Jury Seeks a Longer Term to Probe O.C. Bankruptcy : Government: Foreman says money and effort will go to waste if new panel is sworn before report is complete.

SANTA ANA —  The Orange County Grand Jury, which is investigating local officials’ involvement in the county’s unprecedented financial crisis, has asked the Board of Supervisors to extend the jury’s term until Dec. 31 so it can complete its inquiry, officials said Monday.

The foreman, Mario Lazo, made the request in an April 3 letter to the supervisors, contending that time and money would be wasted if new grand jury members were forced to acquaint themselves with the complex financial issues the current jury is already investigating. The current jury’s term concludes June 30, the final day of the fiscal year.

“All of the investigation and research carried out by the 1994-1995 grand jury would be lost to the new jury, since the new one may not by law prepare reports based on the investigations of another body,” Lazo wrote. “It must do its own research.”

Board Chairman Gaddi H. Vasquez said he and his colleagues would discuss extending the jury’s term when the supervisors meet May 2. “I believe the request is justified,” Vasquez said, adding that he would recommend that the board approve the grand jury’s request.

In his letter, Lazo noted that the “county’s fiscal crisis totally overshadows in importance everything else that the jury had been working on prior to Dec. 6,” when the county became the largest municipality in U.S. history to declare bankruptcy.

“Only recently has the jury’s focus on several issues begun to sharpen,” Lazo explained. “If the jury’s reports are to be completed in the less than three months left to its current term, we do not feel that the jury’s civil oversight mandate can be adequately fulfilled.”

Although the grand jury’s proceedings are secret, it is widely known that the 19-member panel is looking into the financial and governmental implications of the bankruptcy as part of its government watchdog role.

The panel even has hired an internationally renowned investigations firm to assist in its probe, Lazo said. The firm, Kroll Associates, has investigated terrorists, followed money trails in probes of Saddam Hussein and Imelda Marcos, and pursued organized crime figures in New York City.

For months, the jury has heard testimony from a variety of county leaders about the crisis. Among those who have been called to testify are Chief Executive Officer William J. Popejoy, county bankruptcy attorney Bruce Bennett, former interim treasurer Thomas E. Daxon, Health Care Agency Director Tom Uram and Chief Probation Officer Michael Schumacher, sources have said.

Lazo’s letter indicated that grand jurors have also heard testimony from witnesses brought to them by investigators from Dist. Atty. Michael R. Capizzi’s office as part of a criminal investigation into the case.

“Should the district attorney not be able to complete this hearing before June 30, all the time and effort spent on bringing witnesses before the grand jury will have been lost,” Lazo wrote. “The hearings would have to be reopened with all the same witnesses at great county expense before a new and inexperienced jury.”

Lazo said in an interview Monday that even though the panel is hearing testimony from witnesses brought by the district attorney, “no charges have been pressed, nor have any been suggested at this point.”

Capizzi said his office would continue its investigation regardless of who is sitting on the grand jury.

“We can live with whatever system is in place,” Capizzi said. He declined to discuss his criminal investigation or to say who has been called to testify before the panel.

To extend the grand jury’s term, the board would have to pass a resolution that, in effect, would allow the following grand jury to sit for an 18-month term as well. County officials said the next jury must be impaneled for 18 months because it would not be able to accomplish anything if it sat for only six months.

Under state law, grand jury terms must expire at the end of either a calendar year or a fiscal year. The only other time the county allowed a jury to sit longer than its one-year term was in 1973, when officials decided to switch grand jury terms from calendar years to fiscal years.

Lazo said county residents would be better served with two panels each meeting for 18 months than by three sitting for a year each.

“It would take at least three months to get up to speed on everything. New jurors are going to be babes in the woods, like we were at first,” Lazo said.

Supervisor William G. Steiner said he was supportive of extending the grand jury’s term.

“It’s obviously a benefit to have the consistency of this grand jury seeing the process through to conclusion,” he said.

Times staff writer Rene Lynch contributed to this report.

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