The Anaheim Chamber of Commerce’s no-bid, $425,000 one-year contract awarded by the City Council likely isn’t a gift of public funds, despite the Chamber heavily funding Mayor Harry Sidhu’s 2018 campaign, according to a government ethics expert.
Bob Stern, principal co-author of the state’s 1974 Political Reform Act, said the move isn’t a gift of public funds if the Chamber does the work outlined in the contract. The act helped establish government ethics guidelines regulating campaign finance and lobbyists by creating the Fair Political Practices Commission.
“I don’t think it’s a gift of public funds, at least on the surface.” Stern said Monday. “I don’t see any illegalities.”
Instead, it’s a political question, Stern said.
“The main question is is it appropriate? That is a political question,” Stern said. “It’s more a political question than legal.”
The Anaheim Chamber of Commerce got the $425,000 no-bid contract at Sidhu’s request at the June 4 meeting, despite a list of questions and suggested contract amendments from Councilwoman Denise Barnes, including a performance audit.
According to campaign finance data, the Chamber of Commerce spent nearly $240,000 on Sidhu’s 2018 campaign for mayor. The Chamber paid for consulting services, digital advertising, polling and political mailers for Sidhu.
“Mayor Sidhu put these items on the agenda between meetings, outside public view or public input or without asking colleagues on Council for support,” Barnes said at the meeting.
“The mayor is the one asking City Council to waive Council policy … that requires items like this go out for public [bid] process,” she said.
Sidhu addressed none of Barnes’ concerns and eventually cut her off before the vote because she went over her allotted time for debate, according to an unofficial rule single handedly implemented by Sidhu in May. The move has since drawn the concern of the American Civil Liberties Union.
“Councilmember Barnes, your five minutes are up. I’m going to call for a vote right now,” Sidhu said. His rule gives two rounds of five-minute discussions to each Councilmember and Barnes was on her second round.
The council voted 5-1 for the Chamber of Commerce contract, with Barnes dissenting. Councilman Jose Moreno was out of town for work.
Sidhu and the Chamber of Commerce didn’t respond for comment.
“We have been able to keep the taxes and fees low because of a strong economy. This agreement seeks to build on that,” Sidhu said, when introducing the contract. “This is an investment that’ll help keep and expand businesses here, which, in turn, will help us serve residents and invest in neighborhoods.”
The contract essentially states the Chamber will help bring in new businesses and retain existing ones for Anaheim. Additionally, the contract calls for full-page advertising of Anaheim in four issues of the Chamber-run Business Advocate Magazine; a column promoting the city in its newsletter for 10 issues and in 40 issues of its e-newsletter; and social media promotions of Anaheim.
Former Mayor Tom Tait said the contract doesn’t provide for any work the Chamber wasn’t already doing.
“It looks like everything that they’re going to do, they’re already doing,” Tait said Tuesday. “I voted against a similar contract when I was mayor. I think $160,000 for roughly the same stuff. To me, it looked like it was a gift of public funds. Which is illegal.”
Tait said the Chamber will likely use the money for lobbying the city and for political purposes.
“It says (Chamber’s mission statement) that they’re a political body and the reason I voted against it is because I don’t think you should be giving money to a dominant political entity in the city,” Tait said.
According to the homepage on its website, “The Anaheim Chamber is dedicated to building a strong local economy, promoting Anaheim, building business relationships, representing business interests in government and political action.”
Moreno also said the contract is a gift of public funds.
“I do believe it’s a gift of public funds. It’s a gift to campaign donors, campaign supporters. I don’t begrudge that, in a system like ours, people who support you may get some level of access to you, that’s why people often hedge their bets in campaigns and political elections. But I would hope that wouldn’t translate into direct money,” Moreno said Monday.
The city will also be part of the “president’s circle” at the following Chamber-hosted events: the economic development conference, a job fair, a business award lunch, food festivals and lunch with some members of the Angels baseball team, according to the contract.
At the Angels lunch, the city will be given “up to 3 sponsor tables in priority seating for 10 attendees each at the luncheon,” according to the contract. The Chamber will also market the city at its own stadium during the lunch by recognizing the city “as lead sponsor with marketing equal to title sponsorship level. Marketing will include city logo on key marketing materials, signage, website, and at-event materials.” The Chamber will use the Diamond Club for the lunch, which sits roughly 20 rows behind home plate.
Before signing the contract, Sidhu and Councilman Stephen Faessel had lunch with Angels Vice President of Communications Tim Mead and coaches Doug White and Mike Gallego, along with 180 other guests last month, according to pictures in a May 30 Chamber newsletter.
According to the last month’s Angels lunch digital flyer, the title sponsorship cost $20,0000.
The city already has access to two suites at the stadium, according to the lease with the Angels.
“Landlord (Anaheim) shall have the use of two (2) suites for all Team home games … and other events conducted at the baseball stadium at no cost other than a reasonable charge for maintenance and service during such events, and shall be provided with the maximum number of ‘standing room’ tickets…” reads the lease.
Before she was cut off, Barnes asked Sidhu to explain why the public bidding process was bypassed and what benefits the contract will bring the city.
“It is the responsibility of the mayor to explain why the Chamber is uniquely qualified for a sole-source contract without asking others for proposals who might bring even better ideas to the table,” Barnes said. “This council and the public should not have to argue why we question this agreement. It is up the mayor to persuade us to see his viewpoint. Otherwise the council policy legally in place should be followed.”
Sidhu didn’t respond to any of Barnes’ concerns at the meeting.
Moreno said the contract is simply giving tax dollars to Sidhu’s campaign donors.
“It’s public-private partnerships on steroids,” Moreno said. “The second piece that confirms its rotten, is that upon approval of that item last Tuesday, that contract calls for the immediate transfer of money … to the Chamber of Commerce. With no work done.”
The one-year contract states, “half of the total compensation will be paid upon approval of this agreement and the remaining half will be paid within six months.”
The contract comes shortly after criticism of the City Council’s April move to give $250,000 to Anaheim First, a private nonprofit created by the Chamber of Commerce and Visit Anaheim to study neighborhoods in order to help make spending recommendations to the Council on $250 million in projects over the next 10 years.
Stern said the Anaheim First contract isn’t a gift of public funds either.
“As long as they use the money for taking a survey of citizens and coming up with ideas for the city, then it isn’t a gift,” Stern said.
Anaheim First spokesperson Xochitl Medrano said, in a Wednesday email, residents can become members through referrals by “the advisory board and community partners.”
Medrano also said the group has hired two consultants so far — Medrano and Leslie Swan, who runs the Anaheim Hills Buzz, a Facebook group.
Anaheim First will begin studying neighborhoods in July and is scheduled to be done by February 2020, Medrano said in the email.
“We will not predetermine the priorities of residents; the types of development and programs residents want to improve their neighborhoods will be driven by them and will then go to City Council for approval,” Medrano wrote in response to a question about what types of projects the group may recommend.
When asked if the group has attended any Chamber or Visit Anaheim events, Medrano wrote, “Anaheim First members are very active in their neighborhoods and attend many community events, including programs hosted by Anaheim Chamber and Visit Anaheim.”
Since May 2, Anaheim First has been running full-page ads promoting itself in Anaheim section of the OC Register, which runs on Thursdays. One ad thanks Sidhu and the Council. Four ads feature Sidhu’s picture, with one quoting Sidhu at the State of the City address.
Moreno said the contracts for Anaheim First and the Chamber of Commerce will show residents where Sidhu’s priorities stand.
“What they’ll see is that when this regime said public-private partnership, that really means the transfer of public funds into private dollars and profiteering,” he said.
While Sidhu answered none of Barnes’ questions, other Councilmembers defended the need for the contract.
“There are many times, I know for a fact, that businesses because of whatever … were leaving Anaheim,” Councilwoman Lucille Kring said. “The Chamber’s gone out and got them to stay.”
Councilman Trevor O’Neil said he was former chairman of the Orange Chamber of Commerce and understands the value of a partnership with the organization.
“I understand, firsthand, the value that local chambers (of commerce) provide to the business community and how partnering with the city helps foster a strong and robust economy,” O’Neil said.
Councilman Jordan Brandman said the Chamber of Commerce would’ve prevented the Baymont Motel from housing homeless people last year, during the Santa Ana Riverbed homeless camp evictions. The County, under pressure from U.S. District Judge David O. Carter during a lawsuit over its homeless policies, booked motel rooms for homeless people throughout the county last spring.
“I must tell you, my dear colleague from West Anaheim, Ms. Barnes, there would have been no homeless shelter at the Baymont had we had an official relationship with the Chamber of Commerce. There is no way … that that would’ve happened. I say it as sure as the sun rises and sets,” Brandman said.
Barnes disagreed with Brandman and said County’s placement of homeless people at the Baymont was beyond Anaheim’s control.
“These are luncheons … these are entertainment opportunities, which they would do anyway because the businesses are paying for their membership,” Barnes said. “Are you guys reading this?”
Amelia Castro, who sits on the board of directors for Anaheim First, advocated for the Chamber of Commerce contract during public comments.
“Anaheim is a regional hub for economic activity in Orange County and globally known for the center for entertainment tourist and convention activities,” Castro said.
Castro was a Chamber ambassador representing Wells Fargo in 2017, according to a Chamber publication from that year.
“For more than a century, the Anaheim Chamber has been the city’s premiere business organization and leading voice advocating for job creation and business formation,” she said.
Joe Hoffman, a Chamber board member, also said the contract was needed to continue expanding businesses in the city.
“This agreement is an investment in promoting Anaheim as a great place to expand a business or to open a new one. This partnership is an investment in showcasing Anaheim as a desirable business location,” Hoffman told the Council.
Diana Ramirez, another Chamber ambassador, also advocated for the contract and said the Chamber convinced the company she works for to stay in Anaheim.
“When new businesses launch, the Anaheim Chamber assists with ribbon cuttings — inviting ambassadors, such as myself, to welcome and support the businesses’ grand opening,” Ramirez said.
Ramirez also sits on the Anaheim First neighborhood advisory council for District 5.
Resident Jeanine Robbins, who helps run Housing is a Human Right OC, said the contract was payback to the Chamber for helping get Sidhu elected.
“It is crystal clear to me that Mayor Sidhu has become drunk with power and is willing to do anything that his donors wish in order to maintain control of an equally corrupt Council majority,” Robbins said. “Harry, Anaheim is not open for business. You, you, Harry, are open for business. And you’re willing to do whatever it takes to ensure your donors keep their pockets lined with gold,” Robbins said.
Spencer Custodio is a Voice of OC staff reporter. You can reach him at firstname.lastname@example.org. Follow him on Twitter @SpencerCustodio.