A new audit found that Orange County leaders may have lost more money than initially realized under the watch of former Supervisor Andrew Do, detailing a series of contracts auditors say Do steered without documenting what happened to it.
The audit came after Do pleaded guilty to accepting bribes in exchange for rerouting over $10 million worth of contracts, with a judge ultimately sentencing him to five years in federal prison last year.
[Read: Former OC Supervisor Sentenced to 5 Years in Federal Prison in Bribery Scheme]
Do’s lawyer did not respond to requests for comment.
Now, auditors from the Weaver-Tidwell firm say they’ve reviewed over $486 million of contracts and found a series of questionable expenditures where Do ordered county staff to approve a vendor without the proper paperwork or covered up where grant money was actually going.
“We identified a pattern of contracts and grants being steered to certain businesses by Former Supervisor Do, which was often facilitated by his Chief of Staff,” auditors wrote in their report to county supervisors.
To review a copy of the report, click here.
They also noted that Do “established a culture where decisions related to District 1 contracts were not to be questioned, with procurement staff concerned that they would receive a phone call from Former Supervisor Do or his Chief of Staff if their requests were not approved.”
While the federal investigation focused on contracts set up to feed the elderly during the pandemic that were secretly used to funnel money to Do and the company’s owners, the county’s new audit found a series of other questionable payouts to many of the same people through other contracts.
It’s part of a review launched last November by county supervisors, looking at 145 contracts that raised red flags with county staff from when Do was on the board.
[Read: OC Supervisors Move Forward on Auditing Over $4 Billion After Bribery Scandal]
The full review is set to cover over 2,500 contracts over nearly 10 years, including nearly every major vote Do made during his nearly decade-long tenure on the board of supervisors.
What Did Auditors Review?
While county supervisors asked the auditors to review over $4 billion worth of contracts from places like the county general fund, pandemic relief funds and the state’s Mental Health Services Act, this audit only focused on contracts the auditors considered “high risk.”
In that bundle of contracts, worth nearly half a billion dollars, auditors say they found a series of agreements where Do and his former chief of staff, Chris Wangsaporn, moved county funds to specific vendors despite questions on what work they were actually doing.
Many of those contracts were tied into the annual Tet and Moon Festivals put on by Do’s office, where auditors said Do regularly handpicked contractors and paid them in advance “without competitive bidding or solicitation of quotes from other businesses.”
According to the report, one of those companies was 2T Media, which Do used for both festivals and ultimately received over $590,000 from over a dozen county contracts despite it being unclear what work they did.
“Contracts were awarded on a firm-fixed fee basis, with limited detail on the scope of services, contractor requirements or contract deliverables,” auditors wrote. “The contracts to 2T Media resembled a retainer agreement where 2T Media was paid regardless of whether services were performed.”
2T Media did not respond to requests for comment.
Auditors also found that 2T Media and several other companies received grants from Do’s office, but the grants were masked through donations to the Westminster Chamber of Commerce and the Garden Grove Community Foundation.
While Chamber and the Foundation each received the funds, they were directed by Do on where to send the bulk of the money, which went to companies including 2T Media and the Viet America Society, which was the primary company that federal investigators said paid Do bribes.
Peter Pham, the former head of Viet America Society, is facing over 15 charges from federal prosecutors and is currently a “fugitive from justice.”
[Read: Feds Charge More Conspirators in OC Corruption Scandal]
Pham also was connected to 2T Media through a separate company called HD Entertainment, receiving thousands of dollars of sponsorship funds for Tet Festivals, according to the audit.
Auditors Again Call Out COVID Testing Contractor
Auditors also brought up concerns with the county’s contracts with 360 Health Clinic, the county’s leading COVID-19 tester in the early days of the pandemic.
While county supervisors agreed to give 360 Clinic their contract in July 2020, a series of amendments more than doubled their fees and the company submitted nearly 69,000 claims to the county for patients that 360 Clinic said insurance plans didn’t pay for the COVID tests.
County staff raised red flags with the high number of uninsured claims at the time according to auditors, who also noted they could not find proof that all those claims actually deserved to be reimbursed.
Auditors found Do ordered then-Health Care Agency Director Dr. Clayton Chau to move forward with paying 360 Clinic despite the outstanding questions on whether or not the county was being overcharged.
“We identified amounts invoiced to the County for uncollectible claims that require further review to determine whether the County was appropriately invoiced,” auditors wrote. “We recommend that the County obtain additional records from 360 Clinic to determine whether any uncollectible claims paid by the County should be recouped.”
360 Health Clinic has also faced accusations of double billing from Kelly Sabet, the county’s chief compliance officer, according to reports from the OC Register and LAist, and from Laura Garcia, a former employee of the company that’s currently suing them for wrongful termination.
Lawyers for 360 Health Clinic did not respond to requests for comment.
County Supervisors Condemn Former Colleague
County supervisors were quick to praise auditors and lambast Do in statements on Monday evening and Tuesday morning.
“As expected, the most recent audit again exposes criminal Andrew Do for habitually using his position of power to financially reward family, friends and donors through crony capitalist contracts at the expense of Orange County taxpayers,” wrote Supervisor Katrina Foley. “The County must implement additional safeguards recommended by the independent auditor to further protect taxpayers and prevent this type of misconduct from happening again.”
Moving forward, auditors are recommending a slew of improvements, including an update to the county code of ethics, new requirements to use sole source contracts, new due diligence procedures for subcontractors and an evaluation of the county’s fraud hotline.
A Voice of OC investigation last year found many county staff remain afraid to use the county fraud hotline, and that most of the time investigation results remain hidden.
[Read: Can OC Workers Really Depend on the County Fraud Hotline?]
Supervisor Janet Nguyen, a longtime opponent of Do who replaced him on the board, called him “The Godfather of Little Saigon” and pushed for renewed criminal investigations.
“Do’s federal bribery conviction was the tip of the iceberg,” Nguyen wrote in a Monday statement. “Every single person and business who participated in this fraud needs to be investigated and criminally charged if the evidence warrants it.”
Foley and Nguyen were also the first to publish the report.
Supervisor Don Wagner also noted that he wants to see “every dollar misspent by Do” recovered.
“Sadly, they found more misconduct, this time related to the Arts Relief Program and the Tet and Moon Festival,” Wagner wrote. “I am deeply disturbed by these findings and hope that the ongoing audit process uncovers any and all other criminal conduct.”
On Tuesday morning, Supervisor Vicente Sarmiento said he wants to dig into more investigations, highlighting that Do couldn’t have accomplished all of this on his own without help from county staff.
“There were obviously people that were complicit,” Sarmiento said. “There was a culture unfortunately that was bred here, and there was corruption in this county.”
Supervisor Doug Chaffee praised the audit at the meeting, but also said he doesn’t want to keep spending money on it unless it opens doors to recoup cash.
“I’d like to know how far it needs to go, I’d also like to know what the cost situation is,” Chaffee said. “I don’t want to keep spending money if we can’t recover it in some way. The report is disturbing but it’s not what I’d call evidentiary quality.”
Noah Biesiada is a Voice of OC reporter. Contact him at nbiesiada@voiceofoc.org.