Undoing Schwarzenegger’s Damage – The OC Fairground

Within the next month we will  see how Governor Brown deals with some of the left-over issues that Governor Arnold Schwarzenegger could not muscle through, including the sale of state assets to well-connected political cronies.

Much attention is being paid to the sale and lease back of state office buildings, but in Orange County, we continue to be amazed by the unfolding  evidence of the conspiracy behind the attempt to sell the Orange County Fairgrounds.

Is conspiracy too harsh a word?  Let’s look at a document dump that was partially unveiled this week by nonprofit investigative journalists in a voice of OC story. These documents begin to show how an Assembly bill to sell the Orange County Fairgrounds suddenly materialized on July 23, 2009 and was passed in the middle of the night without hearings or public notice.

It’s a long complicated story, and the Schwarzenegger administration was desperately trying to close a deal before they left town, only to be held up by a court order.

An obscure Sacramento joint powers authority, the California Construction Authority (CCA), responded promptly to document requests and shared documents that the Orange County Fair Board had failed to produce.  The CCA was the agency where OC Fair board members buried their $160,000 in spending to lobbyists so that the details and expenditures could be hidden from public records requests and kept from agendas. Lobbying activities and secret plans to create a corporation to purchase the fairgrounds were billed through the CCA under a contract to  an environmental consulting firm, LSA Associates, Inc. LSA had been retained in January 2009 for environmental studies of replacing the equestrian center with additional parking, after serving since 2000 as the land use consultant for master planning of the Orange County Fairgrounds.

The Voice of OC story focuses on the the billing records of  former State Senator Dick Ackerman’s law firm, Nossaman LLP. If you don’t remember Dick Ackerman, he was the Senate Majority Leader until he was termed out at the end of 2008. Billing records show that Ackerman was paid $500 an hour to  contact state agencies, legislators and even paid to do research on whether his effort violated the restriction on former legislators lobbying their previous colleagues.

An investigation by the OC District Attorney cleared Ackerman, although it is difficult to believe that they ever  bothered checking his billing records.  If they had, they would have had a very difficult time reconciling their conclusion with the details, and with the dates of the action.  

There was no public discussion or fair board approval to hire Ackerman’s legal firm, Nossaman LLP. or the powerhouse lobbyists Platinum Advisors, until a Fair Board meeting of July 28th, 2009. But the billing records from Nossaman show that Ackerman and his firm  began working on May 23rd, and incurred $50,000 in charges before they were authorized by any board action.

Similarly, the lobbying firm Platinum Advisors billed $25,000 for their services before July 28th.  A series of meetings, conferences, an appraisal, and other services were billed against the unrelated LSA contracts which were only written to cover land use planning.

The mastermind behind the scheme was Fair Board member Dave Ellis, a well-connected political operative and Fair Board member who had 13 documented meetings and conference calls  noted on the billing records before there was any discussion or approval to hire the various  well-connected lobbyists and consultants.

What were Ellis, Ackerman, and their colleagues doing in their calls to Fred Aguiar in the Governor’s office, powerful State Senator Dennis Hollingsworth, and local members of the Orange County legislative delegation? Every indication is that they were getting legislation written that would authorize the sale of the Fairgrounds, and at the same time organizing the bidding process so that a nonprofit corporation they created would have the inside track at purchasing the property.

Here’s one of the entries in the Nossaman LLP billing entries that shows what was really happening,

07/17/09 (by JPE) Conference with D. Ackerman re status of appraisal and controlling bid process/conditions of sale and purchase agreement. Telephone conference with F. Aquiar

Six days before anyone knew that the sale of the Fairgrounds would be a last minute addition to the Big 5 all night budget marathon, eleven days before Dave Ellis expressed surprise and a motion was made authorizing him to hire whatever experts he needed, they were figuring out how to control the bid process and conditions of sale with an appraisal that they have even now failed to disclose.

State law has many prohibitions against the Fair Board shenanigans, but they become relatively toothless when your local District Attorney has a history of ignoring even the most egregious violations.

However, there is one law that provides for treble damages for phony bills, and that is the False Claims Act, California Code section 12650 to 12656, which enacts stiff penalties for anyone who

  (1) Knowingly presents or causes to be presented to an officer or

employee of the state or of any political subdivision thereof, a

false claim for payment or approval.

  (2) Knowingly makes, uses, or causes to be made or used a false

record or statement to get a false claim paid or approved by the

state or by any political subdivision.

  (3) Conspires to defraud the state or any political subdivision by

getting a false claim allowed or paid by the state or by any

political subdivision.

Is it a false claim to submit billing for environmental planning when the real work that was done was something completely different?

If it wasn’t wrong, why did the Fair Board and its CEO, Steve Beazley, go to such lengths to cover it up, failing to provide documents in response to written public records act requests?

As Attorney General, Jerry Brown got wind of the stench of this deal and declined to continue to represent the 32nd Agricultural District, which is  the state agency that actually runs the Orange County Fair.

Now the Governor’s path forward is clear.

First, demand the resignation of all of the directors of the Orange County Fair Board, and ask for a thorough investigation by both the California Attorney General and  US Attorney’s office, not just of  Ackerman’s role, the actions of Frank Haselton at LSA, the actions of Ellis and CEO Beazley, but also of the apparent false claims and  numerous, repeated  actions taken in secret.

Second, reject the deal that Arnold Schwarzenegger tried to push through at the last minute until all of the dirty laundry has been aired and the public has had a chance to see the inner workings of government by crony. There are too many questions that need to be answered for this process to go forward unchallenged.

In Orange County, the county fair was operated for years as a political patronage machine, with hundreds of thousands of dollars in free concert tickets doled out by the political cronies appointed to the board. Debbie Corona, wife of convicted felon Sheriff Mike Corona, was one of the directors who took full advantage of thousands of free concert tickets.

Fair Board members tried to obtain control of the property so that they could restore their patronage machine, and they pretended that this was a “budget solution” with “local control” which was going to help California balance its massive debt.

Jerry Brown gave a great State of the State address, with one signature line,

I have not come here to embrace delay or denial, but to get the job done. If you have solutions that are truly viable, by all means present them. We need everyone’s best thinking.

My best thinking is to remember the real lessons of the last Progressive Era, including open government and end to patronage and cronyism.

Let’s start right now with the Orange County Fairgrounds.

One thought on “Undoing Schwarzenegger’s Damage – The OC Fairground”

  1. Corruption that comes with Cronyism… It and other state properties sales should be halted and any agreements and such thoroughly investigated for Fraud and such.

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