Citron Agrees to Testify in Sacramento

COSTA MESA — Former Orange County Treasurer-Tax Collector Robert L. Citron will make his first public comments about the collapse of the investment pool he managed when he testifies next week before a special legislative committee looking into the Orange County fiscal fiasco, Citron’s attorney said Sunday.

“He has nothing to hide,” said the lawyer, David Wiechert.

Citron, 69, resigned Dec. 4, two days before the county became the largest municipality ever to file for bankruptcy.

Despite a pending criminal probe, Citron will travel to Sacramento on Jan. 17 to answer the subpoena from the state Senate committee on local government investments, Wiechert said.

Three days later, Citron is to give a deposition to the U.S. Securities and Exchange Commission, which is also investigating the financial debacle.

Some had speculated that Citron would take the 5th Amendment rather than testify, a standard procedure for targets of criminal investigations. Dist. Atty. Michael R. Capizzi has asked the committee not to grant Citron immunity from criminal charges.

Wiechert said Citron is not afraid to answer the questions without any special protections.

The committee has also subpoenaed Matthew Raabe, Orange County assistant treasurer, and invited two county supervisors to testify.

Also Sunday, The Times obtained a transcript of a conference call made less than a week before the bankruptcy filing in which Citron and Raabe assured New York brokers that the county could solve the investment portfolio’s problems without major losses.

In the Nov. 30 call, the men explained the battering that the highly leveraged, $7.4-billion portfolio had taken because of interest rate increases, and outlined possibilities for recovery.

“The pool does, in fact, have a liquidity problem,” Raabe said, according to the transcript. “Further market losses are probable until interest rates stabilize. . . . If all depositing participants in the investment pool remain in the investment pool, it is quite possible that the market value losses will not become real losses.”

The county’s financial consultants now estimate the pool has lost $2.02 billion, or nearly 30%.