Vice Mayor Jason Lee and Councilmember Mario Enríquez are calling for California’s attorney general to investigate allegations of possible budgetary fraud by Stockton’s interim city manager, Steve Colangelo.
The councilmembers leveled several accusations at the interim city manager during a press conference outside Stockton City Hall on Wednesday following an announcement the day before of an investigation by Colangelo’s office into the city providing $50,000 to prop up a comedy event that Lee had promoted and performed in.
Lee has described the investigation as retaliation and politically motivated to distract from what he says is really going on at City Hall.
“Just this week, the City Council’s Audit Committee that I chair discovered that Mr. Colangelo knowingly and intentionally submitted a questionable budget that included the funding of a department that had been previously eliminated,” Lee told reporters, “to only then create a department the council did not approve funding for and then hired a group of individuals without posting the job listings for competitive review.”
Lee was referring to the city’s new Office of Public Transparency, Information and Communication, known as OPTIC, saying that the former Office of Performance & Data Analytics (OPDA) was dissolved without council approval and recreated as OPTIC, also without council approval. However, he says OPDA was still included in this year’s budget, which became effective July 1.
Enríquez said at the press conference he’ll be making a motion at next week’s City Council meeting for the city attorney to refer the matter to California Attorney General Rob Bonta’s office. Lee said will second the motion and that he has already been in contact with the attorney general’s office.
Direction to the city attorney will also include looking into politically motivated investigations, retaliation, and documenting Brown Act violations, Enríquez said.
“Because transparency is important, ethics is important, and true integrity is important, because we have to ensure that the public has trust in our local government. There’s been too much noise, too much static, distracting us from the work,” Enríquez said. “And we have to be able to be honest with ourselves, to say we are doing the work, and we have to hold everybody accountable, regardless of what position you have.”
Over the past couple of months, Lee and Enriquez have publicly asked for investigations into allegations made against themselves and anyone else on the council or at City Hall.
“When you do nothing, you have nothing to hide,” Lee said Wednesday.
Both councilmembers say there has been a lack of transparency and oversight controls in City Hall, which they intend to fix. They also suggested that city staff have faced bullying for speaking out when they have concerns.
“I’m the chair of the Audit Committee. (Enríquez is) the chair of the Legislative/Environment Committee,” Lee said, “and together, we are looking for solutions to make sure that there are more checks and balances to prevent the abuse of power here at City Hall.”
Numerous investigations have been called for in recent months by Stockton city leadership as tensions on City Council and in City Hall continue to play out in public.
Lee and Enriquez have been accused by fellow councilmembers of violating the Brown Act, a state law requiring government meetings and decision making be open to the public, with rare exceptions. Both Lee and Enríquez have denied the allegations.
Councilmember Brando Villapudua has also accused Lee of political extortion, in the form of offering Villapudua support in his upcoming election campaign if he went along with ousting the interim city manager and retaliation if he didn’t. Lee has also denied this charge, while both councilmembers have threatened legal action against each other in recent weeks.
Last week, Lee also sent a letter to City Attorney Lori Asuncion demanding a legal response against interim City Manager Colangelo relating to corruption, retaliation, organizational disruption and a Brown Act violation.
The saga continued Tuesday when it was reported that the city spent $50,000 from its Risk Mitigation Fund to subsidize the live entertainment event Wild ‘N Out in May. The money was reportedly used to make up for a financial loss for the show due to slow ticket sales. Lee, a recurring cast member for the traveling show, was one of the featured performers.
Tina McCarty, director of Stockton’s Economic Development Department, said in internal city emails first revealed by ABC10 that she “approved the use of up to $50K to help the promoter of Wild ‘N Out with potential losses, encouraging the show to continue without cancellation.” She added that the city’s contribution “allowed the show to feel more comfortable with their potential loss including the need to drop pricing to encourage greater attendance.”
As news of the emails broke Tuesday, Lee issued a statement in which he alleged that surfacing the emails was an act of political retribution for his role in trying to ferret out budgetary and financial irregularities at City Hall. He questioned why the city manager’s office waited two months to request information about the event.
Later in the day, interim City Manager Steve Colangelo said he had launched an investigation into how the $50,000 was disbursed without his knowledge or approval and, additionally, “whether boundaries between policymaking and administration were crossed,” referencing Lee’s involvement without using his name.
At Wednesday’s press conference, Lee denied that he personally profited from the event, saying it had been weaponized in the press recently as a distraction tactic.
“As a former cast member of the show, I returned and voluntarily participated to help the show’s success and prove that Stockton is ready for this level of quality entertainment,” Lee said. “I received no compensation for my appearance.”
He also said that was what the fund was for and nothing improper had been done.
“Everything related to the Wild ‘N Out entertainment show in May was done above board and followed the current city protocols,” Lee said.
The council’s Audit Committee, chaired by Lee, addressed the Wild ‘N Out accusations at a meeting Monday. Jason Perry, the head of ASM Stockton, told the committee that ticket sales were low, so he asked the city for assistance, which was approved by McCarty.
Perry told McCarty in a June email that the show incurred a $170,000 loss to its promoters, 5120 Entertainment and Rip Michael Entertainment.
McCarty said the $50,000 provided by the city was helpful to “narrow the loss gap for the promoter.” Canceling the show due to low ticket sales — fewer than 4,000 tickets had sold in the 10,000-seat arena the day before the show — would have deterred other promoters from booking acts in Stockton, she told Deputy City manager Chad Reed in an email.
By dropping ticket prices for Wild ‘N Out Live, “ultimately the event was a success for the city” due to a surge of walk-up ticket sales that boosted total attendance to 7,700.
“This particular show likely had too hefty of an overhead for our region given multiple entertainers, but the genre was embraced by the community and surrounding region,” McCarty wrote.
Lee said Wednesday that McCarty has since been put on leave, describing her as a “whistleblower” with “high integrity.” This was just another example of staff being harassed for doing their job, he said.
Stocktonia could not independently confirm if McCarty had been placed on leave as of Thursday afternoon. City Spokesperson Tony Mannor told Stocktonia that the city couldn’t comment on personnel matters.
It’s also unclear if Deputy City Manager Will Crew, who is set to take over for Colangelo this week as acting city manager, will pursue the investigation into the city’s financial support of the Wild ‘N Out event. Mannor referred Stocktonia to the city attorney’s office, which did not immediately reply to a request for comment Thursday afternoon.
Crew and Colangelo also did not immediately respond to requests for comment Thursday afternoon.
Enríquez said it was City Council’s job to ensure that staff feel protected.
“I don’t care if you’re the janitor working in the hallway, city manager, the mayor, City Council, staff, assistant engineer,” Enríquez said, “we all work collaboratively together as a team to ensure that everyone has an equal right to express their concerns and do their part to ensure that we can do the people’s business.”
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