OC Fairgrounds Gave More than $100K in State Money to Private College while Fairgrounds CEO Sat on the School’s Fundraising Board

SPENCER CUSTODIO, Voice of OC

Orange County Fair and Event Center CEO Kathy Kramer during the Feb. 28, 2019 board meeting.

The state-run Orange County fairgrounds gave over $100,000 to Vanguard University – a private Christian college across the street – while fairgrounds CEO Kathy Kramer sat on the school’s fundraising board, according to IRS financial statements.

Kramer – who did not respond to repeated phone and text messages seeking comment — faces a “clear” conflict of interest sitting on Vanguard’s fundraising board while serving as the top executive overseeing state dollars at the fairgrounds, officially known as the OC Fair and Events Center, according to a government ethics expert and fairgrounds watchdog.

“That’s a clear no-no,” said Terry Cooper, a University of Southern California professor and expert on the ethics of public officials, who called Kramer’s affiliation with Vanguard “at least an appearance problem.”

The state Fair Political Practices Commission “is the final arbiter” as to whether or not this is an actual conflict of interest, said fairgrounds watchdog and local activist Reggie Mundekis. “However, it looks bad to the public when you have a public official who is … not telling anyone that they’re a fundraiser for the group that the fair board is giving money to.”

If the person’s private life and their life as a public employee don’t meet, “there may not be an issue,” Mundekis said.

“The issue comes in when those two paths cross,” she added.

Kramer joined Vanguard’s fundraising board in 2017, according to Vanguard University spokesperson David Vazquez and the fundraising board’s nonprofit filings with the IRS.

The fundraising board is officially known as the Vanguard University Foundation. The board’s mission statement, according to its nonprofit filings with the IRS, is to support the university “through fundraising and management of the endowment. Foundation directors are distinguished members of the community, primarily of Orange County, who support the mission of vanguard as ambassadors and donors.”

Vazquez called it “natural for the fairgrounds or affiliated entities to be engaged with the University, including having representation on the Vanguard University Foundation Board” because the university is close to the fairgrounds.

“Prior to Ms. Kramer’s service on the Foundation Board, Jeff Teller, (former) President of the Orange County Market Place, served on the Vanguard University Foundation Board in the early 2000s—not too long after the Foundation was founded,” Vazquez said.

The OC Market Place is a separate entity and tenant of the fairgrounds, operating an open-air swap meet on the weekends year-round. The Market Place is not officially part of the state agency.

Since Kramer joined the school’s fundraising board, the fairgrounds has given the school nearly $105,000 in state money through contracts and sponsorship deals that are approved by the fairgrounds’ Board of Directors in votes at public meetings. Kramer does not vote on these contracts in her capacity as the agency’s top executive, and she is not a board director. The contracts are brought up before the fairgrounds’ Board of Directors by her staff.

Fair Board Chair Robert Ruiz said he wasn’t ready to comment on Oct. 1 until he and the other board directors gathered more information.

The fairgrounds sponsored Vanguard’s “Fantasia” holiday event for $5,000 in 2017, according to fairgrounds Communications Director Terry Moore.

In 2018, the fairgrounds entered into a contract with Vanguard for $75,000 under a sponsorship agreement where the school would cross-promote events and have their theatre program perform at the fair, among other agreements.

And the fairgrounds’ 2019 fiscal year budget has $25,000 carved out for the university, labelled in the budget as “community engagement spending.”

The fairgrounds’ business dealings with Vanguard are also under a state probe over the possible violation of state anti-discrimination laws.

Students who violate Vanguard’s policies against same-sex relationships can be subject to disciplinary action, including expulsion, according to the university’s student handbook.

The school, located right across from the fairgrounds, is also affiliated with the Pentecostal Christian group known as Assemblies of God, which rejects homosexuality and gay marriage.

It’s illegal under California law for state agencies to give money to organizations that discriminate against people for their sexual orientation, marital status, or religion, among other things.

Kramer became the fairgrounds’ CEO in 2015. Between 1996 and 2011, before Kramer joined, the fairgrounds gave nearly $84,000 to Vanguard to use its school facilities to house fair event staff, according to Moore.

Mundekis said Kramer’s board membership should have been disclosed “to allow vetting of conflicts.”

Kramer’s position on the fundraising board is not a compensated one, according to the board’s IRS filings, and she has not listed her membership on the form 700 statements of economic interest she’s required to file in her capacity as fairgrounds CEO, according to fairgrounds spokesperson Terry Moore.

Moore said Kramer did not list her membership on the Vanguard University Foundation because there isn’t any space on the form 700s to disclose non-compensated board memberships.

Fairgrounds staff are also currently asking the state Attorney General’s Office for clarification as to whether there’s a process for public employees in positions like Kramer’s to disclose non-compensated positions on private fundraising boards that their public agency is giving money to.

As of Monday, Oct. 7, Moore said fairgrounds staff have not heard back from the Attorney General’s office.

Cooper said no public official “should be doing this sort of thing.”

“It’s not unusual,” he added, “but it’s always wrong. I’ve been at this for, what, 40 years now? And I can just tell you that there’s no case in which this sort of thing would occur and would be acceptable.”

Brandon Pho is a Voice of OC intern. Contact him at bpho@voiceofoc.org or on Twitter @photherecord.