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The Honolulu Advertiser
Posted on: Sunday, June 29, 2003

EDITORIAL
Visitors bureau audit cause for heads to roll

We'll put the caveat right up front: It's still only a draft.

Perhaps some misunderstandings will be explained away, resulting in a more benign final state auditor's report on the Hawai'i Visitors and Convention Bureau.

But if the stunning allegations contained in the draft hold up, then radical measures must follow at the HVCB.

The audit lists questionable spending, inadequate fiscal controls, conflicts of interest and a lack of focus. It suggests a culture where public money is diverted to personal use, public resources diverted to self-serving ends, and an atmosphere in which oversight by the Hawai'i Tourism Authority is lax or missing.

In particular, misuse of public funds by Tony Vericella, the president of the HVCB, for what the audit said were personal expenses is unacceptable. This finding should be reviewed by the attorney general and the city prosecutor.

The audit findings suggest that Vericella's ability to continue in his delicate position as a privately compensated executive charged with spending large amounts of public money may be beyond repair.

The reports of conflict of interest — e.g., an HVCB vice president who also served as president of a Taiwan public relations company awarded a $242,000 HVCB contract — are, if sustained, shocking abuses of the public trust.

They suggest a pattern of behavior at the HVCB that may well warrant an end to the state's relationship with it, followed by a serious study of exactly what it is the HTA is seeking to accomplish, how results can be measured, and who might accomplish those ends within — for a change — exacting standards of accountability.

What has been alleged at the HVCB may well be the tip of an industry iceberg. Many in the tourism establishment have quickly begun to circle the wagons to defend a mutually beneficial and incestuous relationship whose public benefit has never been entirely clear. The industry's eagerness to accept Gov. Linda Lingle's invitation to discuss public business behind closed doors is just the latest indication of a relationship that needs comprehensive review.

"You shouldn't throw the baby out with the bath water," said Outrigger CEO David Carey, but it's never been easy to be sure that anything in that tub is worth the $33 million a year it costs.

None of this is meant to argue against the importance of marketing Hawai'i and our visitor industry to the rest of the world. It is a competitive business and, if we're not in there pitching, we will lose to someone else. And there is also no doubt that the HVCB (formerly the HVB) has a wealth of experience in this area.

So we'd like to think the auditor's draft findings are wrong or exaggerated. But the picture at HVCB portrayed in the auditor's draft suggests an industry that has been making merry at the public trough for too long.

Tourism executives must come to understand that they will not correct public perceptions by papering over malfeasance at the HVCB with, as Carey puts it, "performance adjustments."


Correction: David Carey's name was misspelled in a previous version of this editorial.