Bills for County Board’s Europe Junket Stir Uproar

SANTA ANA — Managers of the county’s $1.5-billion pension fund said Friday they will reimburse the county for thousands of dollars in expenses that they incurred while on a recent three-week European junket.

Those expenses, the officials said, were mistakenly submitted to the county auditor. They included such things as opera tickets and alcoholic beverages.

But even as pension fund officials were downplaying the disputed expenses, one member of that board and the county’s auditor were questioning whether the European trip was overly extravagant.

The trip--which took officials to Berlin, Frankfurt, Geneva, Paris and London to participate in a conference and meet with their overseas financial advisers--was attended by four members of the Orange County Retirement Board.

Pension fund administrator Mary-Jean Hackwood and Michael O’Leary, an investments adviser to the board, also attended, as did Hackwood’s sister and one board member’s wife.

The trip cost about $15,000. The county auditor-controller, Steven E. Lewis, has refused to pay about $4,500 of that bill.

The rejected bills were rung up on charge cards and documented varied expenses that are not reimbursable under county rules--including alcoholic beverages, hotel bills for leisure days, personal dry cleaning, meals and hotel rooms for non-board members.

“The question that hasn’t really been asked is whether so many of them should have gone at all,” Lewis said. “Is it really proper to send that many people to Europe?”

County Treasurer-Tax Collector Robert L. Citron, a member of the retirement board, echoed Lewis’ concerns, saying he thinks too many people went on the trip, especially at a time when government programs are being cut to make up for large shortfalls.

“My feeling is that we did not have to send so many people over there for such a long period of time,” Citron said.

A delegation of Hackwood, O’Leary and one member of the board’s investment committee should have been enough, he added.

Board members Keith Concannon, Mary Abbott, Gregory Politiski and Thomas Lightvoet all took part in the trip. Concannon’s wife also attended.

Concannon, however, defended the size of the delegation, saying that sending a smaller group would have produced a narrower range of views on issues of investment management.

“If you send one person, you get one person’s point of view,” he said. “I don’t care for anyone making decisions for me, and I don’t think other people want me to make their decisions for them.”

While officials disagreed about how many Retirement Board representatives should have gone, most conceded that there were errors in the bills submitted to Lewis. Those mistakes were attributed to accounting, and officials pledged to correct the misunderstandings as soon as possible.

“The invoices should not have been sent up until we had a chance to take out our expenses,” Concannon said. “I plan to pay what I owe, just as soon as we discern what that is. The system will have my check on Monday.”

Some billing details remain unclear. The auditor’s office has not yet received expenses for the final week of the trip, for instance.

Officials said the purpose was to attend a three-day conference in Berlin organized by Capital Guardian, an overseas investments adviser that handles $25 million of the fund’s money. The board members also met with other advisers who handle their funds.

It was not the first such overseas trip for the retirement board, which manages the pension investments for most of the county government’s 16,000 employees.

Board members said other international trips have been taken in the past--to the Orient, Australia and Ireland--but in most cases, the financial advisers who were seeking the pension fund’s business picked up the tab.

Although itineraries for some of the officials who participated showed blocks of leisure time and vacation days, Hackwood estimated that she spent about 90% of her 26 days on business.

Her itinerary lists many meetings, and even meals were often held with financial advisers. Her schedule did include frequent breaks, however. Tours of the Geneva countryside and museum, dinner at the top of the Eiffel Tower, a trip to a London theater and a visit to Winston Churchill’s World War II home are listed on her schedule.

Two days in Paris were listed as “vacation days,” and no business was conducted one day in Amsterdam because of the Queen’s birthday in the Netherlands.

But not all her days off were pleasant, Hackwood said, describing how she spent one Sunday in bed after a 15-hour ride on a “cold, rickety” train from Berlin to Geneva.

In light of the disputed expenses, Lewis has recommended that the board review its travel practices and use of charge cards.

“Cash advances could have been issued . . . and they could have used their own personal credit cards and/or travelers checks,” Lewis said in a memo to the board. “Upon returning, they would then have filed a personal mileage and expense claim to be reimbursed for their . . . business expenses and to clear any cash advance.”

Whether such a review will take place remains to be decided. Board Vice Chairman Victor Heim said he sees no need to review the board’s policies, except to determine why the auditor received the billings prematurely.

Other board members insisted that the expenses were submitted simply by mistake and that the trip was in the best interests of the county retirement system.

“It all boils down to appearance,” Lightvoet said. “It was a trip that could be viewed as a junket or a boondoggle, or unnecessary.

“But, very much to the contrary, the trip was very necessary and gave us an opportunity to visit with the managers of our money and to look at people who we might want to invest with in the future,” he said.

Times staff writer George Frank contributed to this article.

The Contested Three-Week Tour In April, members and staff of the Orange County Retirement Board’s Investment Committee-as well as one member’s wife and one official’s sister-toured Europe to check up on the pension’s overseas investments. Most of the expenses have been deemed justified, but some were refused by the county auditor. A look at where the group went and what it did. 1. Berlin, April 7-12: Three days of conferences; some leisure time; afternoon trip to the zoo. 2. Geneva, April 13-16: Half a day of meetings; dinners with investment officials; bus tours of lake and city; visit to art museum; Sunday includes “buffet breakfast, fruit basket, champagne, daily newspaper.” 3. Paris, April 16-19, April 24-27: Meetings with economists, investment officials; dinner at the Effel Tower; two vacation days. 4. London, April 19-24: Meetings with investment officials; working lunches and dinners; visit to theater (to see “Mousetrap”) and Winston Churchill’s home. 5. Amsterdam, April 27-May 2: Meetings with investment officials; two free days (including Queen’s Birthday, a holiday in the Netherlands). 6. Los Angeles May 2: Upon her return to Los Angeles, retirement fund administrator Mary-Jean Hackwood hired a lilmousine to take her home. The county auditor regards that $80.25 expense as unjustified.