California Auditor Grant Parks is opening an investigation into Anaheim after a city commissioned probe found years of alleged influence peddling and corruption steered millions of taxpayer dollars into the hands of special interests.
Most of the alleged corruption laid out in the report created by JL Group investigators revolved around the Anaheim Chamber of Commerce and Visit Anaheim, the city’s tourism bureau, which in one alleged case was used to illegally funnel $1.5 million of COVID relief funds to a Chamber-controlled nonprofit, according to the report.
“We revealed information concerning what we believed was a potential criminal conspiracy and a theft/wrongful diversion of $1.5 million dollars of public funds to the Anaheim Chamber,” investigators wrote.
The audit was requested by Assemblyman Avelino Valencia, a former Anaheim city councilman who sat on the public dais during much of the corruption detailed in the report and said the public needs to know what happened.
“The findings of this report expand on the lack of transparency and abuse of public resources by corrupt individuals in Anaheim,” Valencia said in a statement on Aug. 1. “Their behavior was disgraceful and inexcusable.”
Councilwoman Natalie Rubalcava, who works for Valencia, is also wrapped up in the scathing report.
Investigators allege Rubalcava improperly tried to direct city staff and used a Chamber of Commerce nonprofit, Anaheim First, to help with her election last year.
While Rubalcava has not responded to questions from Voice of OC about the issue, she denied the allegations at the Tuesday night council meeting, saying they were among the “inevitable,” inaccuracies in the investigation.
“We must resist pressure campaigns and rushed reactions to the results of this investigation,” Rubalcava said.
To review Valencia’s request for an audit, click here.
Valencia said he was “confident,” on Tuesday that the state auditor was the best person to take a look at Anaheim “due to their ability to subpoena records and take depositions.”
“This audit has the potential to expose the depth of past unethical actions in order to hold individuals accountable for abusing public resources,” Valencia said.
He did not respond to a follow-up question on whether or not Rubalcava should be investigated.
The investigation will focus on all the money sent by the city to the Anaheim Chamber of Commerce and Visit Anaheim, which according to the investigative report each received numerous contracts with the city without explaining how exactly they planned to deliver.
“There was seemingly no real bargained-for exchange between the City and the Anaheim Chamber concerning the payment of these funds,” investigators wrote. “It was as if the City was merely subsidizing the Anaheim Chamber with infusions of money on a near-yearly basis.”
One of the biggest issues highlighted in the report saw the city council majority give Visit Anaheim a $6.5 million bailout weeks into the pandemic, despite the fact that the Disneyland resort area would be closed for another year.
Then-City Manager Chris Zapata objected to that, saying the city should instead loan the money to Visit Anaheim, and was promptly fired without explanation by Anaheim’s City Council majority, which city investigators now say was due to his opposition to the loan.
“The greater weight of the credible evidence demonstrates that it was Zapata’s opinion that the $6.5 million COVID money that was given to Visit Anaheim should be a loan with interest to the City and not a grant precipitated and caused his termination,” investigators wrote.
Visit Anaheim then allegedly diverted $1.5 million to a Chamber controlled nonprofit, a plan that was devised by Visit Anaheim CEO Jay Burress, then-Chamber of Commerce CEO Todd Ament and former Mayor Harry Sidhu according to the report.
“The facts showed that then-Mayor Sidhu directed Burress to divert $1.5 million to the Anaheim Chamber’s controlled nonprofit and that Ament instructed Burress to report, if asked about the $1.5 million, that it came from other reserve funds,” investigators wrote. “This cover story was created in order to provide some sort of plausible deniability for the unlawful diversion of this $1.5 million.”
The state audit comes as city officials are looking to examine the $6.5 million bailout – more than three years after the money was given to Visit Anaheim.
Sidhu resigned in 2022 after the FBI released an affidavit claiming he illegally helped the Angels baseball team in their effort to buy Angel Stadium by giving them critical information, an allegation he has denied through his lawyer. He has not been charged with a crime.
Ament pleaded guilty to federal fraud last year and is awaiting sentencing. His lawyers declined to comment.
Burress has not responded to requests for comment, but in an interview with investigators admitted to making up the amount of money he requested from the city in the bailout and initially denied that the money came from COVID relief funds, but later admitted it to investigators.
“Burress told our investigators that Ament had instructed him that if anyone asked about the source of the $1.5 million that Burress was to falsely tell them it came from Visit Anaheim’s reserve funds,” investigators wrote.
That investigation could also touch on Anaheim First, a Chamber controlled nonprofit the investigators dubbed a “political data mining operation,” that was at one point set to receive $30 million in tax dollars.
That plan was mapped out at a closed door meeting hosted by Ament in 2020, which was called out by the FBI.
State auditors may find themselves looking into Valencia’s own district director, Anaheim Councilwoman Rubalcava, who investigators say improperly took contact information from Keith Olesen, Anaheim First’s CEO, and used it for her campaign.
“Whether Olesen or Rubalcava’s actions violated the law is beyond the scope of this investigation,” investigators wrote. “However, we did conclude Councilmember Rubalcava was less than candid and forthcoming with us during her interview.”
Olesen did not respond for comment.
In interviews with investigators, Olesen claimed he gave Rubalcava the contact information in a binder during the election season.
“Finally, it was confirmed by Keith Olesen that he provided the binder to Rubalcava during the election,” investigators wrote.
On Tuesday night, Rubalcava ended her silence on the issue since the report was published, claiming that it was “chronologically impossible,” for her to have received the binder in time for it to impact her campaign, adding she didn’t receive the binder until January.
She pointed publicly to an email received in January as proof that she received the binder after the campaign.
Rubalcalva added that she believed that residents in the district she represents care more about issues like stop signs and schools than alleged corruption.
“These are things I will focus on, including making sure we are transparent here on the dais,” Rubalcava said.
Valencia hasn’t acknowledged Rubalcava’s presence in the report, and has stopped responding to questions when asked about it multiple times.
The state audit isn’t currently ordered to dive into many of the other concerns called out by investigators regarding the now-dead Angel Stadium land sale or failures by multiple prominent local lobbyists to properly disclose their meetings with city council members and city executives.
While the city investigation didn’t note any corruption after the 2022 election, city council members and executives have maintained relationships with the Chamber, even attending the organization’s annual luncheon in June as investigators were finishing their probe.
“The potential funneling of tax dollars by these organizations, as highlighted in the independent investigation, demands the need for further examination,” Valencia said.
“Residents deserve to know the extent of the corruption that took place in the City of Anaheim. It is a critical step in restoring transparency and public trust.”
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at firstname.lastname@example.org or on Twitter @NBiesiada.
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