Hot off the presses… much more comment to come……
City of Anaheim:
It Has Not Properly Managed Tourism-Related Contracts and Millions of Dollars in Related Funds
January 30, 2024
Dear Governor and Legislative Leaders:
As directed by the Joint Legislative Audit Committee, my office conducted an urgent audit of the public funds that the city of Anaheim disbursed to two private nonprofit entities—the Anaheim Chamber of Commerce (Chamber) and the Anaheim and Orange County Visitor and Convention Bureau (Visit Anaheim). The city entered into contracts with and disbursed more than $100 million to Visit Anaheim, and the Chamber received from both the city and Visit Anaheim more than $6 million in public funds from fiscal years 2012–13 through 2021–22. In general, we determined that the city lacked a meaningful contract monitoring process and did not properly manage the contracts it entered into with these entities, resulting in unallowable spending and unmet deliverables.
In one case, Visit Anaheim subcontracted with the Chamber to provide work related to promoting Anaheim’s tourism and convention industries. Visit Anaheim did this without the required written permission from the city and absent appropriate oversight from the city. The Chamber then used some of these funds for unallowable services, including advocating for or against proposed federal, state, and local legislation and supporting resort-friendly candidates through its political action committee. Furthermore, the Chamber could not demonstrate that it provided Visit Anaheim with three of the 10 agreed-upon services we reviewed from 2018 through 2022, such as holding meetings with local businesses.
In another circumstance, Anaheim awarded a $6.5 million contract to Visit Anaheim to perform economic recovery activities during the pandemic when Visit Anaheim already had millions in estimated unspent public funds intended to fund similar services. Among the recommendations we have made for the city to improve its contract monitoring policies and procedures is for it to seek to renegotiate its largest contract with Visit Anaheim to allow for more effective oversight.
Respectfully submitted,
GRANT PARKS
California State Auditor
Public Funds Paid for Some Unallowable and Undelivered Services
The City of Anaheim Performed No Meaningful Oversight of its Contracts with the Two Nonprofits
Vern here… I gotta run, but let’s all see what’s here…….
UPDATE: The City’s Response
Anaheim shares state audit, supports recommendations with adoption underway
ANAHEIM, Calif. (Jan. 30, 2024) — Anaheim has shared a state audit critical of contract and funding oversight involving Visit Anaheim and the Anaheim Chamber of Commerce and welcomes the report’s recommendations with adoption already underway.
The report, released today by California State Auditor, criticizes how funding and contracts were overseen and recommends additional oversight, contract review and adoption of the state contracting manual, a policy and procedure guide used by the state of California.
“We welcome this audit as we continue to move Anaheim forward,” Mayor Ashleigh Aitken said. “Oversight and accountability are vital to public trust, and we should always be expanding and improving. Along with our recent tightening of lobbying rules, commissioning of a city ethics officer and enhanced rules for city communications, public records and City Council calendars, the audit’s recommendations will be part of a comprehensive set of reforms to guide Anaheim.”
“Oversight of public money is a top priority for me and our entire City Council,” Mayor Pro Tem Norma Campos Kurtz said. “Anaheim is already a better city today. But our work to improve is never done. These recommendations are a welcome addition to the changes we’ve put in place, and I look forward to joining with my Council colleagues in making them best practices for Anaheim.”
The audit looks at oversight of contracts and funding for Visit Anaheim, the Anaheim Chamber of Commerce and the Anaheim Tourism Improvement District, known as ATID.
You can see a fact sheet with history and background here.
Here’s a summary of state auditor recommendations and Anaheim’s implementation:
- Designate a city advisory board for ATID spending by July 2024: in process with initial City Council consideration expected as early as February.
- Adopt California’s state contracting manual by June 2025: adoption has been directed by Anaheim’s city manager, is in process by the city’s purchasing division and expected no later than mid-2024.
- Amend Anaheim’s agreement with Visit Anaheim by June 2025 with more performance indicators, all expenditures, barring of transfers and oversight of any subcontractors: Anaheim has notified Visit Anaheim that the contract will be amended with City Council consideration expected by mid-2024.
- Assess 2019 and 2020 Anaheim Chamber of Commerce contracts to see if any money needs to be returned: The city manager has directed Anaheim’s audit division to review chamber contracts with expected completion by mid-2024.
Other Anaheim actions taken independently prior to the audit:
- Anaheim Chamber contracts: Anaheim stopped major involvement with the chamber in 2022, has no active chamber contracts and has not since 2021.
- Visit Anaheim ATID transfers to the Anaheim Chamber of Commerce: Anaheim’s city attorney in August demanded a halt to Visit Anaheim ATID transfers to the chamber with transfers stopped in September.
- Visit Anaheim pandemic funding: Anaheim has called for the return of $1.5 million in city pandemic relief funding brought into question and continues to evaluate its options.
The audit
The state audit follows a 2023 city-commissioned investigation of issues that came to light in 2022.
In August, former Anaheim City Council member and state Assemblymember Avelino Valencia requested a state audit of funding involving Visit Anaheim and the Anaheim Chamber of Commerce.
In the second half of 2023, Anaheim staff from the city manager’s office, audit division, city attorney’s office and the convention, sports and entertainment and finance departments took part in interviews with state auditors.
Draft findings and recommendations were shared with the city in late 2023 as part of preparing a city response to the audit.
You can read the audit here.
Anaheim Tourism Improvement District
The audit covers oversight of funding for the Anaheim Tourism Improvement District, or ATID.
The district is made up of 94 hotels and motels in The Anaheim Resort near the theme parks and convention center and in the Platinum Triangle near the stadium and Honda Center.
ATID hotels and motels assess themselves 2 percent of visitor stays, in addition to Anaheim’s 15 percent city hotel-stay tax.
The district was created in 2010 by a vote of the Anaheim City Council with approval of a management plan, district maps and related items.
ATID’s self-assessment relieved the city of Anaheim of paying $6 million in yearly funding for the Anaheim/Orange County Visitor and Convention Bureau, known today as Visit Anaheim.
A 2010 agreement made Visit Anaheim ATID operations manager.
ATID assessments are considered public money for a specific, restricted use. They are collected on behalf of ATID by Anaheim along with the city’s hotel-stay tax.
Assessments are not available to the city with spending directed by independent boards.
For the 12 months through this June, ATID is projected to collect $30.6 million from assessments.
Three-quarters of ATID funding goes to Visit Anaheim to book conventions, hotel rooms and to market visits to Anaheim.
Visit Anaheim is projected to see $22.8 million in ATID funding for the 12 months through this June.
A quarter of ATID funding goes toward transportation projects in The Anaheim Resort or Platinum Triangle, projected at $7.8 million for the 12 months through June.
No more than 1 percent of ATID funding goes to Anaheim for collection costs.
ATID: oversight
ATID spending by Visit Anaheim is overseen by a 22-member board made up of hoteliers and including Anaheim’s city manager and executive director of convention, sports and entertainment.
ATID transportation funding is overseen by a three-person transportation committee that meets monthly and made up of a hotelier chairman nominated by Visit Anaheim’s board, a Disneyland Resort representative as the largest ATID contributor and Anaheim’s assistant city manager.
Audit findings: ATID
From 2012 to 2022, the state audit found Visit Anaheim paid $4.4 million to the Anaheim Chamber of Commerce under a 2010 subcontract.
The audit believes some funding to the chamber was used for “unallowable political activities or advocacy” with a list of examples provided without detailing activities.
The city of Anaheim shares concerns about how ATID funding may have been used and welcomes any additional detail.
The city has addressed the issue through its demand to end ATID funding of the chamber, which stopped in September.
Anaheim is in the early stages of adopting the audit’s recommendation of creating a city advisory board for ATID spending, which will provide added oversight.
Audit findings: Visit Anaheim pandemic funding
In 2020, the Anaheim City Council voted to provide $6.5 million in pandemic recovery funding to Visit Anaheim from the city’s convention, sports and entertainment department fund.
The funding was allocated to keep Visit Anaheim staff in place to rebook postponed conventions and to market Anaheim upon reopening after a 60 percent Visit Anaheim staff furlough in 2020.
The city-commissioned 2023 investigation indicated that $1.5 million of the $6.5 million was transferred to the Anaheim Economic Development Corp., part of the Anaheim Chamber of Commerce.
The transfer was unknown to the city before 2023 and went beyond the direction of the City Council’s funding vote.
In August, Anaheim demanded return of the $1.5 million.
Visit Anaheim responded in November that the chamber funding was from its operating cash and not city funding.
The audit raises questions about Visit Anaheim’s accounting of the chamber payment and its use of operating cash other than for tourism promotion for its members.
The city supports the audit recommendation of increased accountability and oversight of Visit Anaheim through a city advisory board and more detailed reporting of performance, expenditures and any subcontractor oversight.
Anaheim also continues to question the $1.5 million transferred to the chamber and evaluate its options.
Audit findings: chamber contracts
Three Anaheim agreements with the Anaheim Chamber of Commerce are also covered by the audit:
- 2020: a $500,000, one-year shop, dine, buy local contract awarded by the Anaheim City Council to promote shopping, dining and business services during the pandemic.
- 2019: a $425,000, one-year contract awarded by the Anaheim City Council for economic development and business promotion services.
- 2012: a $2.9 million, five-year contract awarded by the City Council to administer enterprise zones in the city under a state program.
The audit criticizes the Anaheim Chamber of Commerce for being unable to document some services under the contracts and ATID money received from Visit Anaheim.
In 2022, Anaheim halted major involvement with the chamber with no current agreements in place.
Anaheim supports the audit’s recommendation of reviewing the 2019 and 2020 chamber contracts, with early work underway by the city’s audit division.
Audit findings: conflicts of interest
The audit found no conflicts of interest or personal financial interest among the city, City Council members and the chamber and Visit Anaheim, according to the audit.
So when do the arrests begin ?
they have already begun …. Todd Ament, Harry Sidhu, and Jay Burress … all arrested …
Happy Day …
Jay’s not arrested. I’ll have more to say about Jay, who I’m starting to think was “let go” from Visit Anaheim for telling the truth to the JL Group.
Just unfortunate white collar crimes. Nothing to see here, “We welcome, yadda, yadda, yadda.
Get caught swiping a candy bar from a 7-Eleven and watch Spitzer come after you.
“The homeless and the challenged and the struggling fill the jails
While in City Halls and corporate walls, impunity prevails.
Where piles of wealth accumulate, and not where they belong,
The Ghost of Kelly Thomas marches on…”
“Visit Anaheim responded in November that the chamber funding was from its operating cash and not city funding.”
What a wonderful non-answer. Buress’ position is that it was okay because the money was laundered through the Chamber’s petty cash drawer.
Jay was gone in November. Not that that might not have been his answer.
Yeah I’m pretty busy with other stuff and gonna have to digest all this, but I see writing a piece called “Let This All Sink In.”
We were always outraged by the $6.5 million “Covid Heist of 2020” since we were warned about it at the last minute by Jose Moreno (it was sprung on us as some kind of “emergency.”) We learned from JL that Burress was told to name whatever amount he wanted, he pulled $5 million “off the top of his head,” Sidhu and Ament told him to tack on another $1.5 million which we know (from Burress talking to JL) that was intended to be snuck over (and lied about) to Ament’s non-profit “Economic Development Corporation.”
And from this audit we learn that VA was in no way in need of this infusion, and ALSO that the $1.5 million given to the Chamber went to lobbying and campaigns – electing the NEXT batch of Councilpeople who’d give the kleptocracy whatever they wanted. Federal COVID money. To help elect Faessel, Diaz & Avelino in Nov. 2020 (ironic as this is Avelino’s audit.)
Don’t forget the COVID Heist was passed lockstep, no questions asked, by the Sidhu majority – Sidhu, O’Neil (who always took special delight in fighting Moreno), Brandman, Kring and Faessel. (And led to the firing of Chris Zapata.)
And we should never forget about the OTHER chamber giveaways of 2019-20, misused in the same way. And we learn from the audit that this sort of behavior went on thru 2022, long after Ament was gone – i.e. under Laura Cunningham.
And we see Cunningham justify her Chamber’s use of public funds on political activities because they “demonstrably benefited the tourism and convention industries in Anaheim.” In her opinion. That’s federal COVID money, and money from the City’s Treasury, to keep electing Chamber/Disney-loyal members to Council.
And observing how Jay Burress was “let go” or forced to resign (?) after telling JL all about the $1.5 million, and the fact that Visit Anaheim is denying all that and resisting returning that money, I’ve been thinking that Jay was only let go for being so indiscreet as to tell the truth to JL, while all his friends were stonewalling them.
Lobbying. It occurs to me what the Chamber was lobbying so hard about, in Sacramento, in 2020 – they were trying their best to ease state Covid restrictions so the Resort could be re-opened before it was safe.
Use of our Federal Covid money to try to weaken Covid restrictions. On top of the fact that that $6.5 MILLION if used as intended could’ve saved lives. I think AG Garland WILL take an interest in that.
Thoughts:
FPPC. Political Reform Act.
Did Anaheim violate its own charter? That might take away some immunity.
Spitzer, then PAGA or Bonta.
When did Burress leave? Probably too long ago for a (seemingly legitimate) suit against the city, if he wasn’t paid off already, but he should also talk to an employment lawyer. (Not me, but I know a good one.) I wonder whether this audit might reset a deadline or two.
Cunningham should offer to serve time in place of his wife, as I’m betting that he got her into this mess.
Now Lou Correa is asking AG Garland to look into all this, because of the results of this audit. Is this what it took, this audit, for Lou to finally believe us about these decades of corruption? And, would they care in Washington about what we do in Anaheim, CA? We’ll see.
https://voiceofoc.org/2024/01/will-the-u-s-attorney-general-be-next-in-line-to-probe-anaheim/
We remember how Lou always endorsed Kris Murray, Gayle Eastman, Jordan Brandman, Steve Faessel… all the guilty parties – making some Democrats angry. But I guess people can change. Maybe.
I’m getting more and more irritated at all the spinning that “Anaheim didn’t have enough oversight” etc. As though the voting mayors and councilmembers had no idea what was going on. People like Moreno and Barnes were calling all this out while it was happening and they were treated like tiresome lunatics.
More heads must roll…
Bad boy, Lou, bad boy. Biting the hand that fed you all those years.
Another Correa profile in courage. The train was already pulling out of the station.
Like when he became Anaheim’s district elections champion. In December of 2015.
https://www.orangejuiceblog.com/2016/06/most-outrageous-correa-mailer-yet-anaheims-voting-rights-champion/
https://voiceofoc.org/2016/06/briceno-correcting-correa/
Yeah, I expect that Lou will convey to the powers that B (for Burbank) that he’s just doing this for show. Otherwise, I wonder how he’ll survive being in the Peter Finch role when Disney calls him into a conference room for a little “Ned Beatty in Network” pep talk. A lot harder than running into a not exactly smoldering apartment to “save” some people, I’d bet.
Take a peek at the Loretta Sanchez Senate announcement pics at the Santa Ana train station.
Among the upward mobile professionals was a gaggle of other folks, including Vern and the sheet metal guy. But a closer look reveals Anahiemchamber folks, BOTH mr. And Mrs. Cunningham as well as the lobbyists for Disney that everyone harps about being in bed with Jordan and Mayor Aitken (figuratively). Of course Vince Samiento,Claudio Gallegos and the Disgraced SA councilman as well.
Get out the magnifying glass and look.
This shit has been being baked in the cake. How many members of Congress get FREE disneyland tickets (and Angels) for their contributors through Lou (and Loretta)? Do some Duanne Robert’s level shit and you’ll realize how the surface was only scratched.
LOL I took that video. (Was that 2015? 16?) And I got to ask Loretta a question about the TPP.
Apart from that… sounds like quite a conspiracy! Worthy of a David Lynch movie.
We tend to leave the conspiracy theories to the Greg Diamond’s of the world.
But it is worth noting that David’s comment left some of the progressive wing of the DPOC’S most vocal members licking their chops at the chance at a piece of the action.
https://newsantaana.com/sanchez-announces-her-campaign-for-the-u-s-senate/
OK OK, meds time for OJ trolls.
Let us not forget that Chris Zappata was canned doing the right thing over the 6.5 million. Everyone knew the graft was going on. Just for sport Laura Cunningham should be removed. AITD money is public money and deserves to be treated as such.
And thanks for the excellent reminder at the Anaheim Dems meeting last night!
I disagree that Laura Cunningham should be removed just for sport. She should be removed for good cause — which I’ll bet exists.
IT’S TIME, ANAHEIM!
My Congressman Lou Correa was kind enough to personally send me a copy of the letter he sent to AG Garland and Treasury Secretary Yellin in the wake of this audit. It’s a really good letter (even if it would have been better a few years ago.) We’ve uploaded it here:
http://www.orangejuiceblog.com/wp-content/uploads/2024/02/Correa-Letter-to-Garland.pdf
(Ignore the first page of that linked PDF – that’s in response to a question from Donna about the currently-endangered American Connectivity Program, something she’s been working in – helping lower-income people get phones, tablets, internet.) Here’s Lou’s letter:
Jan. 31, 2024
Dear AG Garland and Secretary Yellin:
I write to express concern regarding allegations of improperly spent public funds from the City of Anaheim (City) by two 501(c)(6) nonprofit entities. On January 30, 2024, the California State Auditor released its audit of the public funds that the City disbursed to the Anaheim Chamber of Commerce (Chamber) and Visit Anaheim. In light of these findings, I ask that your agencies investigate this matter in order to determine whether any laws were broken, or any federal funds misappropriated.
The audit determined that the City had failed to maintain proper oversight policies that led to questionable, and possibly illegal, use of funds. Specifically, the audit found that “Visit Anaheim subcontracted with the Chamber to provide work related to promoting Anaheim’s tourism and convention industries. Visit Anaheim did this without the required written permission from the City and absent appropriate oversight from the City.”
The City unnecessarily paid Visit Anaheim $6.5 million during the COVID pandemic for an economic recovery contract despite the fact that Visit Anaheim already had millions of dollars in tourism district assessment reserves, according to the state audit. The audit found that the City’s lack of oversight misled Visit Anaheim to award $4.4 million in taxpayer dollars for unallowable services, including lobbying on proposed federal, state and local legislation; meeting with elected officials; and supporting resort-friendly candidates through the Chamber’s political action committee.
The source of these funds remains unclear, given that the City reported through its Coronavirus State and Local Fiscal Recovery Funds filing that “we allocated $6.5 million in federal coronavirus assistance dollars to Visit Anaheim, which books events at the Anaheim Convention Center and promotes Anaheim as a place to visit.” This fact raises the possibility that federal funds were used for improper political activities.
The findings of the state audit raise serious concerns for my constituents, and the initiation of a federal investigation into this matter is in the best interest of taxpayers. I urgently request that you investigate whether any federal laws were broken by the City, the Chamber, or Visit Anaheim.
I thank you for your immediate attention to this issue. If you have any questions, please don’t hesitate to reach out…
One cheer plus a grave nod for Lou.
Who do you think wrote it?