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D.A. renews inquiry into Fair Board money transfers

October 2013
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by TONY SAAVEDRA  October 10th, 2013

The district attorney’s top public corruption prosecutor has renewed an inquiry into whether some Orange County Fair Board members secretly used public money in their private effort to buy the 160-acre fairgrounds – an attempt that critics have labeled “money laundering.”

Prosecutor Mike Lubinski this week asked the fair board to relinquish its attorney-client privilege with its former lawyer – the state attorney general’s office. This would allow Lubinski’s team to interview the attorney who represented the board during the unsuccessful privatization bid in 2009. Because of the potential conflicts, the state stopped representing the fair board, which now contracts with private lawyers.

Fair board chairman Stan Tkaczyk said Lubinski, in making the request, referred to an internal fair board committee report that found some consulting contracts had been hidden from public scrutiny.

“I’m very happy that (prosecutors) are looking at it,” said Tkaczyk, who was not on the board during the attempted purchase. “I’ll be anxious to see what they come back with.”

Tkaczyk said the board would consider the request to relinquish attorney-client privilege at its Oct. 24 meeting.

The Orange County District Attorney’s Office had previously cleared the private effort to buy the Costa Mesa fairgrounds of any wrongdoing in 2010. After a 10-month investigation the district attorney found no evidence of self-dealing, conflicts of interest or illegal lobbying.

But the fair board’s internal committee later found evidence that public money was routed through a fairgrounds contractor to former state Sen. William Ackerman and county lobbyist Platinum Advisors to represent the private purchase effort.

Board member Nick Berardino said Wednesday he would vote to surrender the panel’s confidentiality rights so law enforcement can reopen its investigation.

“I would definitely support waiving the privilege so that law enforcement can complete its job,” said Berardino, who also was not on the board during the attempted sale.

The internal committee found that the lobbyists were paid through a contract with existing vendor LSA & Associates. In a previous interview, Ackerman told the Register that those bills were later backed out and paid by a private foundation formed by some board members.

There were other questionable money transfers.

In 2009, the fair administration deposited $8 million into the account of the California Construction Authority, a joint powers authority that paid LSA and other fair contractors.

The fair chief executive at the time, Steve Beazley, said later that “the funds were sent to CCA to safeguard them from the state,” according to the internal report.

The committee recommended prosecutors also investigate how much public money was spent to promote the sale of the fairgrounds, which was put on the auction block by then-Gov. Arnold Schwarzenegger.

Besides financial irregularities, the committee found that board members either were unfamiliar with open-meeting laws or chose to ignore them, often sending group emails among themselves or phone conferencing with Ackerman.

The sale of the fairgrounds was ultimately snuffed out by a grassroots group which pushed to keep the property under public control.


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