Anaheim Chamber Contracts Raise Issue of Cronyism

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The Anaheim Chamber of Commerce used taxpayer dollars to hire consultants with close relationships to the organization, including the chamber president’s father; a controversial political operative; and two members of the business group’s board of directors, Voice of OC has learned.

The chamber was already under scrutiny after an independent audit found it hired the consultants without prior approval from the city as required by a clause in the contract, which was to administer the city’s enterprise zone tax credit program.

Now chamber officials must also answer to questions of cronyism.

Among the consultants are chamber President Todd Ament’s father, Darrell Ament, and blogger Matt Cunningham. The subcontractors with representatives on the chamber’s board were Agency 51 and Inouye, Shively, Longtin & Klatt, certified public accountants.

One good-government expert said that because the chamber’s contract work was paid for with taxpayer funds, the public deserves to know that the subcontractors were chosen because they “are the best qualified, not because they are the most connected.”

“The city itself wants to make sure of the fact that the chamber is not engaging in nepotism and not engaging people who aren’t the best,” said Tracy Westen, CEO of the Los Angeles-based Center for Governmental Studies.

Todd Ament insists that the contractors, including his father, were well-qualified for the work and doesn’t see any problem with their hiring. The consultants were chosen and paid according to policies set by the chamber board, he said.

Darrel Ament has “years and years” of project management experience, Todd Ament said. Because of Darrell Ament’s experience in the city’s public utilities department,he was able to help “connect the dots” between the chamber and the city to build a chamber work-tracking system that the organization used to create quarterly reports for the city, Todd Ament said.

Darrell Ament was assistant general manager of administration and finance with Anaheim Public Utilities until retiring to the private sector in the 1990s, an online biography states.

Last year the City Council outsourced to the chamber administration of the state enterprise zone, which awarded tax credits to businesses that hired from economically depressed areas. The contract has since ended because the state terminated the program.

On its face, the city’s 2012 decision to outsource the work presented a conflict of interest, Westen said, because chamber officials would be approving tax credit vouchers for its own members. A recent audit acknowledged the potential for such a conflict but didn’t find specific examples of improper influence.

Then last year the chamber requested a $1.1-million increase to the contract because, among other reasons, the organization needed more staff for day-to-day tasks.

The Anaheim City Council approved the contract increase even though the independent audit was already underway. The vote for the increase was 4-1, with Mayor Tom Tait voting no. The council members voting for the contract were Kris Murray, Lucille Kring, Gail Eastman and Jordan Brandman.

“We should have had the audit results before we voted on the big contract extension, and that’s why I voted against it,” Tait said.

The audit found that the city couldn’t adequately track chamber staff time and determine whether the organization was spending enterprise zone funds on other activities.

That finding became especially relevant when Cunningham, a chamber consultant, outraged many by publishing on his blog a photo of a defaced teddy bear, mocking roadside memorial sites that Latinos have constructed to honor young men killed in police shootings.

Todd Ament disputed activists’ contention that Cunningham was blogging on behalf of the chamber, saying that he is a public relations consultant but that the organization doesn’t fund the blog.

This denial contradicted a chamber website that referred to Cunningham’s blog as the “Anaheim Chamber of Commerce Blog.” The reference was changed after the controversy became a national story.

City spokeswoman Ruth Ruiz provided a list of the business group’s enterprise zone consultants — 11 days after a Voice of OC request for the names — that confirmed Cunningham’s firm, Pacific Strategies Corp., was paid under the city contract.

Both Cunningham and Todd Ament said Cunningham was paid by taxpayer money only to write an article about the enterprise zone for the Sept. 10, 2012, edition of the Orange County Business Journal. Cunningham was paid a total of $2,000 for the work, according to Ament.

“The only thing that Matt did is write that piece for the Orange County Business Journal,” Todd Ament said.

Meanwhile, Todd Ament’s father, Darrell Ament, was paid for designing a “Microsoft Project-based system and template” to track chamber staff time and deliverables under the enterprise zone work, according to emails from the chamber and Ruiz. Darrell Ament was paid $9,480 for the work, the chamber email says.

The accounting firm Inouye, Shively, Longtin & Klatt was paid $3,480 for accounting work, and Agency 51 received $8,950 for marketing consulting, according to the email. Chamber board member Doug Shively is a partner in the accounting firm, and board member Tony Serna is an employee of Agency 51.

Todd Ament also disputed the audit’s finding that these consultants were hired without seeking contract-required approval. He said that the subcontractors didn’t do work directly under the contract, so the requirement didn’t apply to them.

However, he added that had he known city officials wanted to vet the consultants before they were hired, he would have allowed it.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek

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