This article first appeared in the St. Louis Beacon, Sept. 21, 2011 - Missouri state Auditor Tom Schweich today sharply criticized the state Tourism Commission's financial practices in an audit, including the $3.21 million that the panel spent over two years on the now-defunct bicycle race, Tour of Missouri.
The audit also faults Lt. Gov. Peter Kinder, who sits on the commission, saying he failed to disclose that he also was chairman of Tour of Missouri Inc.
The staff for Schweich reported in the audit released this morning that the commission doled out money to the bicycle race "without defining what costs were allowable, requiring a list or documentation of actual expenses or providing for penalties if Tour of Missouri Inc. did not follow the contract terms."
The audit also faulted the commission for:
- Funneling money through its advertising agency to send to other vendors;
- Failing to require the agency "to provide annual reports or weekly status reports as is mandated by its contract."
- Lacking a "conflict of interest policy for its members, and three commission members, including the lieutenant governor and the current chairwoman of the commission, (who) took part in funding decisions benefiting entities with which they were associated."
The criticism was noteworthy since Kinder has been a close political ally of Schweich, a fellow Republican, and was one of the auditor's biggest donors in his successful 2010 bid for office.
Because of that relationship, Schweich had recused himself from being involved in the audit, although Schweich officially issued it.
The Missouri Democratic Party swiftly took note, contending that the audit's findings show that Kinder broke the law by failing to disclose to the commission his ties to Tour of Missouri.
Kinder has been expected to challenge Gov. Jay Nixon, a Democrat, in 2012.
The state Democratic Party called for Kinder "to release all financial documentation detailing his relationship to Tour of Missouri Inc., including reimbursements, invoices, receipts and expense reports, so that the full extent to which he benefited from the corporation's spending can be known."
"Once again, Peter Kinder was caught taking money from Missouri taxpayers and using it for his own personal purposes," said Caitlin Legacki, senior spokeswoman for the Missouri Democratic Party. "There's a reason that Peter Kinder didn't want Missourians to know he chaired this corporation. First, Kinder used his public office to funnel millions of tax dollars to a corporation, then as the chairman of that corporation, he spent that money to facilitate his lavish lifestyle of fancy parties and expensive meals. This is the kind of thing that makes Missouri taxpayers sick to their stomachs. Kinder needs to come clean and tell Missourians exactly how much of their tax dollars were spent so he could parade around the state attending fancy parties."
As a examples, the party cites the Tour of Missouri spending on "at least $40,000 on alcohol and lavish parties" in Kansas City and St. Louis. The night of the St. Louis event, the party notes, Kinder stayed in a local hotel at state expense.
Meanwhile, Kinder's allies have countered by citing old news accounts in 2008 that identify Kinder as the Tour of Missouri chairman. They contend that the commission was well aware of his dual role.
Ad Agency, Nixon Flights Also Faulted
Schweich's audit did not ignore Nixon, though, and faulted the Tourism Division because it "paid more than $3,000 in fiscal years 2009 and 2010 for travel relating to the governor's office. The audit questions the appropriateness of these costs because the travel did not always clearly benefit the division and in most instances no division employees were on the flight," Schweich's staff wrote.
"As previous audits have indicated, paying the costs of other state agencies like this circumvents the appropriations process," the audit added.
The audit also determined that the commission and the state Tourism Division budgeted more than had been allocated in fiscal years 2010 and 2011, using money from the following year to make up the difference. Schweich wrote that " the commission's plan to spend more than it expects to have available in a year does not make financial sense, especially when additional budget cuts could occur."
Overall, though, the audit's sharpest criticisms dealt with the division's ad agency and Tour of Missouri, a favorite of Kinder's.
The bicycle race ended after Nixon balked at spending more state money on the event, saying it should be up to private entities to fund the then-annual event. Kinder maintained that the bicycle race -- which attracted some top talent -- brought in far more tourism dollars than the state spent. The audit did not examine that aspect of the race.
Said the audit: "Of the $2.2 million, $1.54 million was passed through to Tour of Missouri Inc.; $480,645 was passed through to subcontractors for website services; and $141,340 was passed through to vendors for conferences, research and other services. The advertising agency had no involvement in most of these services, so it is unclear why it was used to pass monies through to these other vendors."
As for the ad agency: "Rather than paying some vendors directly, the division paid its advertising agency a total of $2.2 million in fiscal years 2009 and 2010 which was passed through to other vendors, reducing the transparency of who actually received the funds," the audit said.
The audit noted that the Tourism Division "also paid the advertising agency an additional $586,056 for website development services, which were not within the scope of the original bid, without soliciting bids or showing the rates were competitively established."
Overall, wrote Schweich, "Division contracts do not allow for adequate oversight of funds, and the division has not enforced contract terms."
