This story is free to read because readers choose to support LAist. If you find value in independent local reporting, make a donation to power our newsroom today.
This archival content was originally written for and published on KPCC.org. Keep in mind that links and images may no longer work — and references may be outdated.
22 years later, Orange County's bankruptcy is finally paid off
The late Orange County treasurer Robert Citron in court in Santa Ana. His risky investments helped drive the county into bankruptcy in 1994.
(
Nick Ut/AP
)
Listen
0:50
22 years later, Orange County's bankruptcy is finally paid off
After 22 years, Orange County is finally paid up. On Saturday, the county made the final payment on a $1 billion bond that helped it get out of its 1994 bankruptcy.
"I think it is very good news this is in the rearview mirror and we can move forward financially as a county," said Todd Spitzer, who was elected county supervisor soon after the bankruptcy and currently represents the county's third district.
In addition to the $1 billion principal, Orange County ended up spending about $500 million on interest payments – money it couldn't spend on public services.
"Our government buildings are in incredible disrepair," said Spitzer. "Our county parks have been neglected because money has been siphoned off and we’ve been importing other people’s trash into our landfills to pay off our debt."
At the time, Orange County’s was the biggest municipal bankruptcy in U.S. history. Since then, Detroit, San Bernardino and Stockton have all gone under.
Orange County's Chapter 9 remains unique because of its eccentric former treasurer Robert Citron, who used psychics and star charts to help manage the county's budget, which he tried to prop up with risky investment schemes.
Citron, who died in 2013, pleaded guilty to criminal charges resulting from the bankruptcy. But Spitzer does not think Citron deserves all the blame.
Sponsored message
"The Orange County Board of Supervisors told Citron to try to produce more revenue out of the investments than anybody else was getting in terms of yield," said Spitzer. "If it's too good to be true, it probably is."
Spitzer said Orange County’ budget is in a lot better shape today, but he cautions his fellow politicians not to get complacent.
"You have to live within in your means," he said.
You come to LAist because you want independent reporting and trustworthy local information. Our newsroom doesn’t answer to shareholders looking to turn a profit. Instead, we answer to you and our connected community. We are free to tell the full truth, to hold power to account without fear or favor, and to follow facts wherever they lead. Our only loyalty is to our audiences and our mission: to inform, engage, and strengthen our community.
Right now, LAist has lost $1.7M in annual funding due to Congress clawing back money already approved. The support we receive from readers like you will determine how fully our newsroom can continue informing, serving, and strengthening Southern California.
If this story helped you today, please become a monthly member today to help sustain this mission. It just takes 1 minute to donate below.
Your tax-deductible donation keeps LAist independent and accessible to everyone.
Right now, LAist has lost $1.7M in annual funding due to Congress clawing back money already approved. The support we receive from readers like you will determine how fully our newsroom can continue informing, serving, and strengthening Southern California.
If this story helped you today, please become a monthly member today to help sustain this mission. It just takes 1 minute to donate below.
Your tax-deductible donation keeps LAist independent and accessible to everyone.
Senior Vice President News, Editor in Chief
