MOORLACH UPDATE — Toll — December 2, 2011

I’ve just returned from the annual California State Association of Counties (CSAC) conference.  This is my third time attending this conference as a representative of the County of Orange on their 58-member (plus officers) board.  It was a productive and packed conference.  Fortunately, it was a quiet week, news wise, for me to be away from the office. 

The first article below is from today’s OC WEEKLY taking another editorial swipe at Donald Bren.  One of the legacy items that I will reflect upon years from now is the donation by Donald Bren of 20,000 acres of open space in the Santa Ana Mountains to the County of Orange and its OC Parks Department, but I digress.  I was not around when the toll roads were formed.  But, I was around in 2004 when I interrupted an attempted a merger refinancing that would have faced the same outcome Jefferson County experienced.  Pulling me in at the conclusion, over my latest disagreement with the Transportation Corridor Agency for the San Joaquin Toll Road, is an interesting coincidence.  However, I’m not sure the topic is an item warranted for the Grand Jury’s attention.

The second article was released yesterday and is of more substance.  As a Supervisor, I try to hire the best policy advisors that I can with the limited budget at my disposal.  I also have to be cognizant of the fact that I am in a term-limited position, thus allowing a maximum of eight years to this administrative role.  Consequently, my staff has the right to consider more permanent employment opportunities that further their careers when they arise, and I want them to do so.  This is occurring with my Chief of Staff, Rick Francis.  The Voice of OC has broken the news, although a more official announcement may be coming from the city of Costa Mesa on Monday.

The matter of term limits brings me back to the CSAC topic.  Serving only two consecutive terms makes it very difficult for the third most populous county to have any meaningful participation in its statewide organization.  Last year, I was elected to the CSAC Executive Committee and was re-elected this past week.  The last time Orange County was fully represented on the CSAC Executive Committee was ten years ago (2001).  The last time the County of Orange had a Supervisor as CSAC’s President was 1951-52, when Supervisor Willard Smith served in this capacity.  That’s 60 years ago!  With 58 counties, the OC is due for another shot at this role.  CSAC has been in existence since 1895 and the only other OC Supervisor to serve as its President was T. B. Talbert (1922-23).  There is a matrix that is used for officer selection.  The rotation starts with urban, suburban and rural counties.  One serves as President, one as First Vice President, and the third as Second Vice President.  The next rotation is north and south.  If the current President is from an urban county in Southern California, then the next Second Vice President should be from an urban county in Northern California.  Consequently, to get into the officers’ seats, you need to be involved for a number of years to build the relationships required to garner the votes, then you have to serve three years, followed by a fourth year as the Past President.  All that said, just to point out that our county is disadvantaged in playing a leadership role in CSAC due to term limits.

On another note, I have never considered those who serve the County as public safety officers as green vipers.  Their union leaders, maybe.  However, I and my office have always conducted ourselves in the most professional manner possible with the representatives of their labor union, regardless of the differences we may share.

BONUS:  The city of Costa Mesa just released this media advisory.  As much as it pains me to read it, I have been working on a succession plan and hope to have an announcement of my own soon.   In the meantime, I want to wish Rick and his family all of the best and am grateful for the time we were able to labor together here at the County.

Costa Mesa hires Rick Francis as assistant chief executive officer

COSTA MESA, CALIF.—The City of Costa Mesa has hired Rick Francis—the chief of staff for Orange County Supervisor John Moorlach—as its assistant chief executive officer.

Francis, a Costa Mesa resident, has spent 22 years in government, the majority of the time working in the County of Orange and U.S. District Court probation departments as a counselor, officer and division director.

In December 2006, Francis was hired as Supervisor Moorlach’s deputy chief of staff, and in 2009, he was promoted to chief of staff. In that nonpartisan role, Francis was the lead policy advisor for the supervisor’s office, working with county, city and special district officials and Orange County residents on a variety of issues.

“As both a veteran of government and a Costa Mesa homeowner, I view as essential the difficult steps the City’s taking to create a sustainable fiscal model for the long-term benefit of everyone,” Francis said. “I’m excited to bring my expertise and passion to the effort.”

In addition to his government work, Francis, 49, was administrative pastor at Newport Mesa Church in Costa Mesa for four years beginning in 2003.

“Costa Mesa is fortunate to get Rick, whose government expertise, effective management style, record of integrity and Costa Mesa residency make him the perfect fit for our City,” said Tom Hatch, the City’s chief executive officer.

Francis will begin working for the City as soon as the standard background check is completed. His annual salary will be $144,048. He and Dina, his wife of 23 years, have three children in college.


Hatch also commended Public Services Director Peter Naghavi for his outstanding work while serving as interim assistant chief executive officer since September.

“Peter stepped up when we really needed him and did an exceptional job,” Hatch said. “We’re not surprised because Peter is such a dedicated professional, but we are thankful.”

 

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DOUBLE BONUS:  I’m including a recent photo of Rick Francis acting on my behalf at a recent event recognizing members of the Orange County Sheriff’s Department.

Donald Bren’s Highway Robbery

[Moxley Confidential] The developer’s role in creating the San Joaquin Hills Toll Road is the county’s most embarrassing un-prosecuted crime.

By R. SCOTT MOXLEY

You might guess that a person worth $12 billion or $15 billion and approaching his 80th birthday would have already bought everything he wanted: mansions, jets, cars, child-bearing women. But Donald Bren, Southern California’s richest man and a person who is accustomed to getting his way even when he’s wrong, so far hasn’t been able to purchase his place in history. There is evidence this failure is annoying the real-estate-development baron.

In the past year, Bren summoned the Los Angeles Times to write a ridiculously superficial hagiography. Being the billionaire’s historically most subservient newspaper, the Times dutifully complied with a Sunday spread more suited to the comics section, as I’ve previously opined (see "The Real Bren Legacy," Feb. 25).

And there is this: Who could doubt Bren’s self-declared generous philanthropy—the man has made a movie touting his own generosity—after he was kind enough to supply the world with the exact words that should be used to describe his life?

Google "Donald Bren," and you’ll see his PR handiwork appear on your computer screen. Most businessmen want to sell a product. Bren’s advertisements sell him as a powerfully rich genius.

"Donald Bren," the Google ad states in bold, underlined lettering. His name is followed by this list: "Chairman of the Irvine Co. Innovator. Entrepreneur. Investor."

The list is missing one important description, but it’s not "Environmentalist." For two decades, the billionaire’s PR department has tried to apply that label, too. Never mind that Bren has poured more concrete over Orange County than any person dead or alive.

Yet, at least in the Google realm, Bren uncharacteristically pared down his greatness.

Thomas Jefferson wasn’t greedy, super-rich, cocky or the head of a corporation as Bren is. On Jefferson’s tombstone are just three accomplishments: author of the Declaration of Independence, creator of this nation’s first statute for religious freedom, and father of the University of Virginia.

Jefferson must have felt his other deeds didn’t need forced, cheap publicity. He didn’t mention he was elected governor of Virginia, launched the world’s best library, served as the nation’s first secretary of state and twice won the presidency of the United States. Hell, he also skipped over a fact sure to excite Bren’s real-estate-developer sensibilities: He doubled the size of the U.S.

There is one similarity between Bren and Jefferson. Both men used forms of slavery to build their fortunes while simultaneously espousing noble concepts. The nation’s third president talked about liberty for all mankind but owned slaves who were forced to work on his plantation.

A few centuries later, the slaves Bren chooses aren’t based on race, but rather occupation. He owns countless California politicians of both major political parties (and more than a handful of journalists). These slaves don’t live on Bren’s estate, but they are readily available whenever the baron wants the public entities to bow to his commands.

Do you recall when onetime California Attorney General Dan Lungren, long a Bren pawn, used his power to sanctify Bren’s desire to bulldoze a key portion of a public road, Newport Coast Drive, so that the Transportation Corridor Agencies (TCA) could build (without public compensation) a private thoroughfare, the San Joaquin Hills Toll Road?

Besides Bren, how many people do you know who can steal a road in broad daylight and have not just two of the state’s biggest daily newspapers, but also every single politician in the region remain mum?

The altered road keeps out the riffraff with expensive tolls and feeds directly into Bren’s crown jewel: the gated, guarded Newport Coast housing development, which at one point had a median home price of $2.7 million.

Indeed, the entire San Joaquin Hills Toll Road was one of the greatest public subsidies to a private individual in the history of California. The tale of Jack Nicholson‘s classic Chinatown has nothing on this buried crime story.

Surely, you’re not going to tell me it was coincidence the toll road was built next to Bren’s properties, a move with an impact that can only be summed up by a deafening cha-ching sound.

The billionaire got the politicians to sell the public on the notion the San Joaquin Hills Toll Road was being built for them—ostensibly to reduce traffic congestion on nearby OC freeways. In fact, the congestion is worse than ever, even though the road is now 16 years old. The road was also sold as the "world’s model" for future transportation projects, though it was actually a financial sham involving Wall Street complicity from the outset. You wouldn’t know it from all the glossy press releases from the TCA, but the road is a disaster.

Consider this indisputable fact: Revenue projections for the privatized road, deemed unassailable by local politicians when they were issued, are off by a whopping $347 million and getting worse by the day. Every year, the actual revenue gap increases, forcing continual bankruptcy worries from the inability to pay off its $2 billion debt.

Meanwhile, somebody made out like the cat that swallowed the canary. The road didn’t just dramatically increase the value of Bren’s adjacent land, but it also gave him the ability to launch new housing and commercial developments. New developments brought new traffic—also stuffing Bren’s bank account.

In 1995, before the road opened, Forbes estimated Bren’s net worth at $2 billion, which made him the 44th-richest American.

Today, with the toll road feeding his Newport Coast developments and his other relatively new businesses along the 73 corridor, his minimum personal net worth is now $12 billion. That’s a massive $10 billion increase. Only 25 people in the nation have more money.

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Brian Brown

Bren certainly builds eye-pleasing properties. But he isn’t a business genius such as Steve Jobs or Jeff Bezos. His awesome skill is manipulating the government to quietly serve his whims, a dark talent that doesn’t jibe with his conservative Republican stances.

In recent weeks, a spat emerged involving toll-road funding, John Wayne Airport, the TCA and Supervisor John Moorlach. Bureaucrats at the San Joaquin Hills Toll Road slapped huge, onerous developer fees on certain airport businesses. According to a news report, one business received a $100,000 bill. Moorlach suggested the TCA eat the fees because they are unfair.

Thomas Morgro, a TCA official, didn’t appreciate that. Morgro suggested county taxpayers might want to pay the controversial developer fees for the private road.

I have a suggestion. Why doesn’t Bren pay the money—estimated to be less than $2 million? He can easily afford it. He wanted the road more than anyone on the planet. He got it, and he profited mightily from it.

But if our richest billionaire continues to leave for the restroom when the bill arrives, he’ll need to amend his four-point legacy to include a fifth description: ungrateful cheapskate.

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Supervisor’s Chief of Staff to Take Job as Aide to Costa Mesa’s CEO

Rick Francis, chief of staff to county Supervisor John Moorlach, is leaving the fifth floor at the county Hall of Administration to be assistant to CEO Tom Hatch in Costa Mesa.

While neither side has made a formal announcement of the transition, both Moorlach and Francis confirmed the pending departure Wednesday. Moorlach said Francis’ move is typical of the last two years of a county supervisor’s second and final term.

"Everyone will be looking for jobs before I complete my term in 2014, unless term limits change," Moorlach said, possibly hinting at a ballot challenge to the current two-term limit for county supervisors.

Moorlach said it was frustrating to see the 49-year-old Francis — who was at one point Moorlach‘s pastor — leave after having spent the last five years working together.

"Costa Mesa isn’t the only entity that has tried to recruit Rick away. He’s an outstanding, well-qualified, competent manager, and he has exemplified good management and leadership skills," Moorlach said.

Moorlach noted that a year and a half ago, Francis applied to be the county’s probation chief and came in a close second.

When Moorlach‘s original chief of staff — the mercurial law professor Mario Mainero — abruptly left the position in 2009, Francis took over the helm. While Francis was much more low-key than Mainero, he was generally seen as a stabilizing influence within the 2nd District office.

"I love to get things done but out of the limelight. I don’t seek a lot of attention. I prefer to work behind the scenes," he said.

Francis said he’s most proud of the work he did to smooth relations between Moorlach and the Sheriff’s Department.

Moorlach came into office in 2006 after a brutal campaign over pensions in which the Association of Orange County Deputy Sheriffs spent large sums to defeat him.

After the jail murder of John Derek Chamberlain in late 2006, relations between Moorlach and the department increasingly soured. Moorlach — who subsequently pushed for the establishment of the Office of Independent Review at the Sheriff’s Department — was also among the first to call on former Sheriff Mike Carona to step down after his federal indictment in 2007.

Francis said he’s proud that he was able to help both sides bridge their differences.

He helped Moorlach "to see that the guys wearing green weren’t this evil group of vipers. I was effective in helping him see a different side of that organization. Today we probably have the best relationship with the Sheriff’s Department," Francis said.

Indeed, Moorlach went on to become one of Sheriff Sandra Hutchens’ staunchest supporters, especially helping her during her spat with the National Rifle Association over her tightening of Orange County’s concealed weapons policy just after her appointment in 2008. Hutchens won election in 2010.

Francis said that as Costa Mesa’s assistant CEO, he hopes to help bridge the differences that divide the city’s workers and City Council majority, which have made national headlines. "Some people, when there’s a fire they run away. Some people, we run toward it to see if we can help," Francis said.

He sees himself bringing a "sense of balance and fairness" to the transformation at Costa Mesa City Hall.

"The current council has clear objectives … and there are ways to approach it in a way that is thoughtful and considerate of the people that are impacted but also having a firm grasp of the fiscal situation the city is in," he said.

Francis said he specifically sees himself helping with the strategic planning needed to implement the City Council majority’s vision of outsourcing in the city.

While council members are eager to move quickly, Francis sees his role as helping to implement a "thoughtful process" for the transformation that "is not overly taxing on staff."

Moorlach said he is finalizing appointment of a replacement chief of staff. Francis moves on Jan. 1.

Francis said the entire process is a new one after so many years at the county.

"It’s excitement and sheer terror at the same time," he said. "The county has been my family for a number of years. Leaving that security isn’t an easy thing to do."

But, Francis added, "I’m excited and eager to take on a new challenge."

Please contact Norberto Santana Jr. directly at nsantana@voiceofoc.org and follow him on Twitter: twitter.com/vocnorberto.

FIVE-YEAR LOOK BACKS

November 30

2001

In the past couple of weeks I’ve been quoted on the Jefferson County, Alabama, Chapter 9 bankruptcy protection filing and the potential to sue those who brought them to the dance.  This is not an old theme, as you can see from this LA Times article, titled “Auditor, Execs Target of Enron Creditors – Energy:  As liabilities are expected to exceed assets, advisors could be sources of compensation,” by Jerry Hirsch and Thomas S. Mulligan.  Here are the opening paragraphs:

Professional services firms–everyone from accountants Arthur Andersen to law firms and financial consultants–are quickly coming into the sights of creditors and shareholders looking to staunch losses from the failure of Enron Corp., once the nation’s largest energy trading company.

Because Enron’s liabilities are expected to exceed its assets by billions of dollars, advisors, executives and wealthy directors of the company will be the likely sources of compensation, according to bankruptcy experts.

Two executives, Chairman Kenneth L. Lay, and former Chief Executive Jeffrey K. Skilling, will be high on the list of targets, experts say.

Lay has netted at least $150 million from exercising Enron stock options over the last two years, according to Securities and Exchange Commission documents. Skilling collected more than $62 million last year in options gains.

More than 200 government agencies used a similar strategy of filing lawsuits against advisors and auditors to win $860 million in settlements after the 1994 bankruptcy of Orange County. More than $400 million came from Merrill Lynch. The KPMG Peat Marwick accounting firm paid $61.4 million. Law firms and other Wall Street investment banks contributed the remainder.

"This gives me a sense of deja vu ," said John Moorlach, Orange County’s treasurer and one of the architects of the county’s recovery strategy.

December 1

1986

The second installment of my discussion on “Doctrinal Dispute – Forms W-2 or Form 1099” for common-law employees appeared in the Christian Management Report (see MOORLACH UPDATE — VLF Theft — October 1, 2011).

1996

The OC METRO published a small magazine titled “METRO MENUS – HOLIDAYS ’96.”  It included a section titled “New Year’s Cheer – Movers and shakers plan special nights out on the town,” which included Larry Thomas, Claudia Roxburgh, Donna Bunce, and myself.

                “Usually we go out of town locally – places like Arrowhead, Catalina, Solvang and Death Valley.  In my old life, New Year’s was like an island of time in my calendar.  It’s after tax planning season and before tax preparation time.

“I don’t have a favorite New Year’s Eve.  They have all been fun and unique ones.  A trip to Death Valley was a more memorable one.  One day, our family and another couple took a long drive to photograph historical landmarks in the area.  We were on a dirt road.   It was almost dark and nobody was out there.  We didn’t know until later that we were almost out of gas.  We inched our way back in the nick of time.  But, we go the photograph!

                “We don’t have any fixed plans for this New Year’s Eve.  We will probably go out of town.  If there’s a lot of snow, maybe we can go to the mountains and go skiing.”

2006

The inaugural edition of the glossy magazine “RED COUNTY,” which featured Mitt Romney on the cover, included two articles that mentioned me.  I was mentioned in a piece by Matthew Cunningham, titled “The Lincoln Club of Orange County – The Once and Future King Maker,” and “Connect the Dots . . . The Growing Need for Pension Reform” by Jerry Slusiewicz.

                Newly elected OC Supervisor John Moorlach ran his successful campaign, winning with a 70% mandate, on pension reform.  Moorlach says, “The last I heard we were a conservative county.”

Disclaimer:  You have been added to my MOORLACH UPDATE communication e-mail tree.  In lieu of a weekly newsletter, you will receive occasional media updates, some with commentary to explain the situation, whenever I appear in the media (unless it is a duplication of a previous story). 

I have two thoughts for you to consider:  (1) my office does not usually issue press releases to get into the newspapers (only in rare cases); and (2) I do not write the articles, opinions or letters to the editor. 

This message should appear at the bottom of every e-mail you receive.  If these e-mails should stop arriving in your mail box, it will be because your address has changed and you did not provide a new one.  If you do not wish to receive these e-mails, then please e-mail back and request to unsubscribe.

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