Anaheim city council to discuss stadium deal after mayor's resignation

ANAHEIM, Calif. - Anaheim City Council members will discuss Tuesday how to go forward with the sale of Angel Stadium to the team following the resignation of Mayor Harry Sidhu, who was a chief city negotiator, but was caught up in an FBI corruption probe of the proposal.

Sidhu resigned Monday, effective Tuesday, saying he did not want to be a "distraction" as the FBI probes allegations he fed insider information to the Los Angeles Angels in the proposed sale of Angel Stadium in the hopes of a substantial campaign donation, as well as cheating on sales taxes for a helicopter he bought.

Anaheim Mayor Pro Tem Trevor O'Neil, who has been acting as mayor since last week, will continue to lead the council.

Sidhu's attorney, Paul Meyer, issued a statement Monday denying his client did anything wrong in the stadium deal, but was stepping down to help the city move forward. Sidhu's resignation came as the rest of the council called on him last week to step down.

Sidhu "has always, as his foremost priority, acted in the best interests of the city of Anaheim, and he does so today," Meyer said.

"In order to continue to act in the best interests of Anaheim and allow this great city to move forward without distraction, Harry Sidhu has resigned from his post as mayor effective May 24, 2022. Meeting the needs of the community has been and will always be Harry Sidhu's top priority."

Meyer said a "fair and thorough investigation will prove that (Sidhu) did not leak secret information in the hopes of a later political campaign contribution."

Rather, Sidhu's "unwavering goal from the start has been to keep the Angels in Anaheim, so that this vibrant social and economic relationship would continue."

Sidhu joined the city's group of negotiators "to help reach a mutually beneficial agreement between Anaheim and the Angels," Meyer said.

RELATED: 

• Anaheim Mayor Harry Sidhu resigns amid FBI corruption probe
• State AG seeks to pause Angels Stadium deal amid corruption probe

The attorney noted that an Orange County Superior Court judge ruled that the negotiating group did not violate the Brown Act. But FBI Special Agent Brian Adkins said in a search warrant earlier this month that the judge may not have had all the facts needed to make the correct call on the Brown Act violation allegations.

"The negotiations followed accepted lawful practices used in all major business negotiations," Meyer said. "No closed session material, no secret information, was disclosed by Mayor Sidhu. The government affidavit confirms that Harry never asked for a political campaign contribution that was linked in any way to the negotiation process."

Adkins alleged that a cooperating witness who wore a wire recorded Sidhu saying he intended to ask the Angels to set up a political action committee to spend up to $1 million on Sidhu's re-election.

The city issued the following statement:

"While no city wants to see a mayor resign under these circumstances, we welcome the resignation as it follows a May 18 formal request as well as calls by all of Sidhu's council colleagues for him to resign. This brings clarity to a question that had been hanging over our city for the past week. And while we have a long process ahead of us, this is one step forward."

The city council meets Tuesday, but Sidhu will not attend. Councilman Jose Moreno said he expects the council will be given four options from canceling the stadium deal and starting over, pausing it until the legal issues are resolved, accepting it as is and "a wild card option" the council majority comes up with.

"I might surprise people tomorrow," said Moreno, a solitary critic of the deal who said he now feels vindicated.

"I think it's a horrible deal, bad from the beginning," Moreno said.

But, he added, if it's shown Angels executives were unaware of the alleged insider information on the appraisal "then is it fair to them that they have this deal" canceled, Moreno said.

"I don't want to be the one who says it's a bad deal and use this other way to get rid of it," Moreno said. "I want to be open and fair."

But if a team negotiator used the inside information "then it's the fruit of a poison tree," Moreno said.

Last week, an Orange County Superior Court judge put the stadium deal on pause at the request of the state Attorney General's Office, which revealed the corruption probe in its legal papers.

In an unusual move, the attorney general's court papers included the FBI search warrant affidavit detailing elements of the federal probe, including two confidential informants, one of whom was wired to secretly record conversations with the mayor.

Just a few weeks ago, the Attorney General's Office hailed an agreement with Anaheim that resolved a dispute over affordable housing in the stadium deal, which includes the stadium itself and surrounding parking areas.

As part of the settlement, Anaheim agreed to set aside about $123 million for affordable housing throughout the city, with $96 million dedicated to the creation of affordable housing within the next five years, and the rest going toward 466 apartments on site at the stadium for low-income residents.

What had been in dispute was how much affordable housing should be created at the stadium site. City officials argued that affordable housing elsewhere in the city could be constructed faster than waiting on the Angel Stadium project to be completed. They said it could have taken up to 25 years to build affordable housing into the stadium deal because it would also require parking structures.

State officials, however, alleged a violation of the Surplus Land Act, which requires promotion of affordable housing on unused or underutilized public land in the state. But Anaheim officials argued it had a lease agreement with the Angels and it did not violate the Surplus Land Act.

The agreement between the city and state resolved the issue, with the city not having to concede any violation of the Surplus Land Act.

In the affidavit filed by Adkins last week, Sidhu is accused of using an Arizona address that was not his so he could avoid paying $15,887.50 in California sales tax on a helicopter he bought. The FBI agent said Sidhu apparently also allegedly avoided paying sales taxes of $1,025 in Arizona.

The FBI also alleged in the affidavit -- which sought emails and cell phone records -- that Sidhu was illegally feeding insider information to Angels officials during the negotiations over the sale of the stadium property from the city to Moreno's development company.

Sidhu used private emails and a cell phone to convey information, then deleted it to conceal his actions, the affidavit alleges. The agent included a transcript of some discussions the mayor allegedly had with a confidential informant, who agreed to cooperate with authorities.

Sidhu allegedly told the informant, who was wearing a wire, that he was going to push the Angels to start a political action committee and fund it with up to $1 million to help with the mayor's re-election once the stadium deal was pushed through.

"... if the Angels deal goes through, by the end of the year, then I'm gonna ask ah, (Angels Representative 1). Right?" Sidhu allegedly told the informant. "I'll just call (Angels Representative 1) up and say, "(Angels Representative 1), we need, we need at least half a million dollars of support for you to come with the IEs."

That was a reference to "independent expenditures," the agent said.

In another meeting with the informant Sidhu allegedly said:

"Because I, I've said, you gotta at least, minimum of a million dollars to come up with my election. They have to. And of course, you know, if Disney, I mean, if Angels (stadium sale) would conclude next year is approved hopefully, we'll push for them at least have a million dollars. You know, for (Angels Representative 1) to say `no' is bad ..."

Sidhu was also accused of "coaching" the confidential informant to mislead an Orange County grand jury investigation of the stadium deal.

The agent also said he believes Sidhu may have tilted a key ruling from an Orange County Superior Court judge in a Brown Act violation lawsuit seeking to undo the stadium sale deal.

The affidavit said one of the people allegedly involved in the negotiations is a nationally known political consultant. Top Democratic National Committee member Melahat Rafiei resigned from her party leadership positions on Sunday after she revealed she was one of the cooperating witnesses.

Rafiei has denied allegations that she could help get a cannabis ordinance passed in Irvine if given bribe money for two council  members. She acknowledged she wore a wire.

Sidhu is also accused of telling the confidential informant to write down all of the questions asked by the Orange County grand jury right after he met with them.

"Because then, then we'll meet and at least you'll let me know what happened," Sidhu allegedly told the informant.

Sidhu's opponent for mayor, attorney Ashleigh Aitken, issued a statement saying, "I am saddened that what was previously perceived by many as incompetence appears to be conscious acts of fraud, greed and deception."

Aitken said the price negotiated by the mayor "was millions of dollars short of its actual value."

Aitken said city officials should restart negotiations now.

Sen. Tom Umberg, D-Santa Ana, and Assemblyman Tom Daly, D-Anaheim, sent a letter to city officials last week demanding a response to a Dec. 19, 2019, letter that requested more information about the stadium deal.

The lawmakers said the FBI search warrant leads them to "ask yet another pertinent and timely question. In light of allegations that the negotiator of this deal acted unscrupulously and outside the scope of his public office, what steps does the Anaheim City Council anticipate taking in the immediate future to remedy what appears to be an unfair, collusive sale?"

Umberg and Daly said they hoped that city officials in the next two months "use this time to review the details of this rip-off. It's important this is done in a manner that is open and transparent to the taxpayers and residents of Anaheim, and within the context and expectations of existing California law."

In December 2019, the two lawmakers questioned how the then-agreed- upon sale price of $325 million was much less than the property's appraised value of $500 million.

The two lawmakers, joined by Rep. Lou Correa, D-Santa Ana, sent a letter to the council on Monday requesting an "immediate investigation into current and former council members that have been identified as part of the federal investigation ... The three lawmakers say five former or sitting council members are referenced in the documents available to the public.

The lawmakers say the sale should be canceled and called on city officials to appoint a "professional and independent negotiator," who would get an "independent appraisal" of the property.