Union boss to board: grab Street’s investment powers
March 19th, 2008, 11:32 am · 16 Comments · posted by PEGGY LOWE
Nick Berardino, the general manager of the Orange County Employees Association, just sent a letter to each of the five members of the Board of Supervisors demanding that it strip Treasurer-Tax Collector Chriss Street of his investment powers.
Berardino’s beef? The Register’s reports that the county could lose $80 million on Street’s investment in a controversial and complex security called Whistlejacket Capitol. The Register’s Ron Campbell reported today that a British court order means the county will be one of the last creditors paid by the failing company.
“The county treasurer made an $80 million bet on an SIV named after a racehorse, and now it appears that Whistlejacket Capital has broken down at the quarter pole,” Berardino’s letter read.
Berardino, the boss of the county’s largest public workers union, has previously called for Street’s resignation and for the supervisors to remove his investments powers in reaction to a series of financial missteps by Street. Although Supervisor John Moorlach, the former treasurer, agrees with Berardino, a vote on the matter failed last year.
Because of the board’s failure to act on Street, Berardino says in his strongly-worded letter that the fault now lies with the board.
“Make no mistake - each dollar lost due to Mr. Street’s risky investment schemes is now the board’s responsibility,” Berardino wrote. “There can now be no question that the time has come for the Board of Supervisors to collectively say, ‘Enough is enough.’”
Berardino has long been critical of Street, even paying for a poll that said county residents want the board to act.
Here’s the text of Berardino’s letter:
March 19, 2008
Supervisor John M.W. Moorlach, ChairBoard of Supervisors,County of
Orange10 Civic Center Plaza, 5th Floor
Santa Ana, CA
92701
Dear Supervisor Moorlach:
In December, despite OCEA’s strong and repeated objections, the Board of Supervisors continued to abdicate its responsibility for the safety and security of County investments to . Today, The Register reported the consequences of the Board’s failure to act responsibly and decisively – British court ruling threatens County’s $80 million investment.
Treasurer Chriss Street
Treasurer made an $80 million bet on an SIV named after a racehorse, and now it appears that Whistlejacket Capital has broken down at the quarter pole.
Since last fall, over and over again OCEA has beseeched the Board to recognize and act upon the series of dangerous red flags that have regularly emanated from the office of theCounty
Treasurer. One “surprise” after another has surfaced, and OCEA has each time sounded the alarm.
With each successive revelation, Mr. Street’s tired, predictable responses to the Board have been the same – he “must communicate better;” he will “be more transparent;” he “apologizes;” he assures you that investments in the County investment pool are “completely safe and secure.” Astoundingly, the Board repeatedly believed him.
This morning the Treasurer’s Office “bombshell of the day” – again disclosed by the press, not by Mr. Street – is that a British court decision places 75 other creditors ahead of the County’s investment in Whistlejacket, placing the County’s investment at substantial risk.
Make no mistake - each dollar lost due to ’s risky investment schemes is now the Board’s responsibility. There can now be no question that the time has come for the Board of Supervisors to collectively say, “Enough is enough.” of his investment authority and begin the process of restoring the public’s confidence in the safety and security of the County’s investment pool. Should the Board fail to do so, responsibility for the consequences will rest where it rightly belongs – squarely on the shoulders of individual members of the Board.
Mr. Street
Mr. Street
Thank you for your consideration and please call me if you have any questions.
Sincerely,
ORANGE
COUNTY EMPLOYEES ASSOCIATION
Nick BerardinoGeneral Manager
Copy to: Janet Nguyen, First District Supervisor Bill Campbell, Third District Supervisor Chris Norby, Fourth District Supervisor Patricia Bates, Fifth District Supervisor Tom Mauk,County
Executive Officer
March 19th, 2008 at 3:42 pm
When will the Board wake up and do their jobs? We had a bankruptcy once already. What do the board members need to see to learn that Street’s investment schemes are just costly gambles with taxpayer’s money.
Not only that, $80 million is just the tip of the iceberg. His investments in sub-prime backed SIVs will soon become junk. Why won’t the Board do its job and act to take away his investing powers?
ORANGE COUNTY CAN’T AFFORD TO LET THIS PROBLEM TAKE US DOWN AGAIN. ONCE IS ENOUGH!
March 19th, 2008 at 4:06 pm
This is crazy!
I thought I voted for strong conservatives! These jokers are making a labor guy look good. It is time for the citizens of this county to stand up and take back their county.
Please, stop making Mr. Berardino look good. STOP THIS MADNESS!
Ken
March 19th, 2008 at 4:36 pm
Question of the day…
Q: If $80 million in county investments are lost in the forest by Chriss Street would anyone on the board hear it?
A: Doesn’t matter, they won’t do anything about it.
Q: If another shoe drops will the board wake up?
A: No. They’ll hire another consultant to tell them it wasn’t a shoe.
March 19th, 2008 at 5:21 pm
I agree with with johndavid, this Board of Supervisors needs to take action. The Supervisors sit around and sternly warn Street that the next time he loses the taxpayer’s money, the Board doesn’t want to be embarassed by not knowing about it when they go to their fundraising parties…they want to be sure and know about it first!
Can you believe it? Nothing about keeping the money safe! 80 million LOST, how many yearly tax installments from how many homes does it take to replace that 80 million? This seems criminal!
If the Board continues to stick by their crooked Street, then they need to be shown the door to the back alley!
March 19th, 2008 at 5:50 pm
If what Chris Street is doing is wrong, then all the government pension systems are even more guilty. Unions have been pushing them to invest in derivatives and all sorts of investments in who knows what. There’s a big outcry about Street, but what about after the internet bubble when pension funds lost billions? How is that different?
March 19th, 2008 at 6:03 pm
Well the other shoe has finally dropped…the Board was warned about this months ago…is the Board going to wait till Chriss loses so much money that there’s another run on the pool and it causes a Bankruptcy?
I, for one, am very disappointed that my Supv., Supv Cambell, has an MBA and can’t figure out that he needs to do something about this!
March 19th, 2008 at 8:00 pm
Has anybody noticed that the state is going broke, our financial security is facing a bleak future, that services to the public are going to be cut back severely, that programming for all of our citizens are facing the chopping block, our education system is being asked to do the impossible. Have the five alleged leaders of the “oc” noticed our financial state of affairs. Perhaps less time renaming ourselves and more time taking care of our affairs. It is time to remove Mr. Street’s investments powers . Please, before it is too late. Please!
March 19th, 2008 at 8:17 pm
Taxwatcher,
Orange County’s Retirement System did not invest in these SIV’s. Which pension plan is currently invested (particularly at the level of 14%) in SIV’s?
March 19th, 2008 at 8:25 pm
SIV’s are nothing like stocks. They are leveraged investments. The financial institution, in this case Whistlejacket Capital, borrows money to by commercial loans. They then bank on being able to refund those loans with investments. They are constantly buying and selling paper. Pretty much what Bob Citron was doing. The only difference is that the County is now like the other members of the County investment pool in 1994. Street’s investing in the scheme instead of running the scheme.
March 19th, 2008 at 9:35 pm
At what point does the careless risking of $80-Mil. of taxpayer funds become grounds to be reviewed for termination? On an investment named for a Racehorse? Chris Street needs to go, NOW. We all stand to lose big time over his unqualified management of this investment. What else will we learn of this guy?
Rob
March 19th, 2008 at 11:38 pm
Didn’t moorlach start this worthless “investment”? Do we really want the Board of Supervisor’s to take the power away from Street and give it back to the guy that started the whole mess? You cannot separate Street’s responsibilty from Supervisor Moorlach’s, they are both just as culpable.
The fact the other members refuse to call for public hearings on the County’s finances means they may also be involved. We need to have a third party conduct an audit and tell the citizens if the County is Bankrupt again. If so, Moorlach and Street should face jail time.
March 20th, 2008 at 5:37 am
When Street was running for his position, John Moorlach was his best friend and closest ally. Now he’s silent or carefully scolding whenever Street’s malfeasance is discussed. Shame on you, John Moorlach! That white horse you think you ride is a tired old nag and we’re sick to death of it. Street ought to be ridden out of town on a rail.
March 20th, 2008 at 6:16 am
The County’s walking down a one-way street to financial ruin while the Board of Supervisors naps beneath the shade of plants at the Old Courthouse and shacks up in sleazy hotels to spy on poor folks just minding their own business.
March 20th, 2008 at 11:07 am
I agree that this is Moorlach’s Mess, but I think we need to focus on Street. Notwithstanding this latest incident, he’s already too hot to stay where he’s at. If Street won’t do the right thing and stand down then the Board needs to be more persuasive. I don’t care what it takes, just get him outta there…
March 21st, 2008 at 5:03 pm
OK, w’ve got a union boss hacking away as he has time and time again on Street, but everytime we find out there is nothing wrong with what Street is doing.
I can’t wait to see old St. Nicky when we find out if John Moorlach actually approved the investment in WhistleJacket. Wouldn’t that put all of you in real tizzy fit!