I recently wrote about non-transparent, no-bid city contracts between Alhambra City Hall and the Alhambra Chamber of Commerce. The non-transparent and vague nature of these contracts poses potential legal risks for the City. Without receipts of record, itemized invoices, regular audits, or public oversight, the potential for abuse of city funds is great.
By Sean McMorris
One area of concern is the Political Reform Act’s “mass mailing” clause as it pertains to the Alhambra Chamber of Commerce’s monthly Around Alhambra publication, which prints, amongst other things, Mayoral Op-Eds and photos of Alhambra City Councilmembers at promotional events.
The Chamber mass mails the Around Alhambra to every residence and business in Alhambra, granting a tremendous political platform to incumbent Alhambra City Councilmembers who rotate in and out of the Mayoral position every nine months.
This is one instance where the secretive nature of the City’s contacts with the Chamber become a liability for City Hall. Section 89001 of the Political Reform Act states that “no newsletter or other mass mailing shall be sent at public expense.” The Act then outlines a set of criteria, which if met, would constitute a violation of the mass mailing clause:
- A tangible item sent to a resident’s home or business (Around Alhambra: check);
- More than 200 substantially similar items are sent in a single calendar month (Around Alhambra: check);
- Features an elected officer affiliated with the agency that produces or sends the mailing (Around Alhambra: check if city funds are being used);
- Includes the name, office, photograph, or other reference to an elected officer affiliated with the agency that produces or sends the mailing, and is prepared or sent in cooperation, consultation, coordination, or concert with the elected officer (Around Alhambra: check if city funds are being used);
- Any of the costs of distribution are paid for with public money or the costs of design, production, and printing exceeding fifty dollars ($50) are paid with public moneys, and the design, production, or printing is done with the intent of sending the item other than as permitted by this section (Around Alhambra:…?…)
The Around Alhambra would appear to meet all of these criteria if the last bullet point is met. The problem is that the city has created contracts with the Chamber that shield the public from knowing how the Chamber is using city funds. In fact, City Hall does not know the details of how the Chamber has used city funds over the years either since the contracts are based on trust rather than verification. Furthermore, the City Council has never requested an audit of the Chamber’s books, nor is such an audit mandated in the contracts.
As suspect as these contracts appear, it would be easier to give the City and Chamber the benefit of the doubt had City Hall not been warned in an advice letter by the Fair Political Practices Commission nearly two decades ago that its partnership with the Chamber to publish and distribute the Around Alhambra (referred to as Inside Alhambra in the FPPC’s letter to the City) violated the mass mailing clause in the Political Reform Act. (see FPPC letter).
The birth of Around Alhambra
In 1995, city hall entered into an indefinite monthly contractual relationship with the Chamber, specifically for the publication of a monthly “community newspaper,” which would become the Around Alhambra. The Alhambra School District was a third-party to the contract, the idea being that all three parties would pool their resources and divide up the newspaper to reach a common constituency with their messaging. The paper was to be distributed to each postal patron within the City of Alhambra. (see 1995 contract)
For its part, City Hall would allocate up to $50,000 a year, doled out on a monthly basis, to the Chamber for managerial, production, and distribution services.
The contract was amended in 1998 to increase distribution, make the contract renewable every two years, and include a monthly payment to the Chamber in the amount of $4,166.67. (see 1998 contract) Minutes from that 1998 city council meeting reveal that the City would also increase its yearly allotment to the Chamber by up to $10,000, and for the first time the term “promotional services” was used to describe the nature of the contract (see minutes from 1998 CC meeting).
With a warning comes a new (revised?) contract
The year after receiving the 1999 advice letter from the FPPC, the City entered into the current ongoing non-transparent “promotional services” contract with the Chamber (see 2000-2001 contract and email “origin of contracts”), which bears many similarities in form to the City’s previous contract with the Chamber to publish and distribute the Around Alhambra, such as: monthly payments to the Chamber, indefinite renewal, near zero oversight and accountability, and unmandated audits (see 2017 promotional services contract) The City amended the contract in 2002 to admit additional services, including “City Promotion and Publicity” that included, amongst other things, a media campaign and the production and distribution of press releases (see 2002 contract amendment).
Thus, the original intent of the earliest “promotional services” contracts with the Chamber was to pay for the publication and distribution of the Around Alhambra, which was in violation of the mass mailing clause in the Political Reform Act. Once informed of this violation, the City, rather than terminate its services with the Chamber, executed a new, or revised, contract with the Chamber for similar services and outcomes absent the mention of direct payments for the production and distribution of a “community newspaper.”
Many believe these facts establish cause for an audit and greater transparency in the City’s contracts with the Chamber. But City Hall does not think so.
Denials, indifference, and excuses
The City denies that any public funds are used for the Around Alhambra, but they can’t prove it since they have never audited the Chamber nor do they require the Chamber to submit detailed invoices or receipts. Furthermore, for decades the sender’s name on Around Alhambra was “City of Alhambra,” and the address was City Hall’s along with a picture of the Alhambra City crest printed below it (see attached screen grab).
Since my inquiries in 2016, the City informed me that City Hall’s address on the publication was an error and the Chamber removed the City Crest and began putting its own address on the publication beginning in Sept. 2016 (see attached email labeled “city hall address on Around Alhambra“). The bulk mailing account on Around Alhambra is indeed the Chamber’s (verified by the Post Office), but because of the secretive nature of the “promotional services” contract we have no way of knowing if city funds are being deposited into the account, which the Chamber also uses to send out city publications that are likely covered in the current “promotional services” contract (see attached city leisure guide screen grab).
Political messaging and unanswered questions
The Around Alhambra continues to print Mayoral Op-Eds on a monthly basis, allowing all current City Councilmembers a nine-month messaging platform that reaches every residence in Alhambra (see attached Mayor’s Corner screen grabs). A single campaign mailer with the same distribution would cost thousands of dollars.
It is still unclear who is paying for the Mayoral Op-Eds, or if the Chamber is printing them pro bono (see attached email thread labeled “who pays for mayor’s corner”).
It is also unclear who the Chamber outsources the printing of the Around Alhambra to. The City claims not to know and the Chamber won’t say (See attached“Plaza Printing and Around Alhambra emails”). Former Alhambra Chamber of Commerce President and Current 12-year Alhambra City Councilman, Stephen Sham, owns a printing business in Alhambra and recuses himself from voting on the Chamber contracts. Councilman Sham and the Chamber have not responded to my inquiries (see attached email thread labeled “request for comment to Sham and Chamber email”).
An underwhelming attempt to appease critics
After years of inquiry and public pressure, the City tweaked its 2018 contracts with the Chamber to exclude some of the vague language and explicitly state that no funds are to be used for the Around Alhambra (see attached 2018 promotional services contract). But it means little since the contracts are as non-transparent as before, nor does it indemnify the City from any misuse of funds as a result of previous contracts with the Chamber. There is no increased oversight or accounting for how the Chamber uses city funds in the new contracts. There is no mandated audit. It is simply window dressing. City Hall remains willfully ignorant about how the Chamber uses taxpayer money.
It could very well be that City Hall does not want to know how the Chamber is using city funds at this point. If impropriety were uncovered it could open the City up to fines, State investigations, and litigation. The prospect of that happening as a result of an independent audit likely outweighs bad optics and public outcry in the eyes of the Alhambra City Council. Besides, if the Alhambra City Council were worried about transparency and impropriety they would not have entered into these contracts to begin with.
State auditors, if you’re listening, please weigh in.
We hope you appreciated this article. Before you move on, please consider supporting the Colorado Boulevard’s journalism.
Billionaires, hedge fund owners and local imposters have a powerful hold on the information that reaches the public. Colorado Boulevard stands to serve the public interest – not profit motives.
While fairness guides everything we do, we know there is a right and a wrong position in the fight against racism and climate crisis while supporting reproductive rights and social justice. We provide a fresh perspective on local politics – one so often missing from so-called ‘local’ journalism.
You can access Colorado Boulevard’s paywall-free journalism because of our unique reader-supported model. People like you, informed readers, keep us independent, beholden to no outside influence, and accessible to everyone.
Please consider supporting Colorado Boulevard today. Thank you. (Click to Support)