Melahat Rafiei, Who was Central to the FBI’s Anaheim Investigation, Takes Plea Deal

The former Democratic party leader could face prison time. She hopes her record and FBI cooperation will help.

Melahat Rafiei, who was a cooperating witness for an FBI probe into a massive corruption scandal involving Anaheim and Irvine, said Wednesday evening that she’s agreed to accept a plea deal with the U.S. Attorney’s office on charges of attempted wire fraud.

She could face time in prison, though she said she’s hoping the judge will take into consideration the role she played in uncovering those broader scandals.

“I have made this painful choice by weighing my options, the most important of which was the care and custody of my son… ” Rafiei said in a statement provided to the Register. “I know this option will bring certainty, closure and a path forward.”

Rafiei was secretary for the California Democratic Party, was helping run campaigns for a number of elected officials and was a prominent consultant for the local cannabis industry until May of last year. That’s when news broke that she’d been arrested in 2019 on charges of “theft or bribery” involving federal funds related to a cannabis scheme, and that she later had been assisting the FBI with a related investigation.

That probe led to federal charges against former Anaheim Chamber of Commerce CEO Todd Ament,and the resignation of then Anaheim Mayor Harry Sidhu. At that time, the Anaheim City Council voided a $320 million deal to sell Angel Stadium to a business partnership created by the team’s owner Arte Moreno, as the release of wiretap transcripts appeared to support allegations of a self-described “cabal” of business and political leaders that had been exerting “significant influence” over how the city was run.

As for Rafiei, the FBI states that she had promised two executives at a local cannabis company that she could help get a favorable cannabis ordinance passed in Irvine if they gave her money to bribe two council members. She later denied those allegations, saying in a statement that she “never attempted to improperly influence any elected official.” Those charges were dismissed without prejudice, which meant they could always be filed again later.

After that arrest, Rafiei began cooperating with the FBI to bring them information about possible corruption in Anaheim. She says she accepted a request to cooperate, wearing a wire and delivering evidence that the FBI used to charge Ament and to raise concerns about Sidhu’s actions.

The FBI previously said that they did not believe Rafiei was being fully honest with them, even while she was acting as a witness.

Federal authorities couldn’t immediately be reached Wednesday evening for comment on Rafiei’s plea deal.

But her attorney, Alaleh Kamran, said via email that Rafiei’s plea is not contingent on any conditions and that the government “has made no assurances other than what is included in the plea agreement, which will not be filed under seal.”

Wire fraud can carry a maximum penalty of up to 20 years in prison, or 30 if the victim is a federally insured bank or other financial institution.

“The hope is that the court will take her distinguished career and lack of criminal history into consideration when sentencing her,” Kamran said.

On advice of her attorney, Rafiei said she can’t discuss facts of the case more until it’s fully resolved.

“I will share my story in due time,” she said. “For now, I will proceed with dignity, humility towards finding peace and clarity in my life.”

Click here to read the full article in the OC Register

After Anaheim’s Last Mayor Resigned, Four Say They’re the Candidate to Move City Forward

In the wake of a City Hall scandal that could still splash mud on more local leaders, Anaheim’s next mayor will have a big job, but also a delicate one.

Four people think they’re up to it: attorney Ashleigh Aitken and former council member Lorri Galloway (both of whom ran for the office in 2018); political newcomer Dick Lopez, a water systems operator at the city’s wastewater treatment plant; and District 6 Councilman Trevor O’Neil, who as mayor pro tem has been running council meetings since former Mayor Harry Sidhu stepped down in May.

“Given the FBI investigation and what’s happened the last six months, I think there’s going to be a lot of people watching this closely,” former Mayor Tom Tait, whose second term ended in 2018, said of the November election for his old seat.

“I think the public, rightfully so, have lost trust in the city government, trust in doing what’s in the best interests of the people versus the well-moneyed special interests,” he said.

Sidhu resigned amid public pressure when it came to light he was being investigated by the FBI, among allegations made in an affidavit for a search warrant was that he may have tried to pass on confidential information to Angels Baseball officials while the city was negotiating with them to sell Angel Stadium, and in return he allegedly hoped to ask for $1 million in support for his reelection campaign.

Sidhu has not been charged with a crime. His attorney has maintained that a thorough investigation would prove Sidhu did not disclose any secret information, and that his campaign contributions are in compliance with the law.

On the heels of Sidhu’s disgrace came the arrest and subsequent guilty plea of close advisor and former Anaheim Chamber of Commerce CEO Todd Ament, who in a settlement pleaded to several counts of fraud in July. In court filings investigators alleged he helped lead a self-described cabal that influenced council decisions in favor of powerful business interests.

With those events as a preface, whoever wins in November steps into the glare of public scrutiny – and takes on a job that, by the time they’re sworn in, will have been vacant for six months.

What Anaheim needs

Anaheim is the county’s most populous city, with about 350,000 residents, and it’s home to two professional sports teams, a large convention center, Disneyland – which, with more than 30,000 employees is the county’s largest single employer – and a surrounding resort district whose hotel taxes are expected to make up more than a third of general fund revenue this year.

“The thing that I like to remind folks is that Anaheim is the 10th largest city in California and so it sits in a very special class of cities” whose mayors play a role in state policy discussions, said Lucy Dunn, who retired as CEO of the Orange County Business Council in December.

Anaheim’s mayor needs to listen to the needs of residents, but also can’t afford to scorn the businesses that create tax revenue to pay for police, parks and libraries, she said.

“My wish is, do not forget what just happened in this city. Remember you have a broad base of representation, and as a city leader your job is incredibly difficult to balance competing interests and to literally raise up Anaheim for everyone,” she said.

With all that to handle, the city’s mayor serves a four-year term for an annual salary of $18,000 plus other benefits. So who wants the job?

Two of the candidates on the November ballot say their experience is what the city needs to get back on the right track after the recent turmoil, which ended up killing the stadium sale.

With Anaheim’s budget of more than $1 billion and more than 3,000 city employees, “now isn’t the time for novices – because of some of the things that have happened at City Hall, there is a learning curve just to go in and understand the city,” said Galloway, who served two terms on the council that ended in 2012.

For almost 40 years, Galloway, 69, has run the nonprofit Eli Home, which provides shelter and services to children and their mothers who are experiencing homelessness, domestic violence or substance abuse. She said Anaheim residents she speaks with are concerned about safety and homelessness in the city, issues she would prioritize as mayor.

O’Neil, 51, also touts his “proven experience” in filling the leadership void left by Sidhu’s resignation. He’s wrapping up a four-year term on the council and also runs a business providing home health care services.

O’Neil said while on the council he supported increasing the ranks of police and firefighters, helped get more than $72 million in pandemic aid to families and businesses, and got the city to take part in a state program that finances turning market-rate apartments into affordable “workforce” housing.

But he’s also been dogged by accusations of coziness with Sidhu and prevailing business interests.

“Yes, I was aligned with former Mayor Sidhu on a number of issues but not all issues, and my voting record speaks to that,” O’Neil said.

Aitken and Lopez said they also would focus on issues such as homelessness and community safety, but they and Galloway all said transparency and rebuilding residents’ trust in their city government will be key.

“As a former federal prosecutor, my No. 1 goal is to really restore people’s faith in a transparent government and ensure they feel City Hall is working for them,” Aitken, 46, said.

She said if elected she would make her schedule public so constituents would know who their mayor is meeting with, and added, “I believe in full disclosure” regarding campaign donations from a person or organization with business in front of the city.

Lopez, 48, said he grew up in Anaheim and was “disheartened” by the recent scandal at City Hall. As a city employee, he’s concerned about the “brain drain” of workers getting trained here and then leaving for other agencies with better pay and benefits, he said.

He’d be willing to consider the ticket tax on Disneyland and other large attractions the council majority just rejected, he said, adding that he’s not seeking to curry favor with the resort district businesses that typically back their preferred candidates with big money.

“We have to make a fresh start,” Lopez said. “That’s what I’m offering here.”

Will they spend?

As the four candidates’ campaigns unfold in the coming weeks, so will another saga: Who will spend money to back their preferred horse.

The Support Our Anaheim Resort Area (SOAR) political action committee – largely funded by Disney – spent more than $350,000 on each of three council candidates in 2018. The PAC reported collecting a total of $1.3 million in 2021, according to campaign finance reports filed with the city.

Aitken, Galloway and Lopez said they have not been supported by big business so far, and while they promised transparency about any contributors, no one explicitly said they’d reject that support if offered.

O’Neil, who was backed by the SOAR PAC in 2018, said he would accept campaign funding from anyone aligned with his political philosophy, “but my ideology and my opinions are certainly not for sale and not subject to influence by contributions.”

Chapman University political science professor Fred Smoller predicted that after the city’s recent embarrassment of making national news, Anaheim voters will be watching the November election closely.

“To me, it’s a change election. It’s post-Watergate,” he said. “People will be looking for new blood.”

Click here to read the full article in the OC Register

Irvine Mayor Distances Herself From Former Top Democratic Party Official Involved in FBI Probe

When one of Orange County’s top Democratic Party power brokers, Melahat Rafiei, got caught up in the FBI’s investigation into Anaheim last week, there were immediate calls from the state and local Democratic Party officials, with many calling on her to resign all her positions and take a step aside. 

But not Irvine Mayor Farrah Khan.

She was one of the few public officials who initially stood firm by Rafiei, calling her a “friend and advisor.”

Following the announcement of the FBI’s investigation, Rafiei publicly identified herself as Cooperating Witness 1, described by FBI officials as a confidential source in their affidavit who wore a wire to multiple meetings with Anaheim officials to aid them in their investigation. 

The affidavit is part of an FBI corruption probe into Anaheim City Hall, which led to former 

Mayor Harry Sidhu resigning and the Angel Stadium land sale getting canned this week.

According to the documents released by the FBI, CW1 “was arrested on a complaint (based on the 2018 corruption scheme involving Irvine officials) and subsequently brought to the FBI office in Orange County where CW1 was interviewed. CW1 agreed to cooperate with the FBI during CW1’s interview. The complaint was dismissed without prejudice based on the government’s motion. CW1 has been assisting the FBI since the date of his/her arrest.” 

In footnotes, agents continued, with special agent Brian Adkins writing “CW1 and the government have not been able to reach an agreement on a pre-indictment resolution, and at this time, there is no further cooperation expected. Based on the government’s interaction with CW1 and CW1’s counsel, I believe CW1’s motive for cooperating in this investigation was to receive leniency for the federal criminal violation CW1 was originally arrested for, as well as other possible criminal conduct.” 

On Tuesday, Rafiei began to publicly dispute that she was ever arrested by the FBI, claiming through a spokeswoman that the documents had it wrong and that while she was detained, she was allowed to leave. 

FBI spokesperson Laura Eimiller declined to comment, but said the affidavits are accurate in a text message to a Voice of OC reporter. 

When Rafiei’s name originally came up, Khan was one of her strongest defenders, putting out a statement calling her a “friend and advisor.” 

“I also want to be unequivocal in my support for my friend and advisor, Melahat Rafiei. I have seen her integrity and ethics up close and personal. She is a leader who deserves credit for rooting out this corruption,” Khan wrote in a post on her Facebook and Twitter last Friday. “I stand with her, and believe our justice system will do its job and clear her name.” 

Less than a week later, she issued a new statement. 

“I am horrified by what I have learned in the last week about the depth of manipulation of the public, our institutions, and our communities,” Khan wrote in a second statement posted exclusively on her Facebook page on Wednesday. “The press has reported that a former consultant for my campaign, Melahat Rafiei, is a cooperating witness in the investigation, unrelated to her work on my campaign. Ms. Rafiei is no longer involved in any way with my campaign.” 

When asked by Voice of OC about the second statement, Khan said that the only thing that changed for her was that Rafiei was no longer working as a campaign consultant. 

“I don’t have any contact with her. I still consider her a friend and I hope that justice will be served,” Khan said in a phone call with Voice of OC Thursday morning. 

While Khan did not say in any of her statements when she became aware of Rafiei’s cooperation in the investigation, Ann Solomon, Rafiei’s spokesperson, said Rafiei called and informed all of her clients about her role in the investigation in February. 

“I was on the phone with her through the process. She told every one of her clients what was going on in February,” Solomon said in a Wednesday phone interview. “Every one of them knew.”

But when Voice of OC followed up a day later with Solomon to confirm whether Khan had been notified, she said she didn’t have a full list of clients and could not say for sure whether specific people were informed.  

Cory Allen, who served as both Khan’s assistant on city staff and worked for Rafiei’s campaign consulting company Progressive Solutions Consulting, is still working for Khan, but left Progressive Solutions this month according to his LinkedIn page

Khan did not respond to a follow up text from reporters asking when she first became aware of Rafiei’s work with the FBI. 

This isn’t the first time this year that Khan has issued seemingly competing statements on a controversial issue. 

In March, she was called out for having Ergun Kirlikovali, who openly disputes the existence of the Armenian Genocide, serving on her mayoral advisory committee after a video surfaced showing the two laughing together at a meeting over a basket of Turkish delights. 

Click here to read the full article in the Voice of OC

Angels Officials Pressuring Anaheim to Approve Stadium Deal; Deadline Given

Anaheim city officials have been given a June 14 deadline by the buyer to approve the Angel Stadium sale – but if they move forward with the deal, they could face legal action from the state over an unresolved affordable housing dispute.

In a letter to the city late Friday, attorney Allen Abshez said Angels Baseball and stadium buyer SRB Management (formed by Angels owner Arte Moreno for the transaction) “have acted in good faith throughout their dealings with the city,” and SRB is ready to close the deal.

But the city also is locked in a dispute with state housing officials and Attorney General Rob Bonta over how and where affordable housing would be provided in connection with the stadium sale.

The city and state seemed like they would avoid litigation when they reached a settlement last month, but before an Orange County Superior Court judge could sign off, it came to light that Mayor Harry Sidhu – who was closely involved in crafting the stadium deal – was under federal investigation for alleged corruption.

On Monday, May 16, state officials raised concerns about the FBI’s allegations against Sidhu – that he sought to provide the Angels with confidential city information regarding the negotiations, in the hope of getting $1 million in support for his reelection.

Sidhu has not been charged with a crime. The FBI affidavit notes the investigating agent has no evidence that Sidhu actually solicited campaign funding from the Angels.

The state was granted a 60-day stay of any court decision on the settlement with the city, which appeared to put the deal in limbo.

SRB Management and the Angels apparently don’t want to wait that long.

Abshez’s letter says the deal approved in September 2020, to sell the 150-acre stadium property for $320 million, “was the result of an honest arms-length negotiations with city staff and its advisors, and has been thoroughly analyzed and debated.”

He concluded, “SRB has met all its obligations and has every expectation that this transaction should move forward, and looks forward to the council’s final action no later than June 14, 2022.”

The City Council was already scheduled to meet Tuesday to consider its options.

Councilman Trevor O’Neil has publicly said he doesn’t support going ahead with the deal. Other council members also have “expressed initial reservations,” city spokesman Mike Lyster said in a statement Saturday.

The city received Abshez’s letter and is evaluating it, he said.

Sidhu’s alleged actions regarding the stadium deal fall outside the good-faith, public process the city followed, Lyster said, but they still raise “questions, concerns and complications.”

Click here to read the full article in the OC Register

Former CEO of Anaheim Chamber of Commerce Facing Criminal Charges

Editor’s note: This story has been updated with a comment from the Anaheim Chamber of Commerce.

Former Anaheim Chamber of Commerce CEO Todd Ament appeared in court Tuesday facing federal charges of lying about his assets when purchasing a home in Big Bear City, according to the U.S. Attorney’s Office.

Ament was charged Monday with making false statements to a financial institution in late 2020 when seeking a loan to buy the second home, according to a press release issued Tuesday.

The announcement comes the day after news broke that Anaheim Mayor Harry Sidhu is under investigation for alleged fraud, bribery, obstruction of justice and witness tampering in connection with the city’s deal to sell Angel Stadium to Angels owner Arte Moreno’s business partnership.

Since his election in 2018, Sidhu worked closely with Ament and the chamber, including teaming up on the “Anaheim First” initiative that was intended to create a 10-year city improvement program based on residents’ input. The program was stalled by the pandemic, but Sidhu recently sought to revive it.

At the federal courthouse in Santa Ana, where Ament arrived in handcuffs for a first appearance hearing Tuesday afternoon, the attorney representing him, Sal Ciulla, declined to comment on the case or say what, if any, connection it may have to the federal investigation into Sidhu.

Assistant U.S. Attorney Daniel Lim, who is among the lawyers prosecuting the case against Ament, also said after Tuesday’s hearing he couldn’t comment on whether the Anaheim probes were related because of the ongoing investigation. He added that, “I think the affidavits for complaint and the search warrants speak for themselves.”

The events described in the affidavits took place in similar time frames and the Ament affidavit mentions multiple unnamed Anaheim elected officials.

An affidavit filed in federal court May 12, in support of search warrants requested in the Sidhu probe, includes references to an FBI investigation that led to a cooperating witness who was an employee of the Anaheim chamber. Names throughout the affidavit were redacted, except in one section transcribing a taped conversation between Sidhu and the cooperating witness, when Sidhu addresses the person as Todd.

Current chamber CEO Laura Cunningham said in an emailed statement late Tuesday, “We at the chamber are shocked by the public allegations about former President and CEO Todd Ament, who separated from the chamber last year. We feel saddened and angered by these disturbing allegations and will cooperate with any law enforcement inquiries.”

To help with financing the Big Bear home, the affidavit supporting the charge alleges that Ament, with the help of an unnamed political consultant at a prominent public relations firm, “devised a scheme to launder proceeds intended for the chamber through the PR firm into Ament’s bank account,” the press release said.

The affidavit in support of the charges against Ament also alleges he was:

  • Working with the political consultant to defraud a cannabis business client by claiming they could offer influence over a potential cannabis ordinance, and diverting the client’s money to Ament’s personal bank account.
  • Acting as a “ring leader,” along with the consultant, of “a specific, covert group of individuals that wielded significant influence over the inner workings of Anaheim’s government.”
  • Working with the political consultant to prepare scripted comments for an unnamed Anaheim city official to deliver at council meetings.

The FBI obtained the information described in the affidavit from sources including intercepted and recorded phone calls, interviews with several witnesses, and bank and other financial records, according to the document.

The affidavit also describes how Ament and the consultant allegedly led “a small group of Anaheim public officials, consultants and business leaders” that Ament and the consultant referred to as a “family” and a “cabal” that held regular meetings to “exert influence over government operations in Anaheim,” the Department of Justice’s press release said.

To illustrate that allegation, the affidavit details a November 2020 phone conversation the FBI listened in on, in which Ament and the political consultant discussed which Anaheim City Council members could be trusted, who should be invited to a retreat to strategize on city issues, and who might need to be reminded to “be a loyal member of the team” because they’d gotten help with their reelection.

The document also gives a lengthy description of the alleged cannabis scheme, which entailed receiving payment from an unnamed cannabis industry client to lobby the city to approve retail sales of cannabis and have influence over creation of the regulations for pot shops. However, the affidavit alleges, Ament and the political consultant actually appear to have worked against the client’s interest by secretly working with an industry competitor and then slowing progress of the issue at City Hall.

Although several Anaheim elected officials and at least one city employee are mentioned, the names of those people are all redacted from the affidavit.

Click here to read the full article in the OC Register

Crony capitalism at the “happiest place on earth”

DisneylandEvery year, millions of families flock to the city of Anaheim to make their dreams come true at Disneyland. On the surface, this seems like a slam dunk for Anaheim. The incredible number of tourists should turn the city into an economic wellspring. However, this hasn’t been the case. In the 60 years of Disneyland’s existence, the per capita income of Anaheim residents has decreased substantially, now 10 percent below the state average. That’s because the relationship between the city government and the Walt Disney Company, ultimately, embodies crony capitalism — favoring the company’s interests at the expense of Anaheim’s residents.

It’s no surprise given Disneyland’s geographical dominance of Anaheim that they are also heavily tied to the city’s political scene. Throughout the years, Disney has continually contributed millions of dollars to local politicians to fight on their behalf. In 2014, Disney poured at least $671,000 into political action committees financing city council candidates.

Last year, Councilwoman Kris Murray, a beneficiary of this political spending, led the campaign for a gate-tax ban for Disneyland. Under this plan, Disneyland is exempt from all ticket taxes so long as they expand by $1 billion dollars over the next 30 years. However, there was nothing to indicate that Disneyland wasn’t already seeking to expand. In order to compete with Universal Hollywood and other surrounding attractions, improvements and expansion were a must. This deal, championed by Murray, was a huge win for Disney.

Other entertainment venues haven’t benefited to the extent that Disneyland has. Movie theaters, concert venues and other private entertainment spaces are not given exemptions on ticket taxes. Thus, the exemption for Disneyland is a clear example of favoritism for a company that helps fund the campaigns of the lawmakers themselves.

In addition to the massive gate-tax ban, Disney has recently requested the largest tax subsidy in Anaheim history. Under the city’s hotel incentive program enacted in 2013, all new “luxury” hotels are eligible to receive a 70 percent rebate on all transient occupancy taxes. Once again, this law seems narrowly tailored to include Disney and a few other wealthy proprietors. Disney has been in the works to build a new luxury hotel and has requested that this new property be eligible for the subsidy, which is worth well over $200 million. Clearly, Disney does not need city money for their projects, as they are more than capable of funding their projects privately. However,  the request has been honored under the current subsidy program.

Finally, Disney has also interfered with a proposed streetcar design in Anaheim by artificially raising its installation cost. Even though the original design was only about 3.2 miles long, its estimated cost sat at around $319 million (or about $100 million per mile). Disney would like the opportunity to expand their resort and attractions, which is only a possibility if cars are taken off the road. Disney wants a streetcar system that doesn’t disturb the park aesthetic and caters to their infrastructure, once again pushing the costs higher.

Not only are these extraneous costs unnecessary, but there isn’t even a market for additional public transportation in Anaheim. ARTIC ridership (the local public transit), has continually fallen well below daily projections. In fact, this proposal brings no notable improvement to the lives of Anaheim residents. Still, Disney continually pushed the streetcar costs astronomically high in order to cater to their needs.

Disney and the city of Anaheim share extremely close ties. The subsequent effect of this relationship has been an increase in subsidies and special privileges for Disneyland at the expense of Anaheim. Crony capitalism abounds in the city of Anaheim, and its residents have suffered as a result.

Matt Smith is a fellow in public policy at the California Policy Center in Tustin, California. He is a graduate of Baylor University, and is currently an M.A. candidate at Princeton Seminary with a specialization in Religion and Society. In addition, he is visiting a student in the Princeton University Politics Department doctoral program.