Santana: OC Gets a Chance to Stomp Out Cronyism in Government

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Orange County supervisors this week find themselves in a unique position, having been handed the ability to seemingly stomp out cronyism in government…starting in their own backyard.

This past week, a state Senate committee approved legislation that would allow the county to adopt an unprecedented level of scrutiny on government contract approvals for private sector vendors wanting to do business with the county government.

It’s called the Civic Reporting Openness in Negotiations Efficiency Act – quietly called CRONEY in the hallways of power – and this past week, the Senate’s Government and Finance Committee approved SB 331 on a 8-1 vote. Freshly minted Sen. Janet Nguyen, (R-Garden Grove), not only voted no but fumed over the legislation sponsored by the Orange County Employees Association and backed up by a powerful arsenal of labor allies operating from a friendly state capitol environment.

Oddly enough, Sen.  John Moorlach – who as a county supervisor introduced the openness-in-labor talks legislation that is now law in Orange County and triggered the same call for transparency on commercial contracts – missed the opportunity to vote or speak at the public hearing in Sacramento.

That left Nguyen (herself a former Orange County supervisor) alone to battle against the legislation, which was introduced in February. It would mandate the appointment of an independent auditor to review and report on the cost of any proposed contract in excess of $50,000 in any jurisdiction that has adopted an ordinance that sets up more transparent labor negotiations – often called COIN (Civic Openness in Negotiations).

The county and Costa Mesa (which made headlines with an aggressive effort to target labor contracts in recent years) have already adopted the COIN ordinance, joined recently by Fullerton and Beverly Hills.

Yet auditing, similar to COIN, is just the beginning of disclosure with CRONEY.

SB 331 also would require most local public agencies – like the county, cities or special districts – to disclose prescribed information relating to contract negotiations on its web site. The act also would require a minimum of 2 public meetings of the governing body before contract approvals.

The independent auditor’s report also would be required to be made available to the public months before a governing body could take any action to approve or disapprove the contract.

The report also would be required to offer a recommendation regarding the viability of the contract, including determinations as to the fiscal impacts of each term and condition of the contract.

The legislation also would set up a high, in some ways unprecedented, standard for transparency on contracts.

It would require disclosure of all offers and counteroffers 24 hours before public meetings – the offers whose success that are most vulnerable to public disclosure.

SB 331 also would require release of the names of all persons in attendance, whether in person or by electronic means, during any negotiation session regarding the contract, the date of the session, the length of the session, the location where the session took place, and any pertinent facts regarding the negotiations that occurred in that session.

Representatives of the governing body and their staff members also would be required to advise the governing body of all offers, counteroffers, information, or statements of position discussed by the contracting person, or any representative and the public agency.

Nguyen attacked the legislation as direct payback from labor to the county Supervisors and their campaign donors and business associates for the COIN ordinance.

“I get what’s going on here,” Nguyen said at the hearing. “It’s tit for tat.”

She’s probably right on that one.

This is likely a power play because even though labor is an easy political target in Orange County, they have lots of friends up in the state capital. Friends like Sen. Tony Mendoza, who is sponsoring SB 331. Friends like the Association of Orange County Deputy Sheriffs, SEIU, Firefighters and ASFCSME – who all testified in favor of the legislation.

Yet this is also good government.

And that presents an interesting challenge for the board of supervisors from “CRONY County,” as it’s now been dubbed.

Already cast into an intensifying debate over a future ethics commission – even an upcoming ballot initiative – it will be interesting to see how the new board of supervisors reacts to such calls for openness in contracting.

Supervisor Michelle Steele has been blazing an amazingly conservative voting record on the board – steadfastly opposing all kinds of fee increases and even arguing against private-sector developer taxes like the Mello Roos taxes recently sought for a series of new home developments by the Rancho Mission Viejo development company.

Steele’s votes have been triggering all sorts of indigestion on the board.

One week, her colleague Supervisor Lisa Bartlett looked as if she had been sucker punched in the gut as she strained to explain how “we” needed such taxes in order to make homes affordable after a Steel anti-tax vote.

It’s not clear who the “we” she represents is.

What is clear is that one of the first things Bartlett did right after her win was send out fundraising materials to county vendors – an almost immediate nod to the political realities of elected life, ie: the fundraising merry-go-round.

Supervisors’ Chairman Todd Spitzer already tried to get one of his vendors paid quietly through the OC Parks department to roll out the Victims Memorial (which was supposed to not cost any public dollars per the supervisors’ own public vote) until Voice of OC wrote about the issue.

That’s the same parks department that continues to operate under a cloud after it was revealed (again by Voice of OC) that county internal auditors have raised red flags about nearly $1 million in questionable consulting contracts – to politically connected friends.

Yet to hear Nguyen at last week’s hearing, the County of Orange operates like a Swiss watch when it comes to private sector involvement for public contracts.

There are public requests for proposals (called RFPs), public hearings…all sorts of checks and balances on contracts when compared to labor negotiations.

She was there, Nguyen told OCEA Ass. Gen Manager Jennifer Muir last week, when large contracts such as the IT contracts were negotiated.

Nguyen even said she finds it offensive that anyone would dare suggest even a hint of corruption at the process.

That’s a stunning statement given that in the midst of all this, the county’s IT contracts are seemingly unraveling with mounting costs for taxpayers.

County officials are already in lawsuits with one vendor, Tata Consulting.

They are also threatening lawsuits with Xerox Corporation over a new IT relationship that took years to negotiate – largely under Nguyen’s leadership.

That contract started unraveling almost immediately for taxpayers, just after Nguyen’s election to state senate.

And the process, which was strung out for years with an RFP process that was largely stalled while Nguyen and an array of other lobbyists worked endless fundraising angles before a final vote was cast.

Janet Nguyen can get as offended as she likes.

It’s the same kind of indigestion folks like the Orange County Register’s restaurant critics feels when he travels to an OC restaurant and doesn’t see a letter grade like any other county.

That’s because Nguyen (who once drew income from a food business run by her husband) largely blocked any kind of restaurant inspection process that resulted in letter grades when she was in office.

Orange County consumers got less protection because her colleagues listened to her.

Now, the Register has revealed that guess what? Restaurant inspections have been reduced since. Supervisors are now talking about a rating system. But guess who gets to pay? Consumers, through their taxes. Not businesses.

Now that’s transparent.

I found it very illustrative that Moorlach – who would have concieveably argued on the same side as Nguyen – wasn’t’ there.

Nguyen sound frustrated by that at the hearing.

And having covered Moorlach for more than a decade, I can tell you that him missing a public meeting is a real rarity.

Yet the word “Crony Capitalism” isn’t one that you only hear in union halls.

You’ll hear it from Moorlach himself.

When Moorlach was running for state Senate this last spring, he was shocked at the intensity of the Orange County Business Council campaign against him.

And crony capitalism is exactly how he publicly described the forces arrayed against him as he sought to influence policy at a higher level.

Taxpayers backed Moorlach overwhelming despite being inundated with mail warning them not to send him to the state Senate.

I wonder if he sent the business interests arrayed against him his own message by not showing up?

I’ve haven’t had time to reach out to John this week – as he is always the most accessible elected official in government – so I’ll wait for his Moorlach update to hear why he wasn’t at the meeting.

Back in Orange County, Auditor Controller Eric Woolery looks like he’s gearing up for the Iran Contra style hearings on upcoming labor talks, according to a recent press advisory.

All of this is now been made possible by the new COIN ordinance.

It will be interesting to see what kind of media appetite this gets from my colleagues at the mainstream dailies and broadcast outlets.

It will be especially interesting to see if there’s the same appetite by county supervisors for that kind of disclosure on the next private-sector contract for politically-connected friends.

If his colleagues pass Sen. Mendoza’s legislation later this year, Orange County supervisors may soon get to show us their appetite for transparency.

  • Paul Lucas

    Wow it sounds like Janet Nguyen was the threat all along rather than Van Tran being the threat. Now with Loretta looking at the Senate, can we expect a campaign for Janet Ngueyn for Congress?

  • Shirley L. Grindle

    It is too bad we can’t get rid of the Lobbyists who are hired guns for anyone trying to get a contract with the County. That is what this is all about. It is the Lobbyists who tell their clients how essential their services are in securing a contract. Too bad the County’s weak Lobbyist Registration Ordinance did not curtail the campaign fundraising they do for the County Supervisors. For that is the primary reason Lobbyists have influence with the Supervisors.

  • David Zenger

    “One week, her colleague Supervisor Lisa Bartlett looked as if she had
    been sucker punched in the gut as she strained to explain how “we”
    needed such taxes in order to make homes affordable after a Steel
    anti-tax vote.”

    By “we” she means Rancho Mission Viejo who uses CFD (Mello-Roos) taxes to shift the burden of infrastructure costs from the house purchase price to regular property taxes that pay back developer financing. It has zero to do with making “homes” affordable. It has everything to do with facilitating development for RMV.

  • Trudy White

    Let’s not assume that Moorlach not being there was some nefarious abandonment. Life happens to us all, people get sick or have other issues that have nothing to do with the topic. I am not a fan, but he was better than Steele, Nguyen and Spitzer. But don’t delude yourself into thinking that any SB will result in a reduction of BS. They are all too deeply entrenched in the hierarchy of the County. You would have to boot all elected officials and upper levels of management. Anything less is like slapping a bandaid on a gaping bullet hole.

    • David Zenger

      Moorlach has his faults, but in three years I never saw him manipulating procurements for favored lobbyists. All the rest of them routinely did.

      • Trudy White

        I agree completely.

  • Kathleen Tahilramani

    Can’t wait to hear Moorlach’s explanation for being MIA.

  • David Zenger

    “And the process, which was strung out for years with an RFP process that
    was largely stalled while Nguyen and an array of other lobbyists worked
    endless fundraising angles before a final vote was cast.”

    True enough. I used to get sick of the same squadrons of lobbyists alighting in the 5th Floor lobbies over and over again.

    Still, on routine contracts (and there are literally hundreds of them every year) it’s easy to see the process getting bogged down. And the County is already notoriously awful on purchasing QA/QC.

  • Cynthia Ward

    Great job, Norberto. Thanks for the update.

    I wonder, why would you assume Moorlach would vote on the same line as Janet? This attempt at transparency seems like exactly what John was campaigning for, I see no reason to believe he would oppose it. But you know the lay of the land better than I.

    I am floored at Janet’s opposition and her immediate belief that this is some sort of “payback”…since WHEN is it payback against an elected leader to open negotiations to more public scrutiny? The only reason to even consider that position if if one has been preventing public scrutiny. Her reaction alone makes this well worth looking into, and I hope this passes, and becomes a standard for all CITIES to follow as well.

    More often lately it isn’t the bills themselves that are triggers, but the reactions of leaders, that tell us which rocks to look under. At the last Anaheim Council meeting an allegation was made during Public Comments by someone we would all usually ignore (if possible) and as the agenda item itself seemed non-offensive it carried no real attention of its own…until the City Attorney jumped in an advised Council (without being asked) that they were not obligated to reveal ex parte communication with an applicant as the item was not a Public Hearing…now THAT got my attention. What is wrong with these people, that the standard is to prevent public participation and information whenever possible?

    The ethics training all public officials have to renew every 2 years teaches us that the minimum requirement is a BASEMENT not a CEILING, it is the LEAST amount of disclosure required but nothing prevents offering more info, and whenever possible, and certainly when asked, we SHOULD be providing additional info above and beyond what is required as the minimum. We also learn than while the labyrinth of laws and agencies related to compliance is confusing and at times frightening, if one behaves at all times as though their grandmother will read about their actions in the newspaper tomorrow morning, there is a pretty good chance you will remain within the law. What are these leaders discussing in closed door meetings with businesses seeking contracts for public funding, that they don’t want grandma reading about tomorrow, and WHY would you conduct yourself in such a way that you don’t want public scrutiny of those discussions? Someone needs to ask Janet about that, please.

    • David Zenger

      Nguyen almost single-handedly corrupted the County’s IT procurements,
      continuously steering the contract process toward her big supporter –
      Xerox – whenever she could. It was blatant.

      The funny part was
      despite her claims of IT knowledge she knows as much about it as she
      does about dog sled racing; except she knew where the checks were coming from.

      • Lyanna Lyns

        It is much worse than that, David. Nguyen had the computer systems rigged from within, which is where the money was coming from for the fake donations that were laundered into her campaign war chest. Employees have been taking evidence to the DA, Grand Jury, Spitzer, Moorlach, Nelson and others for YEARS. You will be happy to know that swift and merciless punishment has been duly handed out…to the whistleblowers. None of our “leaders” have done anything. Ask the Chief of Staff for the current BoS boys. They know all about it. The DA knows all about it. This is the sweet well that the little piggies have been drinking at, dipping and dipping and dipping, all set up and protected with Xerox and all of the cronies who cover it up. The numbers are staggering. You won’t see Spitzer or Nelson say anything about it, because they play dumb, but their CoS minions shield them from any culpability.