California’s Santa Clara CVB had its funding suspended for 60 days by the City of Santa Clara until a new management company can be found.

Employee salaries and benefits will be paid during the 60 days.

The cessation of funding followed allegations of conflicts of interest and mismanagement of public money by the Santa Clara Chamber of Commerce, a volunteer-led organization that manages the Santa Clara Convention Center and the $1.5 million budget of the Bay Area CVB through a contract with the City of Santa Clara.

The allegations came to light following preliminary results of an audit by the City of Santa Clara were brought to the city’s attention at a June 26, 2018, City Council Meeting. The City Council ordered the audit after discovering the Chamber of Commerce had received an increase in its funding without city approval.

The management contract for the CVB expired June 30, but the City Council voted unanimously to extend the salary and benefits of the CVB’s 14 employees, although day-to-day operations have ceased. Because the audit is not due to be completed until the end of July, the city decided to shut down operations for at least 30 days.

“A lot of people are trying to figure out what’s happening, and it’s not clear what’s happening at this point,” said one person with knowledge of the situation but who was not willing to go on the record as a source.

“It definitely hurts the city with the disruption of business as a CVB, but I know a lot of people who have stepped up to try to make the CVB operational moving forward," the source added.

Funding for the Santa Clara Convention Center had previously been approved and the facility remains open.

Among the allegations made against the Santa Clara Chamber of Commerce are the loss of city revenue because the Chamber provided discounts to its members to rent city-owned space, a charge of self-dealing relating to the Chamber possibly holding political fundraisers on public property, and purchasing promotional advertisements in the Santa Clara Weekly, the publisher of which is Chamber member Miles Barber.