In the wake of an FBI corruption probe into Anaheim, city leaders are asking themselves whether there’s a need to curb the influence of Disneyland resort area businesses on local city council campaigns.
Trick is that nearly all members of the current city council majority have had their campaigns funded by the same resort area interests the campaign finance reform measures seeks to limit.
City Council members couldn’t get any consensus on the issue at their June 7 meeting, kicking the discussion to tomorrow’s 5 p.m. public meeting. You can watch it here.
City Councilman Jose Moreno has been calling out the influence of Disneyland resort interests and trying to propose campaign finance reform in the city for years. But it wasn’t until former Mayor Harry Sidhu resigned in May after public disclosure of an FBI affidavit all but announcing an ongoing corruption probe in the city that Moreno was able to schedule a discussion and propose an ordinance on the issue.
Sidhu resigned late last month after revelations of an FBI corruption probe detailed allegations of the former mayor passing critical information to the LA Angels during the secretive stadium negotiation process.
FBI affidavits also say he destroyed public records to hide from the grand jury and tried to score at least $1 million in campaign contributions from the Angels while trying to ram the now-dead stadium deal through.
The former mayor, through his lawyer Paul Meyer, has consistently denied any wrongdoing, saying he never passed information to the Angels during stadium negotiations.
The campaign finance reform efforts also come as residents are renewing – and increasing – calls to limit big money’s influence on local elections and city hall decisions.
At every City Council meeting since news of the FBI corruption probe broke on May 16, people have been demanding their city council resist the resort industry’s influence while heavily criticizing the Anaheim Chamber of Commerce, whose influence was called out by FBI officials.
FBI affidavits also detail a “cadre” of people who actually run city hall, including former Anaheim Chamber of Commerce CEO Todd Ament – who’s now facing mortgage fraud charges and has agreed to a guilty plea, while also vowing to continue helping the FBI in its corruption probe.
“The investigation has revealed that AMENT and Political Consultant 1 were the ring leaders of a small group of individuals who met in person to discuss strategy surrounding several matters within Anaheim — matters that were often pending, or soon to be pending, before the Anaheim City Council,” reads an affidavit attached to the criminal complaint against Ament.
The Chamber spent nearly $240,000 on Sidhu’s campaign for mayor in 2018 – largely paying for political advertising through its political action committee, according to campaign finance disclosures.
In 2019, Ament and the Chamber-held fundraisers also helped Sidhu pay off the $100,000 debt Sidhu owed himself for his failed 2016 Assembly campaign.
The proposed campaign reform measure calls for council members to enter a 12-month recusal window from voting on items that could benefit contributors who donated $250 or more to their campaigns.
If passed, council members would also be barred from soliciting campaign donations for 12 months from people, businesses or groups doing business with city hall.
The ordinance is essentially a beefed up Levine Act, which City Attorney Rob Fabela previously said usually applies to appointed members of government bodies like water agencies.
But Moreno’s proposal takes it a step further, applying it to independent expenditures by political action committees.
That means it could impact Disney’s main PAC in town, Support Our Anaheim Resort (SOAR).
In recent years, SOAR routinely spends at least $1 million of Disney’s money through independent expenditures during election season to bolster resort-friendly candidates. The money is typically spent on political advertising through mailers and internet ads.
In 2020, Disney spent $1.5 million in city council races – much of it to help get council members Jose Diaz, Avelino Valencia and Steve Faessel elected.
Many members of SOAR are also closely related to other resort interests like Visit Anaheim and the Chamber of Commerce.
Some of SOAR’s advisory committee members include Laura Cunningham, current president of the Chamber of Commerce.
And hoteliers, like Bill O’Connell, sit on the committee, according to its website. O’Connell was also the Chamber’s vice chair of finance, according to 2019 tax disclosures – the most recently available online.
Appointed Councilwoman Gloria Ma’ae also sat on SOAR’s advisory committee. She also was part of Anaheim First – a Chamber-created resident advisory committee the city cut ties with after the FBI corruption probe hit. She’s no longer listed as a member on either of the websites.
SOAR was a central financier helping get the former mayor and his majority elected in 2018.
At the June 7 city council meeting, Moreno publicly criticized fundraising to pay off past campaign debts – like Sidhu did with his 2016 Assembly campaign debt. He said the proposed campaign finance reform could put an end to that.
“He also came in with over $100,00 debt from an Assembly race that he failed in 2016,” Moreno said. “He was having campaign fundraisers to pay off that debt with the same donors that funded many of us on this dais — many of you, not me.”
“They may come and write a check to our campaign committee for debt relief, who then writes a personal check to us that goes right into our bank account. If they just gave us the check, that’s bribery under the law. If they write a check to a committee and that committee writes a check to us, it’s legal,” Moreno said.
If the council adopts the campaign finance reform measures, candidates can’t keep their committees open indefinitely to pay off debt – like Sidhu did in 2019.
“This section provides that a City candidate or a controlled committee for such candidate shall only solicit and accept contributions for the purpose of retiring outstanding debt from one year immediately preceding the general municipal election for the office sought through no more than 180 days after the date of the election. No later than 180 days after the election for the office sought, the candidate must retire all campaign related debts,” according to the staff report.
Some City Council members resisted the idea of campaign finance reform at the June 7 meeting. Diaz was not at the meeting.
Ma’ae, who was appointed by the Sidhu majority to replace former Councilman Jordan Brandman last year, raised First Amendment concerns about the proposal.
Fabela, the city attorney, said he’s not too worried about that.
“The Levine Act itself has been on the books for quite some time and hasn’t been struck down on First Amendment rounds,” he responded. “I don’t have much concern that a law that’s consistent with the Brown Act would be deemed inconsistent with the First Amendment.”
Ma’ae said she was “troubled by the burden we’re placing on candidates.”
“I’m not even sure this is legal,” Ma’ae said. “Candidates cannot control the activities of PACs or independent expenditures.”
She also doubted campaign finance reform would change anything in the city.
“To say that removing this single form of expressing support removes all opportunity for pay for play is unrealistic. Rather it targets certain types of groups and supporters over others.”
Mayor Pro Tem Trevor O’Neil said “transparency really is the key” because it shows residents where the campaign money is coming from.
He also echoed Ma’ae’s concerns about applying the recusal mandates to PACs.
“Since candidates have no control on how IEs spend the money, it’s wholly impractical or impossible to regulate a recusal based on that because a committee and its donors exercised their First Amendment right to free speech to support a candidate,” O’Neil said.
Valencia said he largely supports Moreno’s campaign finance reform efforts.
“In concept, I do support the campaign finance ordinance,” he said.
Faessel also said he supports nearly everything proposed in the campaign finance reform efforts, but is stuck on the 12-month recusal window.
“The one year requirement, I’m still stuck on that. So almost everything that has been presented here and discussed, I would be likely supportive of,” he said, later adding that he didn’t know political action committees spent money on his behalf until after the election.
Meanwhile, Moreno said it’s a much-needed reform in the city as the FBI corruption probe is taking a hard look at the influence special interests have on Anaheim City Hall.
“I just want to remind you the essence of this law is that if someone has a financial interest in our city and they gave you money to be elected – in the public’s eye, that’s suspect,” he said. “The trust right now is in crisis.”
Spencer Custodio is the civic editor. You can reach him at firstname.lastname@example.org. Follow him on Twitter @SpencerCustodio.
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