The Brief

The city of Anaheim spent around $17 million on credit card purchases from places like Target, Walmart and Amazon over the past two years, recently obtained records show, but the system hasn't been audited since 2018.

Anaheim spokesperson Mike Lyster, who along with city leadership did not answer detailed questions about the purchases, confirmed the lack of audit.

The absence of audits was a central issue former purchasing agent Kari Bouffard included in a tort claim in June alleging she was fired for raising concerns that the city’s top finance official, Debbie Moreno, was enabling fraud, wasting millions of taxpayer dollars and lying to the City Council.

In the legal claim, Bouffard says when she raised concerns over the lack of an audit with the city’s audit team, which then wanted to audit the credit card program, she alleges Moreno told her: “Do not let them in the door.”

“I found her response unprofessional, dismissive, and deeply concerning, particularly given her role as Finance Director and her responsibility to support accountability and internal controls,” Bouffard wrote.

In October, Lyster confirmed an external legal team is conducting “an independent outside review” of the allegations in the tort claim. But he did not answer questions about who the firm is or how much that contract has cost the city.

LAist requested and reviewed credit card monthly billing statements for all city-issued credit cards for the past two years. The statements show city employees spent tens of thousands of public money at places like Target, Walmart and Amazon on “food, office and other operational supplies for city business purposes,” according to Lyster. The statements do not show details about specific purchases.

The Amazon purchases totaled around $1.7 million of public money over the two years, according to the data. Anaheim provided a breakdown of the Amazon purchases that did not include details about what was bought at the online marketplace.

Lyster said Anaheim monitors credit card purchases appropriately.

He confirmed credit card purchases were last audited in 2018 by the city’s Internal Audit team.

“There was no larger concern with any of the findings, and we reject any mischaracterization and misinformation about oversight of the city’s purchasing cards,” Lyster said in a statement.

Lyster told LAist the city’s purchasing agent, who until recently was Bouffard, can “pursue audits at any time,” but one has not been done recently. In the tort claim, Bouffard said she raised concerns with Moreno over “lack of time and staffing within the Purchasing Division to adequately manage and audit the program.” Moreno’s solution, she said, was a temporary staffer — “an insufficient solution given the scope of responsibilities,” Bouffard wrote.

Lyster also said the financial firm KPMG conducts an annual audit of a sample of credit card transactions. LAist asked Lyster for a copy of the KPMG sample audit, but he did not share it.

Anaheim’s credit card spending amounts to about $800,000 a month.

The city of Irvine, also one of OC’s most populous cities, spends around $500,000 on credit cards every month, according to city spokesperson Kristina Perrigoue. Those purchases are audited monthly, Perrigoue said. Irvine’s purchasing staff randomly selects one department per month to audit and they audit a sample of purchases.

“We take the five users with the highest number of transactions and audit all their transactions for the prior month,” Perrigoue said.

Why it matters

Earlier this year, Anaheim grappled with how to close a $60 million budget shortfall after spending more than they were generating in revenue. City leaders closed the deficit with proceeds from capital bonds and by pulling money previously set aside to repay debt. The City Council recently declined to put a gate tax at its entertainment venues, including Disneyland, to voters. Instead, the majority of the council decided to meet at a future date to discuss revenue generating ideas. At that meeting, Mayor Ashleigh Aitken called for “tightening our belts” to boost revenue.

LAist review of the credit card purchases showed significant spending at vendors — some with which Anaheim has cooperative agreements with.

Cooperative agreements allow agencies like the city of Anaheim to pre-negotiate pricing so they get the best deals.

Anaheim’s credit card policy states that the credit card can only be used for the small dollar purchase of supplies or off-site services. Typically, for bigger purchases, cities turn to cooperative agreements.

“The vast majority of city purchasing — most purchases more than $10,000 — is done by purchase order or contract,” Lyster told LAist.

Credit cards, Lyster said, “provide an efficient, cost-effective way of making smaller purchases, rather than use of petty cash, direct payments, cash advances and check requests, which can be more cumbersome, administratively costly and bring their own risks of misuse.”

“There are cases where a purchase order or contract would be unnecessary and excessive, adding time and cost and impacting timely service to our community,” he continued.

LAist has shared our findings with Aitken, City Manager Jim Vanderpool and all council members. We have also reached out to Moreno for an interview. We will update this story if we hear back.

Here are some of our key findings from Anaheim’s credit card purchases:

• Over $800,000 spent on restaurants

City employees spent more than $800,000 on restaurants in Southern California and elsewhere over two years including around $60,000 at K&A Restaurant and over $20,000 on In-N-Out. Some restaurants from the credit card statement include Aloha Steakhouse in Ventura County, Tacos 1986 in Pasadena and BaBaLoo Lounge in Palm Desert.

Lyster told LAist the restaurant spends “are catering expenses for events or meals for special work operations.”

He said the city also provides meals when they “bring together a large contingent of our own police officers and those of other agencies to work demonstrations, high-profile dignitary visits or other occasions,” especially for work in the evening or on weekends.

Lyster added that the council meetings are also catered and the city hosts community events where they cater food for the public.

• Around $650,000 spent on hotels

LAist’s review of the credit card purchases showed thousands of dollars spent at hotels, including the Grand Hyatt in Nashville, Caesars Palace in Las Vegas and a pet hotel in Oxnard.

“The vast majority of this spending is for employee development to ensure our people are continually learning and aware of best professional standards,” Lyster said about the hotel charges. “This is an investment in our workforce that brings better service to our community.”

• Around $40,000 spent at Costco, close to $120,000 at Sam’s Club, around $120,000 at Target and around $57,000 on Walmart purchases in two years

Lyster attributed this spend to “food and supplies.”

The Community Services Department, he said, buys “food and crafts and other supplies” for the city’s Fun on Wheels program, the Mobile Library and family resource centers.

He declined to answer questions on whether employees submit a request for the purchase of goods and services and how the city tracks if these purchases are used for public benefit. The requests, called requisitions, are typical first steps in the purchasing process detailing quantity, description and use, Bouffard told LAist. When she worked at the county, all purchases went through this “checks and balances process,” she said.

• Over $600,000 spent at Home Depot, more than $550,000 at Office Depot and over $340,000 at Grainger

Lyster didn’t confirm if the purchases at these vendors were made using a purchase order.

He confirmed Anaheim has accounts with Grainger, Office Depot and others, but not if the city’s credit card purchases at the vendors are made through the dedicated account.

LAist correspondent Jordan Rynning contributed to this report.

Lines stretched around the block Sunday at the Original Saugus Cafe in Santa Clarita. It was supposed to be the restaurant's last day before closing after 139 years — making it the oldest continually operated restaurant in Los Angeles County.

But earlier this week, a sign was posted on the door saying, "Reopening under new ownership soon," although there were few details about who would be running it.

The sign was a surprise to the Mercado family, who have operated the restaurant for nearly 30 years. The family now is in a legal dispute with the Arklin family, who owns the property, about the potential re-opening and who owns the historic name.

The background

Alfredo Mercado worked his way up from bartender to restaurateur, purchasing the business in 1998. Since then Mercado and his daughters have operated the restaurant, leasing from the Arklin family. For most of that time, according to the Mercado side, the two families maintained good terms. Property owner Hank Arklin Sr., a former state assemblyman who owned other properties in the area, kept a verbal month-to-month agreement with the Mercados — no written lease required.

That changed when Arklin died in August at age 97.

New terms, failed negotiations

Larry Goodman, who manages multiple properties for the Arklin family's company, North Valley Construction, took over the landlord relationship. In September, the Mercado family say they were presented with a new written month-to-month lease.

Yecenia Ponce, Alfredo's daughter, said the new terms included various changes to the existing agreement, including a rent increase and charges for equipment.

Months of back and forth negotiations about different options, including selling the business, ultimately fell apart. Their attorney, Steffanie Stelnick, says they are being forced out, without proper legal notice, and has sent a cease-and-desist letter to Goodman saying the family has plans to continue running the business.

LAist reached out to Goodman for comment repeatedly Wednesday and Thursday by phone but did not hear back.

Goodman told The Signal, a Santa Clarita valley news outlet, that Alfredo Mercado had changed his mind several times in recent weeks about keeping the business.

“I said, ‘Fine,’ then I got out and got someone to take it over,” Goodman said.

He said he'd been in contact with Eduardo Reyna, the CEO of Dario's, a local Santa Clarita restaurant, and that the cafe could re-open as soon as Jan. 16.

Who owns what?

The dispute also focuses on who owns the rights to the Original Saugus Cafe name.

Ponce said when her father purchased the restaurant in 1998, it was called The Olde Saugus Cafe, but the name was then changed to The Original Saugus Cafe. State records show that name registered as an LLC under Alfredo Mercado.

After Arklin’s death, however, the Arklin family filed a pending trademark application to lay its own claim to the name.

The Mercado family is resisting.

"As long as they don't buy the name from us, we're not handing it over," Ponce said.

Ponce said the family had no idea the landlord planned to continue operations.

"We truly did think we were closing," she said. "We were not aware that they had plans to continue."

She apologized to customers for the confusion.

Whether the decades-old restaurant name survives — and under whose control — may ultimately be decided in court.

Community leaders and politicians in Los Angeles are responding in outrage after an ICE agent shot and killed a woman in Minnesota on Wednesday.

The fatal ICE shooting of 37-year-old Renee Good has sparked anger and fear in Los Angeles, which has been an epicenter of federal immigration enforcement since the summer.

Jorge-Mario Cabrera with the Coalition for Humane Immigrant Rights, or CHIRLA, says the killing was upsetting but not surprising.

" Los Angeles has been witness of the escalating aggressiveness of these federal agents against the community," he told LAist.

Homeland Security Secretary Kristi Noem has defended the shooting, saying Good was trying to run agents over with her car. That account has been disputed by eyewitnesses, the mayor of Minneapolis and other officials. Bystander video also challenges the federal narrative, according to MPR News.

L.A. politicians have joined a chorus demanding justice for Good. Mayor Karen Bass posted on X, saying that ICE agents are waging "a purposeful campaign of fear and intimidation" on American cities.

"The senseless killing of an innocent and unarmed wife and mother by ICE agents today in Minneapolis is shocking and tragic and should never have occurred," she said in the post.

L.A. County Supervisor Janice Hahn called on Noem to withdraw ICE from U.S. cities.

“These ICE agents are undertrained and trigger happy and everyone who has seen this video knows ICE murdered this woman,” she said in a statement.

Some protesters also gathered outside the federal building in downtown L.A. Thursday morning to condemn the killing.