Moorlach, Freidenrich, Seiler
Well, Vern here, and I’m working on a lot of things, including our new group Tenants United Anaheim, but we need a new open thread at least, so how’s this?
What’s up with the County taking away Treasurer Shari Freidenrich‘s ability to invest our county’s $17 billion in funds, like suddenly Shari was the second coming of Bob Citron (the treasurer whose creative and ultra-risky investments led to our 1994 bankruptcy?)
I remember Shari first coming to this post from being the elected treasurer for Huntington Beach, where she got nothing but the best reviews from everyone who worked with her there, Republicans and Democrats alike. And since then she just keeps getting re-elected, with no particular criticism any of us have heard about. Most observers are scratching their heads – what was broken and needed fixing here?
The Moorlach, and the Register‘s John Seiler seem to agree. And Moorlach was a successful OC Treasurer himself, before working with Shari as a Supe. John addresses Freidenrichgate in his latest Moorlach Update, which I get in my inbox, so without further ado (and adieux for now…)
Sound Investments Versus Interference
by The Moorlach, 2-16-2025
Orange County Treasurer – Tax Collector is a position I served in for twelve years. And I had a wonderful time with a great staff. But a financially illiterate Board of Supervisors is what prompted me to run for Supervisor in 2006.
The current Board of Supervisors has been unable to hire a permanent County Executive Officer since the retirement of Frank Kim, even though he gave completely adequate notice about his plans to leave the County.
But this current Board of Supervisors doesn’t make serving in the position of CEO that attractive. Who wants to work for an organization that recently had one of its five board members plead guilty to bribery and is heading to prison?
Enabling former Supervisor Andrew Do to dole out massive sums of money from so called “discretionary funds” was a recipe for disaster.
OC Register readers have already been informed of the County’s budget problems, and the County’s Annual Comprehensive Financial Report for June 30, 2024 is yet to be posted, making it two months delinquent.
Even LA County has already posted its ACFR for the same fiscal year. Being late also delays a comparison with the other 57 California counties. (By the way, Tuolumne County still has to issue its ACFR for the year ending 2022.)
Michelle Aguirre, now the interim CEO, whom I worked with for many years, but as far as I know, has never run a large department let alone the sixth most populated county in the nation until now, wants to meddle into the affairs of an independently elected county official.
The interim CEO wants to remove the investment authority from an experienced treasurer, Shari Freidenrich, who served as the elected Treasurer for the city of Huntington Beach before being elected to her County position.
The investment authority will be transferred to the County Financial Officer, who is new to her job. And the Treasurer’s Oversight Committee, established in the spring of 1995, will be eliminated.
You’d think the interim CEO and the Board of Supervisors currently have bigger fish to fry.
Messing with an independently elected county official is not for the faint of heart. As a County Supervisor, I had my frustrations with Shari Freidenrich’s predecessor, Chriss Street. I also was disappointed with former Sheriff-Coroner Michael Carona and former Public Administrator-Public Guardian John Williams. I’ll spare you those links.
I also know that people don’t leave good jobs, they leave bad managers. And Shari has a reputation of being an overbearing micromanager. She has hired a very able Assistant Treasurer that doesn’t appear to need hovering and is competent in the role. And Shari is trying to improve her management style.
The work product speaks for itself. Orange County has a higher yield than similar sized California counties and has a shorter weighted average maturity. And it has not broken the buck. There may be an article on this subject in the next day or two so I’ll spare you the explanation of the lingo I just used.
Being concerned about investment returns is not an issue. Losing voluntary participants should be the concern of the interim CEO and Board of Supervisors. Less money under management means higher investment costs spread among the remaining investors.
The irony is that the Board of Supervisors is now micromanaging a micromanager. I applaud District Attorney Todd Spitzer, also an independently elected county officer, for speaking up on Shari’s behalf. The last thing an elected officer needs is a dysfunctional Board of Supervisors and an interim CEO with one foot out the door interfering in their business.
For elected positions, that is what the voters are for. And the voters are not interested in converting these elected positions into appointed ones. I tried that with the Public Administrator-Public Guardian position and was unsuccessful. I’ll spare you the links on that too.
Now if a former disgruntled employee decides to run in 2026, then we can probably assume that the campaign is on and the mischief has begun. Ms. Burkhart was a holdover from the Street administration. And Street’s heir apparent was not able to defeat Shari at the ballot box. The joys of politics.
John Seiler of the OC Register‘s Editorial Board provides his perspectives in the piece below:
OC voters want sound investments, not HR drama
by John Seiler (pictured at left w/ Norby and Greenhut, at Bushala’s)
The bad memories of the 1994 Orange County bankruptcy came to mind in the controversy over managing Orange County’s $17 billion investment portfolio. In December, the Board of Supervisors took away from Treasurer-Tax Collector Shari Freidenrich control of the county’s $17 billion investment portfolio. Then on Feb. 11, the Register reported, it took the first step “toward transferring investment authority to the county’s chief financial officer,” Kimberly Engelby.
Another bankruptcy? The expert is John Moorlach. In 1994 he was an accountant in private practice. He ran for treasurer-tax collector, warning incumbent Bob Citron’s soaring returns on the county’s $8 billion investment funds were too risky. Moorlach lost. That December, Orange County declared Chapter 9 bankruptcy, costing $1.6 billion.
Citron resigned and pleaded guilty to six felony counts, spending a year in prison. The board appointed Moorlach to the post. He restored the county’s finances. He’s currently recounting the history of those days on his blog, MoorlachUpdate.com.
Moorlach, with whom I served as press secretary when he was a state senator, told me, “There’s no interest rate risk, no market risk to speak of” in the current portfolio. That’s due to safeguards he put in place back in 1995 and recent prudential management. “So everything should be fine.”
I asked about the problem with Supervisor Andrew Do resigning last year and, in October, pleading guilty to bribery involving a nonprofit where his daughter worked. Moorlach said there’s a “wall” between county investments and anything Do did.
So what’s the problem? The Register reported ex-administrators “said in interviews that Freidenrich’s investments were too conservative and not generating adequate returns.” Well, we don’t want Citron 2.0.
The worst is former staff members allege a “toxic atmosphere” in the office from her “very aggressive management style, resulting in a 2022 warning from the county human resources department.” “She is basically a bully – everybody gets in trouble for every little thing,” Jennifer Burkhart, who resigned in January 2024 as director of tax and central collections, told the Register.
Freidenrich told the Register, “The performance of my duties is key and that is what I focus on.” And she is working with an executive coach.
At the Feb. 11 meeting, District Attorney Todd Spitzer said, “I am a department head, and there are billions and billions of dollars in that fund, and we do not understand why the board feels it’s necessary to” shift control to the CEO, whose office “couldn’t keep track of $10 million that Andrew Do squandered.” Spitzer’s experience is crucial because voters elected him a supervisor in 1996 to clean up the prior board’s mess.
I have two concerns: (read the rest here)
If you commented here within the past week or so, your comments may have been deleted somehow. I’m trying to get to the bottom of it. Please feel welcome to restate what you had to say. For example, there was some really good stuff on this post that I’m very sorry is gone.
This seems to have happened when I went into our decontamination cell and approved three Neshanian comments for reinstatement. They may have been booby-trapped or something, because that seemed to blow up the works.
Eric, you can resubmit the relatively thoughtful one about how Irvine allowing pictures of Ataturk at events is like it allowing pictures of Hitler. Do it without invoking any caustic stereotyping. I do look forward to your luxuriating in the freedom of your new blog.
Damn it…
As I remember Zenger made a series of random observations and reminiscences, mostly about Moorlach & Chriss Street. Then he said that this whole Freidenrich thing is embarrassing for the county, that there must be something going on we don’t know about, and that too bad more County folks aren’t leaking to Norberto.
On that note I pointed out that we often get anonymous pajaritas from the county commenting here, and asked, “Where in the world is ‘Carmen San Diego’?”
Then Neshanian chimed in, “She touched the pink toad.” Apparently a reference to the fact that “Carmen San Diego” comments on the Liberal OC as well as here.
That was just on this story, I don’t remember what else disappeared.
Did I tell you Willie the weenie is a Fresno native who clerked for associate justice of the California Supreme Court Marvin Baxter? My Willie the weenie reference post is safe.
Has the bos given any reason for doing this?