The Anaheim Chamber of Commerce is suing its former longtime partner, Visit Anaheim, claiming the termination of a long-standing funding agreement in 2023 was politically motivated to scapegoat the business organization in the wake of investigations scrutinizing the relationship.
The chamber filed the suit on July 24 in Orange County Superior Court. Once close partners, the lawsuit represents the further erosion of the two organizations’ relationship which, until recently, included shared office space.
The crux of the chamber’s argument is that Visit Anaheim in September 2023 wrongfully terminated its agreement to annually fund the chamber with a percentage of its revenue received from hotel stays within Anaheim, according to the lawsuit.
Losing that contract forced the chamber to operate for years at a loss and scale back its operation and harmed the group’s reputation in the community, according to the lawsuit.
Visit Anaheim ending the agreement cut off about 80% of the chamber’s funding overnight, said Chamber of Commerce CEO Dara Maleki, who took over in the spring as the chamber was considering closing down.
The chamber is demanding $7 million in damages from Visit Anaheim.
“At this time, Visit Anaheim has not yet been formally served with any lawsuit filed by the Anaheim Chamber of Commerce,” said Visit Anaheim President and CEO Mike Waterman in a statement. “As a result, we have not had the opportunity to review any official claims or legal documents regarding this matter. We will continue to monitor any developments and respond appropriately as the situation unfolds.”
The chamber and Visit Anaheim in 2010 entered into a contract for the chamber to provide services to promote hotels in Anaheim. A 2024 California state audit report criticized that funding agreement since the city wasn’t made aware of it until years later and Visit Anaheim did not get the city’s permission to hire a subcontractor.
The chamber received about $4.4 million in funds via Visit Anaheim from 2012 to 2022. Some of the money used was for “unallowable services that involved political advocacy and influence,” according to state auditors.
While the audit was ongoing, Visit Anaheim’s board terminated the funding agreement. According to the chamber’s lawsuit, Visit Anaheim cited former chamber CEO Todd Ament’s criminal plea as the cause. Ament left the chamber in 2021.
Ament, whose criminal case is connected with convicted Anaheim Mayor Harry Sidhu, pleaded guilty in 2022 to several counts of fraud. An FBI affidavit filed in 2022, which preceded criminal pleas by Ament and others, alleged that he was one of the ringleaders of a self-described “cabal” of business and political figures exerting influence in City Hall.
Maleki said the chamber is also one of Ament’s victims and his “malfeasance” happened without its board’s or staff’s knowledge. The chamber is seeking more than $1 million in restitution when Ament is sentenced next month.
Ament is scheduled for sentencing on Aug. 22.
Maleki said there was great pressure on Visit Anaheim to terminate the contract, but Visit Anaheim should have stood up for the relationship.
“I do think that many people were making knee-jerk reactions,” he said.
As the lawsuit puts it, Visit Anaheim was motivated to cancel the agreement under “political expediency, greed, scapegoating, and pressure from external stakeholders, including the California State Auditor and members of Anaheim’s elected leadership.”
Maleki pointed to Visit Anaheim reworking its deal with the city as something that could have been done to prevent the current situation.
“We don’t need to be replaced,” Maleki said. “We need to be rebuilt.”
“At the end of the day, I think the city needs a good chamber and we need a good Visit (Anaheim),” Maleki added. “Hopefully, through these challenging times, we are able to come out of here a better city with better organizations and leadership.”