- 16 -
authorized the use of his opinion. He would have recommended
that the Housing Authority not proceed with the issuance.
Neither Mr. Rosenberger nor anyone else in the Housing
Authority knew of the switch in underwriters until February 1986,
when Mr. Rosenberger was advised of the change by bond counsel.
Mr. Rosenberger believed that the closing on the issuance of the
Bonds occurred on December 31, 1985. As chief of the Riverside
County Housing Authority, Mr. Rosenberger relied upon county
counsel and bond counsel to advise him with respect to the
documents and to discuss any terms that might cause a potential
problem.
County counsel had not been made aware of these problems.
Mr. Anthony Wetherbee served as deputy county counsel and was
primarily responsible for reviewing bond issuances of Riverside
County during 1984 and 1985. He typically consulted with bond
counsel concerning documentation for a given bond issue. Mr.
Wetherbee participated in about 30 or 40 bond closings for
Riverside County. With respect to the Ironwood and Whitewater
issuances, he observed that they differed from other financing in
several ways. For example, most of the documents were being
prepared by the underwriter's counsel, the Stubbeman firm, and
not by bond counsel. The closing was to take place out of State,
but that was not unusual because the primary attorneys (the
Stubbeman firm) were in Texas. Another distinguishing factor was
that the Bonds were to be "warehoused"--kept by the underwriters
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