DA Wants to Know Why Deputy AG Fired Local Fair Board

Chaos at the Fair
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Local prosecutors want to have a frank discussion with Deputy Attorney General Helen Arens – seeking information about what prompted her abrupt firing of the Orange County Fair Board as a client back in December 2009.

In July of that year, Arens, working for then-state Attorney General Jerry Brown, came on as general counsel to the OC Fair and Event Center in the midst of a growing controversy over an attempted privatization of the fairgrounds in Costa Mesa by a faction of Republican board members.

The board members, most of whom had been appointed by Gov. Arnold Schwarzenegger, had attempted to purchase the property through a hastily formed non-profit entity. That was too much for Brown’s office, which took the unusual step of firing the Fair Board as a client.

The Dec. 12, 2009 letter by Deputy Attorney General Matthew Rodriguez concluded that given the “seemingly intertwined and potentially conflicting interests of the district, the district board members and the non-profit, we have determined that we should withdraw from providing legal services.”

This week, prosecutors with District Attorney Tony Rackauckas’ public integrity unit sent current board members a request asking them to waive certain legal immunities and allow for a questioning of Arens.

Specifically, prosecutors want fair board members to waive their attorney-client privilege with Arens in order to enable a discussion about closed-session deliberations about about the privatization bid, which involved public funds steered to lobbyists, lawyers, and real estate appraisers working on the deal.

Stan Tkaczyk, one of Gov. Jerry Brown’s most recent Fair Board appointees, promptly responded this week, agendizing a discussion of the request at their upcoming Oct. 25 board meeting in open session.

“I support the request from the DA,” said Tkaczyk (a former Voice of OC board member). “I’d like to find out what went on.”

Fair Board Director Nick Berardino, another recent Brown appointee who pushed for the formation of this year’s citizens’ fair sale review committee, applauded Rackauckas’ interest, noting that the committee’s report raised troubling questions.

The Fair Sale Review Committee spent months combing through records and held interviews related to the year-long privatization bid ultimately writing a report accusing a faction of fair board members of engaging in “money laundering” by using existing contracts to hire lobbyists, lawyers and real estate appraisers to advance their goal of acquiring the fairgrounds.

The report was forwarded to Rackauckas and has since reignited an inquiry.

“I was happy when my fellow board members supported my effort to form the fair sale review committee and clearly that committee did its work,” Berardino said. “Now, it’s incumbent upon all of us to support law enforcement in its effort to get at the truth.”

Arens had a front seat to the beginnings of the attempted privatization of the 150-acre fairgrounds facility in Costa Mesa. Her first day on the job representing the 32nd District Agricultural Association was a July 29, 2009 meeting where she replaced Deborah Fletcher as the fair board’s official legal counsel.

During that period Schwarzenegger was trying to sell off land — including fairgrounds properties up and down the state and other iconic properties like the Los Angeles Memorial Coliseum and San Quentin State Prison — in an effort to close a massive state budget deficit.

Most local fair boards were dead-set against the idea of privatizing their fairgrounds, but members of the Republican-dominated Orange County board were all for it.

Almost immediately, Arens was cast into contentious public meetings over the non-profit privatization bid taking questions at her first meeting about the non-profit being organized by fair board members to purchase the fairgrounds.

In fact, during the end of her first public meeting representing the fairgrounds, then-CEO Steve Beazley told board members that he and Arens would monitor the board subcommittee of David Ellis and Kristina Dodge, who were exploring the non-profit privatization option for the fairgrounds.

At that meeting, Dodge led the motions that authorized the hiring of consultants that would raise so many questions later.

“I move that the board authorize the staff to retain the necessary consultants to assist in carrying out the governor’s and the legislature’s intent, and also that the board direct Dave Ellis and myself, as members of the governance subcommittee, to coordinate these efforts with the [then] CEO [Steve Beazley],” Dodge said.

Except, consultants like former State Senator Dick Ackerman were apparently already working for the fairgrounds, according to legal billing records dating calls back as far as June 22 regarding incorporation for the non-profit entity. Other documents show work starting as far back as May.

An initial review in 2011 by Rackauckas’ investigators cleared fair board members of any criminal wrongdoing. But  Voice of OC published an expose following the DA reports’ release that revealed Ackerman’s billing records and raised questions about authorizations and potential violations of the state’s revolving door ban on former legislators like Ackerman.

Both DA prosecutors and investigators with the state’s Fair Political Practices Commission have been reviewing the Ackerman revolving door allegations for months – re-interviewing elected officials like former State Assemblyman Jose Solorio and State Senator Lou Correa about what Ackerman spoke to them about during calls he billed the OC Fair and Event Center for.

Yet according to sources close to the investigation, it seems unlikely that Ackerman will face prosecution on that front because none of the legislators could recall anything of substance from their conversations with Ackerman.

What does seem to be meriting a further review from prosecutors are the longstanding questions about how parking lot pavement contracts with a land-use consulting firm, LSA & Associates, got amended privately to include payments for lobbyists, lawyers and real estate appraisers working on the fair board’s privatization bid.

Former Los Alamitos Police Chief Mike McCrary said based on his work leading the Fair Sale Review Committee that the fair board’s approach of secretly amending parking lot contracts mirrored the techniques of “money laundering.”

According to the report submitted by the Fair Sale Review Committee, “Frank Haselton, (December 2012 telephone interview with Mike McCrary) LSA consultant, stated he was contacted by Steve Beazley who asked that he sub-contract with Dick Ackerman of Nossaman LLP. He agreed and received Nossaman’s billings, which were paid by LSA, and then LSA billed the 32nd DAA (through CCA) [The California Construction Authority].”

The CCA was a shadowy joint powers authority set up by fairgrounds across the state to speed up construction projects. Fair board members in 2009 moved more than $8 million to the CCA. Brown appointees to the fair board also have called on the California Attorney General to investigate how the CCA operated.

Regarding the LSA contract, the Fair Sale Review Committee report continued, “He [Haselton] stated he was not involved in developing the scope of work for the Ackerman contract nor did he confirm that the work was completed; he described it as a “pass through arrangement. He also stated he only dealt with Beazley and that he was never contact by any other fair employee or Board member (records show he spoke with Ackerman on three occasions and communicated with CCA). (Nossaman [Ackerman’s law firm] invoices July 13, 2009 and August 14, 2009).

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