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Embattled O.C. treasurer won't seek re-election, asks supervisors to strip him of investment powers

March 12, 2010 | 11:26 am

Street Orange County Treasurer Chriss Street will not seek re-election and has asked county supervisors to temporarily strip him of his investment powers over the county’s investment pool of about $5 billion.

The statement and request comes in the wake of a $7-million judgment against Street for self-dealing and mismanaging a bankruptcy trust as a trustee for eight years before he was elected treasurer in 2006.

Supervisor John Moorlach, the county’s former treasurer and once one of Street’s biggest supporters, had called for Street’s resignation, and Supervisor Bill Campbell said Thursday that he had submitted an agenda item for Tuesday’s meeting to take away Street’s investment powers.

“As a public servant, I am committed to putting the interests of the taxpayers and my staff first,” Street wrote in the letter sent Friday to county Chairwoman Janet Nguyen. “It is therefore my recommendation that the Board of Supervisors temporarily delegate investment authority of the County Pools to the elected Auditor-Controller David Sundstrom while I weigh my legal options.”

Street’s attorney said his client did not resign because he didn’t feel that would be “appropriate” or “necessary.”

Street announcement awakens memories of the county’s historic bankruptcy in 1994, at the time the largest municipal bankruptcy in U.S. history.

The 1994 financial collapse was blamed on the risky and capricious investment strategy developed by then-Treasurer Robert Citron. Street, along with Moorlach, was among those who had predicted the county’s bankruptcy and was viewed as a reformist when he took office.

The lawsuit that resulted in the $7-million judgment stems from the eight years that Street spent at the helm of a bankruptcy trust for a group of shipping companies, in which he was supposed to conserve and liquidate assets for the beneficiaries, but instead bought bankrupt trailer manufacturers and lost millions, according to court document.

“This is a case where a fiduciary lost sight of his mandate ... by engaging in unsuccessful business ventures, self-dealing and violations of the liquidating trust agreement,” wrote Judge Richard Neiter, the U.S. Bankruptcy Court judge who presided over the two-day trial in early February.

Street was trying to create a conglomerate of which he would be chief executive, Neiter wrote.

-- Raja Abdulrahim

Photo: Orange County Treasurer Chriss Street in 2008. Credit: Marc Martin / Los Angeles Times

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