Taxpayer-funded tourism board filled with waste, cronyism

[Newmexican]

Brand WASTE

Report: Taxpayer-funded tourism board filled with waste, cronyism
BY: CJ Ciaramella

October 4, 2012 2:13 pm

The federal government’s latest taxpayer-funded effort to promote U.S. tourism is dogged by lavish spending, cronyism, and questionable accounting, according to a report released Thursday by two U.S. Senators.

The report, issued by Sens. Jim DeMint (R., S.C.) and Tom Coburn (R., Okla.), details questionable practices by Brand USA, a public-private corporation established in 2010 by Congress to promote U.S. tourism.

“It is immoral to ask the federal government to shell out $100 million every year to pay for high ranking executives to enjoy parties in London and luxury suites at major league baseball games in the name of ‘travel promotion,’” Coburn said in a statement. “With millions out of work and our national debt surpassing $16 trillion, this is the kind of indulgence we need to say no to.”

To obtain federal funds, Brand USA must obtain matching private donations. But, according to the report, the company has relied heavily on “in-kind” non-cash contributions to qualify for taxpayer money.

These in-kind contributions include claims of $94.87 taxi fares for 2-mile rides, flights to London costing $6,799.30, and $365 hotel rooms. In one instance, corporate executives counted such expenses as a tip of $1.60 to a hotel doorman and a $14 snack in London as in-kind contributions.

As previously reported by the Washington Free Beacon, the Brand USA board, appointed by the White House, is stacked with Democrats and fundraisers for President Obama.

In 2011, Brand USA chairman Stephen Cloobeck gave $100,000 through one of his companies to the Majority PAC, which is run by operatives tied to Senate Majority Leader Harry Reid, according to the Las Vegas Sun.

Cloobeck claimed $4,128 for in-kind contributions when he attended a conference in Los Angeles this May, according to the report.

Brand USA drew fire from DeMint for sending its board members to England for a business meeting. That meeting lasted two hours and was followed by a VIP launch party. Video of the party was later put on the organization’s Facebook page.

According to Thursday’s report, “correspondence between Brand USA and its contractor in London indicate that Black Diamond Films, a British company, ‘donated’ $215,106 in services to Brand USA, which was ‘over and above the hours allocated within the $50,000 fee.’ This spending is all before the first petit fours were bought, any of the 38 waiters, 18 chefs, or 9 porters were hired, a single glass of champagne was filled, and before the hall was rented. The room alone lists for £9000 + VAT or roughly $17,000.”

“It’s sad, but not surprising, to find the government’s newest tourism venture is just as wasteful and mismanaged as we feared,” said Senator DeMint in a statement. “It’s clear that American tourism industry places little faith in another unnecessary Washington agency, which is why Brand USA has relied on dubious in-kind donations and resorted to breaking its lobbying ban. Only Washington could think that taxing tourists will increase tourism or that we need a new bureaucracy to duplicate our vibrant tourism industry’s advertising budgets.”

The Brand USA CEO resigned earlier this year shortly after its first annual report was released.

Brand USA did not return requests for comment.

http://freebeacon.com/brand-waste/

The Cronyism Board

Tourism board stacked with Obama cronies






BY: CJ Ciaramella
May 24, 2012 5:00 am

The government-appointed board behind an aggressive overseas advertising campaign to promote tourism to the U.S. is little more than a corporate welfare program and a slush fund for wealthy Democratic donors, critics say.

Brand USA, formerly known as the Corporation for Travel Promotion, is a public-private partnership established by Congress to promote the United States abroad. It is governed by an 11-member board. John Connor, director of the Office of White House Liaison at the United States Department of Commerce, appointed the board members. He led Obama’s LGBT outreach efforts in the northeastern U.S. during the 2008 presidential campaign.

All of the board members Connor has appointed have donated to Democrats and Democratic organizations almost exclusively, if they have donated at all.

Brand USA board chairman Stephen Cloobeck is the CEO of the Las Vegas-based Diamond Resorts. Cloobeck donated at least $490,045 in political contributions since 2007, with only $9,700 going to Republicans. In 2011, Cloobeck gave $100,000 through one of his companies to the Majority PAC, which is run by operatives tied to Senate Majority Leader Harry Reid, according to the Las Vegas Sun.

In a YouTube video, Reid called the Travel Promotion Act “a wonderful piece of law that I was able to get through the Congress to help Nevada.”

Brand USA board member Randy Garfield is executive vice president of worldwide sales and travel operations for Disney Destinations and the president of the Walt Disney Travel Company.

Garfield donated at least $4,720 to the U.S. Travel Association PAC, which spent $62,000 to Democrats in the 2010 election cycle—almost 40 percent more than on Republicans.

Brand USA Board Member Daniel Halpern is the president and CEO of Jackmont Hospitality. In the 2012 election cycle alone, Halpern has bundledat least $500,000 in donations to Obama and personally donated $54,555 to Democrats and Democratic organizations, according to the Center for Responsive Politics.

Brand USA Board Member David Lim is assistant vice president of Amtrak. The federal government heavily subsidizes Amtrak: It received $1.5 billion in federal appropriations last year, in addition to $1.3 billion in stimulus funding in 2009.

Brand USA recently drew fire from Sen. Jim DeMint (R., S.C.) for sending its board members to England for a business meeting. That business meeting only lasted two hours and was followed by a VIP launch party. Video of the party was later put on the organization’s Facebook page.

Sen. Tom Coburn (R., Okla.), who voted against Brand USA’s creation in 2009, also criticized the group for the England meeting.

“Every American, especially those who have been out of work for months, should be asking why their taxpayer dollars should subsidize conferences in London for board members of the Corporation for Travel Promotion,” a spokesperson for Sen. Tom Coburn said in a statement to the Free Beacon. “This operation is about self-promotion, not travel promotion.”

Brand USA insists no taxpayer dollars were spent on the event. While 50 percent of Brand USA’s budget must come from private funds, the rest is raised through a $14 tax on foreign visitors.

Free-market critics of the board contend the government should not subsidize corporations who already spend billions annually on attracting foreign business.

Citizens Against Government Waste spokeswoman Leslie Paige said tourism promotion should be left to the private sector. Brand USA is “easily poised to become another unnecessary corporate welfare offering,” she said.

“The whole Brand USA endeavor looks like another excuse to create a new centralized travel bureaucracy within the Department of Commerce that will do what all bureaucracies do: Grow and require more revenues,” Paige said. “Furthermore, private-public partnerships of this sort often evolve into corporate welfare giveaways to profitable corporations who don’t need the money and can easily subsidize self-promotional activities on their own.”

Andy Roth, the vice president for government affairs at the Club for Growth, also said the government has no business subsidizing corporations’ travel advertising.

“If this is such a good idea, then the companies should be doing it on their own, even if it’s not costing the taxpayers money,”

Roth said in an interview with the Free Beacon. “The government should be creating conditions to allow the private sector to flourish, but it shouldn’t be involved.”

The Congressional Budget Office (CBO) projected in 2009 that the program would increase revenues by $135 million over 10 years and reduce direct spending by $290 million, for a combined budget deficit reduction of $425 million.

However, free-market advocates continue to say the corporation is a drag on the economy even though taxpayers are not directly subsidizing the program.

“Proponents of the bill say that it’s not a tax increase because only foreigners will pay it. But the European Union and other governments have already announced that any TPA fee will trigger reciprocal fees for American travelers to their countries,” DeMint wrote in a 2009 op-ed, when the legislation creating Brand USA passed. “Meanwhile, every $10 Washington takes from foreign tourists is $10 those tourists won’t spend in local restaurants, shops, and hotels. This act is designed to help big businesses at the expense of small ones.”
http://freebeacon.com/the-cronyism-board/

[Newmexican]

Brand Exodus

Second Brand USA exec leaves company on heels of Senate report

BY: CJ Ciaramella
October 15, 2012 5:00 am

Another top executive has departed from Brand USA, a public-private corporation founded to promote U.S. tourism, in the wake of a congressional report detailing what its authors call waste and cronyism.

Travel Market Report writes that Brand USA chief marketing officer Chris Perkins has left the company. Perkins is the second executive to leave the firm. Brand USA CEO Jim Evans left in June, a week after several U.S. Senators first began probing the company.

The report, released last week by Sens. Tom Coburn (R., Okla.) and Jim DeMint (R., S.C.), slammed Brand USA and the Department of Commerce for providing “only a small cross section” of the requested documents.

However, the report said, the documents the senators did obtain “paint a picture of mismanagement, waste and cronyism.”

A mix of private contributions and matching federal grants funds Brand USA. The report claims Brand USA relied on questionable “in-kind” non-cash contributions to qualify for more taxpayer dollars.

As previously reported by the Washington Free Beacon, Brand USA’s board, which is appointed by President Barack Obama’s administration, is stackedwith Obama campaign donors. The company first came under fire for hosting a lavish London gala.

Travel Market Report cites an unnamed travel industry source who calls the senators’ findings “fair.”

“But that doesn’t mean you throw the baby out with the bath water,” the source told the publication. “You clean things up; that’s what the board has done by getting rid of Jim Evans and Chris Perkins, the people that put Brand USA in this situation.”
Brand USA, which did not return requests for comment from the Free Beacon, issued the following statement to Travel Market Report:

In a statement, Brand USA said it enjoys strong industry support, is working with more than 260 partners and has received about $59 million in cash and in-kind contributions from private businesses and organizations.

“In-kind donations are vetted scrupulously, first by Brand USA then by an independent accounting firm before receiving a final review by the government,” the statement said.

“Brand USA has been committed to holding administrative and overhead expenses to under 15% – ensuring that at least 85% of spending goes directly toward attracting international visitors.”

It said the private sector, including its board members, have donated “countless hours, dollars and other resources because of their commitment to creating jobs and economic growth for America. We have and will continue to work with the Senator and his staff to address any further concerns they have.”

Brand USA was created by an act of Congress in 2010 to promote U.S. tourism abroad.

Another Brand USA exec leaves company on heels of Senate report | Washington Free Beacon