CATER to Sue City of Anaheim Again

Greg Diamond (Photo: Chris Prevatt)

Greg Diamond (Photo: Chris Prevatt)

Greg Diamond, DPOC vice chair for the North County District, candidate for district attorney, OJ blogger and CATER lawyer, sent a notice to the Anaheim City Council of CATER’s intention to sue the city of Anaheim. Here’s the document:

March 25, 2014, 4:45 p.m.

(email address redacted)

Councilmembers and Staff, City of Anaheim: Two weeks ago, you voted on offering an unspecified amount of municipal bonds of multiple types. with unspecified amounts issued under each type, for the expansion of the Anaheim Convention Center (as well as unspecified “other capital projects of the City, the funding of which with proceeds of the 2014 Bonds is permitted by California law and will not adversely affect the Tax-Exempt status of the 2014A Bonds.”) Earlier that day, you had received a letter from attorney Cory Briggs reading in pertinent part:

Dear Mayor and City Council: On behalf of The Inland Oversight Committee, I am writing to urge you not to approve the items before you tonight. Your approval of these items would be illegal. First, the Anaheim Public Financing Authority (“APFA”) does not have the legal authority to issue the bonds contemplated by this agenda. The City nay not incur this level or length of indebtedness without obtaining the voters’ consent, and the Anaheim Redevelopment Agency’s authority to transact business or exercise powers has been fully withdrawn by the Legislature. See HEALTH & SAFETY CODE § 34172(b).

Significantly, even the ARA’s successor agency’s “rights, duties, and performance obligations under [any Joint Powers Agreement] shall be limited by the constraints imposed on successor agencies by [Assembly Bill X1 26 (2011)].” Id., § 34178(b)(3). The APFA does not have the authority to issue bonds under the Joint Powers Agreement or, even if the Agreement were to purport to give that authority, the APFA would no longer have the authority because neither of the parties to the Agreement has the authority at this point. In short, the APFA has no more legal authority to issue the bonds than the City or the ARA does. Second, the proposed financing structure is an obvious attempt to get around the debt limitations in City Charter Sections 1209 and 1210, which require a vote of the electorate before the City incurs any general- or revenue-bond indebtedness. Indeed, Sections 3 and 4 of the Site and Facility Lease confirm that the transaction is being structured for the purpose of giving the APFA an interest in City property that APFA then uses as collateral for the bonds, the proceeds of which the City will direct.

The Purchase Agreement for the bonds would have no effect without the City executing it. The other transaction documents confirm the scam being pulled on the public without a vote of the City’s electorate: namely, this is a debt being incurred by the City in substance, even if not (entirely) in form. Unless this transaction is put to the voters, it is illegal. 2 Third, the proposed financing structure also violates Section 18(a) of Article XVI of the California Constitution, which essentially prohibits the City from incurring any debt that cannot be serviced by the current year’s income and revenue. The $300 million the City seeks cannot be paid back in any fiscal year, much less the one in which the money is received. Without a vote of the electorate, the structure is illegal.

Lastly, it appears that you have not subjected the “2014 Project,” as described in the agenda materials and defined in the Indenture, to environmental review under the California Environmental Quality Act. The Indenture’s definition is specific enough to allow for meaningful review in connection with this attempt to generate the financing for the 2014 Project. Accordingly, to approve the project before subjecting it to environmental review would violate CEQA and render your actions invalid.

For these reasons, I urge you not to approve the items before you today. Cory J. Briggs Briggs Law Corporation At your meeting, you approved issuance of these bonds notwithstanding the above threat of litigation. You, and those who might invest in these bonds, may have some question as to whether the threat of litigation will necessarily materialize. I write, above all else, to eliminate any such uncertainty.

As General Counsel of CATER, the Coalition of Anaheim Taxpayers for Economic Responsibility, I write to: (1) associate CATER with each and every statement made by Cory Briggs as if made by us, and (2) assure you that, either in association with Mr. Briggs or on our own, we will file suit against the City of Anaheim, in accord with the above concerns and additional ones mentioned below, within the appropriate statute of limitations provided, unless our concerns are rendered moot.

CATER presumes that the City of Anaheim will disclose this notice of litigation, as it must, to potential investors prior to any sale. CATER does not itself seek to stop the issuance of the bonds on April 1, 2014; that decision would be up to the City and the sponsoring bank. CATER notes that, should the issuance of these bonds be found to have been illegal, the law appears not to require the City to reimburse funds to those who had purchased the bonds, despite their not being able to hold the City to their terms. CATER also notes, however, that the failure to honor those bonds may have adverse effects on the City’s credit rating, unnecessarily costing Anaheim substantial sums in higher interest rates should the sale of bonds proceed and the City’s promises not be honored. Preventing such an outcome is in the City’s hands.

Sincerely, /s/ Greg Diamond General Counsel, CATER

According to Council member Jordan Brandman, this suit places in jeopardy thousands of union jobs. “He is trying to stop a project that will create and enhance thousands of good craft, HERE, SEIU, and Teamster jobs,” Brandman told the LiberalOC. “Not to mention the addtional funding also included in the bonds which will be proposed by City staff to build two new fire stations and make vital neighborhood/parks improvements.”

According to documents from the City of Anaheim, outside counsel to deal with CATER has already cost taxpayers about $20,000.  This effort will only add to the cost.

  16 comments for “CATER to Sue City of Anaheim Again

  1. Jason Young
    March 25, 2014 at 7:17 pm

    Thank God someone is standing up to these out of control politicians hell bent on giveaways, taxpayer ripoffs, and numerous nefarious schemes.

  2. Jose Maro
    March 25, 2014 at 7:33 pm

    Diamond for D.A. – because he knows how to use a telephone!!!

    • Greg Diamond
      March 25, 2014 at 10:43 pm

      True, Jose — but that’s only like reason #35,078.

      (In that shot, by the way, I was doing pro bono work helping Hurricane Katrina victims in Mississippi navigate the red tape of dealing with FEMA. So by all means make fun of it some more!

  3. Greg Diamond
    March 26, 2014 at 12:31 am

    I realize that I am not allowed put up a link here, Chris, but you should know that I have placed a commentary on and partial rebuttal of Brandman’s quote on this piece on a reasonably well-known local political blog.

    • March 26, 2014 at 12:39 am

      Thanks for the heads up Greg. I’m pretty sure that our readers will be able to find your rebuttal. If anyone is confused, they can search for the beverage used to compliment Vodka in a screwdriver and add the word “blog.” :-)

    • March 26, 2014 at 11:15 am

      Its astonishing the mistakes you make; confusing the byline on the story that didn’t change. Seriously, when will CATER actually run a candidate for council?

  4. Greg Diamond
    March 26, 2014 at 8:02 pm

    Not only did the author name change, but that “2” in the middle of the story used to be on its own line. But I don’t presume you’re lying; your website may simply be haunted or infested with gremlins. If it’s the latter, one of them apparently got to the question you close with.

    • March 26, 2014 at 8:55 pm

      Greg,

      The post happens to feature a photo of you that was taken by me. Sometimes when our posts land in feeds, and there is not an excerpt clip set up, the photograph caption is published immediately after the post title. That could be what you saw. Bottom line, I did not write this post, as I explained to you in the comments section of your post.

      I did make some formatting changes to Dan’s post this morning. From time to time when Dan creates a post, an inadvertent space is added above the picture at the top of the post. This causes an indenting flaw to show up in the post excerpts on the main page. I fixed that and added some paragraph breaks to your email and placed it in a quotation box. That should explain the formatting issues for you. Had I drafted the post, I would not have had to make those changes.

      I could edit the post again and insert the test of your email, as it was written, if you would like to send it to me. I’m pretty sure you have my email address. That will probably correct the “2 in the middle of the story” issue you’re talking about.

      I hope this satisfies you search for a conspiracy to support your theory. No conspiracy here.

    • March 26, 2014 at 8:57 pm

      The author name never changed. We made a minor formatting fix. There is no question asked at the end of the story. You have poor reading comprehension skills counseling. Perhaps it makes you well suited to be one of Jason Young’s eyewitnesses who sees things that aren’t there.

  5. Cynthia Ward
    March 26, 2014 at 10:18 pm

    One: You do understand that blaming Greg Diamond for CATER’s actions is akin to blaming Haagen Daaz for the size of jeans I squeeze into? While Chocolate Chocolate Chip certainly has its place in my freezer, it awaits my choice to select it instead of the fruit on the counter. So when you begin blaming the employee for the actions of the employer we start down a slippery slope. Now don’t get me wrong, Greg is pretty darn gleeful about doing CATER’s work for us, but if you want to take someone on, you come get me next time, please. I love that you offered a quote by Brandman, but failed to ask the President of the non-profit heading up these two actions whether we have a point to all of this.

    Two: Do we get to see the documents provided by the City showing they have spent $20K? because if they have indeed spent that much money, having taken as much time as they have to respond to us, my guess is Greg Diamond esquire may be a MUCH better attorney than Dan gives him credit for, and they are scrambling to get themselves out of the hot water they willingly immersed themselves in. CATER is not blocking union jobs, the City of Anaheim is doing a fine job of it themselves, they need only follow the law, that is all we ever asked for.

    Three: CATER will never run a candidate, we are a 501c4 non-profit registered with the State of California and the IRS and not a PAC.

    Oh and Dan, thanks for the free media attention.

  6. Greg Diamond
    March 26, 2014 at 10:18 pm

    Thanks, Chris. What had struck me, prior to seeing the apparent change in names, was that the numeral “2” (which indicates where the second page began) was on its own line, with vertical padding above and below, which really stood out. Then when I checked back, that had changed. It’s no big deal, but next time something looks unusual here I suppose I need to take a screen shot.

    That we’re talking about this, as opposed to my rebuttal of the assertions in the story, strikes me as sad-to-bizarre.

    I do have a question for you about reading comprehension:

    Let’s say person “A” authored a blog post, to which person “B” replied.

    “A” then replied to that comment with a comment ending with a question, such as, say, “Seriously, when will CATER actually run a candidate for council?”

    B replies to A with a comment ending in a reference to “the question you close with.”

    A points out that the story — not mentioning his own ending-with-a-question comment — does not end with a question and accuses B of having “poor reading comprehension skills.”

    Under those conditions, is it reasonable for Jordan Brandman to say that someone is costing Anaheim jobs by objecting to an illegal vote when it was his own responsibility to follow state law and the City Charter?

    (I know, you thought I was going to ask “who really has the reading comprehension problem” — but it’s probably best that you don’t answer that one.)

  7. Dan Chmielewski
    March 27, 2014 at 7:59 am

    Cynthia, I didn’t blame Greg Diamond for anything other than adding to the burden Anaheim taxpayers have to pay for outside counsel to deal with your lawsuit(s). File a PRA like I did for invoices for outside counsel; items are redacted as privileged information but the item on the invoice isn’t. Lawyers are not cheap.

  8. Dan Chmielewski
    March 27, 2014 at 8:01 am

    Greg — we only have one stock photo of you; if you want to forward other photos please do. Try stripes instead of plaid.

  9. Greg Diamond
    March 27, 2014 at 10:49 pm

    I didn’t blame Greg Diamond for anything other than adding to the burden Anaheim taxpayers have to pay for outside counsel to deal with your lawsuit(s).

    The lack of any consideration in your statement about whether such lawsuits are meritorious absolutely stuns me — but I suppose that different sorts of people care about different things.

  10. junior
    March 29, 2014 at 5:28 pm

    Diamond – Have you raised $4.19 for your campaign for OC DA yet?

  11. Dan Chmielewski
    March 30, 2014 at 8:46 pm

    Greg, the city attorney is a conservative and cautious type. I don’t believe he’d allow the council to move forward if there was an issue. I continue to be stunned that you think our lawsuit against your blogs previous owner was without merit. The judge decided in our favor. Let’s see his the judge decides in yours.

Comments are closed.