Ex-Budget Chief Convicted of Single Charge in O.C. Bankruptcy

SANTA ANA —  Former Orange County Budget Director Ronald S. Rubino was found guilty Monday on a single misdemeanor charge of falsifying county records, closing the book on the first criminal trial arising from Orange County’s bankruptcy.

Visiting Los Angeles Judge J. Stephen Czuleger pronounced Rubino guilty after accepting a plea of no contest from Rubino to one charge in a revised three-count complaint filed by the Orange County district attorney’s office.

At the same time, the judge dismissed the other two counts--felony charges that Rubino had helped former Treasurer Robert L. Citron divert to the county’s benefit nearly $100 million in interest that belonged to other public agencies that had money in the county-run investment pool.

The plea was part of a deal brokered by the judge and accepted by prosecutors and Rubino’s defense attorney during discussions conducted behind closed doors in the judge’s chambers.

Maintaining his innocence, Rubino said he nonetheless decided to acquiesce to the plea agreement to avoid a costly retrial. His first trial on the two felony counts ended in a mistrial with the jurors deadlocked 9 to 3 in favor of acquittal.

After accepting Rubino’s plea, Czuleger sentenced him to 100 hours of community service and two years of unsupervised probation. The judge said Rubino, 44, could return to his court in a year and change his plea to not guilty. Assuming Rubino does not violate the terms of his probation, this move could result in dismissal of the lone misdemeanor charge and wipe his record clean.

Both sides sought to portray Monday’s final outcome as the best resolution to the case.

“There is a sense of relief that it’s over, but there is a sense of disappointment that I didn’t get the acquittal I thought I deserve,” Rubino said outside the courtroom. “I could not afford to prolong this battle. . . . I can’t get today an acquittal or dismissal, but I think I’ll get this a year from now.”

Assistant Dist. Atty. Jan J. Nolan, the lead prosecutor in the first trial, said she felt very good about the outcome, saying Rubino “is being held accountable and responsible for his actions.”

“We did our job,” Nolan said.

In court, Nolan was quick to point out that Rubino had pleaded no contest to a felony charge that he falsified a county record, but it was the judge who used his discretion to reduce it to a misdemeanor.

Legal experts said the deal was probably the best that both sides could hope for.

“I’m not sure [Rubino] could afford financially or emotionally a second trial,” said Loyola Law School Dean Laurie L. Levenson. “And there were no assurances that prosecutors could convict him because it’s a difficult case to prove. This is why we have a plea bargain. I’m not sure either side could leave with full satisfaction.”

But Robert A. Pugsley, a law professor at Southwestern University School of Law, said he felt Rubino got the better deal.

Pugsley said the sentence imposed by Czuleger was “the most minimal victory the D.A. could have ever thought of.”

For Rubino, the plea bargain was “about the next best thing to a complete acquittal,” Pugsley said.

“Given (Dist. Atty. Michael R.) Capizzi’s successful track record in prosecuting political corruption cases, this latest chapter represents a distinct setback,” Pugsley added.

“By forcing this heavily watered down plea agreement, [Capizzi] is getting very little substance in return for his [prosecution] efforts. In an attempt clearly designed to save face, Mr. Capizzi is giving the defendant a virtual slap on the wrist,” Pugsley said.

Orange County’s taxpayers, who have so far spent $500,000 for Rubino’s legal fees, clearly benefit from the outcome. The Board of Supervisors was set to consider a recommendation this week that Rubino be given an additional $355,000 for his defense fees. Capizzi has declined to offer any estimate of how much his office spent going after Rubino.

During the first trial, prosecutors argued that Rubino, Citron and former top Assistant Treasurer Matthew R. Raabe conspired to distribute only 7.85% in interest earnings--not the double-digit interest the pool was actually earning--to the 200 agencies with money in the county-run investment pool.

Prosecutors said the three plotted in 1993 to skim the interest earnings from the pool because they were worried that investors might be startled by the excessive interest Citron was earning and start asking questions about the heavy risks associated with such returns.

At the time, Citron’s risky investments were producing double-digit returns while the state investment pool was yielding less than 5%. But the plan fell through when Citron’s wrong-way bets on the direction of interest rates brought about the collapse of the county’s investment pool, which suffered a $1.64-billion loss in 1994, triggering the bankruptcy. The diversions were unearthed in an ensuing investigation.

Some jurors who voted for acquittal said they believed Citron’s testimony that he never told Rubino about the interest diversion. They said they also agreed with Rubino that he did not know Citron was depositing stolen funds in the county’s treasury.

After the judge accepted the no-contest plea Monday, prosecutors and defense attorneys continued a debate outside the courtroom about how much Rubino knew about the diversion scheme.

Nolan said Rubino accepted the plea arrangement because he was afraid of new evidence that prosecutors would have presented at a second trial.

“In my view that evidence would have convicted him,” Nolan said. “For him, it is a lot better to plead no contest than be convicted on the new evidence.”

But Rodney Perlman, Rubino’s attorney, scoffed at the prosecutor’s remarks. If prosecutors were so sure that they could convict Rubino, why didn’t they pursue a second trial, Perlman asked.

“Ron Rubino did nothing wrong,” Perlman said. “ If they got all this evidence, they should have presented it. . . . We won, but the tragedy of all this is Ron Rubino and his family have been put through 18 months of hell.”