Irvine Council Grants Member Reprieve in Alleged Spending Scandal

November 30, 2020 Updated: November 30, 2020

The Irvine City Council has voted to retroactively approve Councilman Mike Carroll’s controversial spending of public funds on personal mailers, with Carroll himself casting the deciding vote.

In a parting shot, outgoing Councilmember Melissa Fox blasted Carroll over accusations that he misused public funds on mailers leading up to the Nov. 3 election, and blamed some councilmembers for covering up the controversy.

“This is an attempted whitewash,” Fox said during the Southern California city’s Nov. 24 council meeting.

Carroll, who denied the allegations, also faced dozens of excoriating public online comments demanding he repay more than $70,000 to city coffers.

He chose not to recuse himself from a vote to adjust the budget, and instead voted with two other councilmembers in favor of the move. Carroll’s vote tipped the scales in a 3–2 decision to retroactively approve more than $30,000 in previously unauthorized spending in the current fiscal year, which began in July.

Councilmembers Farrah Khan and Anthony Kuo sided with Carroll, while Fox and outgoing Mayor Christina Shea—who were attending their last meeting as elected officials—dissented.

The issue dates back to August, when Fox accused Carroll of misusing the council’s $10,000 city mail budget, meant to cover the postage costs of hard-copy correspondence between the local politicians and their constituents.

Fox said Carroll’s spending exceeded the amount allotted for the entire council. In a letter sent to City Manager John Russo, Orange County District Attorney Todd Spitzer, California Attorney General Xavier Becerra, and the Fair Political Practices Commission (FPPC), she claimed reports from city staff showed that Carroll authorized the spending of $40,000 during this fiscal year (2020–2021) on the city mailers, and another $32,000 last year.

The FPPC rejected the complaint in a Sept. 14 letter provided by Carroll to The Epoch Times, and said it would not seek to enforce the matter. Fox hasn’t responded to recent inquiries by The Epoch Times about the FPPC complaint.

Epoch Times Photo
Councilman Mike Carroll of Irvine, Calif. (Courtesy of Mike Carroll)

During the Nov. 24 meeting, Fox accused Carroll of bypassing council and going directly to staff. “Clearly staff felt that they had to comply with these requests, and the pressure had to be enormous,” she said.

The mailers weren’t direct campaign advertisements, but prominently displayed Carroll’s name and promoted a town hall series about Irvine’s response to the COVID-19 pandemic and the election, as well as other topics. No other councilmembers were mentioned in the mailer.

“So, while the rest of the council was struggling through COVID to reach out with information to residents by using Zoom calls and emails and being very mindful of our budgets, we had tens of thousands of dollars diverted … just to raise a councilmember’s profile,” Fox said.

She said the issue “points to real systemic problems,” and that she wouldn’t support “sweeping it under the rug” to fill a hole in the budget.

Carroll didn’t speak at the council meeting. However, he told The Epoch Times in late October that the allegations against him were a “complete political hatchet job.”

The mailing costs, he said, were paid with funds from his staff budget after one city staffer was laid off and two other employees were not rehired during the COVID-19 shutdown.

However, council policy stipulates that individual members are not allowed to do that without the consent of the majority of council in an official vote.

During the Nov. 24 meeting, Shea criticized Carroll’s unilateral decision to reallocate public funds budgeted for salaries toward mailers.

“That’s a slush fund. Councilmembers should not have slush funds; they should have specific budgets for specific purposes,” Shea said.

“I’ve worked 26 years. I have never put my foot in that mail room ever. I think that we do have protocols in place, but clearly they’re not being followed. And so I would suggest that the new council … should really bring this up and address this in more detail in February.”

City Manager Marianna Marysheva recommended that the new Irvine City Council create separate mailing and postage budgets for each councilmember.

“That way, it’s not the city manager who is in charge of that budget, it’s you,” she said.

At the recent council meeting, Shea wondered why the entire $70,000 budget discrepancy was not being addressed. “Why are we only being asked to pay back $30,000 when the deficit is $70,000?” she asked.

Marysheva said the council was asked to vote on the current fiscal year’s budget discrepancy of $30,000, and not last year’s $40,000, because the books have been closed on 2019–2020.

“We couldn’t make any more adjustments,” she said. “The reason the fiscal year closed without any issues is because currently City Council’s budget is under the city manager. That department—the city manager’s department—was positive, and therefore there was no way for us to correct that negative.”

But Shea countered that it’s the responsibility of city officials to fix any problems in the budget.

“I don’t mean to be critical, but when accounting has problems … sometimes annual audits will find problems, and they make you fix them,” she said. “They don’t just wipe it away and say, ‘It doesn’t matter, the books are closed.’”

Carroll, a former planning commissioner, was first elected to council in November. Previously, he had been appointed to fill a seat left vacant when Don Wagner was elected to the Orange County Board of Supervisors last year.

Just days before the Nov. 3 election, outgoing Mayor Shea rescinded her endorsement of Carroll over the controversy. She was then defeated in the race for mayor by Farrah Khan, who will be sworn in Dec. 8 alongside new councilmembers Tammy Kim and Larry Argan.

Mayor-elect Khan, currently a councilmember, supported the motion to grant Carroll a reprieve on the $30,000, with a caveat asking city staff to provide a report detailing how funds allocated for councilmembers are spent.

“I will move this forward, but I would like staff to come back and maybe do a presentation explaining exactly how money is used by councilmembers, for what purposes, and just to give the public a better understanding of how this works,” Khan said.

Marysheva said city staff will comply with Khan’s request for a breakdown of the council budget.