Missing Money in Anaheim? Visit Anaheim CEO Resigns After Allegations of Rerouting Tax Dollars

Jay Burress, CEO and President of Visit Anaheim, has resigned amid allegations he helped divert $1.5 million in tax dollars to an Anaheim Chamber of Commerce-controlled nonprofit in the midst of one of the biggest corruption scandals to hit Orange County. 

Christina Dawson, senior vice president of operations for Visit Anaheim – the local tourism bureau – confirmed Thursday that Burress resigned last week and a search to replace him as president and CEO is ongoing.

She declined to comment further.

Mike Lyster, a city spokesperson, said in a Wednesday email the city has not been updated about Visit Anaheim when asked about Burress’ resignation.

“We have not received any notification or update regarding Visit Anaheim,” he wrote.

After publication Thursday, Mayor Ashleigh Aitken said in a text message she couldn’t comment on the resignation since she hadn’t been contacted by Visit Anaheim about the issue.

Aitken’s father, Wylie Aitken, chairs Voice of OC’s board of directors.

The rest of the city council did not respond to a request for comment Wednesday.

Alleged Criminal Conspiracy 

In a 353-page corruption report released at the end of July, independent investigators – with decades of law enforcement experience – 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. 

The money Anaheim gave the tourism bureau in March 2020 was from the city’s general fund and was later backfilled by federal COVID bailout money.

Investigators say Burress was part of a conspiracy to divert the money allegedly concocted by former Mayor Harry Sidhu and former Anaheim Chamber of Commerce CEO Todd Ament, both of whom have pleaded guilty to multiple federal crimes.

“The facts showed that then-Mayor Sidhu directed Burress to divert $1.5 million to the Anaheim Chamber’s controlled nonprofit and that Ament instructed Burress to report, if asked about the $1.5 million, that it came from other reserve funds,” investigators wrote. 

“This cover story was created in order to provide some sort of plausible deniability for the unlawful diversion of this $1.5 million,” reads their report.

In September, Sidhu pleaded guilty to lying to federal investigators about attempting to ram the Angel Stadium sale through for $1 million in campaign support from the team. 

In July 2022, Ament pleaded guilty to a series of federal fraud charges.  

Burress’ name is mentioned nearly 120 times in the corruption report, and investigators say he admitted he completely fabricated the $6.5 million figure the organization said it needed to survive the pandemic. 

Sidhu spearheaded the bailout in March 2020 so Visit Anaheim could book conventions and advertise the Disneyland resort area at a time when the local tourism industry was shut down indefinitely. 

Disneyland would be closed for more than a year.

[ReadAnaheim Council Funds $6.5 Million Bailout To Advertise Disneyland Resort Area]

At the time, former City Manager Chris Zapata objected to Sidhu’s plan saying they should loan them the money instead.

Zapata was fired by Sidhu’s council majority shortly afterwards.

State Auditor Eyes Visit Anaheim

Weeks after the corruption report was released on July 31, State Auditor Grant Parks launched an investigation into Visit Anaheim’s finances at the request of Assemblyman Avelino Valencia, a former city councilman.

[Read: State Auditors to Probe Anaheim’s Rerouting of Federal Funds to Chamber of Commerce]

That audit is expected to be released this winter, according to the auditor’s website.

Click here to read the full article in the Voice of OC

Disneyland workers primed for big salary bump after winning living-wage legal battle

Marlene Hackett works most days in Disneyland at food stands in Critter Country, where she rolls the theme park’s famed churros in brown sugar and shovels buttery popcorn into buckets before handing them out to eager parkgoers.

But with an hourly wage of $21.25 after 13 years as a Disney “cast member,” Hackett, 53, struggles to keep her own cupboards full. So, shortly after dawn on a recent Friday, she was among scores of theme park workers picking up boxes filled with canned goods, pasta, bread and tortillas at a monthly food bank hosted by Workers United Local 50, Disney’s largest labor union.

Throughout the morning, a steady flow of cars pulled up in the alley behind the union’s office, about a mile and a half from the theme park. Disney workers, some wearing double-breasted white chef’s jackets, others in aprons, scanned their employee ID cards at a check-in desk and humbly accepted the donated staples before heading off for morning shifts at the “happiest place on Earth.”

Local 50 represents 8,500 food and beverage workers at Disneyland and the adjacent California Adventure Park. Many, like Hackett, are grateful for the pantry. She said the effort helped keep her family fed when she was out for several months for knee replacement surgery. And now that she’s back at work full time, inflation has continued to eat at her food budget.

“It’s crazy, but the food bank helps a great deal,” Hackett said.

So, too, will a major legal victory handed down last month by the California Supreme Court that is expected to boost pay for thousands of low-wage Disney workers.

On Oct. 25, the justices said they would decline to hear an appeal by the Walt Disney Co. in a long-running class-action lawsuit that alleged Orange County’s largest employer was wrongfully skirting a living-wage ordinance passed by Anaheim voters in 2018. The decision cemented a July appellate court ruling that found the law indeed applied to Disney’s two Anaheim theme parks and resort workforce.

“We don’t have a precise measure of the damages,” said Sarah Grossman-Swenson, an attorney representing workers at Disney’s Anaheim properties, “but we do expect that it will be in the tens of millions of dollars.”

A Disney spokeswoman said the company is still trying to determine exactly how many workers will be affected and how much back pay is owed. But she said raises in line with the city’s living-wage ordinance would show up in the paychecks of eligible workers starting this week.

Javier Terrazas works as a banquet server at the Disneyland Hotel and was a plaintiff in the class-action suit. Disney workers such as Terrazas, eligible for patron tips, are currently paid an hourly rate of $15.50 an hour, the state’s mandated minimum wage. As a group, this category of workers stands to benefit the most from the Supreme Court’s decision not to hear the case — and Disney’s decision to stand down.

“I have multiple jobs, because I can’t make ends meet with what Disney pays me,” Terrazas said. “With this victory, I’ll be able to spend more time with my family and I can just focus on my main job with Disney.”

According to MIT’s living-wage calculator, a working adult with no children needs to earn $21.53 an hour to cover basic living expenses in Southern California. The minimum wage required under Anaheim’s 2018 ordinance is now $19.40 an hour. That’s slated to rise another 50 cents next year.

For eligible Disney workers, back pay will date to January 2019, when the law took effect.

The cessation of the legal battle marks a watershed moment in a tortuous five-year effort to raise the standard of living for resort workers in Anaheim.

In 2018, the Coalition of Resort Labor Unions launched a living-wage movement for Disney workers that included calls for a local ballot measure to raise minimum pay. At the time, the lowest-paid workers at Disney’s Anaheim properties were making $11 an hour, then the state-mandated minimum for large employers.

In an effort to sidestep the ordinance, Disney negotiated a new pay scale that raised the minimum salary to $15 an hour for employees covered by the Master Services Council, an alliance of four unions that together represent 9,500 workers, about a third of Disney’s unionized workforce.

In ensuing months, other unions, including Workers United Local 50, negotiated similar deals. But even as those contracts were being negotiated, Anaheim voters approved Measure L, the November 2018 ballot measure requiring resort businesses that receive a city subsidy to pay a minimum wage that rises along a set tiered schedule. Under the ordinance, the local minimum wage started at $15 in January 2019, then rose by $1 an hour each year until 2022, when it hit $18. After 2022, raises are based on the cost-of-living index.

In the lead-up to the election, Disney asked the Anaheim City Council to shred two major tax break deals the company had been granted, one involving taxes on gate revenue, the other involving bed taxes on a luxury hotel project. With those agreements canceled, Anaheim’s city attorney said Measure L would not apply to Disney.

But a class-action lawsuit filed against Disney in December 2019 on behalf of 25,000 resort workers said the ordinance did apply because of another complex agreement Disney had with the city involving bond sales to fund an ambitious 1996 theme park expansion.

An Orange County Superior Court judge originally sided with Disney before a three-judge panel overturned that ruling, saying the bond sales agreement qualifies as a city subsidy. Disney appealed the case to the state Supreme Court in August. After justices declined to hear the case, Disney said through its attorneys that the company would comply with Anaheim’s ordinance.

Although the court victory has lifted spirits, for many Disney workers pressing concerns remain. In recent months, discontent has bubbled beneath the surface in Local 50 and other union shops, with members accusing union leaders of failing to effectively represent their interests. Along with higher wages, workers say they want changes in a pay scale that does not reward seniority and sets a high bar for paid sick time.

Rafael Rendon, a custodian at Disney’s California Adventure Park, has talked to fellow SEIU-USWW members as a shop steward to see what matters most to them ahead of the Master Services Council’s upcoming contract negotiations. Thanks to the court victory, many custodians, bakers, ride operators and retail workers represented by the union will see raises and back pay. Rendon estimates that at least half of SEIU-USWW’s membership will benefit.

But pay remains an urgent issue.

“Inflation is hitting very hard,” Rendon said. “Members want to see a very large wage increase to upward of $30 an hour.”

Workers United Local 50, which is not part of the Master Services Council, did not count on the court fight ending any time soon and negotiated a new contract in August. Union leaders touted an immediate 30% average boost in pay, with an overwhelming majority of workers set to earn additional raises throughout the five-year life of the contract.

But a razor-thin ratification of that contract — and an ugly act of vandalism the day voting began — underscored the internal tensions. Graffiti scrawled across the back walls of the Local 50 office appeared to call out the union president and vice president by name with vulgar taunts and slurs. Anaheim police are investigating the incident as felony.

Click here to read the full article in the LA Times

After Anaheim’s Last Mayor Resigned, Four Say They’re the Candidate to Move City Forward

In the wake of a City Hall scandal that could still splash mud on more local leaders, Anaheim’s next mayor will have a big job, but also a delicate one.

Four people think they’re up to it: attorney Ashleigh Aitken and former council member Lorri Galloway (both of whom ran for the office in 2018); political newcomer Dick Lopez, a water systems operator at the city’s wastewater treatment plant; and District 6 Councilman Trevor O’Neil, who as mayor pro tem has been running council meetings since former Mayor Harry Sidhu stepped down in May.

“Given the FBI investigation and what’s happened the last six months, I think there’s going to be a lot of people watching this closely,” former Mayor Tom Tait, whose second term ended in 2018, said of the November election for his old seat.

“I think the public, rightfully so, have lost trust in the city government, trust in doing what’s in the best interests of the people versus the well-moneyed special interests,” he said.

Sidhu resigned amid public pressure when it came to light he was being investigated by the FBI, among allegations made in an affidavit for a search warrant was that he may have tried to pass on confidential information to Angels Baseball officials while the city was negotiating with them to sell Angel Stadium, and in return he allegedly hoped to ask for $1 million in support for his reelection campaign.

Sidhu has not been charged with a crime. His attorney has maintained that a thorough investigation would prove Sidhu did not disclose any secret information, and that his campaign contributions are in compliance with the law.

On the heels of Sidhu’s disgrace came the arrest and subsequent guilty plea of close advisor and former Anaheim Chamber of Commerce CEO Todd Ament, who in a settlement pleaded to several counts of fraud in July. In court filings investigators alleged he helped lead a self-described cabal that influenced council decisions in favor of powerful business interests.

With those events as a preface, whoever wins in November steps into the glare of public scrutiny – and takes on a job that, by the time they’re sworn in, will have been vacant for six months.

What Anaheim needs

Anaheim is the county’s most populous city, with about 350,000 residents, and it’s home to two professional sports teams, a large convention center, Disneyland – which, with more than 30,000 employees is the county’s largest single employer – and a surrounding resort district whose hotel taxes are expected to make up more than a third of general fund revenue this year.

“The thing that I like to remind folks is that Anaheim is the 10th largest city in California and so it sits in a very special class of cities” whose mayors play a role in state policy discussions, said Lucy Dunn, who retired as CEO of the Orange County Business Council in December.

Anaheim’s mayor needs to listen to the needs of residents, but also can’t afford to scorn the businesses that create tax revenue to pay for police, parks and libraries, she said.

“My wish is, do not forget what just happened in this city. Remember you have a broad base of representation, and as a city leader your job is incredibly difficult to balance competing interests and to literally raise up Anaheim for everyone,” she said.

With all that to handle, the city’s mayor serves a four-year term for an annual salary of $18,000 plus other benefits. So who wants the job?

Two of the candidates on the November ballot say their experience is what the city needs to get back on the right track after the recent turmoil, which ended up killing the stadium sale.

With Anaheim’s budget of more than $1 billion and more than 3,000 city employees, “now isn’t the time for novices – because of some of the things that have happened at City Hall, there is a learning curve just to go in and understand the city,” said Galloway, who served two terms on the council that ended in 2012.

For almost 40 years, Galloway, 69, has run the nonprofit Eli Home, which provides shelter and services to children and their mothers who are experiencing homelessness, domestic violence or substance abuse. She said Anaheim residents she speaks with are concerned about safety and homelessness in the city, issues she would prioritize as mayor.

O’Neil, 51, also touts his “proven experience” in filling the leadership void left by Sidhu’s resignation. He’s wrapping up a four-year term on the council and also runs a business providing home health care services.

O’Neil said while on the council he supported increasing the ranks of police and firefighters, helped get more than $72 million in pandemic aid to families and businesses, and got the city to take part in a state program that finances turning market-rate apartments into affordable “workforce” housing.

But he’s also been dogged by accusations of coziness with Sidhu and prevailing business interests.

“Yes, I was aligned with former Mayor Sidhu on a number of issues but not all issues, and my voting record speaks to that,” O’Neil said.

Aitken and Lopez said they also would focus on issues such as homelessness and community safety, but they and Galloway all said transparency and rebuilding residents’ trust in their city government will be key.

“As a former federal prosecutor, my No. 1 goal is to really restore people’s faith in a transparent government and ensure they feel City Hall is working for them,” Aitken, 46, said.

She said if elected she would make her schedule public so constituents would know who their mayor is meeting with, and added, “I believe in full disclosure” regarding campaign donations from a person or organization with business in front of the city.

Lopez, 48, said he grew up in Anaheim and was “disheartened” by the recent scandal at City Hall. As a city employee, he’s concerned about the “brain drain” of workers getting trained here and then leaving for other agencies with better pay and benefits, he said.

He’d be willing to consider the ticket tax on Disneyland and other large attractions the council majority just rejected, he said, adding that he’s not seeking to curry favor with the resort district businesses that typically back their preferred candidates with big money.

“We have to make a fresh start,” Lopez said. “That’s what I’m offering here.”

Will they spend?

As the four candidates’ campaigns unfold in the coming weeks, so will another saga: Who will spend money to back their preferred horse.

The Support Our Anaheim Resort Area (SOAR) political action committee – largely funded by Disney – spent more than $350,000 on each of three council candidates in 2018. The PAC reported collecting a total of $1.3 million in 2021, according to campaign finance reports filed with the city.

Aitken, Galloway and Lopez said they have not been supported by big business so far, and while they promised transparency about any contributors, no one explicitly said they’d reject that support if offered.

O’Neil, who was backed by the SOAR PAC in 2018, said he would accept campaign funding from anyone aligned with his political philosophy, “but my ideology and my opinions are certainly not for sale and not subject to influence by contributions.”

Chapman University political science professor Fred Smoller predicted that after the city’s recent embarrassment of making national news, Anaheim voters will be watching the November election closely.

“To me, it’s a change election. It’s post-Watergate,” he said. “People will be looking for new blood.”

Click here to read the full article in the OC Register

Crony capitalism at the “happiest place on earth”

DisneylandEvery year, millions of families flock to the city of Anaheim to make their dreams come true at Disneyland. On the surface, this seems like a slam dunk for Anaheim. The incredible number of tourists should turn the city into an economic wellspring. However, this hasn’t been the case. In the 60 years of Disneyland’s existence, the per capita income of Anaheim residents has decreased substantially, now 10 percent below the state average. That’s because the relationship between the city government and the Walt Disney Company, ultimately, embodies crony capitalism — favoring the company’s interests at the expense of Anaheim’s residents.

It’s no surprise given Disneyland’s geographical dominance of Anaheim that they are also heavily tied to the city’s political scene. Throughout the years, Disney has continually contributed millions of dollars to local politicians to fight on their behalf. In 2014, Disney poured at least $671,000 into political action committees financing city council candidates.

Last year, Councilwoman Kris Murray, a beneficiary of this political spending, led the campaign for a gate-tax ban for Disneyland. Under this plan, Disneyland is exempt from all ticket taxes so long as they expand by $1 billion dollars over the next 30 years. However, there was nothing to indicate that Disneyland wasn’t already seeking to expand. In order to compete with Universal Hollywood and other surrounding attractions, improvements and expansion were a must. This deal, championed by Murray, was a huge win for Disney.

Other entertainment venues haven’t benefited to the extent that Disneyland has. Movie theaters, concert venues and other private entertainment spaces are not given exemptions on ticket taxes. Thus, the exemption for Disneyland is a clear example of favoritism for a company that helps fund the campaigns of the lawmakers themselves.

In addition to the massive gate-tax ban, Disney has recently requested the largest tax subsidy in Anaheim history. Under the city’s hotel incentive program enacted in 2013, all new “luxury” hotels are eligible to receive a 70 percent rebate on all transient occupancy taxes. Once again, this law seems narrowly tailored to include Disney and a few other wealthy proprietors. Disney has been in the works to build a new luxury hotel and has requested that this new property be eligible for the subsidy, which is worth well over $200 million. Clearly, Disney does not need city money for their projects, as they are more than capable of funding their projects privately. However,  the request has been honored under the current subsidy program.

Finally, Disney has also interfered with a proposed streetcar design in Anaheim by artificially raising its installation cost. Even though the original design was only about 3.2 miles long, its estimated cost sat at around $319 million (or about $100 million per mile). Disney would like the opportunity to expand their resort and attractions, which is only a possibility if cars are taken off the road. Disney wants a streetcar system that doesn’t disturb the park aesthetic and caters to their infrastructure, once again pushing the costs higher.

Not only are these extraneous costs unnecessary, but there isn’t even a market for additional public transportation in Anaheim. ARTIC ridership (the local public transit), has continually fallen well below daily projections. In fact, this proposal brings no notable improvement to the lives of Anaheim residents. Still, Disney continually pushed the streetcar costs astronomically high in order to cater to their needs.

Disney and the city of Anaheim share extremely close ties. The subsequent effect of this relationship has been an increase in subsidies and special privileges for Disneyland at the expense of Anaheim. Crony capitalism abounds in the city of Anaheim, and its residents have suffered as a result.

Matt Smith is a fellow in public policy at the California Policy Center in Tustin, California. He is a graduate of Baylor University, and is currently an M.A. candidate at Princeton Seminary with a specialization in Religion and Society. In addition, he is visiting a student in the Princeton University Politics Department doctoral program.

California Is Not Disneyland

At the Howard Jarvis Taxpayers Association, we have seen Proposition 13 blamed for just about everything. A national publication blamed the tax limiting measure for the not guilty verdict in the O.J. Simpson murder trial, while a high school physical education coach wrote in a community paper that the loss of shots by his track and field team was due to the lack of money to cut the grass, and this, of course, was due to Proposition 13.

Now we’re seeing attacks on HJTA sponsored Proposition 218, the Right to Vote on Taxes Act, which makes the taxing process more democratic by allowing voters to decide on local tax increases and to assure property owners that they would have a meaningful say on new assessments, fees and charges. One such attack was a recent opinion piece, calling for the repeal of Proposition 218, because it robs voters of their “democratic power.”

This critic argued that, because Proposition 218 guarantees the voters’ right to approve or reject new taxes, it prevents politicians from matching revenue to their spending: “ [L]ocal officials can give big pensions to cops, but don’t have the power to raise taxes to pay for those pensions.”

But this begs the obvious question: If officials are going to provide benefits to government employees that are unsustainable, wouldn’t it make more sense to limit spending rather than having an open season on taxpayers who are already among the most taxed in all 50 states?

Pundits who call for the repeal of Prop 218 are naïve. They see the state of our political environment as if it were from a sanitized civics textbook or perhaps like Disneyland, a well ordered theme park where fantasies can be made to come true.

DisneylandThe Magic Kingdom may seem genteel, filled with reasonable and well behaved people, when viewed from a tower in the Sleeping Beauty Castle, but outside the park in Realville, a battle is raging between those who work hard to support themselves and their families and those who believe politics is an extension of a grand spoils system where taxes are the preferred weapon to extract ever more money from those who earn it.

California politics is a bare knuckles contest where, by far, the largest and most powerful competitors are the government employee unions. Because of their ability to turn out members to vote for the union label and their ability to use mandatory union dues for any political purpose, they are able to elect a majority to the Legislature, a majority that owes them allegiance.  At the local level, they are just as influential, controlling a majority of votes on many city councils.

And the unions do not adhere to Marquis of Queensbury rules. In San Diego they sent out goon squads to intimidate signature gatherers for a reasonable ballot measure to reform pensions. And in Costa Mesa, they went so far as to hire private detectives to follow city council members, who refused to roll over under union pressure, in an effort to find incriminating information about them.

The result of this union power is evidenced by the recent bankruptcies of cities like Stockton and San Bernardino, where union-beholden council members voted increases in pay and benefits that were unsustainable.

Ironically, had officials been able to raise taxes without going to voters as required by Propositions 13 and 218, the communities would be worse off because California taxpayers and businesses have learned that they can vote with their feet by fleeing to more tax friendly communities or states.  Jurisdictions which lose their tax payers and are left with nothing but tax receivers don’t do very well.

In the real world of California politics, Propositions 13 and 218 are important checks against a corrupt political establishment that is beholden to special interests. So let’s not pretend that this is Fantasyland. The only thing that California politics has in common with Disneyland is that most of the laws enacted that hurt taxpayers are downright goofy.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece originally appeared at HTJA.org

Vaccine Critics Get Defensive Over Measles

As reported by Jack Healy and Michael Paulson of the New York Times:

Their children have been sent home from school. Their families are barred from birthday parties and neighborhood play dates. Online, people call them negligent and criminal.

And as officials in 14 states grapple to contain a spreading measles outbreak that began near here at Disneyland, the parents at the heart of America’s anti-vaccine movement are being blamed for incubating an otherwise preventable public-health crisis.

Measles anxiety rippled thousands of miles beyond its center last week as officials scrambled to contain a wider spread of the highly contagious disease – one that America declared vanquished 15 years ago, before a statistically significant number of parents started refusing to vaccinate their children. … 

Read the full story here