Thrift Crisis Figure Popejoy Handed Orange County Rescue Job
SANTA ANA, Calif. (AP) _ Former American Savings & Loan Chairman William J. Popejoy was named Orange County chief executive Friday, responsible for making drastic cuts in services and staff to solve the county’s bankruptcy crisis.
The task will be a six-month to nine-month job for Popejoy, 56, of Newport Beach, who volunteered to do it for free and beat out corporate turnaround specialist Sanford C. Sigoloff for the job.
Sigoloff, legendary for reviving such companies as Wickes Co., had asked to be paid $500 an hour. He had generated opposition from county department heads including Sheriff Brad Gates, who warned that his ruthless cost-cutting would irreparably harm the county.
American Savings was the nation’s largest thrift in 1984 when it ran aground on loan and securities problems, and federal regulators installed Popejoy as the replacement for buccaneering financier Charles Knapp.
Regulators credited him with keeping the S&L alive and limiting losses despite a huge run on deposits. Nevertheless, the federal government wound up pouring $1.7 billion into American, and it eventually was sold in 1988 to a group headed by Texas investor Robert Bass.
Orange County’s woes stem from former Treasurer Robert L. Citron’s strategy of pouring money from the county and 186 other government agencies into risky bets on lower or stable interest rates.
Citron’s funds lost $1.69 billion of the $7.57 billion invested when the Federal Reserve raised short-term rates six times last year.