Focus on Contract Between Auction House and Public Administrator

Thursday, September 30, 2010 | As county officials begin their probe into the estate dealings of Public Administrator/Public Guardian John Williams, attention is beginning to focus on LFC, a Newport Beach auction house with ties to the highest levels of Orange County's Republican Party.

The company, whose headquarters are about a half-mile from a popular Republican watering hole called Gulfstream, recently won a sole source contract to liquidate a $1.25 million property controlled by Williams' agency.

The public administrator/public guardian has been in the limelight since last month when District Attorney Tony Rackauckas fired the prosecutor's heir apparent, former Assemblyman and county Supervisor Todd Spitzer, because Spitzer looked into an estate case Williams was administering. Williams sent a rare complaint to Rackauckas and issued an even rarer weekend news release criticizing Spitzer's action.

The woman whose case Spitzer reviewed along with a victims rights group has called on the California attorney general to investigate Williams, alleging he is aggressively seeking custody cases for seniors.

Since then, county officials announced they are conducting an audit.

County officials are now beginning to ask questions about why the property auction contract with LFC was never brought to the supervisors, as with most large contracts.

A testimonial from Williams on the website details the sale.

Back in the 1990s, when the County of Orange filed for bankruptcy, they contracted LFC to sell their diverse portfolio of properties worth over $250 million through conventional sealed bid and outcry auction methods.

Recently, the County used LFC's Internet-based auction program to sell a nondescript land parcel that had been on the market for more than three years. We established a release price of $1 million for the property. The marketing campaign produced over 2,800 visitors to the website, 32 registered prospects and 7 active bidders. After numerous rounds of bidding, the property sold for $1.25 million. We couldn't believe it.

Legendary former Orange County Republican Party Chairman Tom Fuentes at one point had an office at the firm, and sources close to the transaction said he made the introduction between the company's owner and Williams.

Fuentes said he couldn't remember making the introductions but admits it "may well have been the case."

"I've known the owner of LFC for 30 years. I was there for a couple of years, and I know John Williams," Fuentes said.

But, Fuentes said, "there's no business relationship" with the firm currently, which is why his state statement of economic interests (Form 700) filed with the South Orange County Community College District doesn't indicate any income from the company.

Fuentes said he had his offices at LFC several years ago when he became a senior fellow with Claremont Institute because the firm donated office space to the program. He still regularly communicates with an email address with an tag.

Yet Fuentes said he had no knowledge of the LFC land transaction for Williams' office. However, he has always been a strong supporter of Williams, and sources say he has lobbied county supervisors on Williams' behalf.

Fuentes' introduction of Williams to LFC was around the time that Williams convinced county supervisors to combine the appointed job of Public Administrator (with an annual salary of $20,000) and the elected job of Public Guardian (which pays $138,000) and hand both offices to him.

Fuentes said he didn't recall lobbying for Williams in recent years but said he is a strong supporter and wouldn't discount the fact that he's let people at the county know his opinions in the past. Fuentes said he's also a big proponent of offices like Williams' being elected offices, arguing that it goes with conservative values of heightened accountability.

Williams is a "dedicated public servant," said Fuentes, who also serves on the South Orange County Community College District with Williams. "He's a very committed and hard-working public official, a man of integrity and of great quality."

Williams recently came under fire because of accusations that he was traveling on behalf of the college district while getting paid by the county. A county internal audit cleared Williams of any wrongdoing.

Fuentes said many of Williams' problems in recent years are because "he has [to] bite the bullet and [has] made hard decisions that have gained him enemies or opponents."

Williams has seen his share of controversy over the past year.

A grand jury in 2009 issued scathing reports against Williams that prompted county supervisors to vote on transforming his office back into an appointed position in December. Williams barely survived the 3-2 vote.

As back in 2009, Williams has now hired political attorney Phil Greer to represent him. Earlier this week, Greer confirmed that the county audit is beginning to probe Williams' operations.

While Greer declined to comment on the LFC contract or Fuentes' connections to it, he said Williams is confident that the county audit will clear his agency of any wrongdoing.

Correction: A previous version of this story transposed the salary amounts Public Administator/Guardian John Williams earns for his two positions. We regret the error.

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