county when it was planning to float bonds based on the incoming settlement funds.  But he was also frustrated by the medical community’s insistence on grabbing almost the whole settlement pie.

He came up with Measure G, which would use 60 percent of the money for health care and public safety, but put 40 percent toward debt reduction.  Unlike Measure H, it includes an oversight committee and allows some flexibility on how the funds will be spent should priorities change.

We don’t buy the medical community’s underlying argument that more government health-care spending is the ultimate fix for the medical community’s troubles.  But even if that were, Measure G is the obvious choice between the competing measures.

That’s because Measure G would deal with health care, and it would also significantly reduce the amount of money the county must spend servicing its bankruptcy debt, thereby freeing up the general fund for other county needs.  The medical community has legitimate needs – but so do other Orange County constituencies.  And, Measure H opponents point out, other new state dollars are being earmarked for health care.

“How do you want to spell ‘greedier’?” Mr. Moorlach asked.  “Sometimes I feel like I’m talking to small kids.  You need to share.”

Mr. Moorlach also shakes his head at some of the knee-jerk support Measure H is getting from opponents of the El Toro airport, who see it as a way to stick it to the pro-airport board majority.  “It’s a vendetta thing,” he said.  “We’ve got to get beyond this anti-airport cancer.”

The medical community needs to leave a little room for others as it elbows its way to the trough.

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