Executives with Anaheim’s tourism bureau have agreed to repay taxpayers over $3 million dollars from a $6.5 million COVID bailout elected officials gave to Visit Anaheim after a scathing state audit said city officials failed to oversee the spending, leading to improper use.
Independent investigators also found $1.5 million of that bailout was redirected to a chamber of commerce-controlled nonprofit – something they described as a theft of public funds.
City council members gave the bailout – later backfilled by federal COVID relief dollars – to Visit Anaheim at the onset of the pandemic to market the Disneyland resort and book conventions at a time when Anaheim’s tourism economy was shut down indefinitely.
[Read: CA Auditors Lambast Anaheim’s Tourism Bureau, Find Improper Tax Dollar Spending]
Now, tourism bureau leaders are expected to pay $3 million from Visit Anaheim’s operating reserves in two installments over a one-year period as part of an agreement reached with the city on Wednesday.
“I continue focusing on moving Anaheim forward,” Mayor Ashleigh Aitken said in a Thursday statement.
“Finalizing this settlement underscores my commitment to accountability, transparency and fostering relations with community partners that share Anaheim’s values. I look forward to working with Visit Anaheim to support the growth of Anaheim’s visitor economy and all the benefits it brings to our community.”
Mike Waterman, CEO of Visit Anaheim, said in an emailed statement after publication of this article that they used the COVID money properly – despite city auditors and city hired investigators saying differently.
“We respectfully agree to disagree with the City’s assessment of Visit Anaheim’s use of these funds. We believe Visit Anaheim met or exceeded all of its obligations under the contract, ensuring Anaheim maintained its position as a premier tourist destination,” reads his statement.
Waterman said the settlement provides a clear path forward and the tourism bureau is focused on the future.
To read the agreement, click here.
The agreement releases both the city and Visit Anaheim from “all currently existing actual and potential claims that could be brought,” from the $6.5 million bailout given to Visit Anaheim approved by city officials when the pandemic was hitting Orange County in March 2020.
According to a Thursday news release, half of the money to be returned will cover the $1.5 million in diverted funds and the other half will cover money that Visit Anaheim inappropriately spent, according to a city audit.
“The audit also notes Visit Anaheim saw $3.6 million in federal pandemic assistance and tax credits, eliminating the need for some city funding,” reads the news release.
The city audit found that over $2.2 million of bailout money was used to cover normal operating costs after the city’s tourism economy bounced back to pre-pandemic levels.
It also found over $800,000 of the money was used on advance payments for future marketing expenses, inappropriate purchases of alcohol, prepayments to vendors and to subsidize shared costs with other organizations.
The agreement comes after City Councilwoman Natalie Rubalcava called for an update in January on whether Visit Anaheim leaders would pay the city back the $1.5 million.
[Read: Questions Persist Over $1.5 Million Anaheim Wants Back From Tourism Bureau]
Residents never got a public update.
City Spokesman Mike Lyster told Voice of OC last week that conversations with tourism bureau executives were ongoing and that the demand for the money was discussed behind closed doors.
City council members first demanded the money back in 2023 following the findings of the independent corruption probe through a letter from City Attorney Rob Fabela.
At the time, Visit Anaheim leaders through their legal counsel defended their use of the money, arguing the bailout dollars were properly spent and the $1.5 million sent the chamber’s nonprofit were not from the COVID funds.
City auditors say Visit Anaheim altered their accounting codes to show the money came from their own funds but they say it actually came from the bailout, according to a summary of Anaheim’s audit.
Meanwhile, city council members met multiple times this year with Visit Anaheim executives – along with Disney executives and hoteliers – to discuss the tourism bureau and tourism tax dollars.
Half of the $3 million is expected to be returned at the end of this month to the city’s general fund – a pot of discretionary money that funds city services like the police department, fire department, libraries and parks.
The rest of the money is expected to be returned on April 30, 2026.
Noah Biesiada contributed to this article.
Editor’s note: Ashleigh Aitken’s father, Wylie Aitken, chairs Voice of OC’s board of directors.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.