New Controversy Raises Questions About County Investigations

A secret ongoing review of potential discipline against one of the Orange County government’s highest ranking executives — ordered up almost six months ago — appears to be stalled with Internal Audit Director Peter Hughes last month protesting the lack of interviews with auditors by private attorneys as well as the fact that key documents hadn’t been reviewed.

As a result of the controversy, incoming Board of Supervisors’ Chairman Todd Spitzer says the county’s use of outside attorneys to conduct investigations of top executives and elected officials needs review.

Following a botched internal probe in 2011 that protected former OC Public Works executive and Santa Ana City Councilman Carlos Bustamante (now facing charges on a dozen felony sex crimes), county supervisors devised a system whereby private lawyers – hired and paid by the county – would be assigned to conduct sensitive investigations of top county officials.

“We’re hiring outside counsel to give the sense of impartiality without any interference of anybody else at the county,” Spitzer said in an interview Sunday with Voice of OC.

“These will not be witch hunts,” said Spitzer, echoing his long standing concern about the lack of clear guidelines on use of private lawyers for government probes into fraud, waste and abuse.

Conversely, “we will not drag these things on forever,” Spitzer said.

Yet, as more and more issues are handled by the County Counsel’s office, nagging questions remain over the process for launching these independent counsels as well as how updates and disclosures are being handled.

“I’m not sure I’m comfortable with some of the reforms we’ve put into place,” Spitzer said. “I’m not sure this is working…there are significant glitches.”

Attorney Debra Reilly was hired last October to review Internal Audit Department findings submitted in March to propose legal and/or disciplinary remedies regarding the granting of nearly $1 million dollars in questionable contracts inside the OC Parks Department back when county Chief Operating Officer Mark Denny was in charge of the agency.

Supervisors’ Chairman Shawn Nelson ordered the review- with the aim of receiving suggested disciplinary measures – back in August.

With CEO Mike Giancola preparing to head out on a medical leave on Jan. 21 for back surgery, Denny was slated to take over as acting CEO until Giancola returns.

But that’s been complicated by Denny’s role in the parks scandal. Spitzer has said that if the investigation isn’t complete by the time Giancola goes out on leave, Chief Financial Officer Frank Kim would take over as acting CEO instead of Denny.

According to sources, when Hughes, who declined comment for this article, saw a Voice of OC story detailing that Reilly had been officially hired back in October to review his own department’s work, he wondered why the attorney had not contacted Internal Audit nor picked up any relevant documents.

Hughes reached out to the County Counsel overseeing the case, Wanda Florence, last month asking why his department had not been contacted.

That apparently triggered a tense exchange between Hughes and Giancola, who contacted him privately and challenged him for asking questions about the private attorney’s investigation.

“Peter, since when did Internal Audit staff reach out to be included in an HR investigation? I have never heard of such a thing. Please advise,” read a Dec. 23 email from Giancola to Hughes, released to Voice of OC under the state’s Public Records Act.

County officials are keeping Hughes’ immediate email response to Giancola secret, citing attorney-client privilege.

This might be a violation of the California Public Records Act, say Voice of OC attorneys. They question how an attorney-client privilege can be cited between two people who aren’t attorneys.

County officials did disclose a written response to Hughes from Giancola, one that came later that afternoon, which read “Peter, I want to thank you for the frank discussion as I better understand your effort and the reasons behind it.”

Reilly and Hughes have both declined comment.

The arguments between the county’s Internal Auditor and the CEO comes just as county officials find themselves locked in a tense debate over who should be the county’s chief internal watchdog.

County supervisors find themselves with an Internal Audit department under significant political pressure in the midst of the parks audit, similar to the Bustamante affair.

It’s exactly the type of situation that moving the office from the Auditor Controller was meant to avoid.

Meanwhile, Auditor Controller Eric Woolery is himself locked in a battle with county supervisors, arguing that the department should be moved back to the Auditor Controller’s office to avoid politicization.

Spitzer admits that having the county’s Internal Auditor feel the need to reach out to a private attorney and demand to be interviewed and have documents reviewed is not ideal for the integrity of investigations.

He also notes the pace of the review has been slow.

The relevant audit was completed last March, and only referred for disciplinary review after press coverage by Voice of OC in August. Nelson asked for a referral later that month and a contract was signed in October. By January, key witnesses like Hughes are complaining about not being contacted or even have source documents reviewed.

Spitzer noted that Giancola is under pressure from county supervisors to get the issue finalized.

“He feels pressed to get something done before he leaves out on medical leave,” Spitzer said.

Yet Spitzer underscored that county supervisors are in no way trying to rush an outcome. He believes Giancola erred in scolding the Internal Auditor for reaching out for a status update, admitting it creates the impression of wanting to quash a thorough probe.

“None of these communications should have occurred,” Spitzer said.

“Peter Hughes should not have to reach out to an investigator to have them come get documents,” Spitzer said.

“This should have been provided from day one,” Spitzer added. “Michael (Giancola) needs to ensure anytime in the future there’s an investigator looking at HR, they will be delivered the complete set of all relevant documents.”

  • You’Have Been’Served

    Simply Google to see O.C. Parks doing extortion, murder, on line counterfeiting, Spying and terrorism, etc. Alicia M Raish uses the County Raptor programs to spy on anyone we saw enough on line. This is a Government employee, using Government resources to defraud the government and citizens alike. These secrets are passed to aid the forigin governments that her Crime ring cronies are partners with. See Google “Robert H Haigh fake funeral” He and many of the ID Theft gang have renounced US Citizenship. What Ms. Raish and her staff are doing is Called HIGH TREASON. Which punishment wise is worse than everything else on this site combined.
    You also have the Forged Documents, Fraud Documents and lots of Perjury evidence, the maker included the threats on school children with guns if the maker went to the police. This is on the County computer. See Cyber Forensic’s on
    This person admits murdering her own mom via advance emails threatening to kill her mom 2 days prior. This should no way be at a park supervisors Computer. It is.
    What else is going on?

  • Kathleen Tahilramani

    Let’s not forget that the current CEO was under “investigation” by a outside law firm when he was hired. The investigation was sloppy and flawed and the absolute aim of the exercise was to suppress information and ensure that a predetermined outcome was protected. The concept of hiring an “outside” law firm is lunacy – who pay’s them? The county pay’s them and shadows and influences their every move. These law firms will not bite the hand that feeds them -ever. Something is very wrong here, why is the CEO so interested in fogging this investigation – who is being protected and why? What is lurking in the documentation? What is the link between the CEO and the COO and the Park contract fiasco? I am getting sick of the word “transparency” – it’s like they spew it out with no notion of what it really means. Well here is a challenge, let’s see everything available to determine who know what and who got what on this Park scandal. Let’s “see” some of that good ole transparency. Cheers to Peter Hughes for not allowing thug tactics to get in his way.

  • David Zenger

    Potential violations of the Contracts Policy Manual and contracting best practices should be audited by the Auditor-Controller.

    Potential violations of specific HR policies should be reviewed and acted on by the Human Resources Department.

    Potential violations of the Government Code and Public Contracts Code and Criminal Code should be turned over to the District Attorney.

    Clear enough?

    • “Clear Enough?”…….. Hmmmmm

      Not really!

      Who should investigate the Office of the District Attorney?

      • Debby Bodkin

        The FBI is failing the public by ignoring the shenanigans continuing in the OC District Attorney’s Office. Many lives, careers and families have been destroyed because of the DA’s politically motivated prosecutorial decisions and pick and choose mentality. Justice is for sale in OC–to the highest bidder. If new OC Supervisor Chairman speaks out about the DA’s practices or requests an investigation, Spitzer will be called a disgruntled employee after leaving the DA’s employment.

        The DA is a smart man…. his ducks are all in a row; however, I will not give up that one day, Mr. Rackauckas and his Chief of Staff Susan Kang Schroeder will slip up and when they do, the FBI better be ready! Too many lives have been destroyed.

        • To rely on the FBI is like relying on the fallen Angel. The FBI is under the control of Eric Holder who perjured himself in lie about AP – DOJ intimidation scheme.

          He would not prosecute IRS Lois Lerner and virtually anyone connected to Obama’s criminal scandals.

          The only way you can get justice the American way, Debby Bodkin, is to be responsible in the ballot box.

          So be careful who you will vote for in the First Sup. District.

          I hope that you do not think about Correa.