Aftermath of a scandal: Anaheim council spars over reforms

Anaheim, CA Skyline

The Anaheim City Council approved a schedule last week to consider various reforms in the wake of a sprawling corruption scandal, which is one of the most-significant scandals in Southern California political history. Here’s an update on where the matter stands. It’s a reminder of how difficult it is to pass substantive changes even after wrongdoing is brought to light.

The recent reform effort, led by Mayor Ashleigh Aitken, comes at a wild time at City Hall. Aitken’s predecessor, Harry Sidhu, recently agreed to plead guilty to federal corruption charges. The findings of an explosive independent investigation were recently published and support much of what the federal authorities alleged last year.

Meanwhile, a recall effort has been launched against a sitting councilmember, Natalie Rubalcava, while Aitken and some members of the public have called for another sitting councilmember, Steve Faessel, to resign. One prominent member of a “cabal” of city power brokers also pleaded guilty to some unrelated charges. Basically, the city’s power structure has been imploding.

Some modest proposals

The 353-page report was produced by the JL Group, a private firm contracted by the city, and suggested a host of reforms, many of which have been included by the City Council in the upcoming schedule. These center on lobbying, gifts, ethics, whistleblower protection, campaign finance, partnerships with outside groups and the city manager’s signing authority.

Some seem commonsensical enough, like defining a lobbyist after allegations of improper and undisclosed lobbying, limiting the aggregate signing amount for the city manager and banning evergreen contracts with the city.

Read Matt Fleming’s Free Cities Center article from last year about the Anaheim scandal.

Read this Free Cities Center interview with former Anaheim Mayor Tom Tait.

But others, like disclosing before votes when a donor is involved, might not be as effective. Currently, there’s a $2,500 cap on contributions to City Council members, but the donor influence in this scandal involved millions of dollars in outside spending being funneled through various organizations. It also centered on undue – and undisclosed – influence of City Hall insiders.

And, of course, reforms don’t always have the desired effect. Much of what has been alleged in Anaheim was already illegal – hence the indictments – and changes to rules can often simply recast the landscape. The problems run deep. For instance, The Orange County Register and some former and current council members peg the issue to the crony capitalist style of business that has been obvious in the city for many years.

The mayor v. the council

The report noted the city’s de facto shift from a council/manager government toward a strong mayor style of governance and suggested returning to the traditional system of empowering the city manager and reducing the influence of the mayor. This wasn’t directly agendized by the council, but it would suggest returning the mayor as a position rotated yearly amongst City Council members instead of independently elected as it is now. At the meeting, Faessel pushed to have this on the agenda after sparring with Aitken.

Aitken had called for Faessel to step down over his alleged role in a mock City Council meeting in preparation for the aborted sale of Angels Stadium to the Angels’ owner’s company. That seemed to violate the spirit of the state’s open-meetings rules, which requires the public’s business to be done in public view. Council meetings are not supposed to have pre-ordained conclusions. Faessel denied he did anything improper.

Sidhu has agreed to a deal whereby he would admit to lying to FBI agents about providing city information to the Angels and hoping to receive a $1 million campaign contribution from the team. He would also admit to destroying evidence. The proposed plea deal said that Sidhu “provided confidential inside information belonging to the city” to a team consultant “so that the Angels could buy Angels Stadium on terms beneficial to the Angels.”

According to the report, the current style of governance allowed Sidhu to force out a former city manager who had questioned whether millions of dollars in COVID funds to an Anaheim travel bureau should be treated as a loan instead of a grant. It alleged that Sidhu conspired with others to divert $1.5 million to the Chamber of Commerce, which sat at the center of the scandal and whose former CEO, Todd Ament, has also pleaded guilty to unrelated corruption charges.

And now a possible recall

Rubalcava is now the target of a recall drive in part because her election effort was allegedly helped by Anaheim First, a non-profit run by the Chamber of Commerce that appeared to be a community advisory group but was used in politicking.

The report alleged that, “the Anaheim First operation was a thinly veiled data mining operation where individuals meeting in the various districts would provide their names, phone numbers, and email information. There was evidence to conclude that some of this information was used for political purposes, which was wholly inappropriate and contrary to the stated efforts of this organization.”

Rubalcava, who was elected in November after the Sidhu scandal had come to light, denies doing anything improper.

Other troubling findings

The report claims that Visit Anaheim received funding from the city through no-bid contracts, as did other Chamber activities. The report called many of the scopes of work “vague and amorphous” and duplicative.

“It was as if the city was merely subsidizing the Anaheim Chamber with infusions of money on a near-yearly basis,” investigators wrote. The report’s most damning charges, which were the substance of the previously-reported indictments, centered on allegations of pay to play and City Hall corruption.

In one instance, Sidhu denied a previously-approved gas station to honor a gas-station rival and political donor. In another, Sidhu allegedly required improvements on a property and then steered the prospective tenant to Ament’s allies. The report said Ament acted as a gatekeeper to Sidhu. People wanting to meet with him had to “pay tribute” like joining the chamber or making a financial contribution to something benefitting Sidhu.

Next steps 

In mid-September, the City Council plans to consider lobbying reforms. This will include, among other proposals, defining a lobbyist and discussing reporting requirements, but change has been slow going. Voters had elected some reformers in November but also elected members supported by resort-area businesses. The council had initially resisted even commissioning the independent report and some members continue to drag their feet on far-reaching reforms.

The entire mess is particularly disappointing because Anaheim had in previous years embraced a freedom-friendly approach that reduced regulations and fees for all businesses and eschewed inside deal-making and corporate subsidies. At this point, it will take real leadership to point the city back in a direction that led to widespread national praise rather than embarrassment and derision.

Matt Fleming is an opinion columnist for The Orange County Register.


Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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