Robert Citron

Early life Born in Los Angeles, Citron grew up in Burbank and Hemet. His father, Jesse, was the doctor who put an end to alcoholic W. C. Fields's love of scotch. He attended the University of Southern California but did not graduate. In 1960 he was hired by the Tax Collection department of Orange County, throughout the years he was promoted and by the time he ran for election was department supervisor. He ran for the elected position of Tax Collector in 1970 where he won. Three years later Orange County would merge the offices of tax collector and treasurer and this is when Citron's title became Treasurer-Tax Collector.

Treasurer-Tax Collector

Citron controlled several Orange County funds including the General Fund, the Investment Pool, and the treasury Commingled Pool. He sent out the county's tax bills with catchy slogans, such as "Taxes paid on time never draw fines." He won re-election seven times; in his last election victory, his opponent, John Moorlach, charged that his handsome gains were the result of risky betting. At that time, the Federal Reserve Bank began to raise US interest rates, causing many securities in Orange County's investment pools to fall in value. As a result, dealers were requesting extra margin payments from Orange County. These extra margin payments were funded in part by another $600 million of municipal bonds issued by Orange County. However, this fix proved to be only temporary. In December 1994, Credit Suisse First Boston (CSFB) realized what was going on, and blocked the "rolling over" of $1.25 billion in repos ("rollover" essentially means issuing another repo when the previous one ends, but at the new prevailing interest rate). At that point some claim that Orange County was left with no recourse other than to file for bankruptcy. While the county was in bankruptcy, every one of its program budgets was cut, about 3,000 public employees were discharged, and all services were reduced.

Financial scholar John C. Hull later described the incident as "the classic example" of an institution initially earning a profit through risky trades, becoming complacent about risk as a result, and then making disastrous losses.

Criminal conviction

Facing 14 years in prison, Citron pleaded guilty to six felony counts and three special enhancements. Charges also included filing a false and misleading financial summary to participants purchasing securities in the Orange County Treasury Investment Pool. Citron was sentenced to one year of work release and five years of supervised probation, and performed 1,000 hours of community service. He served a year in prison, where he was allowed to work in the commissary.

Death

Citron died at the age of 87 on January 16, 2013.