A scathing report from the California Comptroller alleges that the City of Anaheim's tourism promotion office improperly donated tax dollars to the local chamber of commerce and used the tax money to lobby elected officials and the Anaheim City Council. was found to have spent on supporting resort-oriented candidates.
To review the state auditor's report, click here.
Now, the state auditor is requiring both the city of Anaheim and Visit Anaheim to track and certify where the money is going and how it's being used effectively, as well as seek city approval before transferring money. This is what the tourism bureau is asking for. to any external entity.
Visit Anaheim and the Anaheim Chamber of Commerce have been involved since a city-commissioned study last year found that Visit Anaheim provided the chamber with $1.5 million of $6.5 million in coronavirus relief. The two countries face serious questions over their close relationship.
Anaheim CEO Jay Burress and Chamber of Commerce CEO Todd Ament have already resigned, with Burress abruptly resigning late last year and Ament pleading guilty to fraud charges.
[Read: Anaheim Chamber CEO Todd Ament Pleads Guilty to Fraud Charges, Could Face Decades in Federal Prison]
State auditors say there was no need to send the money to the Chamber of Commerce.
“The City of Anaheim paid Visit Anaheim $6.5 million for an economic recovery contract during the COVID-19 pandemic, even though Visit Anaheim already had an estimated millions of dollars in funding. .
Tourist District Assessment Reservation Land,” the auditors wrote.
Audit commissioners said Visit Anaheim had accumulated $6 million in unused tourist district taxes through December 2021 and could have received $6.5 million in relief money if the city had properly overseen the program. He noted that he may not have chosen to give it.
“This surplus, and the fact that Visit Anaheim had $1.5 million in additional funds to give to other organizations, means the city needs to give Visit Anaheim $6.5 million in economic recovery contract funds. ,” the auditors wrote.
Visit Anaheim officials, through a law firm, deny the report's findings, saying the city gave the tourism board $6.5 million just as the pandemic was occurring, and the Disneyland Resort area was closed. However, he claimed that the tourism board did not have $6 million in reserves. Closed for over a year.
“The Anaheim visit just fulfilled a hypothesis.” [Tourism Improvement District] “At the end of fiscal year 2021, nearly two years after Visit Anaheim was provided with COVID-19 recovery funds, Visit Anaheim had more than $6 million in reserves,” said Hilary Potashner, an attorney representing Visit Anaheim. “I was there,” he wrote.
The Chamber of Commerce spends tax money on lobbying.
After the city's investigation, the state auditor was asked by state legislators to tour Visit Anaheim.
State auditors found the tourism board and the city handed over $6.2. Between 2012 and 2022, one million were sent to the House of Representatives with little oversight.
[Read: What Have State Auditors Found in Anaheim’s COVID Bailout Spending?]
The Chamber then uses those funds to support elected leaders, including city council members, congressmen, county supervisors, congressmen, and district attorneys (all of whom are not named in the report). He lobbied for many years.
“The Chamber's subcontract work plans and performance reports show that the Chamber used these funds for numerous tasks involving political advocacy and political influence, none of which is permissible. “This does not apply to activities that are subject to change,” the auditors wrote.
Auditors also found that the funds were used for various other purposes, generally advocating for and against the law, and that the city and Visit Anaheim would benefit in any way from those funds. He pointed out that it could not be guaranteed.
“Because the city did not have a meaningful process for contract oversight, Visit Anaheim was able to pay the Chamber for unacceptable services that involved political advocacy and influence, and the Chamber did not have any knowledge of the city. “We were unable to provide certain services without delay,” the auditors wrote. . “We also found that the city had no substantive oversight or oversight of these or any other contracts.”
City officials and business leaders respond to audit
The chamber's current CEO, Laura Cunningham, said in a statement to auditors that she could not prove that she had performed some of the work she was contracted to do, but that she had not done so. I argued that it would not.
“It is important to understand that unproven deliverables do not mean the work was not done. This is not a statement from the Comptroller General suggesting that the research does not exist. ” Cunningham wrote.
He also said the auditor's claim that the funds were not allowed to be used for political activities was false.
“We respectfully disagree with this assessment because these services and activities clearly benefit Anaheim's tourism and convention industries,” Cunningham wrote. “Furthermore, such activities are consistent with standard operating procedures for tourism improvement districts throughout the state.”
Anaheim City Manager Jim Vanderpool said in a response letter to the state auditor that city officials do not disagree with the four recommendations made by the state.
Vanderpool also said officials will begin considering forming an independent advisory committee to oversee the Tourism Improvement District's tax spending and improve contract oversight.
“The city is currently preparing an action plan to fully implement the four recommendations within the identified deadlines,” he wrote.
Mayor Ashley Aitken also welcomed the audit's results in a city news release, highlighting the FBI investigation and other city reforms following the city audit.
“Oversight and accountability are critical to public trust and we need to constantly expand and improve,” she said. “The audit's recommendations will be part of comprehensive reforms to guide Anaheim.”
Editor's note: Ashley Aitken's father, Wiley Aitken, chairs the Voice of OC's board of directors.
Noah Biesiada is a reporter for Voice of OC and a member of Report for America, a GroundTruth initiative. Contact us at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.
Hosam Elattar is a reporter for Voice of OC and a member of Report for America, a GroundTruth initiative. Contact us at helattar@voiceofoc.org or on Twitter @ElattarHosam.
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