Weeks after quietly stripping elected Orange County Treasurer-Tax Collector Shari Freidenrich of her ability to manage the county’s $17 billion investment pool, the OC Board of Supervisors took the first step Tuesday, Feb. 11, toward transferring investment authority to the county’s chief financial officer.

As treasurer-tax collector, Freidenrich is the county’s banker, responsible for billing, collecting and safeguarding taxpayer dollars.

Since first elected in 2010, Freidenrich was also responsible for the management of the county’s investments. But in early December, the supervisors declined to renew Freidenrich’s investment authority. Since the beginning of the year, oversight of the investment pool has been under CEO Michelle Aguirre.

On Tuesday, the board approved changes to the county’s investment policy, giving supervisors the ability to delegate investment authority to the county’s chief financial officer, Kimberly Engelby, if they choose to in the future.

The action comes amid complaints from former staff members who allege a toxic atmosphere in Freidenrich’s department and an overly aggressive management style, resulting in a 2022 warning from the county human resources department.

Ex-administrators in her office also said in interviews that Freidenrich’s investments were too conservative and not generating adequate returns.

County supervisors have said little publicly about why Freidenrich was relieved of her investment duties, as noted by District Attorney Todd Spitzer.

“The board is obviously pretty privy to information that most of us in the public are not, but I am a department head, and there are billions and billions of dollars in that fund, and we do not understand why the board feels it’s necessary to do that,” Spitzer said at Tuesday’s meeting.

“The CEO’s office couldn’t keep track of $10 million that Andrew Do squandered,” he said. “If they couldn’t manage and oversee the going out of $10 million, how are they going to oversee billions of dollars?”

Spitzer referred to former Supervisor Do’s recent conviction for taking more than $550,000 in bribes to steer $10 million in public pandemic funds to a nonprofit where his daughter worked.

At Tuesday’s meeting, Freidenrich urged the board to “relieve itself of these fiduciary duties” by delegating investment authority back to her.

“Both the board and the treasurer have a common goal: to protect public funds so the funds are available to the board and other local agencies to deliver critical government services,” Freidenrich said. “Today, I’m asking the board to reconsider this decision and absolve the board of this significant fiduciary responsibility by editing the investment policy.”

Concern over the investment pool and the role of the treasurer harkens back to the county’s 1994 bankruptcy when ex-treasurer Robert Citron and his risky investments sent the county into a financial crisis.

Third District Supervisor Don Wagner said officials have been trying to privately deal with Freidrich’s “disturbing performance issues” and HR-related concerns.

Freidenrich was the focus of a human resources investigation two years ago. A May 19, 2022, letter from Chief Human Resources Officer Colette Farnes to Freidenrich noted that an independent investigator raised serious concerns about her treatment of staff.

“Although the investigation did not find that isolated incidents investigated rose to the level of an (Equal Employment Opportunity) policy violation, it did substantiate a violation of the county’s workplace violence policy,” Farnes wrote in the letter obtained by The Orange County Register. “Physical violence in a county workplace will not be tolerated.”

Freidenrich was instructed to “cease and desist” any and all “verbal or physical conduct” that violates county policy. It is unclear exactly what Freidenrich was accused of doing, although one former staff member complained to human resources that the treasurer stood over her, yelling and pointing her finger.

“As an elected department head, it is your duty to provide a safe, healthy and positive working environment for the county’s employees assigned to you,” Farnes said in the letter.

An independent performance audit of Freidenrich’s office in 2021, also obtained by the Register, found that she had the fewest full-time employees among treasurer offices in four Southern California counties. Orange County had 78 workers compared to 531 in Los Angeles County, 111 in Riverside County and 123 in San Diego County.

The ratio of employees separating or transferring out of her office was 34% in 2019, significantly higher than other county departments, the audit said.

In an interview Tuesday, Freidenrich acknowledged she received the letter from human resources and said she subsequently retained an executive coach. She said she strives to be respectful and ethical when dealing with workers.

“I can assure you, everything I’ve done in my career … has been to assure the work gets done properly,” she said. “The performance of my duties is key and that is what I focus on.”

Jennifer Burkhart worked 16 years in the treasurer-tax collector’s office, 14 years under Freidenrich.

“It was 14 years of hell,” said Burkhart, who resigned in January 2024 as director of tax and central collections. In an interview, she described the office as “extremely toxic, extremely non-functional, everything is micromanaged to a level that is unbelievable.”

Burkhart said there was a revolving door of staff, mostly administrators, while positions would sit empty for months.

“She is basically a bully – everybody gets in trouble for every little thing,” Burkhart said. “Everything is late, everything is last minute … completely disorganized … people were taking early retirement just to get out of there.”

Burkhart said Freidenrich often held onto million-dollar grant checks sent from other government agencies to county departments.

“It’s hard for us to do our jobs when the treasurer is taking checks and hiding them,” Burkhart said. She and other former employees said Freidenrich’s office’s investments did not live up to the pool’s potential.

“The danger is not loss, it’s poor returns for the schools and county,” Burkhart said.

Freidenrich responded that while some grant checks may have been delayed in getting to county departments, it didn’t happen often and she wasn’t hiding them.

Freidenrich was first elected in 2010 and unopposed in her reelection three times since, the latest in 2022. She was previously the city treasurer for Huntington Beach from 1996 to 2010.

Wagner said the changes in policy and management should not pose a risk to county funds beyond what is normal in the market.

“Based on today’s decision, nothing should change with respect to county investments, their safety and their security. What we want to do is make sure that some of these other performance problems don’t bleed over,” Wagner said. “There are plenty of other issues in that office that need some attention, and I think the board has lost faith in Ms. Freidenrich’s willingness to work on those other issues.”

Fifth District Supervisor Katrina Foley also noted Freidenrich hasn’t held property auctions in the last four years. According to an email from the treasurer-tax collector’s office, there are about 735 properties with a total of $3.6 million in delinquent taxes due. The office has the legal ability to auction off the properties to recoup the delinquent taxes.

“Under the circumstances, given that we’ve been tightening up all of our procedures and protocols, this is the time where we’re going to tighten up the procedures and protocols in the treasurer-tax collector’s office,” Foley said. “As a board, we take the responsibility very seriously, and there was enough information provided that we felt like we had to pull in the authority to the CFO and the CEO.”

Changing the investment management will be better for staff and ultimately for taxpayers, Foley said.

“We’ve already been through two years of a staff member calling attention to something that was wrongful and no one doing anything about it. We’re not doing that again,” Foley said, referring to concerns raised about contracts directed by former Supervisor Do. “We have to listen to our professional staff who work in the department, have day-to-day experience and understand what’s working, what’s not working, and why.”

Freidenrich countered whether the board’s concern was, “Am I doing my job? Or is it how I’m doing my job?”

“With my 28 years of investing public funds,” she said, “I’ve proven I am a leader.”

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