Amid allegations of using public funds for politics, the Newport Beach Chamber of Commerce has further distanced itself from its Political Action Committee.
Chamber President Richard Luehrs said that the two groups have separated, and last week city officials finalized a contract that will allow them to audit the chamber's books.
These developments come as city officials prepare to choose which nonprofits will receive annual grants for the next fiscal year.
The chamber was awarded nearly $40,000 in public funding this year for its Taste of Newport festival and Christmas Boat Parade.
But some officials and government watchers have questioned whether the money could be spent on political campaigns.
"We're out of the political action business," Luehrs said. "Now what we have to do is to prove it to the city."
In its agreement to accept this fiscal year's grant money, the chamber said it would provide a list of PAC contributions and expenditures for the past three years, if the city requests it. The goal is to prevent the events' proceeds, in addition to the grant dollars themselves, from benefiting political causes.
Until January, the chamber was closely tied to the Business and Community Political Action Committee. The two groups shared board members, while the chamber solicited funds for the PAC and contributions were transferred in bunches.
The Orange Country Register reported that the chamber declined to release its audited financial statements.
Luehrs said that in the beginning of the year they segregated the funding, and then later in January he resigned from the PAC board of trustees, stripped the chamber from the PAC's name and bylaws, and vice versa.
"We removed any reference of the BACPAC," Luehrs said, although the PAC was still listed on the chamber website Monday.
While the city's contract says it can audit the chamber, it doesn't require the organization to release its financial statements.
"We don't think that we need to make our financial matters public records," Luehrs said.
The city requested the precautions after Councilman Keith Curry last year said he wanted to make sure city funds were spent on events.
"I'm confident there will be adequate demonstration of that," he said Monday.
The changes aren't enough for City Council watcher and state Assembly candidate Bob Rush, who has pressed council members to scrutinize the chamber's political activity.
"It's a step in the right direction; however, the agreement is still deficient," Rush said. "I'm not confident that they have changed their tune."
He said the city should make the PAC sign a contract as well.