O.C. Retirement Board Tightens Travel Policy : Pensions: Agency bans county credit cards, limits trips and bars spouses from going along on the journeys.

SANTA ANA —  Reacting to a barrage of criticism, the county employees’ retirement board Wednesday adopted sweeping changes in its travel policy that include doing away with pension fund credit cards, limiting the number of out-of-town trips, and prohibiting spouses and other guests from accompanying board members on travels abroad.

“It’s all a public relations battle,” board member Robert Thomas said. “We were losing the battle, but now we’re winning it back.”

The retirement board decided to act after it was roundly criticized by county officials for a 26-day European trip taken in April by four board members and the retirement fund administrator, Mary-Jean Hackwood. Also on the trip were an investment consultant, a board member’s spouse and Hackwood’s sister.

The trip cost more than $15,000, but the county auditor-controller rejected $5,000 in personal expenses for such items as opera tickets, dry cleaning, alcoholic beverages and charges for extra days at hotels.

Hackwood and the board members who took the trip--Keith Concannon, Mary Abbott, Gregory Politiski and Thomas Lightvoet--said those items were turned in for payment by mistake and vowed to reimburse the county.

Criticism escalated after it was reported that retirement board members and their staff have spent close to $60,000 in travel so far this fiscal year, jetting from Hawaii to Florida to attend conferences and visit fund managers.

Following the retirement board’s special meeting Wednesday to address the travel issue, Board of Supervisors Chairman Gaddi H. Vasquez and Supervisor Roger R. Stanton praised the board’s action.

“I’m delighted that they are instituting some reforms, on the one hand,” said Stanton, the chief critic of the retirement board’s travels. “I’m just disappointed that they didn’t do it on their own, without the prompting of public outrage.”

Last week, Stanton asked the county administrative officer to study the possibility of forming a new board of investment to take control of the $1.5-billion Orange County Employees Retirement System. Stanton said he still is looking forward to seeing a report examining that possibility.

“But I’m not advocating that it be done,” he said. “My action was merely to request that they look into it.”

Retirement board Chairman Patrick Brunner again defended the board’s trips as necessary to keep tabs on investments. But he said a revision of the travel policy was important “to reassure those who have a vested interest in the system.”

“Recent media comments regarding actions of this board do not reflect the solid character of the nine members,” he said.

Under its new rules, the board pledged to:

* Do away with retirement fund credit cards. The credit cards were being used mostly by Hackwood and the assistant administrator to pay for hotel bills and airline tickets for herself and others on the board.

County Auditor-Controller Steven E. Lewis had complained that the credit cards had created an accounting nightmare because too often pension board members or the staff left it to auditors to separate personal expenses from business expenses. No one else in county government, including the county supervisors, has a county-issued credit card.

Under the new policy, board members and staff are urged to request cash advances for trips, or to use their personal credit cards and file expense reports for reimbursement.

* Limit the number of board members who go on each trip to visit fund managers, referred to as “due diligence trips.” The new rules say only two board members, the administrator and a consultant may go on such trips.

* Prohibit spouses, relatives or guests from accompanying board members on trips abroad.

* Limit the length of due diligence trips to one week.

* Direct the retirement board’s real estate and investment committees to review their policy on the frequency of trips they make to fund managers. Current policy says fund managers can be visited every two years, but board members said those trips can be made less frequently.

The changes were adopted on an 8-1 vote, with Concannon casting the no vote.

Concannon later said he thought that the board needed more time to consider the changes. He said he was particularly disturbed by the new restrictions on taking along a spouse on any trips abroad.

Concannon said he plans to continue traveling with his wife of 43 years. She has accompanied him on several board trips, including the 26-day trip to Europe.

“Look, I’m retired and I’m over 70 years old,” Concannon said. “I don’t know if I’m going to be here tomorrow. If I pay for her (travel expenses), who the hell cares?”

County Treasurer-Tax Collector Robert L. Citron, who serves on the retirement board and chairs the operations committee that came up with the travel policy changes, has long been critical of the board sending too many people on too many trips.

“I believe that the changes in the travel policies, particularly the lifting of the credit cards, will go a long way to eliminating any abuses that may have been there,” he said. “It will certainly give us better control” over travel expenses.

Brunner, the board’s chairman, also brought up the issue of the retirement system’s $200-million reserve, which auditor Lewis has called “embarrassingly large.”

While state law requires county pension funds to keep at least 1% of its fund in a contingency account, Orange County’s retirement system has nearly 14% of its fund in reserve.

County officials, who are grappling with a $65-million shortfall for the 1991-92 fiscal year, want some of the reserve funds to go toward offsetting the county’s contribution to the retirement fund.

Brunner said the retirement board “has been looking long and hard at alternative policy that will benefit all parties in an equitable manner and on a continuing basis.”