New reporting exposes Rep. Michelle Steel’s corruption as an Orange County supervisor after she directed a $1.2 million taxpayer-funded contract to DTN Tech, a for-profit political business that produced campaign mailers for her and had no experience managing government funding or providing meals, which in turn charged the government much higher rates than other contractors in the county. Shamefully, this isn’t the first time Rep. Steel has been caught steering taxpayer funds to political allies as Orange County supervisor.
“Rep. Steel giving a million dollar taxpayer-funded contract to her political insider friends proves that she can’t be trusted,” said End Citizens United President Tiffany Muller. “We’re calling for an investigation into this corrupt scheme and for her to be held accountable for taking advantage of her constituents’ hard-earned money.”
Nick Gerda and Josie Huang
11/01/24
Key sections:
- In June 2020, several months into the pandemic, the five Orange County supervisors granted each of themselves the authority to distribute money to feed needy seniors and people with disabilities in their districts.
- Within a few months, each supervisor awarded $1.2 million to their district to pay for meals through early 2021.
- To decide who got their district’s funding and how much each meal would cost, the supervisors used a new procedure they created during the pandemic. The process sidestepped the county’s usual transparency for taxpayer money, and allowed supervisors to make those spending decisions without public votes or competitive bidding.
- LAist examined the contracts each supervisor created for the pandemic meals program in 2020, and reviewed how that taxpayer money was supposed to be spent.
- The contract developed for District 2, under its then-Supervisor Michelle Steel, charged taxpayers the most for meals, by far.
- Steel, who is currently up for reelection for a seat in the U.S. House of Representatives, agreed to pay the vendor she selected about $24 per meal to provide dinners within her district, according to contract records reviewed by LAist.
- Steel’s meals program cost taxpayers more than triple the amount per meal compared to two other districts.
- The vendor Steel selected, which received $1.2 million in total for meal services between early August 2020 and late January 2021, was a marketing and printing company called DTN Tech (DTN) that also makes her election campaign mailers.
- Since 2019, when Steel was a county supervisor and launched her first run for Congress, DTN has received more than a third of her campaign spending on printing, according to Federal Election Commission data. The company’s work for her campaign included over $120,000 in printing and mailing jobs in 2020 during the same timeframe it was being paid under the taxpayer meals contract Steel had directed to it, her campaign disclosures show.
- DTN had no prior track record of providing taxpayer-funded meals, according to an LAist review of the county’s databases of contracts and purchase orders.
- Supervisors in most other districts chose well-established nonprofits that serve the needy.
- In total, DTN distributed 49,762 meals for the $1.2 million in county payments, according to the company’s final tally. It comes out to $24.11 per meal, on average.
- At least two-thirds of the county funding DTN paid for meals went to restaurants that have hired the company as a printing client, according to billing records DTN submitted to the county and the company’s social media posts reviewed by LAist. DTN used 10% of the contract funds — or about $120,000 — for administrative costs over the nearly half-year contract, the maximum amount allowed by the agreement, according to invoices and contract records LAist obtained from the county through a records request.
- While most of the other districts’ contracts required vendors to deliver meals to people, meals in Steel’s district were made available at a site for participants to come pick them up, according to the contract and emails between county officials and DTN.
- And while three districts prioritized or required meal recipients to be experiencing food insecurity, the contracts for Steel and Do’s districts did not.
- DTN and Steel’s campaign declined to share the pricing her campaign has paid for election mailers.
- Nguyen, DTN’s CEO, told LAist the campaign mail invoices are available on public Federal Election Commission filings. They are not — because that’s not how it works. The public data for all campaigns, including Steel’s, show the total payment for a particular print job, but not how many mail pieces were created nor the price per mailer.
- DTN was warned by the county in February 2024 — three years after the contract ended — that it had failed to submit an audit of the meal funds that was required by the contract and federal law.
- Such reviews, known as a “single audit,” do not focus on whether the contract’s cost per meal was appropriate, nor whether the contractor was selected through a fair process.
- DTN’s first work for the county was when Steel was a county supervisor and her staff hired it to print mailers when she was running for re-election in early 2018, which most of her colleagues criticized her for at the time.
- The taxpayer-funded mailers invited recipients to attend a “community coffee” with Steel and then-District Attorney Tony Rackauckas at the home of Lee Ramos.
- The mailers were sent to 16,000 voters — targeted based on age and geography — but Steel’s staff knew the venue only had capacity for 50 people, according to county emails obtained by Voice of OC at the time. State law prohibits the use of taxpayer dollars on mailers promoting elected officials running for re-election, but has exceptions for constituent events.
- After the criticism from her colleagues and a lawsuit threat from ethics watchdogs, Steel switched to using campaign money for further mailers advertising the same event, with nearly the same imagery and text, the Orange County Register later reported.
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