All O.C. Judges Off Misconduct Cases Tied to Bankruptcy

SANTA ANA —  All of Orange County’s judges were disqualified Wednesday from hearing bankruptcy-related misconduct cases against two supervisors and the county’s auditor-controller because of the appearance of conflicts of interest.

Superior Court Presiding Judge Theodore E. Millard said local judges who have a brewing legal battle with the county over court funding might not seem impartial in handling cases against county officials who control their purse strings.

Millard asked that California Chief Justice Malcolm Lucas appoint an outside judge to hear civil misconduct accusations against Board of Supervisors Chairman Roger R. Stanton, Supervisor William G. Steiner and County Auditor-Controller Steve E. Lewis.

The judge’s decision came as a surprise after the Orange County district attorney’s office attempted to remove Superior Court Judge David O. Carter from the cases--not the entire bench.

“The district attorney shot himself in the foot,” said defense attorney Allan H. Stokke, who represents Steiner and had argued in court that prosecutors also should be disqualified. “I think the statement the judge made applies as well to the D.A. as it does with the court. The board has already cut the D.A.’s budget the same way they cut the court’s budget.”

Attorneys for all three elected officials are seeking to remove Dist. Atty. Michael R. Capizzi, contending that Capizzi and his staff are victims of the largest municipal bankruptcy in U.S. history and have conflicts in handling the cases.

Prosecutors were caught off guard by the judge’s decision, but vowed to continue their case against Stanton, Steiner and Lewis. Assistant Dist. Atty. Wallace J. Wade said, “I’m not going to second-guess Judge Millard.”

The Orange County Grand Jury filed civil misconduct charges against the three elected officials, alleging they failed to oversee the high-risk investments of then-Treasurer-Tax Collector Robert L. Citron. If the accusations are found to be true by a jury, Stanton, Steiner and Lewis could be removed from office.

In his ruling Wednesday, Millard said he could not ignore the fact that Orange County judges filed a legal notice with the Board of Supervisors two weeks ago, warning that courthouses across the county could be shuttered after April 15 because of an impending budget crisis. The judges have indicated they might resort to a seldom-used law to force county officials to pay an extra $31 million needed to maintain court services.

Millard said Stanton and Steiner are involved in making decisions on court funding, and that Lewis and his “subordinates are involved in daily decision-making which directly affects the court’s budget and the payment of the court’s payroll.”

“These issues of continuing decision-making regarding the court’s operations create the appearance of a conflict that justifies this court in recusing all of the sitting judges,” Millard ruled.

The judge said he had instructed court administrators to ask Justice Lucas, chairman of the state’s Judicial Council, to appoint an outside judge who might travel to Orange County to hear the cases.

Millard’s decision capped a day of legal intrigue.

Earlier, the district attorney’s office took the unusual step of filing a motion seeking to remove Judge Carter from the case against the three elected officials.

Prosecutor Wade contended in court papers that the district attorney “cannot have a fair and impartial hearing before such a judge.” In filing the motion, prosecutors did not have to give a specific reason for their request.

It has become clear that prosecutors have been dissatisfied with Carter’s handling of the bankruptcy-related cases, which include criminal charges against the county’s former treasurer, assistant treasurer and budget director. Carter recently removed himself from the case against ex-Budget Director Ronald S. Rubino because the judge had performed Rubino’s wedding ceremony.

In court last week, Carter said Capizzi’s assistants had approached two of the county’s top judges seeking to have the case heard in another courtroom. “I take that as a friendly approach at this time,” Carter told prosecutors. “But I suggest that stop immediately.”

On Wednesday, the prosecutors’ motion to recuse Carter was brought to Millard.

After Millard declared that all local judges had possible conflicts of interest in the case, Wade asked to withdraw the motion to remove Carter. That would give prosecutors the option of using their single preemptory challenge against an appointed judge at another time if they oppose the selection.

But Millard denied the request, saying the issue would not have come to his court if prosecutors had not filed the recusal motion.

Stokke emerged from court declaring that prosecutors had blundered. “They are stuck with whoever is appointed now,” he said.

The judge’s ruling did not affect defense motions set for Monday that seek to bar the district attorney from prosecuting the cases.

Defense attorneys said Millard’s decision offered bright prospects for their efforts to remove Capizzi.

Stokke said he believes it will be “very difficult for another out-of-county judge to come in and say the district attorney does not have the same relationship the courts have with the Board of Supervisors.”

“Any judge is going to see [that] a conflict of interest is apparent here,” Stokke said. “The D.A. simply doesn’t belong in this case.”

Attorney Brian Sun, who represents Lewis, said he also believes that judge’s ruling should apply to the district attorney.

“This certainly puts the district attorney even more on the defensive with respect to the recusal motion,” Sun said. “Obviously, the same arguments that are used for the court should be used for the D.A. These [defendants] cut their paychecks.”

Millard’s ruling did not include the criminal cases against Rubino, Citron and former Assistant Treasurer Matthew Raabe.

Rubino was indicted last month on felony counts of aiding and abetting Citron’s fraud and misappropriation of funds.

Citron pleaded guilty to six counts of fraud and misappropriation of public funds and faces 14 years in prison when he is sentenced next month. Raabe, who is charged with the same crimes as Citron, has pleaded not guilty and is awaiting trial in Orange County.

* PROBE REOPENS: Special state Senate panel will look into potential perjury. B1