Congressman Lou Correa (D-Anaheim) is calling on federal officials to launch an investigation into alleged misuse of public funds between Anaheim officials, Visit Anaheim – the city’s tourism bureau – and the local chamber of commerce.
Correa’s Wednesday request comes on the heels of the California Auditor’s report released Tuesday, which alleges Anaheim’s Chamber of Commerce improperly spent tourism tax dollars they received from Visit Anaheim.
Auditors say chamber leaders improperly used some of the money they got over the years to lobby elected officials at the local, county, state and federal level – as well as financially support resort-friendly candidates through a political action committee.
“The Chamber’s subcontract work plans and deliverable reports indicate that the Chamber used these funds for numerous services that involved political advocacy and influence, none of which fall within the allowable services,” reads the audit.
[Read: CA Auditors Lambast Anaheim’s Tourism Bureau, Find Improper Tax Dollar Spending]
In a Wednesday letter, Correa asked U.S. Attorney General Merrick Garland and U.S Secretary of the Treasury Janet Yellen for a federal investigation into the matter.
“The audit found that the City’s lack of oversight misled Visit Anaheim to award $4.4 million in taxpayer dollars to the Chamber for unallowable services, including lobbying on proposed federal, state, and local legislation; meeting with elected officials; and supporting resort-friendly candidates through the Chamber’s political action committee,” Correa wrote.
A focal point of Correa’s plea is the $6.5 million bailout Anaheim officials gave Visit Anaheim in the onset of the pandemic in early 2020.
While the city used convention center reserves to initially fund the bailout, it was later backfilled by federal COVID dollars.
“This fact raises the possibility that federal funds were used for improper political activities,” Correa said in his Wednesday letter. “I urgently request that you investigate whether any federal laws were broken by the City, Chamber, or Visit Anaheim.”
Click here to read Correa’s letter.
The auditor’s findings this week is the latest in a series of investigations into alleged public corruption in Anaheim.
Sworn FBI affidavits and a city commissioned probe both detail Disney resort interests’ undue influence on city hall.
In a statement Tuesday, Chamber leaders said the auditors’ conclusion relied “on a subjective opinion and not on plain facts” and called on them to retract their findings.
They didn’t deny meeting with elected officials and said the contract between Visit Anaheim and the city allows for “additional services” to ensure the success of tourism in Anaheim.
“Common sense and experience demonstrate advocacy is vital to fostering and protecting the resort, as tourism improvement districts throughout the state do,” reads an unsigned statement from the chamber sent to Voice of OC.
Anaheim Chamber of Commerce officials don’t classify that as lobbying.
“We are disheartened to learn that the chamber’s communication with elected officials is an unallowed political activity.”
Last year, a city commissioned investigation found that Visit Anaheim improperly diverted $1.5 million from a $6.5 million bailout from the city early in the pandemic to a chamber-run nonprofit – money that city officials later backfilled with COVID relief dollars.
When city council members authorized the bailout in March 2020, the Disneyland resort district would be shut down for more than a year.
The accusation of Visit Anaheim improperly redirecting bailout money led State Assemblyman Avelino Valencia, a former city councilman, to call on state auditors to investigate.
[Read: State Auditors to Probe Anaheim’s Rerouting of Federal Funds to Chamber of Commerce]
Meanwhile, Anaheim City Council members decided not to do their own audit and opted to wait to see what state auditors find.
In their report, state auditors concluded the city did not need to send money to the tourism bureau, which they say had about $6 million in reserve in 2021.
State auditors also noted a lack of oversight by city officials allowed the tourism bureau and the chamber to inappropriately spend the money.
In response to the audit, city officials say they will follow auditors’ recommendations to improve oversight of tourism dollars.
“The City of Anaheim supports the conclusion that there is always room for improvement in our existing contract oversight procedures and will begin work on adopting a set of policies and procedures specifically for professional service contracts,” reads City Manager Jim Vanderpool’s response to auditors.
In the fallout of the corruption probe, former Visit Anaheim CEO Jay Burress resigned and former Mayor Harry Sidhu as well as former Chamber CEO Todd Ament pleaded guilty to federal charges.
Independent investigators accused the three of being part of a conspiracy to illegally divert the bailout money. Neither of the three have responded to Voice of OC’s requests for comment.
After Sidhu and his council majority approved the local tourism bureau bailout, Anaheim residents – especially in the west side – would go on to see some of Orange County’s highest COVID positivity rates, hospitalizations and deaths.
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.
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