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An annual rock concert sponsored by District Attorney Tony Rackauckas to raise awareness and funds for victims of human trafficking is also raising questions about the music promotion business run by his chief of staff, Susan Kang Schroeder.
The public generally was unaware of Schroeder’s business connections to the concerts because Rackauckas doesn’t require her to file an annual conflict of interest statement, known as a 700 form, that all California government workers must fill out if they make or help make decisions that could affect their outside assets.
“I think in the position she holds, she should be filing 700 forms,” said Shirley Grindle, who wrote Orange County campaign contribution reporting law known as TINCUP or Time Is Now, Clean Up Politics. If Schroeder did have to file, “she would have to disclose this business arrangement she has and it would be out in the open,” Grindle said.
Since 2013, Schroeder has co-supervised the District Attorney’s Human Exploitation and Trafficking Unit, a special team known as H.E.A.T. that prosecutes crimes involving the sexual exploitation of women and children.
At the same time, according to state records, she is president of a company she formed with Scott Foster, a guitarist and singer who volunteered to perform at two H.E.A.T. public concerts and then, via his business partnership with Schroeder, published video from the events to promote his career.
“The founders of m3Connection, Susan Kang Schroeder and Scott Foster, have chosen to keep the meaning of the three ‘m’s in their company a secret,” according to a web site description of their company.
But, it said, “we create and promote your brand andsound(sic) with impactful messaging across television, radio, print, and social media.”
Schroeder has worked for Rackauckas since 1999 and for more than a decade has served primarily as his chief government spokeswoman. In 2010, Rackauckas gave her the title of chief of staff and last year, simultaneously, she served as Rackauckas’ 2014 re-election campaign manager. She is rumored to be a candidate for DA when Rackauckas retires.
Neither Schroeder nor Rackauckas, who has held office since 1998, responded to requests to be interviewed about the H.E.A.T. music events and Schroeder’s side business. Foster didn’t reply to requests for an interview sent through contact information on his web site.
State, county and local government elected officials and employees who make decisions that could affect outside financial interests are required each year to publicly list gifts, investments, income and other assets. The purpose of the 41-year-old law is to protect the public from government officials who might use their posts for personal benefit.
As one of the top five members of Rackauckas’ executive team, Schroeder is paid a base salary of $144,830.40 plus $84,445.36 in other pay and benefits, according to 2013 figures — the latest numbers available — from Transparent California. But she is the only one of the five who isn’t required to file a conflict of interest form.
Bob Stern, who helped write the conflict of interest law, said the titles a government worker holds, such as Schroeder’s designation as chief of staff and co-supervisor of the H.E.A.T. unit, don’t determine whether a person has to file a 700 form.
Titles might sound important but in reality may have little substance.
The key, he said, is “is she participating in or making decisions” that could impact any of her economic interests?
“If it’s shown she’s not making decisions [as either chief of staff or co-supervisor of the H.E.A.T unit], she doesn’t have to file,” said Stern. “[The DA’s office] had to make a judgement when they created [her positions] whether she is making decisions or participating in decisions.
“It’s highly unusual for the chief of staff not to be making decisions or participating in making decisions,” he added, “but if that’s the case, she doesn’t have to file.”
When Rackauckas created the anti-human trafficking unit in April 2013, in addition to naming Schroeder as co-supervisor, he said it would have two deputy district attorneys, an investigator and “support staff who will dedicate their time to aggressively prosecute these unique and complex cases.”
“The new vertical prosecution HEAT Unit will be coordinated and supervised by Chief of Staff Susan Kang Schroeder and Assistant District Attorney Ted Burnett,” Rackauckas said.
“On the team, she’s presumably making decisions?” asked Stern, who also was the first general counsel of the California Fair Political Practices Commission or FPPC, which enforces campaign contribution and conflict of interest reporting requirements established by the 1974 law.
But at the time she was appointed co-supervisor of the unit, Schroeder, a lawyer, had never prosecuted a felony case. She received on-the-job training in how to do that last month when she prosecuted, and lost, her first felony trial.
Orange County lawyers currently are reviewing all departments and agencies to determine if the conflict of interest law is being applied accurately to all employees.
Prosecution of sex trafficking cases comes under the overall administration of Senior Assistant District Attorney Joe D’Agostino, who said in a telephone interview the unit has delivered 64 felony sex trafficking convictions in the two years since it was created.
He said members of his unit handled the legal case work while Schroeder –“we like to call her a co-manager”– was in charge of public relations, political issues and obtaining resources for the victims of sex trafficking, many of whom are children forced into prostitution.
“There was a tremendous amount of need to publicize the unit,” to raise awareness among victims, as well as the general public, about the extent of sex trafficking and its impact on victims, D’agostino said.
Schroeder was “in charge” in the areas “where her skills are — publicity, educating police departments” and getting resources for victims. He said she also was “very actively involved in the political and public relations” portions of the programs, serving on a state committee on new legislation.
When a public awareness event and concert was suggested for the fall of 2013, “Susan was put in charge of planning that event,” D’agostino said. And a year later, when the DA’s office sought ways to “get younger people involved,” a series of speakers, ending with a rock concert, was set up with Chapman University, he said.
Rackauckas announced creation of the H.E.A.T. unit on April 26, 2013. Three months later, on July 19, Schroeder and Foster filed papers with the California Secretary of State’s office to create their “music/artist” firm, M-Cube Connection, LLC, with Susan Schroeder as president.
The address listed was the Orange law office of her then-husband, Michael J. Schroeder, a former state Republican chairman who was instrumental in getting Rackauckas elected 18 years ago and has continued to be a strong political supporter.
In 2014 the Schroeders divorced, but Michael Schroeder remained Rackauckas’ re-election campaign chairman while Susan Schroeder was the campaign manager.
Two months after Susan Schroeder and Foster formed their company, the DA’s office, on Sept. 9, 2013 hosted “Keep Calm and Beat H.E.A.T. Rocking & Rally” at Twila Reid Park in Anaheim. The event was well-publicized by the DA office’s news media department, which Schroeder heads.
Foster and other local musicians, including DA investigator Damon Tucker, donated their time to put on the show. Tax-exempt donations were made through the nonprofit Community Service Programs to cover the roughly $5,000 it cost to put on the entire H.E.A.T. event. Video from the entertainment program now is featured on the DA’s YouTube site.
The purpose of the show was to raise community awareness about human trafficking, according to several news releases from the DA’s office. The 2013 event raised about $3,900 more than it cost to put on, and the surplus was donated to services for victims of human trafficking, according to Community Service Programs.
The 2013 video also is on Foster’s professional web site along with the credit line “Posted by m3connection…,” the company in which he is a partner with Schroeder.
According to the M3Connection web page, when Schroeder met Foster, she was “searching for a new purpose after hitting a turning point in her life.”
The two decided to team up and create the music promotion business.
“She needed a fresh perspective on the world, dissimilar to the human strife she saw daily in her job as a prosecutor,” according to the web site, although Schroeder didn’t actually prosecute cases.
One goal for Schroeder and Foster’s business, the web site says, is to “advocate for the principles of fair compensation and aim to help artists thrive in this new world.
“The principles(sic) of m3Connection have decades of experience in branding and messaging, including appearances on international television shows such as Oprah and a variety of others that air on CNN, FOX, ABC, NBC, CBS, and Discovery,” according to the web page. “They have been quoted extensively in print, digital publications, and radio.”
Links to the M3Connection home page have been disconnected but the site’s back pages remain online.
A year after Schroeder and Foster formed their business, on Oct. 24, 2014, the DA’s office held a second, expanded “Keep Calm and Beat H.E.A.T. Rocking & Rally,” this time at Chapman University. Again, Foster, who is based in Alaska, joined local Orange County musicians, including Tucker, in volunteering to put on the show.
That show cost about $13,500 to put on, according to Community Service Programs, and, thanks to a late donation, raised a total of $45,285.72, leaving $31,708.77 to be donated to services for victims of human trafficking.
The DA’s office used its email list to solicit charitable donations to the 2014 Chapman seminars and the evening concert.
“Tax deductible event sponsorship opportunities are available at $500, $1,000 and $5,000 levels,” the email said. “All event sponsors will receive two tickets to the luncheon event and access to the VIP area at the concert, as well as program recognition. Supporters who contribute on the $1,000 and $5,000 levels will be given full table sponsorship, as well as additional tickets to the VIP areas of the concert.”
In between the two concerts, according to a variety of postings on the Facebook pages of Schroeder, Foster and their associates, Foster performed in Las Vegas and he and Schroeder at least once flew there on a private jet. It’s not known who owned the jet.
Government workers who file conflict of interest forms must also report gifts from individuals or companies that do business with the county or could be affected by officials’ decisions. Since Schroeder isn’t required to file a 700 form, she doesn’t have to say if the airplane flights or any other gifts were provided by someone potentially affected by her work.
A photograph shows Schroeder and Foster on the private plane with Andy Hong, a top executive with foundations run by Orange County philanthropist and Broadcom co-founder Henry T. Nicholas III.
Nicholas’ sister, Marsy, was murdered in 1983 and he and his mother, Marcella Leach, who died March 15, became leading advocates for victim rights. They spearheaded the 2008 voter-approved state constitutional amendment known as Marsy’s Law, the California Victims’ Bill of Rights Act. It expands the legal rights of crime victims.
Nicholas, who supports a wide variety of victim assistance issues, including H.E.A.T., didn’t responded to interview requests about the H.E.A.T. concerts.
The only available commentary from the trips is a May 2014 Facebook posting by Tucker, who traveled with Schroeder and Foster.
Tucker said in a telephone interview the May trip was “friends all hanging out for the weekend” and no one was working. He declined to identify whose jet carried them to Las Vegas. “I’d rather not say whose jet.”
He wrote on Facebook:
“Vegas summary – Friends, limos, private jets, Avicci, Primus, gambling, $30 an ounce imported Japanese steak, sushi, amazing discussions about music and quantum physics, clothing optional pools, SKS rocks and jamming with Foster. – with Susan Kang Schroeder and 3 others.”