COMMENTARY
Tourism funding a shell game
By Ed Greaney
Correct me if I'm wrong:
The Hawaii Tourism Authority was set up by the Legislature to execute the state government's contract with the Hawai'i Visitors & Convention Bureau for tourism promotion.
This contract is the principal source of the bureau's financing. The authority is located for "administrative purposes" in the Department of Business, Economic Development & Tourism, the agency that previously handled this chore for the executive branch.
The authority's members are gubernatorial appointees subject to Senate confirmation, and the majority must be experienced in tourism promotion. The authority members, in turn, appoint an executive director to do whatever heavy lifting may be required. This person need not have tourism experience.
The salary for this position exceeds that of the director of the department where the authority is placed; for that matter, it exceeds that of the governor by a healthy amount. (The incumbent in this job previously administered the entire state Department of Transportation i highways, harbors, airports i for way less salary.)
The authority's power, then, is to allocate money earmarked by the Legislature for tourism promotion (and to cut down on the practice of individual events with a tourism flavor lobbying at the Legislature for state support). This allows the Legislature to avoid line-item ticketing within the broad promotion category.
Yet the authority is inhibited by the fact that since time began, the state has only contracted with the Hawai'i Visitors Bureau. Discretionary decision-making in the task of allocating promotion money is limited to negotiating contract language. At the end of the day, there will be a pass-through contract essentially similar to those before, going back eons.
Thus the authority appears on its face as a most elaborate, cumbersome and hugely expensive machine to execute and administer a comparatively simple mission. (Doubtless, I fail to see the "big picture," but I'm concentrating on essentials here.)
And how does it work in practice? Why, it draws flack from lawmakers and their watchdog auditor for "conflicts of interest" — inherent in the legislation — as well as the inevitable issues involved in commingling public and private money.
Nor does it do much of a job of contract monitoring, judging by the auditor's appalling draft report on the bureau.
It was almost 40 years ago when a similar situation blew up regarding the state's ties with the bureau. Lax fiscal practices at the bureau nearly bankrupted its advertising agency. DBED's predecessor insisted on a separate contract for advertising between all three parties in order to assure both timely payment to — and whistle-blower protection for — the agency.
The most minimal amount of financial discipline proposed by the state was strenuously resisted until new leadership came in and the bureau's board hired K. T. Tom, a retired federal accountant, as vice president for finance and administration. During his tenure, the inherent issues surrounding the conflicting sources of bureau income were resolved satisfactorily or held to a minimum.
However the state-bureau relationship may have changed over the years (I doubt it has changed much), it remains essentially a shell game played by the bureau regarding which shell has the pea in terms of public-private money.
Maybe this time around, something can be done about it.
Ed Greaney of Kailua formerly worked for the state Department of Business and Economic Development.
