OC treasurer threw keys at subordinate, violating workplace violence policy, investigation found

Orange County’s elected treasurer was found to have thrown office keys at a subordinate out of anger, according to an investigation county officials commissioned and funded. The report, from 2022, was obtained by LAist through a records request. Its findings were not known to county supervisors until recently.

A secretary who witnessed the incident quit her job the same day as a result, according to the report, which found the September 2021 incident was a likely violation of workplace violence policies.

It’s one of numerous complaints of mismanagement against O.C. Treasurer-Tax Collector Shari Freidenrich, including employee allegations documented by investigators that she’s been an “extreme micro-manager,” and allegations from the county chief executive that she has been late in pursuing $36 million in property taxes owed to the county.

O.C. supervisors now say these findings and other concerns were behind their unusual decision late last year to yank Friedenrich’s authority to oversee the investment of $17 billion in taxpayer dollars. Until recent days, they weren’t telling the public why Friedenrich — who was first elected in 2010 and has run unopposed since — had lost that authority.

Board members addressed the situation at this week’s regularly scheduled meeting on Tuesday and released a “fact sheet” from the county CEO’s office detailing allegations. That includes investigators’ findings that Friedenrich ran a department with a “highly charged atmosphere of mistrust, suspicion and the belief that Freidenrich has engaged in demeaning, condescending and unfair behavior.”

How we got here

LAist reached out to all five supervisors for comment after receiving public records documenting the investigation, an employee survey critical of her leadership and complaints in a resignation letter by a high-ranking executive under her. Supervisor Janet Nguyen did not respond before publication.

Supervisors Katrina Foley and Vicente Sarmiento told LAist that the board pulled back Freidenrich’s authority to invest after a meeting last fall where Foley and Supervisor Don Wagner heard directly from department employees alleging that Freidenrich created a hostile work environment for her department’s staff.

“ The level of toxicity that the employees uniformly shared was alerting,” Foley said of concerns she says she heard directly from employees.

That fall 2024 meeting was the first time Foley learned of the key-throwing incident, she told LAist.

During that meeting, Foley said, the employees also told her Freidenrich’s behavior was causing widespread problems, including delays in cashing checks, a lack of training for new employees and delays in collecting $36 million owed to the county in unpaid property taxes. The alleged collection delays were in filing liens that pressure owners to pay overdue taxes, and in auctioning off properties with long-overdue tax bills.

Additionally, Foley said Freidenrich missed an important deadline to list county assets, a failure she said caused the auditor-controller to be late on the county’s comprehensive annual financial report — one of the county’s most important financial filings. These delays, Foley said, were of concern because they put at risk the county's credit rating and had the potential to delay state and federal funding if the CEO and CFO had not intervened to get the report done.

The list of allegations against Freidenrich were shared in a document prepared by the office of Michelle Aguirre, the county’s chief executive. The document, which is labeled as a “fact sheet,” was distributed to the press by Foley this week.

In a statement to LAist on Wednesday, Freidenrich said, “These allegations claim to create a pretext for disrupting my honest, ethical and effective stewardship of $17 billion in public funds.”

The allegations and Freidenrich’s response

Regarding the alleged delays in filing liens to collect property tax, Freidenrich wrote to LAist that her office has the highest collection rate in the state for the largest type of property tax. She pointed to state data, which show Orange County ranks fourth among California's 58 counties in total property tax collections. She also said that it is not cost-effective to hold annual auctions of properties whose tax bills are years overdue, another issue raised in the county CEO’s allegations. The CEO’s document says Freidenrich hasn’t held an auction since 2021, causing the county to miss out on $4.4 million.

When LAist asked Freidenrich about the allegations of a hostile work environment, including the key-throwing incident, she said: “There has never been any findings of this type of environment related to my management by the County, who investigated some isolated incidents based on allegations several years ago.”

In a written statement to LAist, Freidenrich said the key-throwing incident was due to her being a “klutz.” She said she “tripped on the way to the door to give the staff the keys. The keys flew out of my hands.”

When Freidenrich spoke to investigators in spring 2022, she also told them she tripped and the keys fell out of her hand. The investigators did not find her account credible, stating in their report: “The evidence supports a finding that Freidenrich intentionally threw keys.”

Freidenrich also told LAist she has never previously heard a complaint of lack of staff training. Gaps in employee training were mentioned in a 2021 county performance audit of her department — a finding she provided a written response to at the time — as well as in a union summary of an employee survey it conducted later that year.

Asked for comment, the county CEO’s office said Freidenrich’s comments didn’t address the specific complaints LAist was reporting on.

“The Treasurer-Tax Collector’s responses appear to deflect rather than respond to the specific questions asked by the LAist,” said a statement Wednesday from the office.

“The CEO’s office has been working since 2017 to address long-standing and pervasive issues with the Treasurer-Tax Collector that has been thoroughly vetted in our eight-page fact sheet that we provided to the Board of Supervisors prior to yesterday’s Board meeting,” the statement read.

“Through the PRA process, media outlets have also received reports that further illustrate a long-standing pattern of dysfunction that have caused harm to the department and the employees who work there.”

Public comments from supervisors this week

Orange County Civic Center

(

Yusra Farzan

/

LAist

)

County supervisors discussed concerns about Freidenrich at their regular board meeting on Tuesday in Santa Ana.

“ I do not ... relish bringing these items up in a public setting, which show the mismanagement and improper behavior of the Treasurer Tax Collector,” Doug Chaffee said. Chaffee declined to respond to LAist's separate requests for comment.

“But 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.”

Supervisor Wagner, who also declined to respond to LAist, said at Tuesday's meeting that he and Foley first learned of the scale of alleged mismanagement when they met last fall with a dozen high-level employees who work for Freidenrich.

“They were telling us stories that were hair curling about that office. And that's what finally prompted us to act,” Wagner said, referring to the board’s decision to yank the investment authority from Freidenrich.

About the treasurer’s department

Freidenrich oversees a staff of dozens who collect about $9 billion each year in property taxes, according to state data. She also serves as the banker for public school and community college districts and the county government.

And until the end of last year, she oversaw the $17 billion investment pool for taxpayer funds held by the county, school districts and community college districts. That’s the only part of her job the supervisors can take away, because the rest of her duties are assigned to her under state law as an elected official, according to the county CEO’s office. She remains responsible for the duties assigned to her by law, including collecting taxes, a spokesperson for the CEO’s office said.

When she was elected in 2010, she jumped from managing fewer than 10 full-time staff as Huntington Beach’s elected treasurer to overseeing about 100 employees at the county in her first year, according to data published by the state.

A county spokesperson told LAist that a professional coach was hired to work with Freidenrich when the investigation report was completed in 2022. The county paid $2,200 for the coaching, she said, and also over recent years provided additional internal coaching by Colette Farnes, the county’s HR director, and Michelle Aguirre, the interim county CEO.

Details of the workplace violence investigation

The probe into Freidenrich’s department was conducted by a law firm the county hired following complaints from employees “of abusive conduct and retaliation” by Freidenrich. The report — dated April 29, 2022 — is marked “confidential.” LAist obtained it earlier this month from the CEO’s office through a public records request, citing court precedent requiring release of such investigation reports.

“The allegation that Freidenrich threw office keys at [employee name redacted], in violation of the County's Workplace Violence Prevention Policy, is SUBSTANTIATED,” states the report.

A temporary secretary quit the day of the incident because of Freidenrich’s actions, according to the report, citing testimony by Freidenrich and a witness.

Other employees corroborated the key-throwing incident, according to the report, and investigators did not find Freidenrich to be credible in claiming the keys accidentally flew out of her hands.

The investigation report also stated that among employees there is a belief that “Freidenrich has engaged in demeaning, condescending, and unfair behavior. Complainants contend that Freidenrich created this situation through conduct that is punitive, abusive, and belittling, and that Freidenrich excessively monitors and micromanages employees, thus resulting in a chilling effect on the entire workplace.”

The report states that the evidence supports many complaints from staff “regarding Freidenrich’s condescending behavior and occasionally demeaning conduct, as well as the excessive micromanaging.”

A few weeks after the investigation report, the county’s human resources director noted the findings in a “cease-and-desist” letter to Freidenrich.

“The independent investigator’s findings raise serious concerns about your treatment of Treasurer-Tax Collector employees,” wrote Farnes, the human resources director.

“Physical violence in a County workplace will not be tolerated,” Farnes added.

“As the County’s Chief Human Resources Officer, I am obligated to instruct you to cease and desist from any and all verbal or physical conduct that violates County policy,” she continued. “As an elected Department Head, it is your duty to provide a safe, healthy, and positive working environment for the County’s employees assigned to you.”

Freidenrich told LAist that she disagreed with the investigation’s findings “but accepted it, retained an executive coach and moved on.”

“Taxpayers expect me to do my official duties in a common-sense, efficient and cost-effective manner and to keep public funds safe …” she added, “from time to time, over the past 14 years, I have had to hold some [department staff members] accountable to ensure that the processes in the office are meeting the high standards expected by taxpayers.”

The records the county disclosed to LAist, which include the employee survey and performance audit, show numerous other allegations of mismanagement by Freidenrich in recent years. One is a resignation letter from early 2024 by a high-ranking executive. She alleged that Freidenrich caused high turnover in the department through a “dysfunctional organizational culture.”

The letter was written by Jennifer Burkhart, who resigned in January 2024. She wrote that Freidenrich’s “obsessive micromanagement, paranoia, dishonesty, and bullying” and “disregard for County employees” made for an unhealthy work environment. She added that these issues and Freidenrich’s “unrealistic expectations of perfection and continual criticism” contributed to high turnover within the department.

Concerns about high turnover were also separately highlighted by the county audit and employee survey.

The audit found that Freidenrich’s department had a “significantly higher” share of employees leave their jobs compared to other departments, resulting in a higher workload for remaining staff. About one-third of all staff left the department in 2019, the report found.

Later that year, an Orange County Employees Association survey of 30 employees found that Freidenrich was overly involved in low-level work processes and caused inefficiencies within the department, according to a report summarizing the responses. Employees surveyed by the union said processes and directions changed often. In the survey, employees used words like “Toxic,” “Unhealthy,” “Hostile” and “Fearful” to describe the department’s culture.

Why is the board taking more action now?

Despite the investigation report being provided to the county HR director in spring 2022, two county supervisors told LAist they only learned of it toward the end of 2024.

Sarmiento told LAist that employee concerns about a hostile work environment compelled him to “ reconsider” Freidenrich’s authority over the investment pool.

The board voted in late December to not renew Freidenrich’s investment authority starting in the new year. At that point, Sarmiento said he was aware of general information about challenges at the department — “ the turnover rates, some of the employee comments. But I didn't know with specificity what some of the specific incidents were.”

Since then, Sarmiento said, he has learned more details from the CEO’s office.

Foley said she and other supervisors learned of the mismanagement allegations against Freidenrich last fall at the same time they were learning of problems with former Supervisor Andrew Do’s handling of taxpayer dollars. Do pleaded guilty in October to a bribery scheme to steal millions of dollars meant to feed needy seniors, following an LAist investigation and federal probe.

“ One of the cultural shifts that's happening on the Board of Supervisors is to do away with what I think has been a historical failure to take into consideration employee complaints,” Foley said. “We are no longer allowing those complaints to just sit to the side and be ignored.”

The board, she said, will now take action on staff complaints so issues don’t fester and become a scandal.

“ It's a new board, a new CEO, new management,” she said when asked why it took so long for the board to be alerted. “All I can do is move forward.”

Even so, Foley said the Board of Supervisors is responsible for monitoring Freidenrich’s actions as a county official.

“ We have a legal duty to supervise the official conduct of all county officials, including the county treasurer,” she said. “And this is as it relates specifically to functions and duties of county officers relating to assessing, collecting, safekeeping, management, or disbursement of public funds.”

The shadow of a painful history

The board’s supervision of the treasurer position — or the lack thereof — has been the subject of controversy in the past.

In the 1990s, two of the then-supervisors were indicted by a grand jury for failing to properly safeguard public funds handled by former O.C. Treasurer Bob Citron. His high-risk investments lost $1.6 billion in O.C. taxpayer dollars and prompted the largest local government bankruptcy in U.S. history up to that point.

The county’s 1994 bankruptcy prompted slashes to programs for people in need, including canceling half of the county’s contracts with therapists serving thousands of families at risk of child abuse, the New York Times reported at the time.

An appeals court later dismissed the indictments against the supervisors, but the memory of the bankruptcy lives on.

“ We've seen — many, many years ago — predecessors of ours allow what turned out to be too much independence at the treasurer-tax collector role,” Wagner said during Tuesday’s board meeting.

“ We have suffered through some incredibly difficult and painful lessons when the Board of Supervisors does not act quickly and decisively  when exercising our authority as it relates to public finance,” Chaffee said.