Visit Anaheim has halted its financial relationship with the Anaheim Chamber of Commerce and will respond in the coming weeks to the city’s demand to return $1.5 million, leaders with the tourism marketing nonprofit told the city.
City Attorney Robert Fabela on Tuesday night gave the City Council an update on the demand for Visit Anaheim to return the money, following the allegations that the agency may have surreptitiously diverted $1.5 million in coronavirus pandemic relief funds to an Anaheim Chamber of Commerce nonprofit in 2020.
Fabela said Visit Anaheim’s attorney conveyed that they will respond to the city’s demand in the next two to four weeks after the completion of their own internal audit. They also have stopped sending money to the Anaheim Chamber of Commerce and plan to end an annual agreement to share revenue with them.
In 2020, the city gave $6.5 million to the tourism agency during the early months of the pandemic to promote tourism recovery. Investigators from the JL Group alleged that $1.5 million of that may have gone to the chamber nonprofit, but they couldn’t determine how it was used.
Visit Anaheim likely violated its agreement with the city to not subcontract for services without the city manager’s approval, which they didn’t get, city staffers said in a report to the council.
“From what I’m hearing now, (Visit Anaheim’s) board is more engaged in how Visit Anaheim is operating,” Councilmember Natalie Rubalcava said. “I think the CEO had a significant amount of leeway on how funds were being dispersed.”
Visit Anaheim markets the city and books the convention center. They are a 501-c-6 nonprofit funded by a 2% assessment on hotel room rates in the Anaheim Resort and the Platinum Triangle.
Tom Morton, executive director of convention, sports and entertainment for the city, told councilmembers that it’d “be a heavy lift” to quickly replace Visit Anaheim with another organization or create an internal department to do what it does for the city. The city could terminate its contract with Visit Anaheim with 180 days’ notice.
The City Attorney’s Office is still working on an analysis to see if Anaheim can halt sending money to the agency as the council has asked, but Fabela was doubtful that it’d be possible.
Tuesday’s council meeting focused on the city’s next steps to create new reforms, but began with Councilmember Stephen Faessel giving an ardent defense for himself following the mayor and other elected officials statewide calling for the resignations of anyone who might have been involved with planning mock council meeting sessions in the lead up to the a sale of Angel Stadium.
An email proposing the sessions to be held in September 2020 – when the council was considering the development agreement that outlined what could be built on the stadium property – was among the details in an agreement former Mayor Harry Sidhu signed with the United States Attorney’s Office to plead guilty to four federal charges. The email proposed the sessions include Sidhu, two council members, including the then mayor pro tem, who was Faessel, two city staffers and Angels representatives.
“While there is evidence that the email was indeed sent, I have no personal recollection of participating in those three meetings, nor any record of having attended them,” Faessel said.
Faessel defended his vote to sell Angel Stadium and said he “was never influenced by some preordained plan, certainly not from a series of meetings that looked like they may never have been held.”
He called for the city to consider ending its city-wide elected mayor position and move to an appointed mayor system after independent investigators recommended the city rededicate itself to the council/manager structure.
“The blame of the corruption lies on the bad actors, not on those of us who were unaware of their corrupt activities,” Faessel said.
Mayor Ashleigh Aitken shot back and defended her calls for anyone involved in the planning of mock council meetings to come forward with information and resign, and took “umbrage” at Faessel’s suggestion for reform.
“I have a problem when a council colleague, the only reform that you can bring in the month since the JL Report comes out is to go after the first female elected mayor?” Aitken said. “That’s ridiculous.”
The council moved forward with setting a calendar for the rest of summer and into the fall for reforms to take into consideration, including lobbying, campaign finance reform and an ethics commission.
Source: Orange County Register
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