The chairman of the Republican Party of Orange County told the O.C. Fair Board on Wednesday that his event management firm has "nothing to hide" when it comes to its contract with Costa Mesa's 60th anniversary party.
Scott Baugh said he was responding to comments made during the August Fair Board meeting, when Director Nick Berardino expressed concerns about the fairgrounds doing business with KB Event Management after a city and police investigation into contracts related to the June 28 to 30 celebration.
The Newport Beach-based company, co-owned by Baugh, handled the event's O.C. Tastefest, which sold food and drinks from area restaurants.
KB, which also organizes the annual O.C. Marathon, has a five-year rental agreement with the fairgrounds that guarantees the property a yearly minimum of $100,000.
Two Costa Mesa employees have been on paid administrative leave for unspecified reasons related to the 60th anniversary festivities.
Costa Mesa officials have declined to provide most of the public documents for the event — including its profits or losses, and bids — on the grounds that an ongoing personnel investigation is involved. The Daily Pilot filed a public records request in August for documents related to the event, but so far has received only a small portion of the requested materials.
"We just know that there is a very, very serious investigation going on with people who we do business with," Berardino said in August, according to the meeting's transcript. "How do we protect ourselves from any mischief, you know, that may be caused by some of the folks that do outside business here, who may, you know, retain money for themselves, not tell us the truth about the agreements we have? You know, we're not getting accurate information from them. They're trying to, you know, cheat, you know, I guess."
Baugh, a former state assemblyman, said KB has never been subject to an investigation or inquiry over its involvement with the city's 60th celebration.
Furthermore, KB Event Management never intended to make any money on the party, Baugh told the Pilot after the meeting. "That was by design," Baugh said.
Baugh said $8,000 from food and beverage sales at the 60th anniversary went to the marathon's foundation, which educates schoolchildren about the benefits of exercise and proper nutrition and helps them participate in the run.
"The false statements and innuendo made against us is harmful to the O.C. Marathon and our ability to maximize revenue at these fairgrounds," Baugh told the Fair Board. "In addition, these statements are harmful to the O.C. Marathon Foundation, where we are trying to reach 10,000 kids annually in Orange County to combat the obesity issues that face in our culture."
Berardino said last month that KB hasn't "been forthcoming with the reports" from Costa Mesa's 60th, to which Baugh said, "We are over here disclosing everything, and if something's going on over there, some other activity, it seems to me that you bring that cloud and put it over here. We just want to clear that air. We have nothing to hide."
He asked that the board treat him no differently than any other vendor using the property.
In a follow-up email, Baugh said he and Berardino had spoken before the meeting, during which time he offerd Berardino various documentation that wasn't available from the city.
"Mr. Berardino chose not to look at those documents," Baugh said. "The point is that while the press and Mr. Berardino cannot obtain those documents from the city, we have voluntarily agreed to provide them. This is an important fact."
Berardino, who works as general manager of the Orange County Employees Assn., said during the meeting that he continues to have problems with the O.C. Marathon contract, which took effect in 2012 and will expire in 2016.
He asked why the fairgrounds didn't look into the potential revenue from sponsorships.
"This is not some little rental thing" Berardino said. "This is a huge business."
Fairgrounds CEO Doug Lofstrom said as a matter of routine, his staff doesn't look at sponsorship opportunities with its rental agreements.
After the meeting, Berardino told the Pilot that his questioning is part of his duties as a responsible financial steward of the fairgrounds.
"As a fiduciary, when you hear people that you're doing business with are part of an investigation — and to date, there is no disposition out of that investigation — a responsible fiduciary needs to make inquiries. And that's all I did," he said.
"I'll just wait like everybody else for the investigation to be concluded. I'm hopeful and have no reason, at this point, to believe that Mr. Baugh is implicated, but I'm going to be very careful."