Anaheim puts its tourism board on a short leash after corruption scandal

Anaheim city leaders are now requiring its tourism bureau, Visit Anaheim, to provide more oversight into how taxpayer dollars are spent after a scathing state audit last year found they diverted funds to resort-friendly candidates.

"We want them to sell the heck out of Anaheim," Councilmember Ryan Balius said of the bureau’s work. That includes booking events at the convention center, driving hotel stays and acting as the city’s tourism customer service center.

But the council’s action this week underscore efforts to keep a tighter leash on the tourism bureau after it was rocked by a corruption scandal.

How much money are we talking about?

A 2% tax on hotel stays in the city generates revenue for the Anaheim Tourism Improvement District. And 75% of the money generated goes toward the work of Visit Anaheim. According to a city spokesperson, that works out to about $30 million annually.

What are the new oversight measures?

Now, Visit Anaheim leaders must provide city leaders with performance data, such as hotel occupancy rates and convention center bookings to document how taxpayers funds are being used.

Other oversight measures the council put in place at its meeting this week:

• Visit Anaheim will have to closely document how funds generated from the hotel tax are spent — and they cannot commingle those funds with other revenue. 

• They will have to share how much of the tax funds go unspent and provide annual updates on reserve balances.

• If Visit Anaheim subcontracts with another organization for more than $150,000, they have to get permission from the city. 

• The tourism tax dollars Visit Anaheim gets from the city cannot be transferred to another entity without written approval from the city. 

Council members also voted to give the tourism bureau a one-year contract that auto-renews every two years.

How we got here

Since 2022, a series of audits, investigations and reports have revealed the grip the tourism industry has on city politics.

In 2020, the Anaheim City Council approved selling Angel Stadium to the owners of the baseball team for $320 million. But the sale fell apart after a federal investigation revealed then-mayor Harry Sidhu was feeding “city-specific information” to the Angels’ owners to use against the city in negotiations. The investigation also revealed an overly-friendly relationship between Sidhu and Todd Ament, the former CEO of the Anaheim Chamber of Commerce.

Federal prosecutors accused Ament of being the ringleader of a “cabal” of leaders, including elected officials who worked behind the scenes to influence city politics — using taxpayer money to do it

An independent investigation also revealed a "potential criminal conspiracy” to divert $1.5 million in federal COVID recovery funds through Visit Anaheim to a nonprofit controlled by the chamber.

And a state audit found Visit Anaheim routed taxpayer dollars to the chamber which then funneled the money to support “resort-friendly candidates through its political action committee” and lobby for laws that benefited hotels in Disney’s vicinity.

Sidhu has been sent to prison for his crimes, and Ament is awaiting sentencing.