ORANGE COUNTY IN BANKRUPTCY : BOND TICKER : Planning for Defeat of Tax Hike

Orange County’s flock of Republican lawmakers in Sacramento are so confident that Measure R will go down to defeat on Tuesday that they’ve already scheduled a morning-after strategy session.

There might be one conspicuous no-show--newly enshrined Assembly Speaker Doris Allen (R-Cypress), who has not been on the same bus with the delegation on bankruptcy recovery or just about any other issue of late. The entire delegation has opposed Measure R with the exception of Allen and Sen. William A. Craven (R-Oceanside), who is co-chairman of a Senate committee on the bankruptcy.

As the new Speaker, Allen would seem to have a prime opportunity to flex her muscles to help bail out Orange County.

But members of the county delegation worry that Allen won’t try to grab the chance. The reason those Republicans cite: When Allen was installed as Speaker by Assembly Democrats, they never bothered to replace her predecessor--Democrat powerhouse Willie Brown of San Francisco--as presiding officer for the special session dealing with the bankruptcy.

Thus, it could be Brown--who has made a sport of bashing Orange County on the bankruptcy issue--holding the gavel when the delegation begins a push for alternatives to Measure R. The Assembly is tentatively slated to meet Wednesday on the bankruptcy.

“I think they’re going to play some games with it,” said Assemblyman Curt Pringle (R-Garden Grove). “Doris Allen still supposedly resides in Orange County, but she doesn’t seem to want to do anything to help.”

Anti-Tax Hike Leader Wants Gates Probed

An opponent of Measure R sent a letter to the Orange County Grand Jury on Friday alleging that Sheriff Brad Gates predicted at a forum that the county would receive only a $250-million settlement in its lawsuit with Merrill Lynch & Co.

The letter, written by anti-tax activist Bill Mello, comes a day after County Chief Executive Officer William J. Popejoy asked the grand jury to remove Supervisor Roger R. Stanton for saying that the county might settle the lawsuit for $500 million. Popejoy contended that Stanton’s settlement prediction was well below the county’s settlement figure of $1.2 billion and “undermined” negotiations with the Wall Street giant.

On Friday, Mello said it was hypocritical for Popejoy to criticize Stanton and not Gates, who he claims told an Irvine forum in May that the county would probably receive a $250-million settlement from Merrill Lynch.

Gates strongly denied making the statement.

Gates said he told the forum audience only that the largest settlement ever in a case like Orange County’s was about $250 million to $300 million. He said he also told the audience that in some past cases, judges have limited damages so that brokerage house shareholders don’t suffer severe losses because of poor management actions.

“I was just talking about what history has shown,” Gates said. “I said I didn’t know how much the county would receive.”

Gates scoffed at the comparisons to Stanton, who he described as a “decision-maker” with a clear influence over negotiations with Merrill Lynch. “I don’t have any authority over the settlement,” he said.

Compiled by Shelby Grad and Eric Bailey