Wall St. Firm Paid for Roth’s 1987 N.Y. Trip : County government: First Boston gave the supervisor $2,500 after he voted to give the investment company a role in the county’s jail financing plans.

SANTA ANA — A Wall Street investment firm gave Orange County Supervisor Don R. Roth $2,500 to pay for a weekend trip to New York with his wife in 1987, four months after Roth voted to give the firm a major role in the county’s multimillion-dollar jail financing plans, interviews and documents show.

After the trip, Roth said in a state-mandated filing that he had received the money from the firm, the First Boston Corp., in the form of an honorarium for giving a “speech at First Boston seminar.”

But First Boston officials said in recent interviews that Roth never gave a formal speech and that the seminar consisted of a closed-door meeting between Roth and about a dozen company officials to talk about jail financing strategies.

These officials said the $2,500 was intended to cover the Roths’ expenses to go to New York City for the meeting, with the rest of their time during the trip left free.

Jackie Roth, Don Roth’s wife at the time, said that she and the supervisor met for an hour on a Friday with First Boston officials, getting a tour of their mid-town skyscraper and shaking hands with two company executives. Most of the four-day trip, she said, was spent sightseeing, dining at restaurants like the Tavern on the Green and attending the Broadway play “Starlight Express.”

The Roths stayed in a $165-per-night hotel room booked by First Boston, arriving Thursday and leaving Sunday. Jackie Roth said she believed the June, 1987, trip was arranged by well-known Orange County lobbyist Frank Michelena.

At the time, Michelena was working as a consultant for First Boston, an investment banking firm that advises municipalities on the financing of public projects and underwrites the sale of bonds. Michelena did not return several telephone calls to his office last week.

Unrelated to the First Boston trip, an investigation of Roth is underway for alleged conflicts of interest involving his relationships with people doing business with the county. Experts in state political law say the New York trip raises new legal and ethical questions about an elected official accepting a fee from a corporation seeking business from an agency the official oversees.

Roth declined comment. His attorney, Dana Reed, said that he could not discuss the ethics of the trip but added, “I see no legal issues here.” He noted that the statute of limitations on political finance violations has run its course, since the trip was taken more than four years ago, and that the First Boston payment was disclosed by Roth as required.

First Boston officials called the company’s payment for the trip unusual but added that it was a relatively inexpensive way to gain an important political figure’s insight into problems municipalities face in financing jail construction. First Boston was interested in gaining a larger share of the jail financing market.

Since the mid-1980s, First Boston has vied for millions of dollars in county business stemming from jail and airport projects, and the firm has also been picked to underwrite some of the $3 billion in bonds to be sold to finance construction of three planned toll roads in Orange County.

Officials said it was First Boston in 1989 that pitched the idea to Roth of building an Orange County jail about 160 miles east of Santa Ana in the Riverside County desert, a plan that Roth championed for more than a year.

Several political finance experts contacted by The Times said that the First Boston trip raises the question of whether Roth--by declaring that he was paid for giving a speech at a New York seminar--misreported the purpose of the trip, a potential violation of the Political Reform Act.

Carol Thorp, a spokeswoman for the state’s Fair Political Practices Commission, said that while she could not comment on the Roth trip specifically, the agency views incorrect reporting of political finances as a serious issue.

“The key factor is whether (the misreporting) was done by mistake or not,” she said. If the FPPC finds an intentional misrepresentation, it can issue a warning or undertake more serious civil disciplinary action, she said.

Ruth Holton, executive director of California Common Cause, said that what Roth did was “certainly unethical, to be wined and dined and put up in a nice place. I would argue there was only one reason they were doing that--to influence his vote. And if he doesn’t realize that, he’s certainly naive.”

Several officials in the banking industry also questioned the trip.

“We never give honoraria to elected officials who might be voting for us in the future,” said Grover McKean, an investment banker who lost an Orange County jail contract several years ago to First Boston and is now a partner in the international investment banking firm of Lazard Freres & Co. “Besides the legal problems, it just gives the wrong impression.”

The FBI and the Orange County district attorney’s office have been investigating since earlier this year whether Roth violated conflict-of-interest laws and other regulations governing public officials in his relationships with several firms and people who do business with the county. The FBI has said it wants to determine whether Roth engaged in a quid pro quo to trade political favors for gifts from business people.

State conflict-of-interest laws ban officials from voting or making governmental decisions on matters affecting anyone who has given them gifts or honorariums totaling more than $250 during the previous 12 months.

In the one-year period after the New York City trip in June, 1987, First Boston does not appear to have had any business before the county that required approval by the Board of Supervisors. County records indicate that Roth did not cast any votes affecting the company during that year.

However, both before the trip and after the one-year legal limit, Roth did vote several times on issues directly affecting First Boston:

* On March 10, 1987, less than four months before the trip, Roth voted with his fellow supervisors to make First Boston the financial adviser for the county’s jail program, a major role that gave the firm responsibility for studying multimillion-dollar bond financing. Because such financing was later abandoned, the firm never received a fee, county officials said.

* On Sept. 13, 1988, the supervisors unanimously approved a motion by Roth to make First Boston the senior fiscal manager for the Theo Lacy Branch Jail expansion in Orange. The firm beat out two other finalists for the job of helping underwrite the $43-million project’s bonds. But First Boston lost the job when legal obstacles delayed the project and county officials decided to finance it without bonds.

* And on June 20, 1989, Roth seconded a motion by Supervisor Harriett M. Wieder to approve a new list of financial firms eligible to handle major building projects for the county. As a result, First Boston was listed among 15 international banking firms as potential underwriters for tax-free government bonds. Officials said selection for this list is crucial to taking on later roles in the financing of county projects.

What county officials describe as Roth’s most critical dealings on an issue that concerned First Boston came several months later, in August, 1989, when he publicly proposed his plan for building a major regional jail in the Riverside desert.

The county was then planning to build a jail in Gypsum Canyon near Roth’s Anaheim-based district. Roth had fervently opposed the plan, and he offered an alternative, announcing that he had held a series of private meetings with a Riverside official during the last year to discuss the desert jail idea. He called the proposal “our best chance to solve Orange County’s jail overcrowding in a cost-effective manner with popular support.”

Both First Boston and county officials said that First Boston had initially pitched the idea to Roth sometime earlier and had done a feasibility study for his office. First Boston had already done work for Riverside County and was well established there.

“He was interested in any idea that would find a solution (to the jail overcrowding problem) that did not include the Gypsum Canyon option, and we talked a lot about it with him,” recalled Michael T. Gomez, an investment banker with First Boston who worked on the desert jail plan.

Roth promoted the idea for more than a year, diverting attention from Gypsum Canyon. County budget director Ronald S. Rubino estimated that staff members spent 1,500 hours studying the desert proposal.

However, a December, 1990, report from the county administrative office doomed the regional jail proposal, concluding that it might cost $969 million more than a Gypsum Canyon jail over 30 years.

From all indications, Roth’s relationship with First Boston began in earnest with the trip to New York City. “It enhanced our relationship with him,” said Michael George, a former director with First Boston who handled the Orange County account at the time and who was at the New York meeting.

Yet, when initially asked several weeks ago about the 1987 trip, First Boston officials denied it took place.

“It’s not our policy to fly government officials anywhere. It’s nothing I’ve ever done. We’re so very careful about this stuff because of disclosure issues,” said Anthony Hughes, a First Boston director who oversees public finance in the western region. “It would strike me as unbelievably unlikely that we would have paid for that.”

But later, First Boston officials said that a check of corporate records showed a voucher for the $2,500 honorarium to cover Roth’s participation in a June 26 seminar at company headquarters. About 10 First Boston executives attended, along with a lawyer and an investor who worked with the company, officials said. Roth was the only elected official there.

Company officials said the meeting was the only one of its kind ever held between company executives and an elected leader. “This was highly unusual,” acknowledged First Boston Vice President Andy MacMillan.

George, the former company official, was asked in an interview why Roth, then a newcomer to the Orange County Board of Supervisors, was picked to attend.

“You say, ‘Why Don Roth?’ I say, ‘Who’s in a better position to come and have this type of confidential discussion with us?’ ” said George. “He ended up being a major figure in the (Orange County) jail siting discussions. What we got from him--what we bargained for--was the insight of a local politician, so we could have an off-the-record discussion in the sense of advising us on political strategies for jail financing” in nationwide projects.

“From our vantage point,” he added, “his participation was worth $2,500.”

George said he wrote Roth a letter just before the trip that read:

“Rather than directly paying for your expenses in connection with the trip to New York, we would propose to pay an honorarium of $2,500 in consideration of your participation in our seminar. I trust that this amount will be sufficient to offset most, if not all, of your related expenses. . . .”

First Boston officials said that as a convenience for Roth, they booked him a room at the Omni Berkshire Place Hotel at their corporate rate. This and all other expenses for the trip, including air fare, were covered under the $2,500 honorarium, company officials said.

George said he isn’t sure how much the weekend cost Roth. “He might have hitchhiked for all I know,” George said.