Politico

Larry Elder's new campaign manager faced scrutiny for millions in billings to public agency


OAKLAND — The new campaign manager for Republican gubernatorial recall frontrunner Larry Elder has been the subject of investigation by the Orange County District Attorney’s office in connection with millions of dollars billed by his consulting firm to taxpayers, according to a Southern California attorney who has been questioned in the probe.

Jeffrey Corless, who last week joined Elder’s campaign team, is chief executive and president of Irvine, Calif.-based Venture Strategic Inc., a politically connected public relations and communications firm tapped to develop communications strategy for Orange County’s Transportation Corridor Agencies. The agency, which manages the county toll roads, hired Corless’ firm in 2015 in its effort to sell commuters on the value of area toll roads to ease gridlock.

Southern California attorney Adam Englander, a consultant for the city of San Clemente, said in an interview that in March 2021 “an investigator from the Orange County District Attorney’s office met with me for hours to discuss the investigation of Venture Strategic and the TCA.’’

Englander said he provided the investigator with seven gigabytes of public information which he said documented “gross overbilling by Venture Strategic.’’ He said that based on his review of the documents, the firm has been paid nearly $5.9 million in consulting fees from the public agency.

Tim Lineberger, Venture Strategic’s spokesperson, would not comment on whether the firm had recently been the subject of a DA investigation, but said that no charges have been filed against Corless, and said that the accusations of wrongdoing were part of “politically motivated attacks” by Democrats.

“It is no coincidence the second Venture Strategic began working in support of the recall against Gavin Newsom, Newsom’s cronies who hold positions of power in government abused their authority to leak information and smear us with blatantly false insinuations of wrongdoing,’’ he said in an emailed statement to POLITICO. “Government agencies have apparently spent hundreds of thousands of taxpayer dollars auditing and reviewing this matter, only to discover Venture Strategic underbilled the toll road agency, was owed roughly five thousand dollars, and successfully performed on the contract.”

Another source, who declined to be named for publication because he is engaged with a public entity concerned about the issue, said he was also interviewed by Orange County prosecutors for hours earlier this year in connection with the probe. The source said the concern was that the agency is billions of dollars in debt, in part because of what the source called “unconscionable multi-million dollar payments’’ to Corless’ firm.

“That means the toll roads, which were supposed to be free, aren’t going to be free for decades, if ever,’’ the source said.

Corless has served as a campaign adviser to a roster of GOP candidates, including former U.S. Senate candidate Carly Fiorina, state Sen. Melissa Melendez (R-Lake Elsinore), and Orange County Supervisor Lisa Bartlett — who is also a member of the board of directors of the toll agency.

Corless’ firm has also been hired to develop communications strategy for the re-election campaign of GOP Orange County District Attorney Todd Spitzer, according to Lineberger.

Spitzer spokesperson Kimberly Edds, asked about an investigation of Corless’ firm, responded in an email: “There is no investigation.” Asked if there had been any past probe of the firm, Edds answered: “We don’t discuss investigations.”

With less than three weeks until the Sept. 14 recall election, Corless’ hiring — and the questions raised in the past about his firm — poses another potential public relations problem for radio talk show host Elder’s gubernatorial bid.

The Republican candidate shuffled his campaign staff and hired Corless last week in the wake of accusations of abuse from his former fiancee, Alexandra Datig, first reported in POLITICO. Datig has alleged Elder pulled out a loaded gun during a domestic argument, and detailed what she called “incidents of domestic abuse” at his hands in a report she filed Wednesday with the Los Angeles Police Department. She said she was interviewed by detectives for two hours Wednesday, POLITICO reported.

Ying Ma, a spokesperson for Elder’s campaign, did not respond to requests for comment.

Eugene Fields, a spokesperson for the transportation agency, said in a statement that the agency is “unaware of an investigation by the Orange County District Attorney’s office into Jeff Corless or Venture Strategic. We have not been contacted about an investigation.” He said the TCA conducted four audits of the firm and concluded there was no malfeasance.

But Englander said all of the audits the toll agency ordered regarding Venture Strategic’s work for the TCA were severely limited because toll authority officials purposefully restricted their scope. He said local, state and federal officials had pushed for a detailed forensic criminal audit to determine if there was possible unlawful activity in the billings of the firm and if the city should be compensated.

Despite repeated efforts, Englander said, “the TCA refused, time and time again, to conduct an actual independent forensic audit that would review Venture Strategic’s timesheets.’’

“An audit doesn’t mean anything when you simply compare the amount of hours billed to what was paid out,’’ Englander said. “Someone needed to review whether the hours billed were actually worked.”

The firm’s work has been scrutinized and sharply criticized by San Clemente officials who opposed the proposal to extend a toll road through their beachside town and filed suit, seeking the consultants’ billings through the California Public Records Act.

Corless’ strategy firm has been under scrutiny for alleged overbilling dating back to at least 2019, when a Los Angeles Times investigation documented that among those whom Corless tapped for consulting jobs in connection with the account were Nico Melendez, the husband of state Sen. Melendez. Corless’ firm also subcontracted work to Curt Pringle & Associates, which had an additional separate contract with the toll agency for overall “long-range visioning,’’ the investigation showed. Along with Pringle — the former California Assembly Speaker, the former mayor of Anaheim and a GOP consultant — the firm also hired Pringle’s daughter Katie.

The Times investigation reported that invoices billed by the firm claimed that Nico Melendez, “in a single day in 2017… worked seven hours reading news at $175 an hour,’’ though Melendez told the paper his time sheet showed he spent only two hours that day reading news. “The same invoice charged $1,050 for six hours of reading news on another day earlier that same week,’’ the Times reported.

In 2019-2020, the Orange County grand jury released a report titled “The Transportation Corridor Agencies: Are they Taking a Toll on Orange County?” which outlined major concerns about what it cited as financial improprieties, corruption and lack of oversight by the toll road agency with regard to fees paid to consultants. The report criticized the “almost Tammany Hall fashion” in which “any elected official who opposed action” by the agency would be politically punished through campaign activities “to inhibit their re-election to office.’’ But the report said that due to the Covid outbreak, “the grand jury was unable to investigate further.”

A second Orange County grand jury report, titled “$28 billion for a $2.8 billion toll road” and released in 2021, outlined further concerns, saying “millions have gone to advocacy groups that are free to politically support certain TCA Board members and undermine others.”

Lineberger, in his statement to POLITICO, said, “We will have no further comment on this matter moving forward and encourage anyone who is interested in the truth to refer to the publicly available audits, our previous statements, or the TCA itself. We have a state to save, and a recall to pass.”

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