Government-sponsored travel promotion agency raises concerns

Friday, June 15, 2012

Grassley, Colleagues Seek Answers on Spending, Other Practices

of Government-sponsored Travel Promotion Agency

WASHINGTON - Sen. Chuck Grassley of Iowa is among six senators who are asking for information about troubling spending and practices by a government-sponsored travel promotion agency called Brand USA.   Besides Grassley, signers of a letter to the Commerce Department secretary were Sens. Jim DeMint (R-South Carolina), Tom Coburn (R-Oklahoma), Rand Paul (R-Kentucky), Jeff Sessions (R-Alabama), and Mike Lee (Utah).

Brand USA is a government-sponsored travel promotion agency, created to boost tourism in the United States.  It was formerly known as the Corporation for Travel Promotion, which was created by Congress in 2009.

In order to pay for Brand USA's funding, Congress levied a $10 tax on foreign tourists.  To date, $25 million incurred from the tourist tax has been distributed to Brand USA.  Brand USA has come under scrutiny for holding lavish parties in London, subsidizing travel corporations' advertising budgets, a misguided ad campaign, and struggling to meet federal matching funds requirements.

The full text of the letter follows.

June 14, 2012

Via Electronic Transmission

The Honorable John Edgar Bryson                                                    
Secretary
U.S. Department of Commerce                                              
Herbert Clark Hoover Building                                 
1401 Constitution Avenue, NW                                
Washington, DC 20230

Dear Secretary Bryson:

Recent media reports raised serious concerns about the direction and management of the promotional campaign directed by the Corporation for Travel Promotion (Brand USA/Corporation), a public/private entity formed to promote U.S. tourism abroad.  We are concerned about reports of potentially significant waste and misuse of funds at the Corporation.

Congress passed the Travel Promotion Act (Act) in 2010 to "increase international travel to the United States ... thereby creating jobs and stimulating economic growth."  The Act sunsets in 2014 when funding for the Corporation would be provided by industry contribution only.  The Corporation is responsible for spending hundreds of millions of dollars to promote America abroad and must ensure that the highest standards of performance and accountability are met.  Unfortunately, recent reports indicate that the Corporation is allegedly not meeting those high standards.

It is our understanding that in November 2011, the entire Corporation Board traveled to London to attend the World Travel Market, a trade show for the travel industry.  While there, the Board held a meeting in London to discuss marketing strategies and efforts to lobby Congress. Despite the fact that board members traveled all the way to London for the meeting, it was a brief event, beginning at 1:30pm UK time and ended at 3:30pm UK Time.

A related video (https://www.facebook.com/video/video.php?v=2210089064112) shows members of the Corporation Board enjoying themselves at a Brand USA Launch party held at the British National Maritime Museum in Greenwich, London. The video, also available on the Brand USA website, shows it was a high-end affair held at the Maritime Museum covered in light art projections displaying the Brand USA logo.  Brand USA also provided guests, over 500 VIPs, sushi, champagne and petit fours.

We want to ensure that the Corporation's administrative and financial matters are fully transparent.  It is our understanding that the Corporation awarded a media consultant, JWT of New York City, an initial ninety day contract.  According to a recent GAO report,[1] the Corporation negotiated a subsequent Master Service Agreement with JWT without first going through the bidding process.  Moreover, the Corporation's first substantive annual report, due out on May 15^th, has yet to be released to the public even though the Department of Commerce (Department) has been reviewing it for weeks.  For a company spending tens of millions in federal funds it is vital that such this information be made available to the public and Congress immediately.

In an effort to gain a clearer understanding of the operations of the corporation and its oversight by the Department, please provide the following:

1) All documents associated with the production of the Launch Party held at the British National Maritime Museum, including all costs associated with the event, menus, transportation, swag given to guests, invoices from contractors, and museum rental charges.

2) A comprehensive list of all Brand USA employees and Board members who attended the World Travel Market and Brand Launch Party at the British National Maritime Museum in London.

3) The salaries and benefits of the top five most highly compensated individuals employed by the Corporation.

4) An itemized listing of all expenses incurred by the Corporation since its founding current through the date of this letter.

5) An itemization of all cash and in-kind contributions made to the corporation current to the date of this letter.

6) Copies of all in-kind advertising contributions made to the corporation including the claimed value for the contribution by the Corporation.

7) In correspondence  dated December 20, 2011, March 2, 2012, March 15, 2012, and May 1, 2012 from Mr. Scott Quehl  at the Department of Commerce to Ms. Lauren Carrico or Ms. Wanda Fischer at the Department of Treasury, Mr. Quehl states, "the Department of Commerce has reviewed the CTP's request for payment of ... and associated documentation received ..."  Please provide copies of all documentation referenced in those letters.

8) On March 2, 2012 Ms. Laura Carrico at the Department of Treasury received a letter from Mr. Scott Quehl at the Department of Commerce stating "the Department of Commerce has reviewed the CTP's request for payment of $15,718,112 and associated documentation received February 1.   Our review concludes that the CTP has received qualifying amounts from nonfederal sources totaling $2,476,884. The Department of Commerce therefore recommends the transfer of $4,953,768 to the CTP. " Please provide all documentation associated with the review of this request for payment and an explanation of the rationale for the reduction in authorized payments.

9) The number of webpage hits to www.discoveramerica.com identified by country of origin.

10) A detailed and itemized breakdown of all the costs associated with the contract with JWT, including costs associated with retaining talent, the production of videos, and other multimedia items.

11) Copies of print advertisement's placed overseas by Brand USA and a listing of the publications in which the advertisements were placed or location of outdoor advertising placement.

12) For items 1, 2, 3, 7, 8, 10 please provide a short justification for the expenses and detail what results you expect from the expenditures and what metrics you will use to measure the success of the expenditures.

Thank you in advance for your prompt attention to these matters. I would appreciate receiving a response by no later than June 27, 2012. Whenever possible please provide documents and materials electronically.  Should you have any questions please do not hesitate to contact our offices.

Sincerely,