A small item on the Orange County Register's political blog the other day stirred memories of a scandal that rattled the highest reaches of California politics in the 1970s.

Louis Cella, a physician who virtually controlled Orange County politics in the 1970s, with tentacles reaching into the Capitol, died Nov. 7 in Palm Springs, the Register reported.

Cella and a very wealthy Orange County rancher and developer, Richard O'Neill, formed a political and business alliance known as "Dick and Doc," that was, in effect, a shadow government. It placed four sycophants on the five-member Board of Supervisors, and Cella's Santa Ana medical clinic had a wing devoted to political operations.

Their hegemony was shattered, however, by dozens of indictments and convictions, including Cella's 1976 federal conviction on 22 counts of tax evasion and Medicare and Medi-Cal fraud in a chain of hospitals that he built.

Dick and Doc financed a number of local and state politicians, including the late Ken Cory, state controller in the 1970s and 1980s. And while most in their political stable, like Cory, were Democrats, they tapped Republicans when it was advantageous.

One GOP legislator – who later received a lucrative lobbying contract from a Cella-connected company – carried a bill that exempted Cella's hospitals from state oversight.

O'Neill, a one-time state Democratic Party chairman, escaped prosecution and died several years ago.

I spent weeks in Orange County in 1975 digging up documents – a laborious feat in that pre-computer era – and interviewing sources about the Cella-O'Neill machine.

Al Donner, my partner at the Sacramento Union, and I broke the story that a federal investigation of the hospital chain had been launched. The Union then published our lengthy series, "Web of Influence," about the machine's intertwined political and financial interests.

While I concentrated on Orange County, Donner delved into Cory's appointments of campaign donors and their relatives as "inheritance tax referees" – some of whom were tied to the Orange County machine.

The deeper we dug, the more tangled the story became, such as the murder of one tax referee as he desperately sought reappointment by Cory, and the never-solved mystery of a yacht that vanished off Baja California. There were 10 people aboard, including the machine's chief political operative, Fred Harber, and Ronald Caspers, an Orange County supervisor and banker who had financed the hospitals.

We uncovered indications of Mafia involvement, including an obscure company partially owned by a known Mafia figure from Las Vegas who was involved in one Orange County land deal.

Donner and I wrote thousands of words, but we always suspected that we had barely scratched the surface.

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Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/walters

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