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Anaheim officials are expected to keep a closer eye on how tourism tax dollars – meant to market and promote the Disneyland resort district – are being spent after state auditors alleged the money was being used to lobby elected officials.
In a report published earlier this year, state auditors accused the Anaheim Chamber of Commerce of using tourism dollars given to them by the city’s tourism bureau, Visit Anaheim, to lobby nearly two dozen elected officials and support the campaigns of resort friendly candidates for more than a decade.
[Read: Is it Legal to Spend Tourism Dollars to Lobby Elected Officials?]
The auditor’s report came on the heels of sworn FBI affidavits in 2022 and a 353-page independent investigation report released in 2023 that both allege Disneyland resort interests exert undue influence over city hall.
This week, officials are considering creating a seven member advisory board made up of hoteliers, city staff and Visit Anaheim representatives to oversee how the money is being spent –fulfilling one of the key recommendations by state auditors.
To watch Anaheim’s Tuesday 5pm City Council meeting, click here.
According to a staff report, the purpose of the board is to make recommendations to city officials on the spending of tourism dollars. The panel would be made up of two hotel representatives, city staff including the city manager or his designee and the Visit Anaheim president and CEO.
Hotel representatives will be recommended by the Anaheim/Orange County Hotel & Lodging Association and serve for four year terms.
A Public Corruption Scandal: Who Will Sit on The Board?
Tonight’s discussion comes in the wake of one of the largest public corruption scandals to rock in OC in recent times – all detailed in sworn FBI affidavits and the city’s own commissioned corruption probe report.
In the city commissioned report, independent investigators alleged Visit Anaheim took $1.5 million of the $6.5 million COVID bailout they were given by the city council and sent the money to a Chamber of Commerce controlled nonprofit.
They said the diversion of money was part of a conspiracy by former Anaheim Chamber of Commerce CEO Todd Ament, former Mayor Harry Sidhu and former Visit Anaheim CEO Jay Burress.
Both Sidhu and Ament have pleaded guilty to multiple federal crimes.
Burress quietly resigned from his role in November – months after investigators released their report. His replacement is expected to sit on the proposed advisory board.
The allegations in the investigators’ report about improper use of the tourism promotion money led State Assemblyman Avelino Valencia, who was an Anaheim city council member when the corruption scandal first surfaced, to call for the state audit.
A Visit Anaheim representative isn’t the only one expected to sit on the board.
Or the only one called out by independent investigators.
City Manager Jim Vanderpool is also expected to sit on the advisory board.
Investigators allege Vanderpool was on board with an Anaheim Chamber of Commerce plan to keep as much as $100 million a year out of the city’s general fund once the 1997 resort bonds are paid off.
[Read: How Disneyland Resort Interests Planned to Withhold Tax Money from Anaheim’s Working Class]
Tourism Tax Dollars at Work
The tourism money in question comes from a 2% tax local hoteliers impose on their rooms in the Anaheim resort area as part of the Tourism Improvement District the city established in 2010 for marketing the resort area.
In turn, the city collects that money then sends it to Visit Anaheim.
Following the state auditor this year, officials are looking at potentially using some of the revenue collected towards affordable housing in the city.
During a discussion on Disneyland’s proposed expansion in April, City Councilwoman Natalie Rubalcava publicly asked Disneyland Resort President Ken Potrock if they would be willing to direct a portion of tourism dollars used to support housing resort workers.
Potrock voiced support for the idea but said it was not up to them alone to decide how to use the money, saying the decision would have to involve support from others in the resort district.
[Read: Will Tourism Dollars Help Fund Anaheim’s Affordable Housing Trust?]
Beyond creating an advisory board to address their concerns, state auditors are also recommending Anaheim officials create a contract oversight procedure and renegotiate their contract with Visit Anaheim by Jan. 2025.
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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