Who is Dave Ellis? A Portrait of our Fair Board Chairman.


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Given the shitstorm coming down the pike for the various insiders implicated in the attempted Great Swindle of the Orange County Fairgrounds, we figure it’s time to start introducing some of the players whose names you’ll be hearing a lot in the news in the coming months.  And current Fair Board chairman Dave Ellis is one such character who’s been particularly fascinating to me for a long time now.  Publicity-shy, he’s conducted his 25-year political career as much as possible in the shadows.  (He now prefers to be called “David,” probably because it’s even harder to google.)

Why is it, I wondered, that so many people – of every political persuasion – say things about Dave like:

“That was the sleaziest political operative in Orange County who just walked past.”

– a long-time Newport Beach Republican activist.

“I shook his hand and then looked for some hand sanitizer.”

– Geoff “Pot Stirrer” West, conservative  blogger of “A Bubbling Cauldron.”

“It’s impossible to insult Dave Ellis:  He lives in the sewer, he knows that he lives in the sewer, and he’s proud of living in the sewer.”

– a colleague who has worked with Dave for years.

I knew I needed more details!   But even the most cursory sketch of the man’s quarter-century political career quickly bloats into an encyclopedia of OC GOP corruption and scandal.  At all the great moments – from the 1994 bankruptcy, to the attempt to foist an El Toro International Airport on the public, right up to this year’s Fairgrounds Swindle – Dave Ellis was there in the center, pulling strings, raking in bank, and chuckling to himself.

I’m glad it’s impossible to insult Dave Ellis, because I want to do a complete portrait of him, warts and all (or should I avoid redundance and just say “warts?”)   And why should he feel insulted anyway, given that what most of us would consider misdeeds, Dave considers great successes!

“Cutthroat” Consulting, 1985 to present.

Newport Beach is a Republican universe.  Hence, not only are Dave’s clients all Republicans, the folks he attacks, the enemies he’s made, are also mostly all Republicans.  OJ blogger Ron Winship, a former council candidate and victim of Dave’s, tells me that if you’re not on Dave’s team, you’d better be expecting a scurrilous and deceptive attack mailer a few days before the election, leaving you no time to respond.

Here’s one typical dirty trick Dave played on behalf of one of his Newport Beach clients:  In the 2002 council race there was an anti-development slate known as the “Greenlight Committee.”   (One constant seems dependable:  Dave is always on the side of unlimited development, and politicians with that philosophy tend to be the ones to hire him.)  That year, Dave’s pro-development client Gary Adams was in danger of being defeated by his Greenlight opponent Richard Taylor.

So Dave, without Adams’ knowledge (and improperly using his “Airport Working Group” connections) created a totally deceptive robo-call message that went out to thousands of NB voters in the last few days before the election, claiming 3rd candidate Ron Winship was the “Greenlight candidate” and encouraging all anti-development Newporters to “vote for Greenlight candidate Ron Winship.”  This successfully split the anti-development vote and drained enough votes from Taylor to Winship to throw the election to Adams.

Typically, when asked if he was responsible for this lying robo-call, the mendacious Ellis laughed heartily and denied it – twice.  But after Taylor hired a detective who tracked the message down to the “Airport Working Group” (which was practically synonymous with Dave) he copped to having “created” the message, but protested that he never “authorized” its being released, blaming THAT on “the vendor.”  Yes, and the impeccable Dave Ellis has some prime beach-front property in Costa Mesa to sell you.

Apparently Dave was forced to go “talk to the DA” about this whole affair.  (Picture a few cozy moments confiding in a Father Confessor, followed by martinis and backslaps.)  The main reason this story got as much press as it did is because Mayor Adams, unaware of the trick played on his behalf and mortified to have won in such an underhanded way, went on to craft a law to prevent such abuses in the future.

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People who’ve been inside Dave’s office tell me that, like a safari hunter with stuffed heads adorning the walls, his rooms are wallpapered with his trademark “Eleventh-Hour Hit Pieces.” The kind that usually spell success for Dave’s clients.  The kind that (I imagine) drove his longtime partner Scott Hart to sever ties with him ten years ago (or am I just projecting the relief in Scott’s voice in this article?)  The kind that drove the beloved Barbara Venezia out of politics in 2006, to put and end to the savage attacks on her husband.  By the way, two years later Babs struck back with this pricelessly catty passage in her Register column:

Campaign season delivers more than money for campaign consultants. A winning candidate equals access and influence.

When it’s not election year, many are consultants for the building industry.

Historically, it’s almost impossible to get elected if you don’t tap into building industry funding and support.

But consultants are hired guns; they work for and against cities, depending on the issue and who hires them. They’re lobbying the same people they helped get elected.

Many question this incestuous relationship and say it’s not a recipe for success for residents of any city.

For example, on the Newport Beach City Council, everyone with the exception of Nancy Gardner has at one time been represented by consultant Dave Ellis.

But those hiring Ellis this round may find him distracted as election day nears. His wife’s arraignment on drunk driving charges is Wednesday.  She was arrested July 27 after reportedly leaving the Orange County Fair pulling the “Do you know who my husband is?” routine with the officer.

It’ll be interesting to see where Ellis’ influence lies.  My guess is his strategy will start by attacking the officer’s reputation.  Oddly enough, his wife’s name was not in the DUI listings regularly posted in the Daily Pilot.

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But if a shark was to be jumped in Newport, Dave jumped it last Fall with his attack on the highly respected council candidate, architect, and former Reagan education adviser Rush Hill.  With the City of Bell’s scandals fresh in the public’s mind, and a couple of unions ONE union (firefighters) backing honest, well-known conservative Hill over Dave’s client Ed Reno, Dave cobbled together a masterpiece so absurd that it backfired and assured Hill’s election.  Readers, behold the “Bell-By-the-Bay” mailer!  (Thanks for the PDF, Rush.)

and the backside…

(Dig the young, fit “city manager” apropos of nothing.)  This piece was so over-the-top, a sort of Dave Ellis self-parody, that several previous council allies of Dave cut ties with him over it, and endorsed Rush Hill.  A very RARE Ellis defeat, but to be savored.

Riding the El Toro Airport Gravy Train, 1990’s to 2002

Before we move on to graver matters, it would be wrong to skip over perhaps Dave’s most lucrative gig – propagandizing for the creation of an El Toro International Airport, from the mid-90’s to the Airport’s final defeat at the hands of OC voters with 2002’s Measure W.  From 1998 to 2000 alone he pulled in $620 grand from Newport Beach’s very shrill “Airport Working Group” (AWG) for whom he became the most well-known spokesman and consultant.

Dave took to this job with characteristic gusto, “creating an extensive series of deceptive mailers and television ads portraying a future El Toro International as an inexpensive and safe airport,”  and “ridiculing Airport opponents.” (Pignataro)  Note the unmistakable anti-Semitic imagery in these AWG cartoons, aimed at the largely Jewish leadership of the anti-Airport forces:

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Toward the end there, however, as it became clear that OC voters were going to reject this boondoggle, Dave set to hedging his bets by working both sides – one of his common characteristics we’ll observe. Beginning May 2000, he was also involved in funneling money to legally troubled Seal Beach Councilman Shawn Boyd to help promote affordable housing in, among other places, the former El Toro Air Force Base – obviously a goal at odds with building an Airport there.  (Dave once again had to have “a little talk” with the DA about that one.)

The OC Weekly‘s Pignataro, who did the best work on the issue, describes the feeling of liberation Dave evinced on the defeat of his longtime pet cause:  “Ellis wasted no time returning to his first political love: promoting commercial and residential developments wherever and whenever possible. That put him at odds” with many former anti-development allies, whom he proceeded to gleefully savage whenever convenient.    (ANOTHER Dave characteristic we’ll continue to observe!)

Sowing the Seeds For OC’s Legendary 1994 Bankruptcy

Let’s take a brief break from Dave’s cutthroat consulting, which after all is Dave doing what he’s paid to do, albeit with great relish and no holds barred.  And let’s go back to 1994, when our beloved county suffered the largest municipal bankruptcy in US history.  For those too young to remember, the OC lost $1.6 billion in risky derivative investments that year and was forced to declare Chapter 9 till the following June, causing stock and bond prices nationwide to tumble.  During that time we were forced to fire 3000 public employees, cut every county program budget, and reduce all services.

And who was our broker at the time, beginning in 1991, encouraging our county leaders to pursue these dangerous and exotic investments?  Why, the illustrious stock-market crashers Merrill Lynch – specifically their #1 salesman Michael Stamenson, the self-styled “Master of the Universe” unforgettably portrayed in this NYT article,  who acquired Orange County as Merrill’s biggest account, and boasted of having the ”tenacity of a rattlesnake, the heart of a black widow spider and the hide of an alligator.”

(Merrill later got away with paying us only $400 million and never admitting guilt.  It’s amusing to read the two Wikipedia accounts of the bankruptcy, which are scrubbed totally clean of any mention of Merrill Lynch or their lobbyists and place the entire blame on the shoulders of hapless, superstitious OC Treasurer Robert Citron.)  

More from the NYT:

Mr. Stamenson was Mr. Citron’s No. 1 adviser, and Mr. Citron was his No. 1 client — a client whose elephantine trades were often greeted with ”high fives” by employees at Merrill’s San Francisco office. The relationship was so close that Mr. Stamenson would write ”Bullet Points” for Mr. Citron to tell the Orange County Board of Supervisors. Mr. Stamenson, along with other Merrill executives, gave $4,000 to Mr. Citron’s re-election campaign, 10 percent of the total.

And when Mr. Citron became concerned that rising interest rates would undermine his investments, Mr. Stamenson produced a Merrill economist to quell his fears — wrongly as it turned out.

And guess who was paid good lobbyist money to hook up these pirates with our Treasurer, Supervisors, and other officials whose consent was required?  Why, none other than Dave Ellis and his then-partner Scott Hart!  How did you guess?  As this ‘95 LA Times article lays out,

The giant Wall Street firm [Merrill Lynch], blamed by Orange County for $1.64 billion in investment losses that triggered the county’s bankruptcy, agreed to pay Hart and Ellis a retainer and “a performance incentive, like a bonus” if they helped Merrill Lynch get selected to underwrite county bond deals.

“Our job was to assist Merrill Lynch in marketing bonds [and] underwriting services to different governmental agencies as well as the Board of Supervisors,” Hart said, “[and] to educate them a little bit on what the political environment was in that particular jurisdiction where we were marketing the bonds.”

The article, by Michael Wagner and Matt Lait, bristles with a righteous fury rarely seen in MSM reportage:

For years, a number of Wall Street’s biggest firms and Orange County politicians engaged in a lucrative courtship, with campaign contributions flowing in one direction and multimillion-dollar bond deals being awarded in their wake.Details, brought to light in the more than 9,000 pages of testimony before the Orange County Grand Jury obtained by The Times, show that well-connected lobbyists and political consultants were routinely hired to sway the county’s top elected officials, who chose the underwriting firms for billions of dollars in new bond issues.

The testimony portrays a near-textbook description of “pay to play,” a pernicious system of buying political access that federal securities regulators have been trying to stamp out in recent years. In often frank terms, both consultants and top county officials described how the normally secretive world of municipal finance operated in one of America’s richest counties…

When asked why an underwriter like Merrill Lynch would require a lobbyist to gain access to a public official, Hart responds, “That’s the way it’s been as long as I’ve been around.”  The second page of the article paints a detailed picture of Dave Ellis reporting back to Merrill Lynch which officials will be helpful, which ones may be a problem, and which ones need their palms greased with campaign contributions. Read it with nausea.

Spreading the Stain into the Inland Empire

Q: What’s even better than operating in a county where the DA’s policy is to never go after powerful politicians? (Tony Rackauckas in the OC)

A: Operating in a county where the DA is your actual creation! (Mike Ramos in San Bernardino.)

Dave’s creature Mike Ramos,
San Bernardino’s
endlessly compromised DA.

For at least fifteen years now – since the mid-90’s – our Dave Ellis has been a very busy boy in San Bernardino County.  For a guy like Dave, the Inland Empire is a Wild West of opportunities:  Even less Democratic presence than in the OC; even less government oversight than in the OC; even less of a watchdog press than in the OC; and endless room for commercial and residential development! After having helped elect SB’s District Attorney Ramos, Sheriff Rod Hoops, and numerous other high-ranking officials, and now working as their paid political adviser, there is virtually no restraint on Dave’s profitable meddling in that smoggy wasteland.

The term déjà vu is often misused, and I won’t do that – it properly refers to an inexplicable feeling that you’ve done or seen something before, when you most certainly have not, and it can cause folks to speculate on former lives, or a collective subconscious. Rather, what Dave saw in the 909 was remarkably similar circumstances to those he had fucked up so grandiosely and lucratively in the OC. Just as he had sucked possibly as much as a million dollars from Newport Beach taxpayers and George Argyros in a failed attempt to build an airport at the closed El Toro Base, there was also – lo and behold – another closing Air Force Base near Victorville to be similarly exploited! And just as he had helped shepherd the OC – for huge fees – into bankruptcy through investments in unsafe derivatives, he could do the exact same thing to San Bernardino County’s previously excellent Employees’ Retirement Association! (SBCERA – much more below.)

One last parallel with the OC that should not be left unmentioned: the vital role played by muckraking, watchdog BLOGGERS far in advance of any local mainstream press. In this case we’re giving props to the exemplary, anonymous “InlandPolitics.com” which breaks all the Ellis, Ramos, and SBCERA stories long before the SB Sun and Press Enterprise get around to amplifying, legitimizing, and fleshing them out.

For brevity’s sake I’ll be very selective in reporting Dave’s San Bernardino shenanigans; I apologize for omitting the numerous scandals his pet politicians have embroiled themselves in (often through Dave’s fault), the still-unexplained hundreds of thousands in fees his cronies on the Yucaipa Water Board have paid him, the failed Victorville II power plant which has cost that unfortunate town $50 million so far, and so much more. Instead I’ll focus on the most spectacular and newsworthy of his SB swindles: his nearly $2 billion takedown of SBCERA – a story still developing.

San Bernardino County’s pension fund for its public employees was once ranked one of the highest performing of its size in the nation. For years the fund “prided itself on innovative investment strategies with a primary goal of safety and preservation of capital,” and invested mainly in safe stocks and bonds, easily exceeding its goal of 9% annual return needed to keep pace with mandated actuarial pension obligations and operating expenses. (Unlike many such pension funds, SBCERA doesn’t bear any health insurance obligations, as SB public employees pay a higher percentage toward their own benefits than any other similar group of county employees.)

Brett Granlund of Platinum Advisors

Then, around 2007 along came Dave Ellis, with his ever-present crony former Yucaipa assemblyman Brett Granlund of Platinum Advisors (one of two names you’ll always see pop up whenever Dave is up to no good – the other is Buck Johns of Newport-based Inland Energy, whose I.E. mischief, while considerable, seems confined to Victorville.) How sweet it would be if the fund could make even more by riding on the amazing wave of derivative trading atop the housing bubble – with healthy fees going to consultants Dave and Brett, and the possibility of astronomical bonuses to Fund employees like CEO/Chief Investment Officer Timothy Barrett (based on the expected stellar performance!)

Up to a 100% bonus – that is, an extra $325 grand on top of Barrett’s $325 grand salary? That sure sounded good to Barrett and the other decision makers at the fund, and soon Ellis and friends had themselves a no-bid sweetheart contract to, first of all, lobby Sacramento for the necessary legislation to grant SBCERA the independence (from the SB Supervisors) to make these changes. And the legislation was quickly accomplished – a most curious development, as neither Dave nor his Delta Partners are registered as lobbyists!

And then, because it had worked so well with Orange County’s funds 14 years earlier, Dave and his pals began running SBCERA muchlike a hedge fund,” according to one outside investment manager, sinking huge chunks of it into risky investments – derivatives, real estate, commodities. Well, I think we all remember what happened to Wall Street in 2008-9, and the Ellis-operated SBCERA was hit particularly hard, losing nearly $2 billion in those two years: What was once a top-ranked fund is now ranked in the lowest 10%, and Barrett – recently split for greener pastures – didn’t get quite the bonus he was hoping for… but it’s all good for Dave and Brett who continue to rake in their 6-figure fees!

Bizarrely – well, shamelessly and comically actually – Ellis last year talked SBCERA into establishing an agency fund, “Pacific Public Partners.” NOW, if you are a local public agency tasked with providing health benefits to your retirees, YOU can invest your funds with Dave Ellis and his SBCERA, through Pacific Public Partners!  Doesn’t that sound inviting?? As Inland Politics pungently summarizes, in question form, “An unqualified contractor marketing a pension fund ranked in the bottom ten percent of all pension funds as a money manager to other public entities?” I guess so. Unsurprising that one year later, although Dave naturally continues to get paid for this flight of fancy, there have been ABSOLUTELY NO TAKERS.

It’s now looking like rats deserting the sinking SBCERA ship: First Ellis client and crony former SB Treasurer Dick Larsen, instrumental to bringing Ellis on board SBCERA, unexpectedly resigns; then last October CEO/CIO Barrett abruptly leaves for the greener NY pastures of Eastman-Kodak, followed by Lance Kjelgaard, the chief counsel. The fund cannot go bankrupt like Orange County did; San Bernardino taxpayers are going to be on the hook for making up any shortfalls Dave’s machinations caused. But then, to quote a long-time associate who has worked with Dave in the Inland Empire for 15 years until a recent falling-out:

“I can think of no issue Dave Ellis has ever been involved in where anything constructive has resulted for the benefit of taxpayers.”

What do you say, Republicans? One of yours?

A Rogue’s Gallery of Accomplices

…In which we give Dave a short break, and look at the remarkable number of political associates of his who have had ethical brushes with the law.


William "Buck" Johns

Buck Johns, of Newport-based Inland Energy. Since their days together at the El Toro Airport Working Group in the ’90s, Buck has been one of Ellis’ political “clients” (meaning Ellis is his paid “advisor” and runs all his “hit mail”) and one of Dave’s two inseparable sidekicks. (It’s unclear, between Buck and Brett, which one is Moe and which one Curly.) Over the past decade, from his comfy perch in Newport, Buck has made the unfortunate town of Victorville his fiefdom, presiding over their VV2 powerplant debacle, masterminding their failed EB-5 Immigration program, meddling in their political affairs, and costing the poor Victorville saps millions. The town is now facing three investigations – from the San Bernardino County Grand Jury, the SEC, and the U.S. Citizenship and Immigration Service (USCIS). All of these investigations will lead squarely to the door of old Buck Johns.

Former Yucaipa Assemblyman Brett Granlund of Platinum Advisers (see above.) Formerly known for referring to his hometown as “a dust bowl full of white trash” while sedated in a hospital bed, he and his Sacramento lobbying firm have been connected at the hip with nearly every hinky Ellis enterprise – from the above-described SBCERA disaster (for which Platinum has raked in hundreds of thousands) to the below-described Fairgrounds Swindle (for which Platinum was secretly paid 50 grand for still-undisclosed services.) Brett’s brother Bruce and his ex-wife Lonnie sit on the Yucaipa Water Board, which regularly pays, again, hundreds of thousands of dollars to both Brett’s Platinum Advisors and Dave’s Delta Partners – for services NOBODY HAS YET FIGURED OUT. Brett’s most famous brush with legal trouble came in 2005 when he represented both sides in SB County’s controversial purchase of a jail facility in the town of Adelanto from Maranatha Corrections, and failed to disclose his conflict of interest. Despite the insistence of the very respected investigators that this was an ethical breach, friendly DA and Ellis client Mike Ramos cleared him. Convenient that.

Pharaoh’s Lost Kingdom,
underage Redlands rave hotspot
run by Ellis client
Shahvand Aryana

Shahvand Aryana – Yet another shady character who shows up on Dave’s 700 forms – not a politician and yet somehow in need of between 10 and 100 grand’s worth of Dave’s “consulting” expertise in 2006 – Mr. Aryana owned and operated “Pharaoh’s Lost Kingdom Adventure Park” in the town of Redlands, known in the late aughts for its popular “rave” parties. In the first half of 2009 alone, there had been 99 drug-related arrests at these very profitable raves, and although Mr. Aryana agreed with Redlands Police to limit admission to age 18 and over, he repeatedly reneged on that agreement resulting in what Redlands Daily Facts described as “boys and girls, ages 13, 14 and 15, under the influence of drugs and running around dressed only in underwear, vulnerable to situations no one wants to talk about or even think about.” Still, that represented the least of the 32 code violations dogging that park under Aryana’s tenure – “Neglect of the park is evident in swimming pools with only puddles of stagnant water and on a go-kart track used as storage for old cars. The structures and surrounding amusements are generally in disrepair. Weeds and dirt cover most of the park.” Eventually – although he fought hard in court – Ellis’ client Shahvand Aryana lost his permit to run the place, and, after being shuttered for some time, it is now under new management.

San Bernardino County Sheriff Mike Ramos (see above.) – Not only Ellis’ most useful ally in the County, as client, inseparable friend, and insurance policy, but also a figure of towering Nixonian shamelessness. SB residents who pay any attention are alternately entertained and outraged by his outsize appetite for golf, alcohol, and extramarital affairs; his dependable habit of distracting voters from each successive personal scandal by the launching of pointless “investigations” that lead nowhere; and his jaw-dropping hypocrisy in constantly railing against “political corruption” when he is as guilty of same as anyone in the County. The SB Grapevine, in their editorial “The Two Faces of Mike Ramos,” list numerous questionable contributions bordering on “bribes” to him, his striving for total secrecy while preaching open government for everyone else, his fine for concealing campaign income and expenditures … and since that September piece, yet another fine for doing the same thing again! Heck of a job, SB’s top law-enforcement official!

Hapless obsessive campaign contributor
Mark Leggio.

Mark Leggio – Another strange case from Dave’s 700 forms – like Shahvand, in need of SOME sort of “consulting” services in 2006 to the tune of from $10,000 to $99,999. Auto dealer Leggio somehow just couldn’t get enough of contributing to local Republican candidates, and got six months for laundering more than $50,000 in illegal campaign contributions. What he’d do would be to donate the maximum amount to a candidate and then have colleagues – generally, employees of his car dealerships – make further contributions and illegally reimburse them. The prosecutor alleged Leggio “blatantly violated the law … to either buy political influence or be a political player,” while the Judge, sentencing Mark to a six-month sentence servable on weekends, opined that “he wanted influence and wanted ego gratification.” I wonder if we’ll ever know what non-politicians Leggio and Aryana paid Dave Ellis for in 2006?

The very crooked former Seal Beach councilman Shawn Boyd has a much clearer and dirtier link to our Dave. Remember, we mentioned this in the El Toro Airport section above – he had a complicated deal going around 2000 promoting housing developments throughout Southern California, including on the closed El Toro Base where Dave was supposedly hellbent on putting an international airport.  Still Dave agreed to function as a middleman, funneling 65 grand from trailer park mogul Richard Hall to Councilman Boyd over a couple of years.  Funny thing, though, Dave didn’t feel comfortable being called a “middleman” even though that’s what he was.  As he stammered to investigators, “I don’t know if that’s a correct characterization…  But, um, clearly Richard is paying me and I am paying Shawn. So . . . but we’re working collaboratively on the deals. So I . . . I don’t know if ‘middleman’ is the right term or not.”  Somehow Ellis weaseled out of the matter as he tends to do, but promising young Shawn Boyd was brought down for voting in favor of a  multi-million dollar deal for Hall after secretly receiving $104,000 from him. And lying about it.

Dick “Judas of the Fairgrounds” Ackerman.
The law is closing in.

Former State Senator and Minority Leader Dick Ackerman – whom we Derailers of the Sale have long referred to as the “Judas of the Fairgrounds.”  We’ve long contended that the termed-out Senator was illegally lobbying his former colleagues on the legislature to vote in favor of putting the OC Fairgrounds up for sale, and that the the Fair Board – driven by Dave Ellis – was paying him to do it.  This lobbying would have been illegal, as far less than the required year had passed since he’d left office.  All kinds of weasel words were spoken by Dick and his apologists – he wasn’t really lobbying, he was just gathering information.  And he was preparing legislative language.  And he was only talking to the Governor’s staff, not legislators.  All bullshit – friends of mine have been painstakingly gathering documentation.   And now the Voice of OC reports that the Fair Political Practices Commission has finally launched an investigation into the old hack, based on our new incontrovertible evidence.  Disbarment and a hefty fine for the old smarmy miscreant, anyone?

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It’s truly breathtaking that Dave himself has been in trouble as little as he has, given his habitual contempt for rules and laws. No doubt this is due to his symbiotic relationships with DA’s and other powerful pols in the counties where he operates. Typically on those rare occasions when he does get a slap on the wrist, it’s just a small fine, such as the one he dismissed to the SB Press-Enterprise as “about one-third of the price of a red-light ticket.” Classic sociopathic behavior, don’t you think, to neither apologize nor even attempt to diminish the gravity of one’s offense, but instead to crow about the lightness of the penalty? Let’s see if Dave’s long streak of impunity changes any time soon. Insh’allah…

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The Fair Board’s Alpha Dog

All in all, what a guy for Governor Schwarzenegger to put on the Orange County Fair Board in March of 2007!

Actually it was a little puzzling: The Governator didn’t owe Dave any particular favors anyone could think of, and Boards like these are usually little rewards for wealthy, aging loyalists and idle trophy wives. What would a player like Dave Ellis want with a lightweight gig like this, and what was up? We were soon to see, and it would sure have nothing to do with the Fair Board’s alleged mission of “stewarding” the property as a public trust.

On the Sacramento end, the bone-headed Governor, surrounded on one hand by anti-public property zealots like Chief of Staff Fred Aguiar and on the other by honey-tongued lobbyists like his campaign finance chairman Gary Hunt, was bound and determined to sell off as much state property (your property and mine) as he could – ideally to deserving people who’d been nice to him – for a little extra boost to that year’s revenues. Bottomed-out real estate market be damned.

And on Dave Ellis’ end, well, there’s no way HE was going to lose out on a once-in-a-lifetime chance to control and profit off 150 acres of prime central-OC real estate, scant miles from his home!

What follows is in no way a complete account of the Great Fairgrounds Swindle – that would take an entire book, which will probably be written by the Voice of OC’s Norberto Santana. We are still just telling the story of Dave Ellis here, albeit one of his more colorful and still-developing chapters. So this is the story of how the Fair Board (which I consider synonymous with Dave) facilitated the Swindle.

“Synonymous with Dave?” Yes. For it’s been plain for all to see since 2007 that Dave is the Alpha Dog on the Board – only recently Chairman in name, but always the de facto Chairman. When it came time last month (reportedly on Arnold’s orders) for the Board to unanimously crown him Chairman (against unanimous public opposition) director Gary Hayakawa pointed out that it didn’t make much of a difference if Dave were chairman or not, as he’d still only be one vote out of nine, and the others could easily outvote him if they chose to. Technically true, but that sight has not been seen in lo these four years, of the rest of the Board ever disagreeing with Alpha Dog Dave. (With the exception of now-fired congenital thorn-in-the-side Dave Padilla.) Transcripts show pliant directors Hayakawa and Dykema occasionally fretting about Bagley-Keene violations and the like, but Dave Ellis would always laugh off those concerns, and everyone but Padilla would go right along.

To get his hands onto our Fairgrounds, Dave Ellis would eventually hatch a Plan A, a Plan B, and a Plan C – the Plan A consisting of himself and other members of the Board (some of whom are quite wealthy) forming themselves into a “non-profit” Foundation and buying the property themselves. But first, to accomplish his goals with minimal interference and publicity, it would be a good idea for Dave to start, with one other easily-manipulated Board member, a two-person SUBCOMMITTEE for that purpose.

Genesis of the “Furlough,” or “Governance,” Subcommittee

This document – including annotated excerpts of the DA’s “whitewash” report – begins with the transcript of part of a February 2009 Board meeting, and provides a fascinating glimpse into “Shock Doctrine” practice – the taking advantage of a somewhat unrelated crisis and its resulting confusion and panic to achieve one’s own long-held, insidious aims.

Beginning with mensch Padilla, the Board expresses their angst and outrage over the fact that Fairgrounds workers, whose pay does NOT come out of the state budget, were being unfairly forced to share the pain of Arnold’s state-worker furloughs, and they brainstorm over how to remedy this injustice. Dave bides his time, alone among the directors in not even feigning concern for the workers, until on page 11 he seizes his main chance: The problem according to Dave is that the Fairgrounds are under government (i.e., public) control – subject to the whims of what he calls “the squirrels up in the legislature” (ignoring that the furloughs were ordered by the Governor.) So, Dave proposes forming a Subcommittee to look into privatizing the property somehow. Here is the root of the Swindle, the Original Sin:

Director David Ellis: “… But this conversation brings me back to something we discussed three months ago [?] and that was: Why are we a part of the State of California? I mean I think that this problem: Look, it’s a political entity. The state’s finances are going to go up and down over the decades. Why aren’t we actively working with our partners or whoever the Western Fair guys are, saying: These profitable agricultural associations need to detach from the State of California. That way you govern your own employees and your own — you set your own policies and things like that… You don’t have these squirrels up in the legislature dictating your future. Highlight and capitalize squirrels, because that’s what they are.”

[NB. These “squirrels,” e.g., Lou Correa and Jose Solorio, Tom Harman and Jim Silva, are your representatives and mine; none of us ever voted for Dave Ellis.]

And so the Furlough Subcommittee, later to be known as the Governance Subcommittee, was formed, consisting of Dave, comely tycoon-spouse Kristina Dodge, and with eccentric New-Age Randian Fair CEO Steve Beazley thrown in. Problem is, such a Subcommittee is only allowed to perform an advisory and info-gathering role and to report, in public, back to the full Board. The Bagley-Keene Act explicitly forbids such a subcommittee from actually taking actions, especially the very consequential actions this “subcommittee” would go on to take. Aside from the fact that its very formation should have been agendized and subject to public comment.

[It’s possible, if you’re so inclined, to feel a MINISCULE bit of sympathy for Dave, who had ALWAYS operated in secret and took to the open governance required of public entities like a mole blinking in the harsh sunlight.]

On May 15 of ’09, Governor Schwarzenegger announced to the Wall Street Journal his intent to sell the OC Fairgrounds and many other state properties; it’s unlikely that this took Ellis and other insiders by surprise. It would still be another two months before the legislature, in a notorious underhanded late-night maneuver July 23, authorized the sale. But Dave’s Subcommittee was all ready to spring into action that May.

The Illegal Acts of Dave Ellis’ Subcommittee in Pursuit of “Plan A”

1. The Appraisal. Half a year later, at the historic November Town Hall meeting, a spokesman for Arnold’s Dept. of General Services, despite insisting that the Fairgrounds were being sold come hell or high water, shocked the crowd by admitting to Assemblyman Solorio that the government hadn’t conducted and wasn’t intending to conduct an appraisal of the value of the property. A great crowd-gasp was heard: Our government was planning to sell the property without even knowing how much it was worth? Later on, Solorio followed up in his gentle manner with CEO Beazley: Had there really been no appraisal and why not? Beazley (a failed actor turned Bad Actor) responded with stuttering torrents of circuitous deception, laboriously giving the impression that no appraisal had even been attempted.

Now, through our own detective work, we know what a liar he was. We have uncovered proof (now posted on the Voice of OC) that beginning as early as May 2009, Richard A. Fuller Consulting was secretly paid $36,856.38 of our public money, by Dave’s Board (the OCFEC), for “appraisal services.” The billing was accomplished through the same complex shell game that I describe below in the Ackerman-lobbying section. Richard Fuller is highly respected at what he does, and it’s inconceivable that he didn’t produce the appraisal he was paid for. But none of us citizens have ever seen this appraisal, and the Board alternatively continues to lie or refuses to comment on the matter. (Hard for them to know what to say now, I’m sure.) The only credible explanation for the appraisal’s continued invisibility is that the Fairgrounds are worth a hell of a lot more than anyone’s admitting – certainly more than what Dave’s “Foundation,” or Facilities Management West, or anybody else, really cared to pay.

I’d say this constitutes a triple or quadruple swindle on the public – 37 grand of public money illegally authorized and strenuously concealed, to acquire an appraisal solely for the interests of private gain, and then burying that appraisal so that neither government nor taxpayers will even know what the fair price is, and then OF COURSE capped off by lying about the whole thing.

2. The illegal lobbying of Dick Ackerman. First order of business, Dave had better at least make sure the Fairgrounds were actually going to get sold. Legislators in other localities where Arnold was trying to sell prized public property were fighting back hard and Sacramento was backing off – San Francisco wouldn’t part with their Cow Palace, nor LA with their Coliseum, nor Del Mar with their Racetracks. Fortunately OC voters don’t pay a whole lot of attention to politics and current events, so the sale could be sneaked through quickly if the right someone could make sure OC’s lawmakers were all on the same page. And the perfect guy for that job would be Dave’s crony and long-time, termed-out Senate Minority Leader Dick Ackerman, whom we met above.

As we mentioned there, old Dick was not allowed to lobby his former colleagues legally until the end of 2009, and when it began to look pretty undeniable that he’d been doing exactly that over the summer, OC’s euphemism factory flew into overdrive, and T-Rack pulled one of his trademark phony investigations exonerating Dick. But now Norberto has posted, for all the world to see, Dick Ackerman’s contract for lobbying (the phrase used is “to be liaison with state elected officials”) and phone records of old Dick calling eight key legislators shortly before and after the July 23 vote.

NOW Dick, opening his mouth a crack after 18 months of refusing to utter a word about this, is claiming he can’t say anything due to “attorney-client privilege.” A steaming pile of horse shit. For one thing Dick wasn’t hired as an attorney, and Reggie Mundekis knocks down that excuse in several other ways in the comments here, in the manner of Littlejohn with a quarterstaff.

But what’s really interesting, in that hinky-interesting way, is the method in which billing and payments were made, for both the assessments and Dick’s lobbying (plus an extra mysterious $50 grand to Ellis’ old crony Brett Granlund’s Platinum Advisors.) Meet CCA – the blandly named California Construction Authority. This joint-powers authority had already done tens of millions of dollars worth of construction and land-use planning for the Fair (e.g. decimating the Equestrian Center for additional parking, etc.) so a few extra tens of thousands to them drew no unwanted attention.

Meanwhile, Nossaman LLP, the consulting firm that illegal lobbyist Ackerman and assessor Fuller work for, would bill … NOT CCA, but another environmental consulting firm named LSA, who would in turn bill CCA for these services. Confused? Yeah, that’s the idea, they WANTED you to be confused. Once more: Ellis’ Board paid CCA, which paid LSA, which paid both Nossaman and Granlund’s Platinum Advisors, and Nossaman pays Ackerman and Fuller.

And to top it all off, this is public money Ellis’ Board spent on purposes far different from what they claimed at the time, so we are now in the world of FALSE CLAIMS, which is a World of Shit. See our extensive documentation of the Board’s false claims here, if you really want to get into the weeds of this thing – we’ve figured out the never-completed work these funds were supposedly paying for, and we now know where the funds REALLY went. Yet another evident crime that our new AG, Kamala Harris, is likely to take a great interest in.

Ackerman’s and Platinum’s lobbying for the Fairgrounds Sale, though illegally authorized and paid for, was successful: the entire OC delegation (with the exception of Silva and Duvall) was convinced that “Orange County” and “Costa Mesa” wanted the Fairgrounds sold, and ABx22 passed. Too bad for old Dick though – the state’s Fair Political Practices Commission has taken close note of our documents and launched a “proactive investigation” into this lobbying of his, and the penalty could be disbarment at the least!

3. The Foundation. Another service Ackerman/Nossaman was paid for in this circuitous manner was “assistance with preparation of bylaws and other services in connection with the establishment of a non-profit” through which six covetous Fair Board members (and an unspecified number of other co-conspirators whom we were never able to identify) planned to purchase and run the property themselves. At least this was approved by the Board itself and not just Dave’s Subcommittee, but still payment for Ackerman’s services in the matter were routed through the same Rube Goldberg system and concealed with the same False Claims.

However, this particular action was impossible to keep secret, and backfired pretty severely. As I’ve written elsewhere, Dave’s Fair Board “shook the tree, and the fruit fell, but it did not fall into their hands.”

The Ignoble Face-Plant

A LOT of stuff went wrong with Dave’s Plan A to buy the Fairgrounds.

For one thing, everybody found out about it. It was a confusing time, as I remember, what with the Board’s secretive and underhanded dealings, Jim Righeimer’s Orwellian “Save The Fair” campaign, and the developers beginning to circle around all this chum like sharks. But it was pretty clear that the Board – even if the more deluded and self-righteous of them had convinced themselves they were acting to “protect the Fair” (hello Mary Young & Dale Dykema) – were objectively doing nothing more nor less than attempting to shift it from our public control to their personal control. And that would not stand. Unprecedented public outcry was the first hurdle Dave’s Board banged their shins on.

Then then-Attorney General Jerry Brown was made aware of the shabby goings-on. Like all Fair Boards, this one had been legally represented, for a very reasonable fee, by a “deputy” from the AG’s office. This particular gal happened to be especially passive, and the Board members rarely asked her advice or even bothered letting her know what they were up to, and she didn’t pry. But still, Jerry determined that between the Board’s violations of open meetings laws and the “conflict of interest” he perceived in their Plan A, he couldn’t in good conscience represent them at all, so he recalled that deputy.  From then on (to this day) the Fair Board have had to hire their own legal representation – using our public money, naturally, to hire their friends at top-dollar law firm Mannat Phelps – and as Norberto wrote a couple weeks ago, their legal expenses have skyrocketed into the hundreds of thousands.

Another cluster of the clusterfuck was this: OC Supervisors Bill Campbell and John Moorlach (the only supes to take much notice of the Fairgrounds situation) had originally been interested in and favorable toward a non-profit purchase, but when they saw the shoddy, legally shaky way Ellis’ Board was going about it, they began to distance themselves. Norberto quotes Supervisor Campbell:

“Where I felt things got weird,” Campbell said, “was when we said to the foundation early on that we would like to work with you, and we would willing to provide a financing source but you’ve got to make sure your meetings and decisions are open to the public.”

Campbell continued, “for some reason, Ellis didn’t really like that… I said, you’re using public money to do this and the public has a right to know,” Campbell added. “They never came back to us to ask for the money. And that made me concerned that it (other financing) may be from a developer.”

Eventually the Board of Supervisors asked the District Attorney to investigate the situation – although, granted, anyone who asks for a T-Rack investigation knows what to expect – the merest appearance of diligence, damage control with no risk of damage.

Even lawmakers started to notice something was awry, as Assemblyman Solorio, having second thoughts, filed a bill to rescind the legislative approval of the sale.

Finally, panicked Fair Board members began to drop out of the scam like flies; by early December the jig was up. Bitterly joining the exodus, Dave Ellis spat: “I hope the state retains ownership of the fairgrounds and we give everyone on the grounds enough government to choke a horse.

Of course we realize that when Dave says “government” he refers to the government regulation that he hates so much, not the manipulation of government which is his bread and butter. But still, his fantasy of choking a horse got us thinking – as long as he’d been on the Board he’d been a tireless persecutor of the Equestrian Center, instrumental in cutting it in half for more parking, and making no bones of the fact that he’d like to see it just gone. Does Dave have a problem with horses? Could he be the boy from Equus, grown up? I mean, they shoot horses, don’t they?

The Whitewash, FMW, and Plan B and C…

Off toward the southwest, over the vast placid Pacific, the glowing orange orb is slowly sinking, igniting an exaltation of cumulus; the gulls circle and screech, day draws to a close, and I needs must finish this tale. We’ve already covered most, but not all, of Dave Ellis’ crooked activities relating to the Fairgrounds Swindle. Let me quickly wrap up the rest.

DA Tony Rackauckas – well, actually one of his flunkies, Bill Feccia, behaving exactly like his boss – wasted 10 months and millions of dollars on a Potemkin investigation of the Board’s and Ackerman’s illegal activities, doing God knows what. He apparently talked to no legislators, never contacted dissident Board member Dave Padilla or anyone else who might say anything critical or illuminating, and apparently lifted not a finger to look for incriminating documents that we found pretty easily.  The DA’s dereliction (as so often in the T-Rack office) reeks of cover-up and collusion, and perhaps the new sheriff in Sacramento, Attorney General Kamala Harris, will have something to say about that.

As most of the County knows by now, the most relentless and well-connected of the sharks circling around the Fairgrounds turned out to be Facilities Management West (FMW) – a consortium of ill-tempered, avaricious, secretive Newport millionaires, who went through a painful charade of negotiations with the City of Costa Mesa throughout the Spring of 2010 before leaving them “like a bride at the altar” and snagging the prize for themselves in an apparently fixed auction, all the time represented in Sacramento by Arnold’s finance chairman Gary Hunt.

Ken Fait, the face of FMW.

But Dave Ellis is a worldly, thick-skinned guy who rolls with the punches, so he quickly devised a Plan B: If FMW were destined to be the owners of the property, then at least he and his friends could manage and operate it – of course, for reasonable fees, and unspecified “royalties” on the “intellectual property.” The Board put cranky shriveled pharisee Dale Dykema on Plan B detail,  negotiating this idea with FMW.  (An obvious benefit for FMW would be having the Board on their side as they tried to negotiate the remaining rapids – the one time I met Dave & shook his hand we were both showing up late at an FMW court hearing – he told me he “heard it was gonna be a good show” – and sure enough he was hobnobbing and backslapping with the FMW crowd afterward.)

But the people were not done fighting – FMW was just about the most unacceptable, untrustworthy and unpleasant folks we could imagine taking over the OC Fairgrounds – and we took to the courts, won a series of temporary restraining orders, and before the sale could be consummated, our old AG – always skeptical toward this Swindle – was our new Governor!

NOW Dave Ellis and his cohorts – living on borrowed time as Jerry Brown could (and should) replace them any day – are singing a whole new tune. They have now decided they are AGAINST the sale (although FMW folks keep showing up to the Fair Board meetings with quizzical looks on their faces.) Plan C is some sort of “profit-sharing” agreement Dave would like to strike up with the state.  Although it’s hard to say what those profits are – depending on what day you catch them and what they’re trying to pull off, they will variously claim the Fair made only $800,000 last year, or $4 million.

Can you believe Dave is actually heading up to Sacramento, City of Squirrels, to try to sell Governor Brown on this idea?  As Gus “OC Progressive” Ayer wrote last week in Calitics,

“…we’re hoping that Jerry Brown just summarily fires Ellis when he arrives in Sacramento as one of the Fair Board’s authorized negotiators. Dealing with the Orange County Fair Board would be the governmental equivalent of negotiating with terrorists.

and also offers Jerry this excellent advice:

“Our new Governor has already launched surprise attacks on two of the great boondoggles in the state – redevelopment and enterprise zones.  Now it’s time to take a stab at the half a billion dollar a year spent on lobbying in Sacramento. Take a whack at the guys at Capitol Strategies, Platinum Advisors, and the rest of the high dollar consultants who put together deals. Propose a bill that will preclude any local government funding for lobbyists, since it appears that local government agencies, at 83 million a year, are the number one source of lobbying funds.

If local governments are on the ropes financially, let them cut lobbyists, lawyers and consultants before they start laying off teachers, paramedics, and police officers.”

*

The case can easily be made that, if it weren’t for Dave’s illegal machinations, this Fairgrounds would never have been put up for sale, saving the County untold grief, stress, bad blood, and legal fees. What if he had actually put his considerable energies and resourcefulness into preventing the sale instead, as so many other similar Boards did? That’s just impossible to imagine: As the sinking scorpion sadly confessed to the stung frog, it is just his nature to do what he does.

Rules Are For Lesser People. Or Are They?

Looking back over what we’ve uncovered of Dave’s 25-year political career, and attempting to find some recurring themes to draw it all together, a sort of Unified Theory of Daveness, we can make these observations:

  • He doesn’t seem to have an ideology beyond whatever will make him the most money: He does claim to despise “government,” as many Republicans claim to, but all he seems to mean by that is any government regulations that get in the way of him and his closest friends making as much money as possible.
  • He evinces nothing but contempt for following any rules, especially those regarding disclosure of one’s activities. And on the rare occasion he does get a slap on the wrist, he boasts about how small the punishment was, rather than even feigning regret.
  • He strives to keep his activities shrouded in secrecy as much as possible: I’m told that he HAD A COW when his photo (below) was finally printed in the Daily Pilot – this after two decades of heavily influencing public affairs. This secrecy worked fine for him when he was just a consultant, but it wasn’t something he could continue on the publicly accountable Fair Board.
  • “Dave Ellis Associates.” “Delta Partners.” “Bieber Communications” aka “Bieber-McCracken.” In Upland, “Citizens Against Corruption” and “Neighborhood Preservation Coalition.” That’s just CURRENTLY, and what we know about. The more entities you control and hide behind, the easier it is to conceal your activities, your income, and your connections. And you can also arrange to get KICKBACKS from the subcontractors you send your clients to.
  • He has a tendency, whenever he can pull it off, to hedge his bets and play both sides of an issue – however things turn out he’ll still usually manage to come out on top, and even if he doesn’t, he still collects all his fees.
  • Dave believes that a good friend and ally today is someone it may be convenient to stab in the back and throw under the bus tomorrow. (Conversely, he seems stunned when people he’s savagely attacked rebuff his friendly overtures, as happened with the Venezias.)

All telltale signs of a political sociopath. How long can this guy’s run of impunity continue, and won’t somebody please think of the children? The shadows seem to be gathering about Dave and his cronies. It’s beginning to look like the enemies he’s made outnumber his friends. He is no longer showing up for his public commitments. The attention he is starting to get is purely of the unwanted kind. And as a wise man once said:

“There is no joy on earth quite like bringing a malignant narcissist to justice.”

Dave Ellis, Fair Board Chairman


About Vern Nelson

Greatest pianist in Orange County, and official troubador of both Anaheim and Huntington Beach (the two ends of the Santa Ana Aquifer.) Performs regularly both solo, and with his savage-jazz quintet The Vern Nelson Problem. Reach at vernpnelson@gmail.com, or 714-235-VERN.