Orange County residents finally got a public explanation of why county supervisors quietly stripped elected Treasurer-Tax Collector Shari Freidenrich’s investment authority months after the Voice of OC first reported on the issue in December.
[Read: Santana: Why Did OC Supervisors Strip Elected Treasurer of Managing Investments?]
One by one on Tuesday, a majority of supervisors explained publicly that they took over control of over $17 billion in investments from Freidenrich because of concerns of how she managed her office – including concerns from staff that she created a hostile workplace.
At the same time, they stressed that the county’s investment pool was secure and are stepping in to keep it that way.
“The public deserves to know why the board believes these actions are the most prudent and appropriate to take at this time,” said Supervisor Chairman Doug Chaffee at Tuesday’s meeting.
“The board cannot simply sit idly by, while a county elected department creates an environment which is ripe for fiscal mismanagement, plus the welfare and well being of our county employees being put at risk.”
Freidenrich did not respond to a request for comment Tuesday.
Chaffee and other supervisors including Katrina Foley added that county officials including CEO Michelle Aguirre have tried to address their concerns with Freidenrich but to no avail.
“Ms. Aguirre has put in probably the most amount of time to try to help correct the course correct in the treasurer tax collector’s office over the years, and what we’ve learned is it’s consuming her time every day as well, and not allowing her to do her job,” Foley said.
Foley said mismanagement of the office has led to delays in cashing checks, refunding schools and a host of other issues, pointing to a fact sheet posted online about the department.
“There’s more than $32 million in liens that are outstanding and have been outstanding for more than five years. I mean, we all have to pay our property taxes. Getting a five year pass is very unreasonable,” she said.
Who Will Oversee The Treasury?
Now, supervisors are expected to consider at their next meeting handing oversight of the investment pool to the existing Audit Oversight Committee, which includes two members of the board of supervisors and five residents who are appointed by supervisors.
They are also expected to dismantle the Treasury Oversight Committee, which includes members picked by Freidenrich and which currently oversees the money.
This is despite several members of the committee bringing up concerns around the lack of clarity on why so many shifts were being made in a meeting last month.
David Carlson, chair of the committee, said members of the audit oversight committee never were required to have experience in managing public investment funds.
“At no time was there a criteria that there be an experience with guiding or managing or auditing large public investment funds,” he said in a Monday interview.
“Whereas the treasury oversight committee had a responsibility to look at people with backgrounds in finance and public investment funds – that is not the case for the audit oversight committee.”
Breaking The Silence: An Elected Treasurer & A Hostile Workplace
Tuesday’s meeting comes after two public agencies reportedly pulled money out of the county’s $17 billion investment following the supervisors decision to quietly strip Freidenrich of her investment authority without a public explanation.
The lack of explanation has also sparked public criticism and concern from State Assemblyman Avelino Valencia and District Attorney Todd Spitzer about the public being left in the dark.
[Read: OC District Attorney and Treasurer Question Supervisors Takeover of $17 Billion Investments]
Supervisor Vicente Sarmiento said he was glad that Valencia was calling for and encouraging good governance but also issued a criticism of Valencia.
“When he was on the city council in Anaheim, they had some challenges with respect to bribery and corruption, and they could have tightened up the campaign finance reform measures there, and unfortunately, he chose not to do that,” Sarmiento said at the meeting.
Amidst the mounting questions, OC Board of Supervisor Chairman Doug Chaffee put out a scathing letter Monday stating that the investments are strong but officials have lost faith in Freidenrich’s ability to manage her department.
[Read: Santana: Keeping Watch Over Orange County’s $17 Billion Investment Pool]
Chaffee pointed to an independent investigation that found Freidenrich violated the county’s workplace violence policy, a 2021 performance audit of Freidenrich that found high staff turnover in the department and preparing the 2022-23 annual statement of assets a year late.
To read Chaffee’s letter, click here.
Carlson said Freidenrich has done a good job in managing the investment pool and was elected by residents.
“Any criticism of her management style is, I think, appropriate for an HR action, but not appropriate to overturn tens of thousands of votes that she received to be treasurer, elected by the voters of Orange County,” he said.
Meanwhile, Susan Lester, a former public finance director for the county, spoke to county supervisors publicly on Tuesday saying many in the Treasure-Tax Collector office had raised concerns about the workplace environment Freidenrich fostered when she was asked to help the department in 2021 fill vacancies.
“On my first day at the TTC department, multiple employees came to my office in tears, complaining of working conditions and being publicly reprimanded by treasurer Freidenrich in preparing the department’s fiscal year 2021-22 budget,” she said at the meeting.
“With regards to my efforts to fill vacancies, several eligible candidates declined to interview, citing a reputation as a bad place to work.”
At Tuesday’s meeting, Supervisors Don Wagner and Sarmiento stressed the county’s investment pool was safe.
“This is not an issue of risk to the funds. It is an effort to fix problems that were outlined by the chairman. It is because those efforts have failed through, in my opinion, an unwillingness of the department head to make the proper fixes,” Wagner said at Tuesday’s meeting.
Wagner also said that he and Foley spoke with several high ranking staff members in the Treasure-Tax Collector office last Fall that raised concerns about Freidenrich.
“They were telling us stories that were hair curling about that office,” he said, encouraging staff members to come forward if they find themselves in similar situations.
“That’s what finally prompted us to act.”
Noah Biesiada contributed to the reporting in this article.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.
