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Viet America Society non compliant long before county pushback

September 24, 2024

The red flags were there for months. But First District Supervisor Andrew Do and county staffers continued to pump millions in COVID relief funds into fledgling charity Viet America Society – money officials now allege was then misused to enrich group leaders.

On Tuesday, Sept. 23, the OC Board of Supervisors will consider a series of steps to beef up the county’s oversight of spending and will also decide whether to censure Do.

Beginning in 2021, each of the five supervisor districts was given $10 million in federal COVID relief money and an additional $3 million in general funds with the discretion to spend the funding in their communities without the typical scrutiny given when approving a large county contract. Most of the tax dollars in question came from Do’s First District discretionary fund, which he directed to Viet America Society without having to get a full board vote.

A county lawsuit has accused Viet America Society and some of its leaders of funneling $10.4 million, mostly intended to feed the elderly and disabled, into personal purchases and real estate. Do is not named in the lawsuit.

Voluminous internal emails and county documents reviewed by The Orange County Register revealed county staffers repeatedly let Viet America Society skate on delinquent audits, while keeping the money flowing from Do’s discretionary fund.

Consider:

• Six months after Viet America Society missed the deadline for conducting a federally required audit on public tax money for fiscal 2021, the county in March 2023 gave the charity another $2 million to continue a pandemic nutrition program.

• With Viet America still past due in delivering the 2021 audit, Do and the county in August 2023 distributed another $3 million to the charity – paid upfront – for a senior meals program and an additional $1 million the next month for a Vietnam War memorial. The Orange County Community Services department and the Office on Aging were supposed to oversee the meals program – but were unaware of it and uninvolved for months, according to county documents.

• The new contracts came while Viet America was on the verge of becoming delinquent on a second audit, this one for fiscal 2022. The county still has not received either audit and the memorial has not been completed.

• The contracts were also inked while Viet America Society was in danger of losing its charity status for being out of compliance with state Department of Justice rules.

• Month after month, Viet America Society submitted incomplete invoices to the county for $166,666 apiece in reimbursement. While documents show that county officials hounded Viet America Society for the proper information and audits, the group was not forthcoming.

• In November 2023, just two months after the county signed its last million-dollar contract with Viet America Society, Renee Ramirez, a director at Orange County Community Services, wrote an email to Elsa Rivera, contract administrator for Orange County Community Resources, asking: “Why would a program manager pay if they weren’t meeting monthly contract requirements?”

Why indeed?

Why were the monthly payments being approved? Why was the county entering new contracts when Viet America Society was delinquent in providing an important accountability audit on the existing contract? Did anybody check Viet America Society’s charitable standing with the state Department of Justice, which sent out warning letters to the nonprofit in April 2023 and February 2024?

A spokesperson for the county said it will no longer answer questions on Viet America Society because of the pending lawsuit. Do did not respond to multiple requests for comment. Viet America Society representatives have said the work was done to feed people, though the organization’s bookkeeping was lacking.

Supervisors on Tuesday will look at four proposals to improve county oversight.

Fifth District Supervisor Katrina Foley is recommending the board direct the county’s internal auditor to conduct risk assessments of all federal American Rescue Plan-funded contracts within 90 days to make sure contract audit and monitoring requirements are being met.

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The board will also consider directing Interim CEO Michelle Aguirre to create a policy for the board’s consideration that would require that all discretionary fund contracts be reviewed and approved by the county’s procurement office.

Aguirre may also be directed by the board to review all county contracts and subcontracts to find out if familial connections need to be disclosed in accordance with a new state law.

Supervisor Vicente Sarmiento said more proposed reforms would follow.

“I have directed our CEO to begin to identify key areas needing further reform and am working with the team to bring these items to the board,” he said in a statement.

Three bills inspired by the lack of accountability for millions of dollars sent to Viet America Society were signed into law by Gov. Gavin Newsom earlier this month and will go into effect Jan. 1.

Do directed the funds to Viet America Society from his district discretionary funds without disclosing that his daughter held leadership roles at the nonprofit. That is not a violation of county policy or what the state law was at the time.

One law, AB 3130, will require county supervisors to disclose family ties they have to any contractor, including nonprofits, before allocating any money to the group. Another bill, SB 1111, will make it a crime in California for elected officials to knowingly be involved in awarding contracts to organizations if their child is an officer or director of the vendor, or owns at least 10% of the group.

“The signing of SB 1111 is a huge win for our efforts to root out public corruption and stop the cheating of taxpayers,” State Sen. Dave Min said in a statement. “Whether it’s a county supervisor or the president of the United States, elected officials steering public contracts to their family members is unfair and should not be tolerated.”

A second law, AB 2946, will require a majority vote from the OC Board of Supervisors before awarding discretionary funds. Details of this spending will also have to be posted online.

“With the signing of AB 2946, we are taking a crucial step toward restoring public trust in how district discretionary funds are managed in Orange County,” Assemblymember Avelino Valencia, D-Anaheim, who authored the bill, said in a statement. “This law will provide the necessary oversight and transparency to ensure that taxpayer dollars are spent responsibly.”

The last action item to be considered by the board on Tuesday is to direct Aguirre to provide the Board of Supervisors with quarterly updates on all contract disputes within the county.

“We need to immediately triage the situation and make sure that all of our contracts that have been issued under ARPA as well as under the board offices are in compliance with our contract policy manual and with federal requirements,” Foley said. “Later down the road, we need to analyze the system in a more in-depth way to create better oversight, so that the board as a whole is notified sooner than we were in this situation.”

Foley said it is unacceptable that Viet America Society has been non-compliant for more than a year.

“We, the board as a whole, not just one board office, should have been informed sooner,” she said. “We need to have a uniform system for all the board office contracts, and they all need to be in compliance with the contract policy manual.

“I think the rules were in place, but there were places where you could avoid following the contract policy manual because it doesn’t specifically say in the contract policy manual that it applies to everything,” she added. “So now we’re tightening that up.”

Fred Smoller, a political science professor at Chapman University, said he was surprised the county hadn’t learned its lesson after its 1994 bankruptcy. The financial collapse came after supervisors put their faith in the bad financial bets of then-county treasurer Robert Citron.

Oversight and accountability were lacking then and are lacking now, Smoller said.

“The county is responsible to voters and voters want their money spent responsibly,” he said. “Something isn’t right if you had warnings and you didn’t take action.”

Jodi Balma, political science professor at Fullerton College, said county contract rules, procedures and “so many red flags” were overlooked when it came to Viet America Society agreements.

“You would like the county, which has rules and regulations, massive numbers of checks and balances in place, to follow their own rules,” Balma said. “The idea that county staff were asking questions, they were bringing this up, and the staff’s concerns were ignored. They were sidelined. That’s another problem that the CEO really needs to address.”

Many have faulted Do, but Balma said some failures go beyond the supervisor.

“Of course, we wish Andrew Do had not done this. Of course, we wish that nepotism did not occur. Of course, we wish that Viet America Society was a legitimate agency that had done the work. However, there are other people that allowed this to happen,” Balma said. “Someone at the county approved the check without any of the receipts, without any of the documentation.”

“We really do in a democracy, rely on the integrity of those elected officials, and when they are caught in a scandal like this, they should have the decency to resign,” Balma added, “and there are so many people calling on him, and he won’t, which is really disappointing.”

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