The Act specifies that Brand USA can draw from this fund if it receives matching donations from the private sector. In 2012 Brand USA received two dollars from the Treasury for every private dollar it collected and one dollar from the Treasury for every private dollar in subsequent years. The Act allows only 20% of the donations be received be in cash - the remainder in in-kind donations.
Unfortunately, this effort has been an economic boon only to those associated with the 'public-private' company. The Daily Caller reports it obtained documents revealing "extensive waste and mismanagement at the public-private partnership".
The Washington Free Beacon reports in its article, “The Cronyism Board Tourism Board Stacked with Obama Cronies” that numerous Brand USA Board members were 'heavy' contributors to President Obama and Democratic campaigns. Documents show that many members of the Board of Directors of Brand USA are also significant cash contributors to the corporation. Of the eleven members of the board, eight have made cash contributions to the corporation. The board members were appointed by John Connor, director of the Office of White House Liaison at the U.S. Department of Commerce. Mr. Connor led Obama’s LGBT outreach efforts in the northeastern U.S. during the 2008 presidential campaign.
An October Congressional report, “Initial Investigation of Brand USA and the Department of Commerce’s Oversight,” detailed some of the partnership's unusual activities. And KTS Business Consulting performed a comprehensive audit of Brand USA the agency’s management.
According to the audit, “Although The Brand USA has a mission statement, not one staff member was able to recite it.” “Furthermore, a majority of the staff did not have any idea what the mission was. … It became very clear that The Brand USA needs a strong vision. Staff’s responses were all varied, and it identified that there is not a consensus on the direction of the organization." Further, Brand USA "[s]taff spends money without any checks and balances or funds tied to a budget.”
The Report highlights serious concerns about how the federal matching funds were spent and asserts abuses by Brand USA in its pursuit of unjustified federal funds, and alleging Brand USA has refused to fully respond to Congressional inquiries.
The October 1, 2012 deadline (when “donations” to Brand USA were reduced to a one-to-one value) created an urgency at Brand USA that led to numerous questionable donations.
Amtrak donated $10,000 in cash, in addition to train tickets, corporate information technology support, and 22 luxury baseball seats. These weren't just good seats, but located in the 'Lincoln Suite'. Forbes.com reported, “[t]he Lincoln Suites, starting at $300,000 per year, include access to the private Stars and Stripes membership club, a private entrance off the main concourse, and inside the suite, marble countertops with an induction heating range to keep catered food warm.” How does a luxury night at a baseball game further Brand USA’s mission?
Amtrak defended its contributions, stating they originated from ticket revenue; however, Amtrak's ticket revenue is not easily distinguishable from federal taxpayer funds provided to the company - currently, $1.5 billion annually. Essentially, Brand USA received additional federal funds from Amtrak.
Brand USA also attempted to collect over $10 millions dollars in federal funds for the market value of advertising it received free of charge from newspaper articles and television interviews, and the value of time spent by the company's Chairman. A 2 1/2-minute interview with Travel Channel International was valued at $4.9 million by the company; and, an interview with Eurosport was given a value of $272,172. A $4.9 million donation alone would have netted the company almost $9 million in federal funds.
Board members also inflated 'expenses' as donations. One trip to London by Board member, Randy Garfield (Disney Destinations), listed the total cost of round trip airfrare from Orlando to London as $10,037.60, although the roundtrip direct flight on British Airways from Orlando to London was $1,951.92. Tom Klein of Sabre Holdings, listed a $379 in car fare between meetings on October 5, 2011, and $95 on November 11, 2011, with hotel charges of $365. The fare from Union Station to the Capitol Hilton was $13. The distance from the Corporation for Travel Promotion to Reagan National Airport is 5.5 miles, and taxi fare is $24. And, the General Services Administration permits a maximum per diem for lodging in Washington D.C. of $183.
Fortunately, the Department of Commerce refused the above 'donations'.
Brand USA is less than two years old and has a spending record that rivals any government agency, including:
- $1 million (+/-) on the London launch part in 2011, including $69,300 on freebies, $17,000 for the room, $50,000 for neck wallets, and $13,101 for umbrellas
- $4,139 for 250 holiday cards
- $3,592 for a holiday e-card
- $2,449 for a ringtone of Rosanne Cash's song “Land of Dreams,” created for a promotional campaign
- $2,700 for 26 sets of business cards
- $50,252 for giveaway items at the 2012 International Pow Wow trade show, including $35,000 on Chinese-made water bottles for the event
- $1 million (+/-) in severance pay to eight terminated employees
Chief Communications Officer, Anne Madison, insists that 85% of the organization’s funding is spent on marketing and programs to meet its goals. Madison claims an increase of 12% for Canadians' “intent to visit” the U.S., 14% for Japanese, and 14% in the United Kingdom since Brand USA's launch. However, actual numbers to prove such increases are not accessible. What value does 'intent' have?
Brand USA was established to increase tourism and create jobs: a proposal which would have meager economic impact, at best. It seems the only jobs it has created is for those who are involved with the partnership.
I submit - once again - responsibility and accountability are non-existent at the federal level these days.