The controversy over Orange County First District Supervisor Andrew Do’s direction of millions in taxpayer money to a charity with ties to his daughter has cast a harsh spotlight on the county’s policies for handling the windfall of COVID relief funds at the discretion of individual supervisors.
Traditionally, each member of the Board of Supervisors is provided $200,000 or so yearly to spend on events and programs as they see fit, without the kind of scrutiny given to larger contracts awarded by the county.
Beginning in 2021, however, the five supervisors were each given $10 million in federal COVID relief money and another $3 million in general funds to spend on their communities, representing a 6,400% increase in discretionary funds available to them. To date, the district supervisors have allocated about $46 million, or 71% of the one-time funding, to a variety of cities, school districts, nonprofits, county initiatives, hospitals and more.
Fourth District Supervisor Doug Chaffee said he set some early guidelines for how his office would be directing the discretionary funds in his district, focusing on helping veterans and residents experiencing or at-risk of homelessness and providing healthcare, workforce development and infrastructure projects.
“I have the discretion to do innovative things that I think are good for the community,” he said of the infusion of funds. Just last month, his fellow supervisors approved his plan to earmark $500,000 toward a homelessness prevention program run by the nonprofit Friendly Center in which struggling families can receive help with up to three months worth of rent. “It enables me to do creative things.”
County records show Do has spent $12.4 million of his discretionary allotment in the First District, with Supervisors Katrina Foley and Vicente Sarmiento spending $11.3 million in the reformed Second District; Supervisor Don Wagner spending $4.2 million in the Third District; Chaffee spending $8.1 million in the Fourth District; and former Supervisor Lisa Bartlett and Foley spending $10.1 million in the reformed Fifth District. Unspent money gets rolled over to the next budget year.
Do directed nearly half his allocation — $6.2 million — to a fledgling group, Viet America Society, for which his daughter is listed as a leader, without disclosing the family relationship. Much of that money was to provide hot meals to shuttered seniors, county documents show.
In the Second District, the single largest amount of money, $3.2 million, went to the city of Costa Mesa for two public park projects. The top allotment given in the Third District was $1.7 million to the Sheriff’s Department for fentanyl abatement. In the Fourth District, the largest allotment, $1 million, went to Fullerton for the social worker program within the city’s police department. And the top allotment in the Fifth District was $1.5 million to Charitable Ventures of Orange County.
Supervisors also spent their funds in smaller denominations on such things as doling out gas cards, helping businesses rebound and supporting community events.
According to the LAist online news site, Do’s discretionary spending was on top of board-approved contracts and other funds that pushed the total to Viet America Society to $13.5 million. Records show Viet America Society did not receive its federal tax exemption status until 2020, the same year it started getting millions of dollars from the county.
Do and representatives from Viet America Society did not return requests for comment.
Funding not illegal, but ‘ripe for abuse’
Do’s failure to disclose that he is related to Viet America Society officer Rhiannon Do — listed in public documents alternately as vice president and president — doesn’t appear to be illegal. But the backlash has been extreme, with The Orange County Register editorial board joining the chorus calling for him to resign. It was the county’s discretionary spending program that allowed Do to channel millions of dollars to Viet America without a bidding process.
Former Orange County Supervisor John Moorlach, now the director of the Center for Public Accountability at the California Policy Center, said he doesn’t believe supervisors should get discretionary money.
“To have a discretionary fund with minimal accountability is just ripe for abuse,” Moorlach said. “It’s doling out public funds, taxpayer dollars, to garner goodwill, theoretically, at the ballot box. There’s just an inappropriate odor coming from that policy.”
Foley said each year she asks the cities and communities she represents for a list of infrastructure projects or programs for which they have funding gaps so she can figure out whether she can use her budget or help find a grant.
“If done correctly, we are investing where there are gaps in funding to support community needs. And I think that’s perfectly appropriate,” she said. “We’re just giving the taxpayers back their money. The money is going to go into the system somewhere. I’d rather get it back out into the community.”
Under current practice, this is how the county handles requests for discretionary expenditures: Each supervisor submits for board approval what general areas they want to spend the money on, such as senior nutrition or housing. Once approved, the supervisor decides who will provide the service and submits it to the county chief executive officer.
From there, it goes to county lawyers, contract writers and purchase officers for vetting to ensure the party is in good standing with federal and state governments. If approved, the contract is signed.
In the case of Viet America Society, the group’s charity status with the state expired in November, according to the California Attorney General’s Office, meaning it would not be eligible for county funding today.
Reform proposals fail
While the process may seem lengthy, it is only informal and not written into any county policies – a recent effort failed by Supervisor Katrina Foley to get it codified and Supervisor Vicente Sarmiento to toughen it up.
Sarmiento last month proposed that supervisors be required to disclose any immediate family member who is involved in the organization receiving the money. If so, the contract would need board approval.
Additionally, he proposed that no more than 20% of the contract amount be used for administration fees.
“As elected officials, we have an obligation to be as transparent as possible with the public and disclose any potential conflicts of interest, especially when voting to spend taxpayer dollars,” Sarmiento previously said.
Sarmiento’s proposal deadlocked, with Do absent and Supervisors Wagner and Chaffee dissenting.
Chaffee said he didn’t disagree with the purpose of Sarmiento’s proposal, but said it was poorly written. He believed the proposals were “both too narrow and not broad enough,” saying the tougher policies should encompass all county staff, not just supervisors.
“I want to be certain when we issue a contract, it is fair and open without discrimination. That we be sure to get good value. … We’ll be able to monitor it to be certain that they did what they’re supposed to be doing,” Chaffee said. “Who runs the organization? As long as they do that, it doesn’t matter to me.”
Tracy Westen, an expert in good government and former CEO of the now-closed Center for Governmental Studies, said that while Do’s actions may not be criminal, the optics are bad, especially when using discretionary money. Westen suggested that disclosure would be a good prophylactic against suspicions of self-dealing.
“If a supervisor knows he has to give an accounting when he gives money to a family member, they become more careful and more aware the public is looking into it,” Westen said. “The more sunlight, the more careful the person will be.”
What other counties do
Elsewhere in some other Southern California counties, supervisors routinely have millions of dollars in discretionary funds available to them, but also a more rigorous oversight procedure in how that money is spent.
In San Bernardino County, each district since 2021 has received $17 million to spend on community needs. However, unlike Orange County, each allocation by the district must be approved by a board majority.
“The discretionary funds program was not created as a tool for individual board members, but for the board as a body to support community-based initiatives that align with the county’s mission and vision,” said county spokesperson David Wert.
Riverside County also requires a board vote on each allocation from the discretionary fund. Also in Riverside County, supervisors cannot allocate discretionary dollars 60 days prior to an election in which they are a candidate and have an opponent.
‘Oversight is therapeutic’
Westen said guardrails such as getting board approval for each discretionary item may be seen as cumbersome and less efficient. But it’s better than the backlash if things go wrong. “Having some oversight is therapeutic,” he said.
Foley said she voted for the county’s process to be codified in writing because it would solidify the process for the public and for staff. Guardrails to ensure money is being used correctly, she said, would mean requiring documentation, receipts and report-backs.
“I didn’t actually know that we didn’t have a formalized, written-down system. From my standpoint, before this whole thing got exposed, I thought that we did have procedures because our office was required to comply with all these procedures,” Foley said.
“So, they were more practice than procedures is what we’ve now learned. And so what could we do better? We could make them official procedures instead of just practice.”