OC Grand Jury: Street’s SIV Investments Imprudent

The Orange County Grand Jury has released a report on their review of Treasurer-Tax Collector Chriss Street’s investments in Structured Investment Vehicles (SIVs) HT Ron Campbell-OC Register. The Grand Jury concluded that “although SIVs are ‘facially’ compliant with the County’s policies, these investments should have been reviewed and challenged.”

The report added that “the Grand Jury strongly believes that the investments in SIVs did not meet the standard of prudency for Orange County.”

The report lays the blame at the feet of the Treasurer’s Oversight Committee (TOC) for the failure in oversight. “The TOC was not doing an effective job of reviewing these and other investments.”

Finding. #11 – “The investment in SIVs were imprudent for several reasons. Among them are: safety and liquidity, the highest priorities for the County’s investment, were not adequately considered; the TOC never reviewed them and, 56 of 58 California counties chose not to invest in them.”

The result was the loss of more than $69 million in County funds. Whlie the proportion of county investment in SIVs rose dramatically under the stewardship of Treasurer-Tax Collector Chriss Street, the report noted that these investments began more than 10 years ago under the administration of former Treasurer-Tax Collector Supervisor John Moorlach.

UPDATE: The Treasurer, through his spokesperson Keith Rodenhuis, got back to us saying; “It’s an honor to work with the Grand Jury on this report and our office always welcomes additional scrutiny and transparency. We already have in place a robust system of checks and balances and will work with the Oversight Committees regarding the reports recommended actions.”

It would be interesting to hear from Moorlach since he was the one who initiated these types of investments by the County. But since Moorlach likes to portray himself as the “Savior of County Investments” and the guardian of Christian theology based “servant leadership,” We doubt he will have anything meaningfull to say.