Opinion: Editorials

Tourism agency uses 'in kind' donations to milk taxpayers

|
Photo - Brand USA logo
Brand USA logo
Opinion,Editorial

Last August, Amtrak took more than $6,000 in Nationals tickets and donated them to a little-known federal agency called Brand USA. The agency was able to leverage that "donation" to claim $12,000 in taxpayer dollars, which become available only as a match to private donations.

In other words, taxpayers were paying Brand USA to have its board members watch Nats games from luxury seats. Did we mention that the vice chairman of Brand USA's board is also Amtrak's chief marketing officer?

This was reportedly par for the course for Brand USA, according to a new report by Sens. Jim DeMint, R-S.C., and Tom Coburn, R-Okla., who found Brand USA rife with cronyism and wasteful spending. Congress created the public-private partnership in 2010 with the ostensible purpose of promoting tourism within the United States. Senate Majority Leader Harry Reid, D-Nev., was a big supporter. The Commerce Department picks its 11 board members -- many of whom are big wheels in the tourism and hospitality industries. Many are also Democratic donors as well.

The agency is funded by a $10 tax on all foreign travelers. One might think that a more effective means of promoting tourism would be not to penalize people who visit the U.S. Why exactly the tourism industry needs federal help to promote itself in the first place is not clear either.

What the senators' report does make clear is that the agency has been used to provide a series of lavish perks to its top officials and that these perks have been used to justify further taxpayer funding.

Here's how it worked: Brand USA can draw up to $100 million annually from the government provided it gets one dollar in private donations for every two federal dollars. That sounds reasonable until you realize that by law up to 80 percent of those private donations can be noncash "in-kind contributions." Thus, $6,000 in "free" Nats tickets put taxpayers on the hook for $12,000 in funding for Brand USA. Other "in-kind" donations to Brand USA include $10,000 for a first-class trip to London for its board members (though the Commerce Department balked at some of the charges) and $215,000 for single party at a London museum. How any of this boosts tourism to the U.S. is anybody's guess.

Brand USA also engaged the white-shoe law firm of Patton Boggs. Its $84,800 bill to Brand USA includes multiple references to lobbying-related work - despite the fact that the agency is legally barred from lobbying.

In any event, Patton Boggs was kind enough to designate an additional $28,000 in legal work as an in-kind donation to Brand USA. So the agency was able to leverage that to claim $56,000 more in taxpayer dollars, which covered more than half the remaining cost of the agency's apparent efforts to lobby for even more taxpayer dollars in the first place. Neat trick, that.

Perhaps the most outrageous thing the senators uncovered is that Brand USA tried to pass off independent news stories about the agency as in-kind contributions worth $5 million. The Commerce Department rejected that one, but nice try.

To date, Brand USA has raised $59 million in in-kind contributions -- which means taxpayers have ponied up a minimum of $118 million as a reward for this sort of book-cooking. It's about time this agency was abolished and tourism-related businesses started buying their own ads.

View article comments Leave a comment