Tedium Is Citron’s Fate at O.C. Jail

SANTA ANA —  Hunched at a small table, an orange Day-Glo vest marking him as a convict, the pallid man faces a dingy yellow wall in a windowless room where a poster reads, “When all else fails, read the directions.”

Most weekdays, former Orange County Treasurer Robert L. Citron sits at the sheriff’s commissary, paying his debt to society by sorting county jail inmates’ requests for personal items. Fifty-cent bags of popcorn and ramen are the goods most often requested on the 2,000 order forms filled out each day.

The commissary manager says it’s “busywork” for a man once known as an autocratic financial genius who was driven from office in disgrace and finally pleaded guilty to fraud after the county’s $1.64-billion loss and bankruptcy in 1994.

But on other days, Citron’s interests again align with the county and the 200 schools, cities and agencies that lost money. These are the kind of days Judge J. Stephen Czuleger had in mind when he declined to send Citron to jail, saying, “I think we can get more out of him.”

On these days, he drives his beloved Chrysler New Yorker a few minutes from home, through Santa Ana’s wealthiest old neighborhood, to a suite of gray legal offices shaded by eucalyptus trees.

He settles into a black leather swivel chair at a conference table. Soft drinks and black-bound volumes of evidence sit nearby. Citron waits for the videotape to roll. And sometimes stammering, often rambling, he recalls his 21-year rise and fall as county treasurer.

Citron, 72, says he was duped into making rashly imprudent investments by Merrill Lynch & Co. The county has sued Merrill Lynch for $2 billion, saying Citron was a “pigeon” for greedy brokers at the investment house.

Merrill Lynch, which maintains the whole sorry mess is Citron’s fault, has unleashed scores of lawyers from four high-priced firms to defend itself against the county and other adversaries.

The battlefield is a rent-a-suite building a mile north of Citron’s old Civic Center office. There, for 39 days off and on since May, he has given sworn statements to Merrill Lynch lawyers.

Other witnesses are currently in the hot seat, but Citron is due back for four more days of depositions in mid-September, and the deposition cutoff date isn’t until the end of February.

A secrecy agreement keeps Citron and other participants from discussing what’s said, and he declines to discuss the suit or his situation in detail. But his relief is evident at having escaped a jail cell, even for the stresses and tedium of the commissary and the depositions.

“I’m OK, thanks to God and Dave,” he says, referring to his post-bankruptcy conversion to Christianity by Chrysler dealer Michael Shepard and the defense provided by his attorney, David W. Wiechert.

Citron finds both commissary and depositions “very arduous,” Wiechert says. “Each situation has its drawbacks. I think he’ll be glad to have some time to spend with [his wife] Terry when it’s all over.”

The Citrons’ social life is dinner out once or twice a week with friends. Strolling in his neighborhood, he stops to chat about home prices or a raiding coyote he’s afraid could attack his West Highland white terrier. And Citron looks ahead with relief to the end of his tedious commissary duty in October, neighbor Daniel T. Miller says.

Citron frets that the record of the criminal grand jury proceedings against Merrill Lynch remains sealed.

“He did express disappointment that the grand jury transcripts were held up,” Miller says. “I think he feels that they will vindicate him.”

The county, which refused to fund Citron’s criminal defense, is footing his legal bills for the depositions and some other proceedings. County risk managers won’t disclose how much has been paid, citing litigation concerns, and Wiechert says he doesn’t discuss fees.

But Citron’s court files show the time he spends away from the commissary in legal proceedings. And at Wiechert’s going rate of $275 an hour, the bills to the county for that time would be about $90,000 so far.

Besides the 39 days of Merrill Lynch depositions, the files show that Citron spent May 29 and parts of May 27, 28 and 30 at the county courthouse in connection with the grand jury’s investigation of Merrill Lynch’s role in the bankruptcy.

In a no-fault settlement, the brokerage paid $30 million to end that criminal probe and is now fighting a legal battle to keep transcripts of it sealed.

Citron also received work credit for two days spent testifying against his former assistant, Matthew Raabe, plus a day spent with prosecutors getting ready for that testimony.

Citron says the crimes to which he pleaded guilty, chiefly a scheme to divert interest that should have gone to cities and schools, were Raabe’s idea, and Raabe was convicted of fraud.

County officials say the money spent on Citron’s legal bills is well worth it. And the amount pales in contrast to a separate $50-million litigation war chest set up as part of the county bankruptcy-escape plan.

“I don’t think any apology is necessary for preparing the county’s case in the best way possible,” says Supervisor William G. Steiner, who was getting ready recently for his own depositions by the Merrill Lynch attorneys.

Steiner expressed dismay at the amount of time required of him (“We were asked to set aside five days”), a dismay that previous participants say will quickly turn to sheer boredom.

An example, they say, is Michael Stamenson, the Merrill Lynch salesman who provided most of the riskiest securities in Citron’s portfolio and who often appears to be snoozing as he sits in on the Citron sessions, his own lawyer close at hand.

Citron nemesis John M.W. Moorlach, shunned by county voters during a pre-bankruptcy race for treasurer and appointed to replace Citron afterward, said he spent 10 days being questioned.

Moorlach said he finally began fighting the tedium by sliding sideways, out of video camera range, to see if the operator was paying attention and would get up to move the camera.

Moorlach’s interrogators were not only Merrill Lynch but other defendants in county suits and lawyers for the 11 cities and local agencies that declined to join the county’s litigation and retained the right to sue it.

“Sometimes I felt like the witness for the plaintiff and sometimes for the defense,” he said.

Moorlach described mob scenes with a dozen attorneys crowding his room and more jamming nearby suites where separate sessions were underway for Citron and Stan Oftelie, the former head of the Orange County Transportation Authority, which had been the largest investor in the treasury.

As the days wore on, the questions became maddeningly repetitive, but the roomful of lawyers remained.

“They just sit there, waiting with their laptops,” Moorlach said. “Who knows what they’re keying in?”

Things are just as crowded back at the sheriff’s commissary. Sales of toiletries, fast food, tabloid magazines and paperbacks to inmates have quadrupled in the past seven years, commissary manager Larry Bartosiewski says.

A dozen workers scurry about among stacks of instant coffee, pillows and greeting cards in English and Spanish.

And nearby in the dingy little room sits Citron, who once oversaw a $21-billion portfolio of tax funds. He holds a stack of color-coded orders, alphabetizing them by inmate name.

“The work is pretty tedious and not very challenging for him,” says Miller, his neighbor. “He’s looking forward to getting past it.”