The Anaheim City Council on Tuesday night pushed back on a huge budget increase request by the outside firm it hired last year to look into possible legal transgressions related to the negotiation of the now-canceled sale of Angel Stadium, and an unspecified range of contracts and legal agreements going back years.
Last August, the council approved a $750,000 contract with JL Group, an 8-person firm consisting mostly of retired police officers that specializes in workplace and background investigations. Of the current city council, only two – Councilmembers Jose Diaz and Steve Faessel – were on the council when JL Group was hired.
The decision to conduct the investigation was precipitated by the FBI probe into Mayor Harry Sidhu and Angel Stadium sale negotiations, and the arrest of former Anaheim Chamber of Commerce President Todd Ament for wire fraud and tax evasion related to personal business ventures.
Last night, the two company principals, Jeff Love and Jeff Johnson, along with Clay Smith, the retired judge hired to supervise their investigation, asked the council to award them another $750,000 – doubling their budget – while promising not to request anymore increases.
The council refused the request and instead voted 6-0-1 to direct JL Group to come back with a narrower, manageable scope and attendant price tag.
JL Group has invoiced the city for $559,032 as of December 2022, and the city expects they will have burned through the remaining approximately $190,000 when the January invoice arrives. In other words, the firm is telling the city it will $1.5 million to complete a project they quoted at $750,000.
Love and Johnson both charge $350 an hour, and their associate Agnes Szkopek charges $290 an hour, while their investigators charge $275. JL Group also charges $250 an hour for travel time.
According to JL Group, they compiled a list of 200 witnesses to interview, and have about 700,000 e-mails to read.
JL Group principals were vague when pressed by councilmembers as to what they had turned up so far, even when it came to quantifying how many of the 200 witnesses they had interviewed so far. One of the principals, Jeff Johnson, refused to disclose to the council exactly how many interviews they have conducted.
Councilmember Norma Kurtz asked how many of the interviews had been done, prompting Smith, Love and Johnson huddle before Johnson answered, “We’ve completed several dozen, thus far.”
“Several dozen?” asked Kurtz.
“Yes,” said Johnson.
“Does several mean four, five or six [dozen]? Eight, nine ten?” asked Kurtz. “When you say several dozen, I’m assuming that means more than five or six dozen?”
“I’m not sure if you want an exact number, and we really don’t want to give an exact number,” answered Johnson.
Judge Clay added that they’re “prioritizing” the interviews so the “lengthy, meaty interviews are being done first.”
Among those early “meaty” priority interviews: two JL staff spent three hours in December with blogger/council gadfly Vern Nelson and his wife, both of whom are prone to seeing everything that happens in Anaheim city government as the product of carefully orchestrated conspiracies. At $350 an hour, that’s $2,100 (not counting travel time).
According to Nelson, the JL investigators also asked them for leads.
Councilmember Natalie Meeks, who was the city’s public works director for many years, expressed strong reservations over the enormity of the budget request combined with the broadness of the scope and lack of specific results to date.
“I’m always concerned with the change order that comes in doubling the scope or the cost and time of a project, Meeks told Smith, Love and Johnson. “I mentioned I’m a former public works director. We do very specific bids, very specific line items – and, of course, this this proposal contract did not have that. It was very general.”
“It seems to me that at this point in your investigation, you should be you should be able to give us a specific proposal,” Meeks continued. “Now, who else are you going to interview? How long is it going to take you? It seems like you would have the documentation in hand that you need, when you’ve had a lot of time and a lot of hours. It seems like you would have at least a basis enough to give us something more specific.”
“I’m uncomfortable approving another general contract,” Meeks said.
Even Investigators Unsure The Scope Of Their Investigation
Cojuncilmember Natalie Rubalcava asked the JL Group representative what they thought their scope of work is.
“That sounds like a very easy question, and I wish that it were,” replied Judge Smith. He said JL Group found the size of the original investigatory scope approved in August to be difficult to work with. Smith said they hoped to gain more clarity from the council at its October 25 meeting.
“We did not come away from the city council that night with any real clear direction in terms of modifying or clarifying the scope,” said Smith.
Councilman Jose Diaz, one of two who councilmembers who were in office last year when the contract was approved, blamed the overly-broad nature of the scope for JL Group running out of budget.
“At the time I expressed my concerns about how broad the scope was,” said Diaz. “So, colleagues, it’s not JL Group’s fault that it is taking so long and is so expensive. It was a gigantic scope of work.”
“In my years as a public servant,” said Diaz (whose day job is water manager for the City of Orange), “I know when you’re not specific in the scope of work, it could go forever.”
City Paying JL Group To Research Information That Is Already Publicly Available
Mayor Ashleigh Aitken, who was elected after the JL Group contract was awarded, expressed concerns that much of the scope of work concerned information that any member of the public can readily access.
“When I looked at this, some of my concerns are…when they’re giving you that scope of work, that to me is all publicly accessible information that any of us could get on our smart phones right now,” said Aitken.
“And so I think they charged you with gathering a lot of information that was already publicly available, and so I think that is unfortunate,” said Aitken.
“But now that we’re in this position, I’m just trying to be sensitive to being a steward of taxpayer money,” said Aitken.
“We have folks that come here that want their libraries open on the weekends, better conditions in the parks, and they want us to do beautification projects around the city,” said Aitken. “And when we talk about $750,000, that’s three firefighters for us that we could be putting on the streets.”
Council Consensus On Narrowing Scope Instead Of Doubling Budget
Aitken opined on options for JL Group to narrow the scope within a smaller budget augmentation, “even though it won’t be absolutely comprehensive – knowing that there’s always going to be more people to talk to and more documents to read.”
Other councilmembers also expressed their desire for JL Group to come back with a more refined scope of work and smaller budget augmentation request.
Johnson articulated his doubts they could do that.
“There are a lot of surprises that change things, so it’s really hard to, at the beginning of it, to say this is what its’ going to be, this is what it’s going to take, this is what we need to do, and it’s going to cost you two hundred grand. That’s just not possible,” said Johnson.
“We can do our best, but obviously we didn’t do a very good job on the first one,” Johnson continued.
“If the council wants to change the scope, you’re free to do so. We want to address what you need investigated,” Johnson continued. “We’re just asking that it’s consistent, and that it’s clear for us so that we give you the product you want.”
“I guess that one of the questions I want you to bring back regarding the scope of work – what are you investigating?” replied Councilmember Meeks.
“You’ve indicated the council has not been clear on what we want you to investigate,” Meeks continued. “You’ve got months of documentation and interviews. What are we investigating and how much is that going to cost?”
“You’re at least halfway through,” Meeks commented. “Can We get a more specific scope of work for the next half of this investigation?”
Ultimately, it was clear that after JL Group was variously unable or unwilling to provide specifics of what it had turned up after spending 6 months and nearly three quarters of a million dollars, the council had little appetite to throw another $750,000 into an investigation that lacked a manageable, defined scope.
“It sounds like we’re kind of throwing numbers out. You’ve stated that you’re not really sure how much linger it would take – it’s sort of like an abyss of information that we’re exploring at this point,” said Rubalcava.
“It would be reckless of me, as a representative of District 3, to approve taxpayer funds for an investigation that doesn’t have a clear scope,” said Councilwoman Natalie Rubalcava.
Rubalcava signaled her support for a revamped proposal with a clearer scope that’s “very narrowly tailored” to the Angel Stadium deal negotiations, arguing that from the standpoint of the public, that was the “crux of the need for the investigation.”
“What we don’t want is just some document that’s a bunch of gossip and something that you might read in a newspaper that most people don’t read.”
The council voted 6-0-1 to approve a motion by Meeks directing JL Group to return with a more defined scope based on work completed thus far, along with a dollar amount for that scope, for the Feb. 28 city council meeting.
