O.C. Bankruptcy Forces Power Shift : Politics: Erosion of supervisors' power leaves some of them grumbling. But most officials see CEO William Popejoy's sweeping authority as necessary--and working.

By MATT LAIT and RENE LYNCH

June 4, 1995 12 AM PT

TIMES STAFF WRITERS

SANTA ANA — Orange County supervisors--once the most powerful politicians in the county--are becoming virtual figureheads as their handpicked chief executive officer increasingly assumes decision-making authority, county officials and observers said last week.

As the county’s bankruptcy crisis continues to unfold, Chief Executive Officer William J. Popejoy makes little effort to keep supervisors up-to-date about the county’s recovery plans, and frequently decides matters without their input.

Popejoy has also been markedly successful at imposing his will on them, most dramatically when he forced the board to retreat on its “no new taxes” pledge and place a sales tax hike on the June 27 ballot.

“At times we’ve felt bypassed and out of the information loop, but these are extraordinary times,” said Supervisor William G. Steiner, who added that Popejoy often acts as if “the board is sometimes in the way. When he accepted the job he told us that we would all be mad at him at some point. He was right.”

Even Popejoy admits that he has seized control, and says the county’s better off for it.

“I do think there has been a shift of powers and it’s served the county well,” Popejoy said.

It is a situation that has left some supervisors miffed. Aides to the supervisors grumble that their bosses have been relegated to part-time employees as Popejoy surrounds himself with his own hand-picked advisers, who are often aware of key developments in the county before the board is. Board members complain that sometimes they are the last to know.

“We have a wonderful way of getting information,” Supervisor Marian Bergeson said sarcastically. “We read the newspaper in the morning.” Most recently, Popejoy was said to be home with a bad case of flu. In reality, he was on his way to New York to meet in secret with the chairman of Merrill Lynch & Co. to discuss a possible settlement of the county’s $2.4-billion lawsuit against the Wall Street firm.

Piqued supervisors were not briefed until a week after the fact.

Other than pleading with Popejoy to keep them informed, there is not much the supervisors can do about it. As a condition of his unpaid employment, Popejoy negotiated a contract by which the board cannot remove him without a 4-1 vote. The closest the board has come to challenging Popejoy was when Supervisor Jim Silva considered holding a board meeting in closed session to discuss Popejoy’s performance. The meeting never took place.

Part of the reason the board remains largely silent, observers say, is that Popejoy has handily won over the support of the public. And Popejoy has made substantial progress toward helping the county dig out of its unprecedented bankruptcy.

In addition to getting the supervisors to agree to put Measure R on the June 27 ballot, Popejoy ordered the largest work force and budget cuts in the county’s history by slashing 41% of the operating budget, laying off 846 workers and eliminating nearly 2,000 county jobs.

He also convinced obstinate Sacramento lawmakers to pass a series of controversial bills aimed at helping the county bail out of bankruptcy.

“Even if they had the four votes, there’s no way the board is going to sit up there and say, ‘We’re going to get rid of this financial expert who’s been working for free.’ That would be very unpopular,” said Mark Baldassare, UC Irvine professor of urban planning.

Popejoy’s power and authority were unheard of when Ernie Schneider was the county’s administrative officer, and took his marching orders directly from the board.

“I think to some degree he’s testing the boundaries between the elected and appointed officials in the county,” Baldassare said. “For the supervisors, that’s got to be very difficult. They’ve been in the driver’s seat historically, telling the CEO what to do. Now they have a chief executive officer who’s saying he’s going to go his own way and decide what he’s going to do on his own, and has the attitude of, ‘If they don’t like it, so what?’ ”

Popejoy, a former executive of American Savings & Loan, said the bankruptcy has proven that the county’s last governmental structure was faulty and unable to respond to crisis situations. The old way was “suicidal,” he said.

“The amount of progress we’ve made has been impressive. They [the supervisors] used to get criticized for moving too slow. Now I get criticism for moving too fast. . . . I don’t think you can efficiently manage the county as a group under these circumstances,” he said. “It would be suicidal.

“We’re in a time of crisis and decisions need to be made quickly and that requires a strong CEO,” he said.

Bergeson agrees. “Decision-making has to be centralized during a crisis like this,” the supervisor said.

She also foresees a time when the post of supervisor will become a part-time job, and eventually be eliminated as the remaining county land is annexed by cities or newly incorporated.

Judging by the past few months, supervisors could be considered part-time workers now.

Lately, top aides to supervisors privately complain that they have little to do. Policy meetings and strategy sessions, which were vital before the bankruptcy, have all but stopped, they say.

“Everything is being done on the third floor,” said one staffer, referring to Popejoy’s office in the Hall of Administration.

It doesn’t sit well with activists and constituents who pride themselves on being able to get a supervisor on the phone for an immediate response.

“The supervisors have let him take over the county,” fumed Carole Walters, president of Orange Taxpayers Assn. and the Committees of Correspondence, outspoken anti-tax groups.

Popejoy disputes that and says the board should be happy it’s getting as much information as it does.

“I’m not operating in a vacuum,” he said. “On all major matters, they are consulted. . . . I’ve consulted with them more than any board of directors I’ve dealt with in private industry.”

But even as he says he keeps the supervisors apprised of his actions, Popejoy complains that when he does brief them on sensitive matters, they often leak the information to the media--sometimes having a “chilling effect” on his plans.

As a result, much of Popejoy’s work is done in secret and in consultation with businessmen he has brought in to help advise him. His closest county confidant is Sheriff Brad Gates, who applauds the job Popejoy is doing.

“We’re still in a crisis situation,” Gates said. “You’re not always capable of spending the time you would like to communicate to everybody as thoroughly as you’d like to. That’s uncomfortable for all of us.”

Gates added: “The track record of what Popejoy has been able to accomplish has shown that this is a real good way to run a county. There are a lot of ideas on what the board may and may not be in the future. Right now we have the right thing in place.”

But there are signs that a power struggle is heating up.

Privately, Popejoy says he disdains politics and all things political. Lately, some say he is showing public disdain for the board. He has been noticeably absent from public Board of Supervisors meetings and one county insider says it’s because he purposely schedules conflicts that require him to be elsewhere.

Some say Popejoy is politically savvier than he lets on.

“He may not know all the ramifications of Orange County politics, but he is politically astute,” Steiner said. “He didn’t fall off the turnip truck. He knows how to move an agenda forward.”

Popejoy has privately criticized at least one board member--Silva--for a lack of leadership, and has been known to make critical remarks about others.

Silva declined to be interviewed for this story. Board Chairman Gaddi H. Vasquez could not be reached for comment and Supervisor Roger R. Stanton issued the following typed statement: “I respect Mr. Popejoy’s abilities and I appreciate his contributions to the county thus far.”

Some wonder whether there is any turning back when Popejoy steps down later this year, as expected, and the board finds a replacement.

“The bankruptcy has put a light on the inefficiencies of county government,” said Orange County political consultant Eileen Padberg. “The public appears to want someone like Popejoy. The question is whether the board will allow that.”

Solving the crisis pits business, which favors efficiency, against bureaucracy, which is often weighed down by politics.

Some believe that the supervisors should be applauded for bringing in a strong-willed CEO and recognizing the limitations of the county’s government structure.

“The supervisors have no experience at being CEOs, and that’s not a criticism because that’s not what they were hired to do,” said Newport Beach City Councilman John C. Cox Jr., a Popejoy supporter. “I think the supervisors did the right thing in bringing him in.”

But some say that Popejoy’s “wartime powers” should be only temporary, and say his replacement should be more responsible to publicly elected representatives.

“It flies in the face of representative democracy,” Steiner said.

Popejoy disagrees. He said he hopes that the powers he has acquired are handed over to his successor when his contract expires in November. It is the supervisors, he said, whose role should be limited to setting policy goals. Like Bergeson, he believes that board membership should become a part-time job.

“This is a transition for the board. I know it is awkward. In the meantime, I have a job to do. I’m a failure if I leave here and they are happy because they were consulted on everything but we’re still in bankruptcy,” he said.