Anaheim City Council members are set to wait a little longer to find out what happened to $1.5 million they gave to the local tourism bureau, Visit Anaheim, after they refused to move on a city investigation into the issue.
It comes after the bureau declined to answer most of the city’s questions about the money.
Traditionally, Visit Anaheim is funded by a special, self-imposed tax on hotels in the resort district, who then use the money to advertise the resort area’s amenities and book conventions at the city’s convention center.
But they’re now under scrutiny after a city-commissioned independent investigation found Visit Anaheim took $1.5 million of the $6.5 million COVID relief dollars they were given by the city council and sent the money to a Chamber of Commerce controlled nonprofit.
Investigators allege the plan to secretly move the money was allegedly concocted by former Mayor Harry Sidhu and former Chamber CEO Todd Ament, both of whom have signed guilty pleas to multiple federal crimes and are awaiting sentencing.
[Read: Ex-Anaheim Mayor Sidhu Agrees to Plead Guilty to Corruption Charges]
Sidhu spearheaded the bailout in March 2020 so Visit Anaheim could book conventions and advertise the Disneyland resort area at a time when the local tourism industry would be shut down for over a year.
[Read: Anaheim Council Funds $6.5 Million Bailout To Advertise Disneyland Resort Area]
At Tuesday’s city council meeting, City Attorney Rob Fabela said he sent a letter demanding the return of the $1.5 million that was allegedly improperly sent to the Chamber. Visit Anaheim refused to make a decision until they complete their own internal audit over the next 2-4 weeks.
Fabela added that Visit Anaheim claimed to have cut off all ties with the Chamber of Commerce on their own.
However, he said the city won’t be able to cut off Visit Anaheim’s special tax funding while they’re under investigation by state auditors despite the fact that the money goes to the city first, a move city council members had previously been weighing.
“It would be a difficult thing to do,” Fabela said. “That’s something that probably will be out of our control.”
Visit Anaheim is also under investigation by the California State Auditor’s office, which is probing the last decade of the organization’s finances to ensure no other funds went missing.
[Read: State Auditors to Probe Anaheim’s Rerouting of Federal Funds to Chamber of Commerce]
Visit Anaheim CEO Jay Burress is mentioned by name nearly 120 times in the report, and admitted he completely fabricated the $6.5 million figure the organization said it needed to survive the pandemic.
“(Burress) acknowledged that there was no actual basis for this number, instead it was essentially invented,” investigators wrote.
In an interview with investigators, Burress said it “literally came out of the air,” adding that he originally was going to ask for $5 million before Sidhu encouraged him to ask for $6.5 million, and investigators noted that additional $1.5 million was diverted to the Chamber of Commerce.
Burress did not respond for comment.
During Tuesday’s meeting, city council members also praised Visit Anaheim’s board of directors, insisting they were not responsible for the failings of the organization.
“The board probably would not have approved that,” said Councilwoman Natalie Rubalcava, referring to Burress’ decision to transfer the $1.5 million. “There may have been opportunities for oversight that were missed by them.”
“I want to recognize Visit Anaheim’s board,” said Councilwoman Norma Campos-Kurtz. “I want to thank our own city attorney’s office and Visit Anaheim’s board of directors for moving very quickly on a very serious issue.”
Many of Visit Anaheim’s board members are major campaign donors, and four members of the board also sit on the board of the Save Our Anaheim Resort District political action committee, which has spent millions in recent election cycles to back resort-friendly candidates, including Rubalcava and Campos-Kurtz.
[Read: Anaheim City Council Campaigns Funded More by Special Interests than Residents]
While Councilman Carlos Leon questioned why the city couldn’t just bring their tourism advertising in house, the rest of the council said they didn’t want to unnecessarily punish Visit Anaheim.
“I want to be very careful we don’t hurt the tourist industry,” said Councilman Jose Diaz, who was also backed by SOAR in 2020.
He added the city freezing funds to Visit Anaheim could have “unintended consequences.”
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.
•••
Since you’ve made it this far,
You obviously care about local news and value good journalism. As an independent and local nonprofit, our news is accessible to all, regardless of what they can afford, but it’s not free to produce. Help us become 100% reader funded with a tax deductible donation. For as little as $5 a month you can help us reach that goal.