State Auditor Launches Probe into the City of Huntington Beach's Settlement with Pacific Airshow LLC
(SACRAMENTO, CA) — Today, the Joint Legislative Audit Committee (JLAC) approved an audit of the City of Huntington Beach’s settlement agreement with Pacific Airshow LLC, on a bipartisan vote. The California State Auditor, Grant Parks, will now be tasked with reviewing the public funds that were used to compensate the Airshow for revenues lost due to the cancellation of one day of the 2021 Airshow and the closure of local beaches following the oil spill off the coast of Huntington Beach.
The announcement comes in response to a letter sent by Senator Min in January requesting JLAC examine whether the multimillion dollar payment exceeds the appropriate compensation for lost revenue, and constitutes a gift of public funds. A member of JLAC, Senator Min noted in his letter that the Pacific Airshow did not have a contract with the City, only an Event Permit granted by the City. It remains unclear how the settlement payments were calculated, as neither the City nor the Pacific Airshow have publicly shown any evidence of lost profits.
"Like hundreds of businesses along the Huntington Beach coastline, there is no doubt that the Pacific Airshow lost revenue during the beach closures that followed the 2021 oil spill. But it is unclear that they were owed any damages from the City for its decision, made in conjunction with the State and the County of Orange, to shut down its beach, and it is also unclear whether their lost revenues were anywhere close to the amount provided by the City’s settlement,” said Senator Min. “At a time when public trust in the integrity of our governments is at an all time low, it is more critical than ever that we provide transparency and assure the public that their tax dollars were not used in inappropriate or illegal ways. I’m grateful to my Democratic and Republican colleagues for voting to authorize this audit, which will hopefully get to the bottom of this.”
“As an elected councilmember who was on Council during the oil spill and the settlement ‘negotiation’ by the new Council majority, I have serious questions about this settlement. ‘Why was this case settled and why for so much money?’ are among them,” said Huntington Beach City Councilmember Dan Kalmick. “These questions were never answered by our Elected City Attorney and no investigation was ever performed. It’s high time that a respected third party audit what is going on in Huntington Beach.”
The City of Huntington Beach has hosted the Pacific Airshow since 2016, attracting millions in attendance every year. Following the October 1, 2021, oil spill, the City of Huntington Beach made the decision to close the beach because of potential health impacts, facilitate cleanup coordination efforts and cancel the last day of the 2021 Airshow.
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