Huntington Beach’s top attorney is refusing to answer questions about a $7.4 million settlement reached with the operator of the Pacific Airshow for the city canceling the event during the 2021 oil spill.
It’s also the same company that also created signs at a campaign event for City Attorney Michael Gates last year, although his campaign didn’t pay for them.
“It’s not a public record,” Gates said in an interview last week. “The terms the public is entitled to know we’ve released, but it’s not a public record.”
The move is raising transparency and ethics concerns among the minority faction of city council members.
Councilman Dan Kalmick said he was only allowed to read the settlement while Gates supervised him, and called for its immediate release to the public in a text message to Voice of OC.
“There is no reason to not release the entire document unless that Majority and the City Attorney are trying to hide something they’re not proud of,” Kalmick said.
Kalmick declined to state any of the details in the settlement, but said the public “needs,” to see it in its entirety.
Mayor Tony Strickland also said he had to read the settlement in Gates’ office and was not provided with a copy, adding he supports it being released to the public if there is no legal liability.
“I believe in transparency, whatever we decide,” Strickland said.
The settlement with Code Four, the company that manages the annual airshow, stems from a lawsuit over the city’s decision to shut down the airshow during the 2021 oil spill, a move the company said cost them millions.
[Read: Huntington Beach Reinstates Pacific Airshow, Settles Lawsuit with Operator]
The city is set to pay up to $7.4 million to Code Four for their losses with the support of the council’s new conservative majority.
Strickland called it his “signature moment” as mayor.
“We should be honored that Huntington Beach gets to host an event like the airshow,” Strickland said in an interview. “It’s a signature event.”
While Gates released a summary of the settlement’s requirements earlier this month, he’s refused to provide all the details to the public or release any excerpts of the document itself.
While the airshow operator did not receive any money from Gates’ campaign, the company was paid by Strickland and Councilman Pat Burns for the equipment to host the new council majority’s and Gates’ “victory rally,” days ahead of last November’s election.
Councilwoman Natalie Moser said if the city were to release the document, it would back up her concerns.
“I think once that’s made available, I think that the concerns will be made much more apparent,” she said in a Wednesday interview.
Councilwoman Ronda Bolton also raised transparency and ethical concerns over the settlement.
“This whole thing stinks,” Bolton said.
In a statement from the city’s public records department, city staff cited a host of exemptions to not release the settlement agreement, including the fact that the settlement was an attorney-client work product.
The statement also cited concerns that the settlement contained “architectural and office building plans,” along with “pending litigation to which the public agency is party.”
Officials also say it’s not in the public’s interest to see the $7.4 million settlement.
“Records in which the public interest in maintaining confidentiality outweighs the public interest in disclosing.”
Kevin Elliott, CEO of Code Four, the company that runs the airshow, praised the agreement in a joint news conference on May 9 with Gates and other city leaders.
“Without the combined leadership of these officials … there would not be a future airshow in our city,” Elliott said.
Code Four did not respond to requests for comment.
Elliott also advertised last November’s “victory rally” on his Facebook page, urging residents to come to the victory rally and celebrate with the candidates.
“It’s going to be the biggest rally in OC this election season!” Elliott wrote. “Don’t miss it!”
In another post, Elliott encouraged his followers to get informed about the election, linking to a blog post about Strickland, Burns and Councilmembers Casey McKeon and Gracey Van Der Mark – all four of whom are now the new council majority.
“This upcoming election is the most consequential in Huntington Beach history!” Elliott said on Oct. 27.
Those posts all came as Code Four was wrapped up in litigation with the outgoing city council over the cancellation of part of the air show in 2021, a decision made by local leaders after they were forced to close the beaches and spent weeks cleaning up an oil spill.
When asked about his past payments to Code Four and if they were a conflict of interest, Strickland said he simply paid them for some banners and campaign memorabilia and that he didn’t work with them.
“These are the guys who run the Super Bowl … they should be recognized as a Huntington Beach company,” Strickland said. “Frankly I didn’t know Kevin Elliot until I became a councilman on a personal level.”
Bolton questioned Code Four receiving a settlement after providing supplies for Strickland’s campaign.
“That’s my understanding, that there’s some type of relationship,” Bolton said. “If that’s the case … then yeah that’s a conflict.”
When asked about the importance of the airshow, Strickland pointed to an economic report prepared by Visit Huntington Beach, a tourist marketing organization, that claimed the airshow generated over $70 million for local business.
“When a restaurant or hotel is full, we get those impact fees,” Strickland said, but he said he was unable to say how much money the city itself received or speak to the accuracy of the reports.
Bolton said she thought the 2019 report on the airshow’s impact had some “gaping holes,” adding officials should not have settled the lawsuit.
“It’s part of this pattern of irresponsible decision making,” Bolton said. “You’re going to see more of those, because that’s just how these guys roll.”
When asked for specifics, Bolton said she had concerns it over estimated the amount of sales and property tax that was generated by the city from the airshow.
“All sales during that three day period, those are not attributable to the air show,” Bolton said. “There’s no way it amounts to millions and millions of dollars just in revenue that comes to the city … if that was the case, the revenue would have to be like in the hundreds of millions of dollars.”
Councilwoman Moser said she had “massive ethical concerns,” with the deal, and that she’d urged her colleagues not to sign on.
“I think now that the settlement agreement has been executed, it should be a public document.”
This story was updated to specify Councilmember Rhonda Bolton’s complaints against the air show’s economic impact study.
Hosam Elattar contributed reporting to this story.
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.