Coto de Caza Supplier Management, Fleming and Street on the Street

 August 23, 2007

As is usually the case, there seems to be at least two sides to every story.  Such is the case with embattled Orange County Treasurer-Tax Collector Chriss Street, who has been fending off accusations of fiscal irresponsibility triggered by a 1.5 million dollar office remodeling, paralleling the street traveled by Capistrano Unified Superintendent James Fleming who faces criminal charges related to the creation of an enemies lists. In May, Fleming and former Assistant Superintendent Susan McGill were charged with using taxpayer money to create two lists of political opponents.

Until recently,  the most traveled street was to give Street the benefit of the doubt, particularly those close to the Treasurer, including long time friend Supervisor John Moorlach, even though trouble had been brewing on the street for months.  For example,  Dan Harrow, who replaced Street as trustee of the bankrupt Fruehauf Trailer Corp. in the summer of 2005, sued Street for allegedly mismanaging the trust, using it to improperly enrich himself, charging personal expenses that ranged from a Botox injection to a personal trainer to a $1.06 candy bar. The trust also paid his personal credit card bill and hired a private plane for his family.  In an August 9, 2007 OCR article by Peggy Lowe, Jack Pitney, a government professor at Claremont McKenna College is quoted as saying  "decisions that might make sense in the private sector raise a lot of eyebrows in the public sector. But if you're running the money for a county that was in bankruptcy not long ago, you have to be more sensitive to appearances."

In a shock-and-awe announcement Supervisor John Moorlach, who had patiently waited  on side-streets, while Street blamed his legal and ethical problems on his political foes, today announced that Street may have used a falsified document to cover up an improper award process on a contract to a private company.  With this new information coming to light, Supervisor Moorlach was forced to call on Street to resign or  ask the Orange County Board of Supervisors to revoke Street's authority to invest the county's $7 billion portfolio.

When Messrs. Varo/Mezger were appointed  to the CZ Master Association board of directors, one of their first acts was to fire the CHP, without a suitable alternative, then fire the largest private security company in the world and replace it with one of the smallest one in the region in a deal worth close to $1.5 million/year.  In that case, the property management company claimed to have received multiple bids, but ended up with a compelling program.  An audit of the process used in this cased found no evidence of due diligence.  The moral of the story may be that instead of using falsified documents, Street should just have “lost” any and all supplier management documents

Buzz:  You have just added to the Grounds to RECALL Jerry Mezger from office.  I forgot about the bogus process used to select Universal.  That $1.5 million dollar contract was awarded without implementation of a proper supplier selection process.  Frankly, when we saw the marketing materials with pricing submitted as the basis for the “compelling offer” accepted by Varo/Mezger we were astounded.  I don’t know if Universal was the right company for CZ.  The problem is that no one on the CZ Board at the time could have known either because the process used to select Universal and fire Securitas was not comprehensive enough to cover all the bases.  I saw the materials with my own eyes and as someone very experienced in supplier selection and management, I can make this charge with complete and significant authority.  Joe Morabito - former member CZ Master Association board of directors