Bankruptcy on the Backs of the Poor. (cover story)

ORANGE County (Calif.); CALIFORNIA; UNITED States

This article presents information on the financial crisis being faced by the Orange County, California. Although hundreds of local officials were directly involved in the management of the Orange County Investment Pool, the blame for the financial disaster has been heaped entirely on one man, treasurer/tax collector Robert Citron. The crisis in question made the Orange County poorer by at least dollar 2 billion. It is informed that from the late 1980s Citron began selling municipal bonds for the sole purpose of gambling in securities. In the best years he won as much as dollar 800 million for delighted participants in the Investment Pool. Moreover, as recession eroded Orange County property values for the first time in living memory, earnings from speculative repurchase agreements replaced the otherwise dangerous shortfall in taxes.