DA Fair Board Investigation Finds No Criminal Conduct

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District Attorney Tony Rackauckas has once again cleared the Orange County Fair Board’s former Republican majority of any criminal wrongdoing relating to their efforts in 2009 to privatize the 163-acre fairgrounds in Costa Mesa.

The 8-page report – nearly a year in the making – has already drawn fire from fairground activists who slammed the DA probe as a woefully inadequate review that took too long, didn’t interview key witnesses and got facts wrong.

Former board members argue the current DA review, just like the 2011 probe, confirms what they always felt: they may have acted sloppily but didn’t’ intentionally break the law or force a privatization to benefit themselves.

Meanwhile, OC Fairgrounds Chairwoman Ashleigh Aitken characterized the report as the end of a chapter in fair history saying, “we hope to move beyond the events of the past.”

“We would like to thank the OCDA’s office for their work in completing this final investigation, and the volunteers of the Fair Sale Review Committee for their dedication to this process,” said Aitken in a statement released by the fairgrounds.

District attorney officials declined to discuss their report.

The report again cleared former state Senator Dick Ackerman of allegations he illegally lobbied state legislators in 2009 on behalf of the Fair Board. State Senator Lou Correa and former State Assemblyman Jose Solorio acknowledged meeting with Ackerman, but said they couldn’t recall what he talked to them about when DA investigators interviewed them years after the initial allegations were made.

The DA review also backs up the most questionable action taken by the former Fair Board: paying out more than $150,000 in lobbying, legal and appraisal contracts without any kind of public vote for those actions.

According to the DA’s report, Ackerman’s law firm – Nossaman LLP – was retained on behalf of the Fair Board by LSA Associates, which had a contract going back a decade with the fairgrounds contracting agency – the California Construction Authority.

Yet according to the report submitted by the Fair Sale Review Committee that triggered the DA review, “Frank Haselton, (December 2012 telephone interview with Mike McCrary) LSA consultant, stated he was contacted by (former Fair CEO) Steve Beazley who asked that he sub-contract with 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].”

DA officials also state that because the contract was to assist with the implementation of the OC Fair’s Master Plan Project, the lobbying contracts were apparently legal.

“All of the fees for Mr. Ackerman’s legal services on behalf of the OC Fair in connection with the proposed sale of the Fairgrounds were reviewed and approved by the OC Fair CEO and a CCA project manager in accordance with both OC Fair Board policy and CCA policy, and, accordingly paid by the CCA,” concluded the report.

The CCA has since dissolved amidst an accounting controversy.

The DA’s conclusions on the legality of the process behind the hiring of and payment to Ackerman stunned former Fair Board Chairman Stan Tkaczyk, who said if that was a legal manner to authorize public spending, then he would be prepared to offer motions in the future for any contract work to avoid public consideration and simply be added to the LSA contract.

The disputed actions date back to the inclusion of the fairgrounds in Gov. Arnold Schwarzenegger’s attempt during the depths of the Great Recession to sell off state landmarks to raise money. 

The board secretly arranged to hire a series of lobbyists and lawyers to best flesh out how to achieve a privatization and drew especially hot fire for attempting to set themselves up to run a private non-profit that would operate the fairgrounds.

There were allegations of criminal conflict of interest – even leading the state attorney general to fire the Fair Board as a client – along with public concerns from county supervisors, a massive citizen petition drive against the sale and ultimately a series of lawsuits that only concluded in the waning days of the Schwarzenegger administration.

Ultimately, Gov. Jerry Brown took the fairgrounds off the auction block.

But for many activists, there was a need to have a final accounting of the Fair Board actions, which were clearly designed to avoid public review.

That led to the board’s newly appointed Democratic majority to organize a Fair Sale Review Committee to do its own probe and collect documents to be forwarded to the district attorney for review.

A 2011 review by the district attorney also concluded that no criminal activity had occurred in a 49-page report.

Yet almost immediately after the report was released, a Voice of OC story showed serious flaws in how the investigation was conducted with key witnesses indicating they were never interviewed.

After their own year-long review was completed, the chairman of the Fair Sale Review Committee – former Los Alamitos Police Chief Mike McCrary – concluded that fair board members had engaged in a type of political money laundering – focusing on how more than $150,000 in lobbyist and lawyer contracts were secretly tucked away inside an existing contract with LSA and Associates without any public action or vote.

During the Schwarzenegger administration, Fair Board members steadfastly and consistently refused to release documents detailing how a series of lobbyists – led by Ackerman – were hired or how they were paid.

Those key documents were only released after two fair activists – Sandy Genis, who is now a Costa Mesa councilwoman, and Theresa Sears – ventured to Sacramento, where documents were mistakenly released to them by clerks at the now-defunct CCA.

Other legal billing documents were only released after Brown appointees came onto the board.

Nonetheless, in a Nov. 24 letter to Orange County Fairgrounds CEO Doug Loftstrom, from Rackauckas’ senior prosecutors, they concluded that, “there was no evidence that there was ever any attempt by the Nossaman firm, LSA Associates, CCA or the OC Fair Board members or staff to hide or disguise, any of the invoices or the expenditures.”

Sears, who played a central role in the fairgrounds task force, said the district attorney’s conclusions were laughable.

“I would think having to travel to Sacramento to get this information (billing invoices) indicates “hiding and disguising.”

“How about an 820-day wait?” added Sears noting that in 2012 she was finally given access to key legal billing invoices that were illegally withheld going back to 2009 despite a public records act request.

One key document turned over to Sears by OC Fair & Event Center CEO Steve Beazley back in 2012 was a $21,070.20 invoice for legal services from Ackerman’s firm, Nossaman LLP.

Sears had been seeking that invoice since December 2009, several months after it was paid. Her and other activists spent years piecing together invoices totaling hundreds of thousands of dollars secretly paid to Ackerman’s firm, to county lobbyist Platinum Advisors and on appraisals of the fairgrounds property.

She said it was stunning that DA investigators never talked to the very activists who blocked the sale and pressed the fair board for documents.

“Give me a break! Sears said. “It’s very troubling that key members of the Fair Sale Review Committee (Genis and Sears) were not interviewed especially since we obtained records the DA didn’t bother to uncover in their first investigation.”

“This report lacks complete credibility without interviewing those key witnesses,” Sears said.

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