CSL Criticizes Media Coverage of Angels Report; Rejects “Conflict” Claims

Anaheim Blog today received a copy of this letter sent by Convention, Sports & Leisure to Councilwoman Lucille Kring, in which the firm rejected “conflict of interest” claims being fanned by some local gadflies and picked activists opposed, and reported on by the Voice of OC.

This story was “broken” by a VOC commenter, “Anaheimer” (aka Kevin Hogan, part gadfly Cynthia Ward’s claque). The conjured “conflict” was the claim that CSL parent company Legends Entertainment was selected as Angels Baseball’s new food service contractor because the CSL report arrived at the unremarkable conclusion that the Angels have a positive economic impact on the city.

The key part of the Voice of OC article casting doubt on CSL’s assertion of its independence from Legend’s food service business:

Yet filings with the state of Texas, where CS&L is based, indicate that the consulting and hospitality firms have the same top executives.

The Legends website lists Dan Smith as “President, Hospitality,” a position he has apparently held since at least 2012. However, on a 2013 filing with the Texas Secretary of State, Smith is listed as president of CS&L.

Additionally, Texas filings show three other executives for CS&L also serving as executives at Legends Hospitality LLC. They include David Checkett, David Hammer and Marty Greenspun.

Despite these filings, the parent company’s letter claims that “Legends management nor staff have involvement in the day-to-day operations of CSL or have any influence on projects in which CSL provides advisory services.”

The letter from CSL directly addresses this part of the VOC story:

Dear Council Member Kring:

We have followed some of the recent reports attempting to cast a false light on CSL, Legends and our recent work for the City of Anaheim. As we have stated in the past, CSL and the various operations of Legends, are run as completely separate divisions, including our customers in the Legends Hospitality line of business. Any discussion with the Angels regarding Legends Hospitality’s food and beverage services took place completely independently of the CSL work for the City. As such, we categorically deny any implied wrongdoing between the two.

Furthermore, no Legends Hospitality management or staff had any input or knowledge whatsoever of the work performed by CSL on behalf of the City, and no CSL management personnel working on this project for the City, or any other CSL project, were at any time involved any Legends Hospitality negotiations or other related discussions with the Angels. Additionally, we feel that it is important to note that Dan Smith is not an officer of CSL nor has he ever served as President of CSL, nor has he had any interaction whatsoever with the analyses conducted by CSL for any project it conducts, including our work for the City of Anaheim.

During the original CSL acquisition process, officers of Legends various divisions, including Legends Hospitality, of which Mr. Smith is, were used in the CSL company tax filings. This formality is in the process of being adjusted to reflect CSL’s actual responsibilities and leadership structure. Bill Rhoda was serving as president of CSL prior to and after the date of the acquisition. Mr. Rhoda has over 20 years of professional sports experience, including analysis of economic impact in markets throughout the country.

That didn’t seem very difficult to clear up. The Voice of OC article was published on April 24. The letter to Kring from CSL is dated April 25. Although the VOC article states that “Legends spokesman Eric Gelfand declined to comment,” I have no idea how much time Gelfand was given to provide a comment. Since CSL is an independent subsidiary of Legends, I’m guessing Gelfand declined to comment because he didn’t have the facts readily at hand.  It would seem allotting just a little more time to ascertaining the truth of the matter could have led to a more complete and factual story.

39 comments

  1. CSL lists Bill Rhoda as part of the “key personnel” in its proposal to the city for this specific project.

    Bill Rhoda is the EVP for Business Development of Legends.

    So . . . a person who is “key” to the CS&L study and who is also key to securing new contracts for Legends isn’t a conflict of interest because . . .?

    Now either he was doing both at the same time (which is bad if you weren’t sure) or CS&L lied and said he wasn’t part of “key personnel” for the study.

    I’m glad CSL is taking this seriously. They should.

    Incidentally . . .

    “we feel that it is important to note that Dan Smith is not an officer of CSL nor has he ever served as President of CSL”

    If I were Dan Smith, I’d be a little concerned about signing legal documents as President for a company I’m not President for . . . They put people in jail for stuff like that.

  2. I wonder why Charles Black quit…..

  3. Did Cantor and Diamond leave our meeting just to go home and blog some more? Congrats to a couple of men who’s lives are so shallow they have to blather online in the middle of the night. At least the DPOC finally removed Diamond who’s been a political liability for our party for far too long. I dont have to wonder why the party fired you Diamond …

  4. Anaheim Resident

    Crickets crickets and more crickets…there’s a Volunteer Fair in Ananeim today Cantor – if you are not too tired from blogging in your underwear all night, you may want to roll up your sleeves, step away from your keyboard and actually help our community. Big shock when you don’t show!

    • I’m not exactly sure why you’d be shocked. I did tell you yesterday I wasn’t going.

      Glad to see we’ve now descended to discussing my fashion choices. Classy joint you run here, Matt.

      • Matthew Cunningham

        Howzabout everyone chill out a bit? I’d rather not have to spend time policing comments. But Ryan – you’re not exactly raising the tone yourself.

  5. Matthew Cunningham

    I didn’t hold you solely responsible, Ryan. But you have been uber-antagonistic lately.

  6. Matt, let’s review just what those of us you lump into one conspiracy theory actually object to in the Angels deal.

    The folks that make up CATER have a wide variety of views on the Angels, what we do agree on is that before we discuss deal terms for the biggest investment in the City’s portfolio, the people of Anaheim were entitled to review the CSL report and decide for ourselves whether it was credible, and discuss the report in open session. In fact, the State of California says quite clearly that we have that right. It’s called the Brown Act, and Matt, the people of Anaheim we denied the right to review the CSL report before City Council used it as the basis for their decision. Would you like to defend that? Tell us that it is OK to keep critical information from the taxpayers who own that asset? Or do you agree that we have the right to that information and since we were not afforded that right we have the right to challenge the decisions made based on that report? Can we discuss that without name calling?

    The people of Anaheim deserve to know that the report by “experts” upon which the Council relied was free of Conflict of Interest. That is why the Contract between CSL and the City of Anaheim has a specific provision for Conflict of Interest, and interestingly there is no caveat in there for “It’s OK because our parent company wrote us a note.” The Conflict of Interest provision in the contract cites the State’s Political Reform Act, and if we use that standard, CSL has some ‘splainin’ to do. I don’t recall anyone saying explicitly that the CSL report was written to score Legends a concession deal, but there is no arguing that if we use the State’s standard for Conflict, having the parent company bidding for work with the company a subsidiary is writing a glowing report about pretty much hits the mark. There is no requirement of quid pro quo to be met there, the standard is that the company may not have an interest in any other aspect of the deal.

    Now as far as cross over with Execs, the filings for the Texas Comptrollers office pulled by Voice of OC were for the year 2013. CSL was acquired by Legends in 2011. So how long does it take them to stop filing these temporary place holder names with the State of Texas? Are these docs filed while stating under penalty of perjury these people really truly are the leaders of our company? Because it seems funny to do that and then get angry with a reporter for reporting that the people the company says are running the company are running the company! When Tom Morton demanded an explanation from CSL/Legends, the guy who sent the letter to him, David W. Checketts. was listed by documents filed by his own company showing he is an Executive for Legends AND an executive for CSL. None of us gadflies made that up Matt, CATER does not have the ability to get into the Texas Comptroller’s website and post documents on behalf of CSL and Legends.

    So you tell me what about that seems kosher, what about that is wrong for the people of Anaheim to call a “do over” on.

  7. Let me get this straight; Tait serving on the OCTA board while his firm holds OCTA contracts isn’t a conflict but the CSL/Legends thing is?

    • Correct.

      • That’s ridiculous. You have no understanding of what a conflict of interest is.

        • Okay . . .

          Tait has no ability to influence his OCTA contract. He wasn’t on the board when the contract was issued, he can’t extend his contract, change its rate, etc. That contract was put out to bid, awarded on merit, and has no nexus to his current decision making ability– a decision making ability that is limited to his share in any majority vote on a matter. As there is no nexus, there is no conflict . . . unless Tait has somehow invented a time machine. It’s as big as a conflict as Tait taking the bus to work, which of course would be a ludicrous attempt to demonstrate a conflict. In order for his previous contracts to be a conflict, you must demonstrate how they impact his current decisions AND how those decisions impact the old contract– all I’ve heard is just a bunch of yammering that it is because it is, which is just circular and stupid. No nexus, no conflict.

          If Tait were voting on something that did impact his contract, that’d be a different story. This also doesn’t include any other conflicts that might arise from any other normal conflict applicable to any other officer (campaign contributions, etc.) I’m just speaking to the old contract.

          CSL was engaged by the city to provide an unbiased assessment of the value provided by a local business, a business to which the city had entered into a economic partnership. At the same time, a key resource at CSL and its parent company sought to enter into its own economic partnership with the same local business that the city hired CSL to analyze. By engaging both the city and the entity the city sought to have analyzed, CSL created a conflict of interest by introducing the potential for bias as their analysis of the assessment of value provided by a local business to the city could (or may not have) be used to leverage their own economic agreement with the local business. To what point that conflict of interest turned into actual execution of bias to favor CSL has not been determined. It could actually be zero, but that has no bearing on the legality of the conflict, its lack of disclosure to the public, or even the simple morality of attempting to float the issue as not relevant to the public’s interest.

          What you (and Dan) are missing is the concept of time. Conflicts occur in the present. Unless Tait is doing something right now as party of his duties as an OCTA board member that is impacted by a previous contract, there’s no conflict. If he is, tell me what it is and we’ll talk.

          CSLs issue is defined as a conflict by State Law: “Courts have concluded that independent contractors, who serve in advisory positions that are frequently held by officers and employees, are subject to section 1090. Specifically, ‘independent contractors whose official capacities carry the potential to exert considerable
          influence over the contracting decisions of a public agency may not have personal interests in that agency’s contracts.’ ”

          Council members have gone on record stating the economic study was a key reason supporting their decision to commit the city to an MOU (which is a contract, also see: “A decision to modify, extend, or renegotiate a contract constitutes involvement in the making of a contract under section 1090. (See City of Imperial Beach v. Bailey (1980))” CS&L and its parent company had a personal interest in that contract (i.e., should that contract get cancelled, Legends gets no money.)

          To put it more correctly, Legends has the conflict of interest as it is the primary shareholder of CSL.

          And that’s why they’re different. Hope that was helpful.

          • “Tait has no ability to influence his OCTA contract.”

            His company reports to OCTA staff, and Tait is the boss of that staff. Do you think OCTA staff aren’t aware of that? You think that doesn’t influence how they supervise and manage Tait’s company?

            Legends contract is with the Angels, not the city. And thanks for citing section 1090. Now try applying that to Tait’s conflict as an OCTA director.

            • You’re going to have to draw a better nexus between Tait’s specific duties as a director and how deliverables are paid upon, audited, and/or reported. It’s not a bad way to go, but you’re still at the point that it’s a conflict because it’s a conflict. Until you draw a present decision to a present benefit of the contract, you’re out in thin air. That’s how 1090 gets applied. NO VOTE, NO BENEFIT, NO NEXUS. Tait’s role as a director doesn’t include day to day supervision of anyone.

              Seriously– lay it out for us. Don’t just run around claiming that it is because it is.

              Legends contract is with the Angels. Legends is the majority stockholder of CSL, which has a contract with the city, therefore, Legends (in the eyes of the state) has a contract with the city. The conflict was present at the time its influence over contracts was being exerted.

              • Managing a contract involves holding contractors accountable if they aren’t performing, and possibly cancelling the contract. They are going to behave differently when their contractor is also their boss. If Tait & Associates screws up, do you seriously think OCTA staff are going to treat them like any other contractor? Wake up. Stop pretending that isn’t true, Ryan.

                CSL had a one-off contract with the city to deliver report. Product delivered. Contract over. It doesn’t matter that their parent company was competing to provide food service for the Angels. Not the city. For the Angels. I’d love to see you make your “Legends has a contract with the city in the eyes of the state” argument before a judge. You’d be laughed out of court.

                You are such an over-the-top shill for Tom Tait it is impossible to take you seriously.

                • Look, I don’t make the laws. You don’t like them, take them up with Sacramento. That’s no justification to call me a shill, which has a very specific meaning that in no way applies.

                  But if you want to come at me with personal insults, by all means, join the club. Again, dues are five dollars. Send a check or beer– Matt will tell you where.

                  You’re making a run at the spirit of the law (ok, good for you), but that doesn’t change the fact that you’re not addressing the letter of the law.

                  You need to demonstrate a decision that’s concurrent with a material impact to Tait’s financial interest. All you’ve done is make an allusion that Tait might be able to intimidate his way into under performing on an obligation.

                  Not only is that a bad read of the law, but even if it were true– you’ve done nothing to specify what obligations remain under the contract. For all we know, all the work is done.

                  I wouldn’t have to make an argument before the judge. All I’d have to do is show that Legends is the majority owner of CSL.

                  That’s it. Seriously. I don’t even have to show that there was impropriety. Just the relationship is enough given how the law is written.

                  But hey, since you’re so into labels: Who’s pocket are you in? CSL doesn’t need anyone to defend them, so why are you?

  8. Answer me. What part of it is OK to keep that CSL report from the public before it was used as the basis for the Council decision on Sep 3rd?

  9. Do you think any council votes would have changed based on the final version of the report being available?

    • Irrelevant. There’s no immateriality threshold in the Brown Act for this type of omission.

      • Totally relevant.

        And I’d like Ms. Ward to answer my question: what was different between the two versions of the CSL report, since that is the crux of her lawsuit.

      • Yup, lets kick the Angels out because Cynthia Ward found a technical glitch. Good call. I’m so glad we have CATER here in Anaheim.

        BTW, why doesn’t CATER care that Tait had to abstain on every OCTA vote in Anaheim but then felt comfortable joining the OCTA board two minutes later?

        Moment of truth: I think Tait is a terrible leader. He has done nothing but damage to the city.

        Now CATER, your turn: Tait is infallible ( Y / N )

        • 1) No one wants to kick the Angels out because anyone found a technical glitch. Stating so is dishonest. In fact, no one here wants to kick the Angels out, period.

          2) Given that CATER is focused on Anaheim and not county wide issues, I don’t really see how your question and allusion to hypocrisy has any bearing whatsoever on CSL, Legends, or their economic impact study. Trying to change the subject to something you feel suits you better doesn’t change what’s being discussed here and is dishonest.

          3) No one is saying anyone is infallible. Again, stating so is dishonest.

          Is there anyone who reads this blog who’s willing to honestly post discussion under their own name or are we condemned forever to wade through this stagnant morass of murky, bitter, and distinguishing group think?

          Come on people. CSL. Legends. Conflict. Si se puede.

          • You are such a shameless Tait shill. Arguing with you is pointless.

          • Big companies like CSL have different divisions, some of which never talk to each other. There is no quid pro quo here of one contract to get another.

            But Tait being on the OCTA board gives him personal contact with the rest of the community, an unfair advantage at long term OCTA plans and budgeting so that when he does leave office and waits his allotted time, his firm would still have an unfair advantage for bidding on future OCTA contracts due to his work on the OCTA board.

            • RJ, stop being a jerk.

              Dan, doesn’t matter. I don’t need to demonstrate quid pro quo. If you don’t like it, talk to your buddies upstate who can change the law.

              Re: OCTA, again, doesn’t matter. While you make a pretty decent point about do-loop between public sector work and private sector contracts, that’s not the law. I certainly empathize with the point you make. I’d point right at Curt Pringle as a superb example.

              • Jerk? Look who is talking. You couldn’t utter a critical word about Tait if you tried. You only comment here to muddy the waters and attack anyone who does criticize Tait.

                You’ve called on Kring to resign form office for a stupid remark she apologized for, but when it comes to the ethical mess Tait’s OCTA position puts him, you admit it exists but all you do is shrug.

                • Another reminder, we’re talking about CSL and Legends. Kring’s stupidity when choosing to operate a keyboard or Tait’s bad behavior has no bearing on topic in front of us. My unwillingness to own an opinion that you’d like to hear doesn’t justify you insulting me.

                  Also, I didn’t admit an ethical mess exists. Sorry.

              • Dan Chmielewski

                So Pringle’s unethical, but Tait isn’t?

                Back to CSL and Legends, I don’t see anything illegal here or unethical. Businesses function this way all the time. I’m sure a little digging would reveal many such contracts by Tait’s business.

      • I’d argue the council would have voted the way they voted regardless of how much time they have the documents

  10. Oh Ryan, I guess we just give up and admit defeat, here all this time I had missed the section of the Political Reform Act that says it is OK to break State Law as long as you can argue your political opponent might have broken a totally different and unrelated State Law. Yeah I get it now. The 4 to 1 vote aided by staff making up the rules as they went along in an effort for a predetermined outcome is perfectly reasonable and we look the other way as long as we don’t like the one and only guy voting against them. Sure, it makes sense now, I will just drop everything and move on.

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