As an OC supervisor, Michelle Steel awarded a $1.2M pandemic meals contract to her campaign mail printer

In June 2020, several months into the pandemic, the five Orange County supervisors granted each of themselves the authority to distribute money to feed needy seniors and people with disabilities in their districts.

Within a few months, each supervisor awarded $1.2 million to their district to pay for meals through early 2021. The money came from the federal government and was intended to provide relief as COVID deaths surged around the country and many people stayed home to avoid getting sick.

To decide who got their district’s funding and how much each meal would cost, the supervisors used a new procedure they created during the pandemic. The process sidestepped the county’s usual transparency for taxpayer money, and allowed supervisors to make those spending decisions without public votes or competitive bidding.

Last week, the pandemic meals program was back in the spotlight. At a news conference announcing a plea deal with Andrew Do — who resigned the same day as county supervisor — O.C. District Attorney Todd Spitzer called the funding method supervisors used for their meals program a “horrible mistake by the board” that led to an unbelievable “lack of oversight.”

Do admitted to receiving over $550,000 in bribes connected to the meal program, according to prosecutors. He pleaded guilty in federal court Thursday to conspiracy to commit bribery, under the conditions of his plea deal. No other current or former supervisors were accused of misusing the meal funds.

LAist examined the contracts each supervisor created for the pandemic meals program in 2020, and reviewed how that taxpayer money was supposed to be spent.

Our review found the cost per meal varied widely by supervisorial district.

The contract developed for District 2, under its then-Supervisor Michelle Steel, charged taxpayers the most for meals, by far.

Steel, who is currently up for reelection for a seat in the U.S. House of Representatives, agreed to pay the vendor she selected about $24 per meal to provide dinners within her district, according to contract records reviewed by LAist. Her district at the time included the cities of Huntington Beach, Costa Mesa, Fountain Valley and Stanton.

County records show meals under her program were only available for pick-up, while all other districts’ contracts required home deliveries.

Steel’s meals program cost taxpayers more than triple the amount per meal compared to two other districts.

The vendor Steel selected, which received $1.2 million in total for meal services between early August 2020 and late January 2021, was a marketing and printing company called DTN Tech (DTN) that also makes her election campaign mailers.

Since 2019, when Steel was a county supervisor and launched her first run for Congress, DTN has received more than a third of her campaign spending on printing, according to Federal Election Commission data. The company’s work for her campaign included over $120,000 in printing and mailing jobs in 2020 during the same timeframe it was being paid under the taxpayer meals contract Steel had directed to it, her campaign disclosures show.

In an emailed statement, Steel said the pandemic was unlike anything in modern history and people were in need of food.

"My two primary goals were to ensure people got fed and we did everything we could to assist restaurants during that terrible period," she wrote.

Steel did not make herself available for an interview after multiple requests to her campaign spokesperson. Current and former supervisors involved in the meal program did not provide interviews by deadline.

DTN had no prior track record of providing taxpayer-funded meals, according to an LAist review of the county’s databases of contracts and purchase orders. The company didn’t cite any meal distribution experience when asked by LAist why they were chosen for the work. Auditors hired by DTN this year, under a requirement in the meal funds contract, wrote that DTN had "not previously received government awards," according to a copy of their findings LAist obtained from the county.

Supervisors in most other districts chose well-established nonprofits that serve the needy. LAist’s review of the contracts shows:

• In District 3, Supervisor Don Wagner awarded most of the meal funding to city governments to distribute. For unincorporated areas, he awarded money to the nonprofit AgeWell Senior Services. AgeWell’s pricing totaled about $11 per meal for lunches and dinners, including delivery.
• In District 4, Supervisor Doug Chaffee awarded the funding to Meals on Wheels, at a price of less than $8 per meal for lunches and dinners, including delivery.
• In District 5, then-Supervisor Lisa Bartlett awarded the funding to 2-1-1 Orange County, at a cost of about $7.50 per frozen meal from Ruby’s Diner, including delivery.

U.S. Rep. Michelle Steel joined Congress in 2021 after six years on the Orange County Board of Supervisors.

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The Washington Post

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The Washington Post via Getty Images

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The remaining district — District 1 — was the only one besides Steel’s to select a vendor without a known track record of providing taxpayer-funded meals.

Andrew Do, who was that district’s supervisor at the time, awarded $1 million of his district’s meal funds to a little-known nonprofit called Hand to Hand Relief Organization — which accounting records and a public tax filing show forwarded most of the funds to a newly-created group, Viet America Society (VAS). He gave the other $200,000 directly to VAS, according to county records.

Unlike the other districts, Do’s contracts called for a flat total fee and had a minimum required meals per week — which worked out to about $16 or $17 per meal if his vendors delivered the minimum. If the vendors exceeded the minimum meals, the cost per meal would be less, based on the way the contract was structured.

In his plea deal, which followed a months-long LAist investigation and federal probe, Do acknowledged that VAS was not providing all of the meals the county paid for. Much of the money was used to purchase a home for his daughter Rhiannon Do and to make hundreds of thousands of dollars in cash withdrawals, according to federal prosecutors. County officials are suing Hand to Hand Relief Organization and VAS in a civil fraud lawsuit in state court, claiming their leaders — including Rhiannon Do — diverted millions in meal funds to private use.

In what prosecutors called a "package deal," in addition to her father's guilty plea, Rhiannon Do admitted to criminal misconduct around the hiding of hundreds of thousands in meal funds that were used to purchase a home for her. Other defendants in the county’s civil fraud lawsuit against VAS have denied wrongdoing.

The response from Steel’s spokesperson and DTN Tech

Lance Trover, a spokesperson for Steel’s current re-election campaign for California’s 45th Congressional District, said in an e-mailed statement that Steel chose DTN “because of their experience in logistics and event management and because they were an existing and vetted [county] contractor.”

“Michelle believes that we should always ensure there is transparency and proper use of any taxpayer dollars,” he wrote.

Asked whether Steel considered other vendors for the meals work, her spokesperson responded that “the other vendors were already receiving existing funds.”

Asked about its more expensive meal pricing, DTN CEO Serena Nguyen said in an email that they provided “hot fresh dinner meals from reputable restaurants.” One of the eateries later was recognized by the Michelin dining guide, she noted.

“We also wanted the gourmet experience and share with those in need quality over quantity,” Nguyen said. “Each [meal] portion would consist of protein, carbs, and vegetables, along with a dessert, yogurt, and/or a coconut water."

The vendor chosen by then-Supervisor Michelle Steel to run her district's pandemic meal program from mid-2020 to early 2021 said it emphasized quality over quantity. The menu lists items such as slow-roasted turkey & gravy, prime rib roast, honey baked ham and lasagne.

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Courtesy of Serena Nguyen

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In total, DTN distributed 49,762 meals for the $1.2 million in county payments, according to the company’s final tally. It comes out to $24.11 per meal, on average.

DTN Tech offered meals for recipients to pick up, in a departure from other districts' vendors which provided delivery.

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Courtesy of Serena Nguyen

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She said the goal of the program in Steel’s district — branded as OC Meals — “was not only helping those in need but also supporting local restaurants.” She said Steel’s office selected restaurants from applications that were open to any in the district that wanted to participate.

At least two-thirds of the county funding DTN paid for meals went to restaurants that have hired the company as a printing client, according to billing records DTN submitted to the county and the company's social media posts reviewed by LAist. DTN used 10% of the contract funds — or about $120,000 — for administrative costs over the nearly half-year contract, the maximum amount allowed by the agreement, according to invoices and contract records LAist obtained from the county through a records request.

While most of the other districts’ contracts required vendors to deliver meals to people, meals in Steel’s district were made available at a site for participants to come pick them up, according to the contract and emails between county officials and DTN.

And while three districts prioritized or required meal recipients to be experiencing food insecurity, the contracts for Steel and Do’s districts did not.

Asked about this, Steel’s spokesperson wrote that the program’s purpose was to “help those in need of meals during COVID lockdowns.”

“The program prioritized senior citizens, people with disabilities, single parents, and those facing unemployment, key populations who could be in need of prepared meals during the hardship of the lockdowns,” Trover wrote.

DTN and Steel’s campaign declined to share the pricing her campaign has paid for election mailers. Trover, Steel’s campaign spokesperson, said Steel’s campaigns paid the full market rate price for the work. He added that there was no connection between the campaign’s mailers and the meals program, other than DTN providing both services.

Nguyen, DTN’s CEO, told LAist the campaign mail invoices are available on public Federal Election Commission filings. They are not — because that’s not how it works. The public data for all campaigns, including Steel’s, show the total payment for a particular print job, but not how many mail pieces were created nor the price per mailer. Nguyen did not provide the invoices to LAist after a follow-up request.

Audit was years late

DTN was warned by the county in February 2024 — three years after the contract ended — that it had failed to submit an audit of the meal funds that was required by the contract and federal law.

DTN then commissioned the audit and submitted it to the county in May 2024. Aside from failing to submit the audit on time, the audit didn’t find any deficiencies with DTN following through on the contract requirements. Steel’s campaign and DTN pointed LAist to that audit, noting that county staff were satisfied with its findings.

As for being years-late on the audit, the auditors wrote that DTN “was unaware of this requirement as it has not previously received government awards.”

“The Company does not anticipate receiving these type[s] of government grants in the future,” the audit report adds.

The audit focused on whether DTN followed the contract’s requirements. Such reviews, known as a “single audit,” do not focus on whether the contract’s cost per meal was appropriate, nor whether the contractor was selected through a fair process.

Steel’s prior county funding of DTN drew controversy from colleagues

DTN’s first work for the county was when Steel was a county supervisor and her staff hired it to print mailers when she was running for re-election in early 2018, which most of her colleagues criticized her for at the time.

The taxpayer-funded mailers invited recipients to attend a “community coffee” with Steel and then-District Attorney Tony Rackauckas at the home of Lee Ramos. All three were candidates seeking election that year (Steel and Rackauckas were seeking re-election and Ramos was running for Costa Mesa’s city council).

The mailers were sent to 16,000 voters — targeted based on age and geography — but Steel’s staff knew the venue only had capacity for 50 people, according to county emails obtained by Voice of OC at the time. State law prohibits the use of taxpayer dollars on mailers promoting elected officials running for re-election, but has exceptions for constituent events.

Three of Steel’s four colleagues on the O.C. Board of Supervisors at the time criticized her mailer, including Spitzer, who at the time was a supervisor running against Rackauckas to be DA. Spitzer called it “a campaign mailer” and a “ruse.”

Andrew Do was the only supervisor at the time who didn’t condemn it.

After the criticism from her colleagues and a lawsuit threat from ethics watchdogs, Steel switched to using campaign money for further mailers advertising the same event, with nearly the same imagery and text, the Orange County Register later reported.

There were prior controversies around other supervisors' taxpayer-funded mailers in O.C.

The largest spending was by Andrew Do before his 2016 re-election. He had taxpayers fund 1.2 million mailers to voters in his district, many of which prominently featured his name and photo.

Citing Andrew Do’s mailer spending, the state Legislature later passed a law banning all local elected officials across California from sending out such mailers in the 60 days before they’re up for election.

In 2018, Spitzer was accused of improperly sending out more than 738,000 taxpayer-funded mailers featuring himself before his election as DA, after not sending any such mailings in his first five years in office, the OC Register reported at the time. Spitzer did not comment at the time.