An Anaheim City Council member has publicly raised concerns that the leader of the city’s tourism bureau – Visit Anaheim – is trying to abolish a state prescribed oversight committee in the aftermath of one of Orange County’s largest corruption scandals.
Now, Disneyland Resort-backed Councilwoman Natalie Rubalcava is calling on the Bureau’s new CEO Mike Waterman to show up to a city council meeting to publicly answer questions.
“I actually have my policy aide audit Visit Anaheim meetings and there was something that was concerning on one of the meetings that just took place where the CEO is basically saying the state mandated oversight committee that we put in place is something that he’s going to abolish in four meetings,” she said at the end of the Oct. 29 meeting.
“I’d like to hear his strategy on that.”
Rubalcava did not respond to a request for comment.
In a Monday email, Waterman said he fully supports the advisory board and that he apologized to City Manager Jim Vanderpool for his comments.
“Visit Anaheim is committed to actively participating on this board,” he wrote.
Rubalcava’s request comes after a scathing state audit found loose regulations on the city’s tourism tax spending – with auditors recommending the city create an independent advisory board to oversee how those public dollars meant to market the resort area are being used.
The funds stem from a tax on hotel stays in the Disneyland Resort area.
[Read: CA Auditors Lambast Anaheim’s Tourism Bureau, Find Improper Tax Dollar Spending]
Over the summer, Anaheim officials voted to form that committee – which includes two hoteliers, Waterman, City Manager Jim Vanderpool, the city’s Convention Center Director Tom Morton, and two other city employees.
[Read: Anaheim Institutes Oversight of Controversial Tourism Bureau]
Waterman, who was appointed CEO and President of Visit Anaheim in April, said at the committee’s first meeting last month that he tried to talk city officials out of making the advisory group.
He also called it a redundant exercise, arguing that Vanderpool and Morton sit on Visit Anaheim’s board of directors and are informed about what’s going on at the tourism bureau.
“Selfishly, my belief is, over time, maybe after the second or third or fourth meeting – we’re supposed to do four meetings a year – we’ll all decide that this is not necessarily the most effective use of our time, and we will disband it,” Waterman said.
“But I do understand the desire for the city to be able to say we did what the state told us to do.”
Yet Morton and Vanderpool were already on the board of directors when state auditors found the tourism bureau misspent funds.
In their scathing report, state auditors accused the Anaheim Chamber of Commerce of improperly spending tourism dollars given to them through Visit Anaheim to lobby nearly a dozen unnamed elected officials, advocate for or against legislation and support candidates through their political action committee.
“Because the city did not have a meaningful process for contract monitoring, Visit Anaheim was able to pay the Chamber for unallowable services that involved political advocacy and influence,” reads the audit.
Waterman said in a Monday email that Visit Anaheim has no current or outstanding contract with the chamber of commerce.
“We do not believe [Tourism Improvement District] funds can or should be used for lobbying purposes other than to protect the use of [Tourism Improvement District] funds for destination marketing and promotion,” he wrote.
Oversight in The Wake of a Conspiracy
Rubalcava’s remarks come over a year after city-hired independent investigators alleged in a 353-page report that the tourism bureau diverted $1.5 million of its $6.5 million city bailout to a Chamber of Commerce-controlled nonprofit.
[Read: Anaheim Council Funds $6.5 Million Bailout To Advertise Disneyland Resort Area]
The investigators – with decades of law enforcement experience – wrote that former Visit Anaheim CEO Jay Buress was part of a conspiracy to divert the funds allegedly concocted by former Mayor Harry Sidhu and former Anaheim Chamber of Commerce Todd Ament.
Both Sidhu and Ament would go on to plead guilty to multiple federal crimes.
State auditors found that Buress directed Visit Anaheim’s finance director to change the funding source for the $1.5 million in spending.
“According to Visit Anaheim’s senior vice president of operations and its finance director, the former president requested the reallocation of transfers from its economic recovery contract accounts to other operating accounts because he stated that the transfer could not show on the record as being from economic recovery contract funds,” state auditors found.
They also found the $1.5 million spending – stemming from a verbal agreement – was due to a lack of oversight and that the overall $6.5 million the city gave to Visit Anaheim at the beginning of the pandemic might not have been needed.
[Read: Anaheim City Council Majority is OK with Visit Anaheim Holding Onto Millions of Bailout Dollars]
“This lack of accountability highlights the need for the city to require Visit Anaheim to separately account for its tourism district assessment fund expenditures to ensure that these funds are spent appropriately and in compliance with the tourism district assessment contract,” state auditors wrote.
Burress quietly resigned from his role at the tourism bureau at the end of last year.
The diversion of bailout dollars isn’t the only alleged schemed investigators called out in their report.
Those same investigators also accused Rubalcava of misconduct – alleging that an Anaheim Chamber of Commerce resident advisory group helped her get elected by acting as a political operation and that she broke city charter rules by sidestepping the city manager and directing staff herself.
[Read: Was an Anaheim City Hall-Funded Nonprofit Used as a Political Data Mining Operation?]
Investigators accused the advisory group – Anaheim First – of giving Rubalcava a list of names and contact information they gathered when conducting community outreach meetings to help her 2022 election campaign.
Rubalcava publicly denied and pushed back against those allegations last year, arguing that the report had inaccuracies.
Editor’s note: Ashleigh Aitken’s father, Wylie Aitken, chairs Voice of OC’s board of directors.
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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