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Home / News / Politics / Rep. Correa calls for federal investigation of Anaheim tourism funding

Rep. Correa calls for federal investigation of Anaheim tourism funding

by City News Service
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By Paul Anderson

Rep. Lou Correa, D-Santa Ana, called on federal officials Wednesday to investigate Anaheim’s use of COVID-19 pandemic money that was identified in a critical state audit of the city’s funding of Visit Anaheim, the organization that promotes tourism and the city’s convention center.

But city officials attributed issues raised in the audit to a clerical error they are seeking to fix.

“We’re looking into ways to file an amended report that cleans up the mistake made,” Anaheim Mayor Ashleigh Aitken told City News Service. “I welcome our state and federal partners and findings and recommendations to help us increase transparency in ways we do the people’s business.”

City officials said all of the federal pandemic relief funding was used for expenses allowed under the terms of the grants.

Correa, however, cited a state report that indicated the city allocated $6.5 million in pandemic relief to Visit Anaheim, which books events at the convention center and promotes local tourism. Correa wrote in a letter to Attorney General Merrick Garland and U.S. Treasury Secretary Janet Yellen that he was troubled by information in the state’s audit, which was released Tuesday and noted that Visit Anaheim subcontracted with the Anaheim Chamber of Commerce, which engaged in political lobbying.

“This fact raises the possibility that federal funds were used for improper political activities,” Correa wrote.

The state’s audit found that Visit Anaheim “improperly subcontracted” with the Chamber of Commerce without getting permission from the city.

“The chamber then used tourism district assessment funds for unallowable services, including advocating for or against proposed federal, state and local legislation, meeting with elected officials and policymakers, and supporting resort-friendly candidates through the chamber’s political action committee,” according to the audit. “Notably, Visit Anaheim’s subcontract did not require the chamber to track its costs or provide invoices substantiating its expenditures.”

The state audit faulted the city for failing to conduct “substantive monitoring or oversight of these and other contracts, including a $6.5 million payment to Visit Anaheim for an economic recovery contract during the COVID-19 pandemic even though Visit Anaheim already had millions in estimated unspent tourism district assessment funds intended for similar services.”

City officials said they are on track to implement suggested changes ahead of the state’s deadline.

“We are focused on cleaning up our policies and procedures as a city and implementing the recommendations that include an audit committee to oversee tourist improvement dollars going forward,” Aitken said. “We don’t have any current contracts with the chamber and haven’t since 2002, and I feel strongly moving forward … all parties need to commit to tighten oversight and rectifying past mistakes. … That means if the chamber and Visit Anaheim want to continue a fruitful relationship with the city going forward they need more guardrails and oversight in place.”

Aitken called on Visit Anaheim to return $1.9 million “that inappropriately ended up with the chamber.”

To argue that the money came from the city’s reserves “is to me a shell game and the funds should be returned immediately,” the mayor said.

Sen. Tom Umberg, D-Santa Ana, said he was pleased that he co-authored the request for the audit.

“I felt it revealed quite a bit,” Umberg told City News Service. “It’s egregious that money designated for vaccines and other COVID-related issues was spent on whatever it was spent on. We don’t know what it was spent on between the chamber and Visit Anaheim.”

But Umberg said he was “glad that the Anaheim City Council is focused on this and I’m optimistic that the requisite transparency and accountability will be added.”

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