Public funds, political ties eyed in fallout from Anaheim corruption probe

As fallout from the FBI’s corruption investigation involving the city of Anaheim continues, leading to the resignation Monday of Mayor Harry Sidhu, local officials are looking to immediately tackle practical concerns, such as safeguarding public funds that might otherwise be in jeopardy.

But the scandal, which includes reports of political contributions and secret meetings, also is offering both political parties clear villains to try and tie their opponents to, just two weeks before primary elections wrap up.

On the practical side, Supervisor Katrina Foley on Monday called for an audit of all active contracts Orange County and the Orange County Transportation Authority have with Angels Baseball and the Anaheim Chamber of Commerce.

That includes an April vote to add $1.6 million to a now-$5 million contract between the county and the baseball team for mental health awareness ads to run at the stadium. Foley’s staff says another contract between the county and Angels Baseball, that one related to a zero waste initiative, is expected to come before the board on June 7.

“I am deeply concerned about the criminal investigations into corruption in the City of Anaheim,” Foley said. “While I have no reason to believe there are any financial irregularities, we must do everything we can to protect the taxpayers.”

Federal investigators allege in court records made public last week that a self-described “cabal” of business and political leaders in Anaheim held private retreats and exerted “significant influence” over how the city is run, bypassing the public process.

In a May 12 affidavit, the FBI accuses Sidhu of fraud related to the purchase of a helicopter along with bribery, obstruction of justice and witness tampering in connection with the city’s deal to sell Angel Stadium to SRB Management, Angels owner Arte Moreno’s business partnership, for $320 million.

Sidhu has not been charged with any crime and Angels Baseball hasn’t been accused of any wrongdoing in the case. But the stadium deal has been delayed, and Sidhu’s move to resign as mayor also removes him from his role on the board for the OCTA, since he served as the city’s representative.

At least one other leader in Anaheim also is under scrutiny.

In a May 17 affidavit, the FBI lays out evidence indicating that former Anaheim Chamber of Commerce President Todd Ament attempted to exert improper influence over Anaheim officials. The FBI also says the evidence shows that Ament defrauded a cannabis business and used funds gained in that deception to line his own pockets. Authorities charged Ament last week with lying about his assets when he bought a home in Big Bear City.

Sidhu and Ament are Republicans, and some Democrats are jumping at the chance to link them both to prominent GOP figures.

Jay Chen, a Democrat challenging Rep. Michelle Steel, R-Seal Beach, in the 45th House District race, sent a press release Monday pointing out that Steel received a $500 donation from Sidhu in the fall. Steel also previously endorsed Sidhu’s campaign and spoke in support of the Angel Stadium deal.

Steel’s campaign didn’t immediately respond to a request for comment.

Then there’s Pete Hardin, a Democrat challenging Republican District Attorney Todd Spitzer. Last week, Hardin called on Spitzer to refund related funds that were donated to his campaign, which included $100 from Ament personally in 2021, another $2,100 from the Anaheim Chamber of Commerce in 2019 and $1,000 that came from Jeff Flint, who’s widely understood to be the political consultant who worked with Ament.

Spitzer’s campaign manager, Tim Lineberger, said that as soon as these allegations came to light, the DA committed to donate the $100 from Ament and the $1,000 from Flint to charity “instead of returning it to the implicated individuals, which Hardin for some reason believes would be more appropriate.” That donation will be happening soon, Lineberger said, with the $1,100 to go to Operation Warm Wishes.

Spitzer didn’t plan to refund the chamber donation. Lineberger said the FBI has offered nothing to suggest that the chamber as a whole is implicated in any wrongdoing.

Meanwhile, Republicans are taking aim at Democratic candidates with ties to veteran political and business consultant Melahat Rafiei, a key player in the investigation and a prominent member of the Democratic Party.

The documents made public last week show that Rafiei was arrested three years ago on bribery charges, and since then has been cooperating with the FBI in its probe.

In her role as a cannabis industry consultant, the FBI states Rafiei in 2019 had promised two heads of a cannabis company, Terra Tech, that she could help get a favorable cannabis ordinance passed in Irvine if they gave her money to bribe two council members. She denies those allegations, saying in a statement that she “never attempted to improperly influence any elected official.” Those charges have been dismissed without prejudice, which means they could be filed again later. Also, to date no information has been revealed to indicate that any council members in Irvine were interested in such a scheme.

Still, after that allegation, Rafiei said she accepted a request to cooperate with the FBI, and that since then she has worn a wire and delivered evidence that the FBI used last week to charge Ament and to raise concerns about Sidhu’s actions.

An FBI agent states in footnotes to the Ament affidavit that he believes Rafiei has at times “lacked candor” in the investigation, including possibly omitting information about other potential attempts to “pay bribes to elected officials.”

Some of Rafiei’s clients in the worlds of both cannabis and politics have been expressing shock in the wake of news, saying they had no idea  she’d been arrested on bribery charges three years ago and had been working with the FBI.

With mounting calls for her to step down from leadership roles, Rafiei on Sunday night resigned from elected positions with the Democratic National Committee and as secretary of the California Democratic Party. She also stepped down late last week from appointed roles on the OC Fair Board and on Anaheim’s city culture and heritage commission.

Some of Rafiei’s recent political clients include state Sen. candidate Joe Kerr, Huntington Beach Councilwoman and state Sen. candidate Kim Carr, Irvine Mayor Farrah Khan and Anaheim mayor candidate Ashleigh Aitken.

Aitken, who has been challenging Sidhu for the mayorship, paid Rafiei’s firm, Progressive Solutions Consulting, $10,000 in the second half of 2021. She didn’t respond to requests for comment, but previously told the Voice of OC that she’d parted ways with Rafiei in February, when she learned what was going on.

Kerr’s campaign for the 38th Senate District paid Rafiei nearly $4,000 and paid her firm more than $6,700 for consulting fees in March and April. Rafiei also donated $250 to Kerr’s campaign.

Kerr said Monday that he parted ways with Rafiei last week, as soon as she made public statements about her involvement in the probe.

“I can’t speak to the veracity of the allegations,” Kerr said via email. “I am not privy to any of the details other than what has been stated publicly. My decision to sever ties was simply a matter of not needing any distractions right now. With two weeks to go before the primary, I need to focus my energy and attention on the final push of my campaign.”

Carr’s campaign for the 36th Senate District paid Rafiei’s firm nearly $9,000 in March for consulting work. Her campaign said she stopped working with Rafiei in March, when she started working with a new consulting firm. And they noted that Carr last week joined calls for Rafiei to resign from her posts.

Other local Democrats who have received donations from Rafiei also said they were taking steps to refund that money.

Anaheim City Council candidate and OC Fair Board member Natalie Rubalcava-Garcia said she asked her campaign treasurer to refund an unsolicited donation of $250 that she received from Rafiei. Rubalcava-Garcia also said she’s refunding a contribution from the Anaheim chamber out of an abundance of caution.

Rubalcava-Garcia said she was glad Rafiei had stepped down from the Fair Board, and she hopes that both the board and the city can focus now on working for residents.

“Anaheim is great city and I’m confident we will be able to move forward in a positive way,” she said.

A few Democratic leaders and voters have expressed public support for Rafiei in wake of the news, with one local resident tweeting that she “had energy and expertise to burn and will leave a huge void in the party.”

David Campos, vice chair of the California Democratic Party, tweeted a thank you to Rafiei “for her many years of service to our party” and added that, in his own experience, she’s “a person of honesty and integrity.” But he also said she “did the right thing by resigning.”

Reporter Alicia Robinson contributed to this report.

Source: Orange County Register