Tuesday, August 23, 2011 | The Orange County Fair Board’s attempt to privatize the county fairgrounds in Costa Mesa — a two-year saga that prompted multiple investigations and lawsuits — ended last month when Gov. Jerry Brown officially nixed a proposed sale to the Newport Beach-based Facilities Management West.
But what has not ended is the heightened scrutiny — both locally and statewide — of how fair boards operate and the sometimes-murky ways in which they finance their activities.
The scrutiny is also coming at the height of fair season, with Orange County just finishing its summer fair and the Los Angeles County Fair set to start in two weeks.
In addition to cutting more than $30 million in state subsidies for local fairs, Brown has appointed a task force to study how California’s 78 county fairs should operate. The goal of the 28-member panel, according to state Department of Fairs spokesman Jay Van Rein, is to determine “what are all of the options out there” for governance and funding.
Meanwhile, Nick Berardino, general manager of the Orange County Employees Association and one of Brown’s most recent appointees to the local Fair Board, is pushing for formation of a citizen task force to review the many issues raised by the botched attempt to sell the 163-acre grounds in Costa Mesa.
“We’ve seen these quasi-government agencies and entities that are creatures of the state, and no one is watching them too much,” said Assemblyman Jose Solorio (D-Santa Ana). He submitted several bills over the past two years dealing with the proposed fairgrounds sale and is working with Brown’s staff and the statewide task force.
“We need to increase transparency, monitor their work and make sure they are efficient with our taxpayer or customer dollars,” said Solorio.
Yet while Solorio is pushing for more transparency, local Fair Board leaders are pushing back against Berardino’s calls for a public review.
Both Dave Ellis, Fair Board president, and Steve Beazley, CEO of the Orange County Fair and Event Center, say there’s no point in going over the past. Ellis refused to place the issue on the agenda for the Fair Board meeting Thursday. He has also refused to answer a reporter’s questions on the issue.
Berardino said he will continue to press for a discussion.
“As public officials, Fair Board members owe it to the community and taxpayers to take every possible step to ensure transparency and good government,” Berardino wrote his fellow board members last week. “The path to good governance must be cleared of any barrier to open and effective public discourse.”
The ongoing scrutiny of Ellis and other Fair Board members focuses primarily on their failed effort to buy the fairgrounds through their own non-profit entity when former Gov. Arnold Schwarzenegger put it up for sale in the summer of 2009.
The main unanswered question — which is the focus of an investigation by the state’s Fair Political Practices Commission — involves the quick hiring of former state Sen. Dick Ackerman and the county’s lobbyist, Platinum Advisors.
Critics of the Fair Board have spent the past two years protesting those contracts. They argue that not only was Ackerman’s secret hiring a violation of the state’s open meetings law but his contacts with state legislators regarding the sale amounted to illegal lobbying because he had been out of office less than a year.
Orange County District Attorney Tony Rackauckas investigated Ackerman’s hiring and found no criminal wrongdoing.
Rackauckas’ investigation drew heavy criticism, however, and a Voice of OC story later revealed that DA investigators never looked at Ackerman’s own legal billing records. The records show Ackerman phoned several Orange County legislators immediately before and after crucial votes on the fairgrounds sale.
There are also questions about how the Fair Board paid Ackerman.
Payments to Ackerman came from LSA and Associates, which was one of the Fair Board’s existing subcontractors. LSA paid Ackerman’s law firm, Nossaman LLP, more than $100,000. Platinum Advisors received more than $50,000, according to Ackerman’s billing records.
However, Ackerman billed LSA for services involving contracts for paving the parking lot at the equestrian center and for a master plan update, according to Ackerman’s billing statements and contract documents.
Yet there is no evidence that Ackerman had anything to do with the paving of the equestrian center or the master plan update. He has not returned calls for comment on his work for the fairgrounds.
An Imploding Agency
Also muddying the waters are documents showing that Ackerman’s payments were steered through the California Construction Authority, a little-known and now defunct joint powers authority established by fairs to speed up construction of facilities.
For most of the spring and summer, CCA officials stalled Voice of OC public records requests regarding any contract amendments that would have changed the scope of either contract with LSA and Associates. Those records have yet to be produced.
In several interviews, CCA General Counsel Dick Hyde acknowledged that FPPC investigators were asking similar questions. In the spring, Hyde blamed the agency’s inability to respond to records requests on a fiscal crisis created by the abrupt resignation of their CEO, Tom Baker, over the unauthorized spending of tens of millions on a solar panel project.
In an interview this week, Hyde said he was not aware of any contract amendment that would have authorized Ackerman’s work.
“I don’t think that contract allowed for lobbying,” Hyde said, referring to LSA’s contract with the fair.
Just as the CCA was imploding in November 2010, Baker’s replacement became Becky Bailey Findley, a former OC Fair and Event Center CEO who also at that time was CEO for Facilities Management West and a consultant for the city of Costa Mesa.
Bailey Findley has referred all questions about the Ackerman affair and the solar panels to legal counsel.
But on May 24, Bailey Findley sent out a message to fair CEOs across the state announcing that gross fiscal mismanagement had prompted the death of the CCA:
Late last fall it was discovered that CCA had spent all of its reserves and then some in an attempt to keep the photovoltaic project loans at a reduced interest rate for participating fairs. F&E has supported CCA over the last 8 months plus has reimbursed CA Fairs for the majority of redirected funds.
CCA finds itself at ground zero — no reserves, no prospects for operational support and with a reduced funding mechanism for client fair capital projects. The CCA Board of Directors has engaged in survival planning resulting in a strategy to reinvent the organization in an effort to continue to provide services to CA Fairs now and into the future.
Last November, Bailey Findley drew a stark picture in a memo sent to CCA board members advising them that Baker had resigned suddenly when confronted about the failed solar panel project.
Bailey Findley told board members that the photovoltaic project — whose remnant solar panels are now stored at the local fair in Sacramento called Cal Expo — has spent more than $20 million in a questionable manner subsidizing loans for the installation of solar panels.
“It appears the use of the loan funds was done without the authorization or approval,” Bailey Findley wrote.
Since the blow-up of the solar panel project and the cut in general fund subsidies for fairs, the CCA joint powers authority has been left with only a board and a lawyer, Hyde said.
Hyde and Bailey Findley have since spent months this year trying to collect delinquent payments to the solar panel project from places like the National Orange Show.
Yet since the Feb. 22 Voice of OC story revealing the CCA connection to Ackerman’s billing statements, activists seeking public records requests about the contract say the agency has gone dark.