New documents reveal lavish spending at government-subsidized travel-promotion agency
Promoting travel to America can be expensive — especially if Uncle Sam is footing most of the bill.
Documents exclusively obtained by The Daily Caller show extensive waste and mismanagement at the public-private partnership Brand USA, a government-backed travel-promotion agency established in May 2011 under Travel Promotion Act of 2009 to encourage foreign travelers to visit the United States.
Some of the new organization’s recent expenses include $4,139 for 250 holiday cards, $3,592 for a holiday e-card and $2,449 for a ringtone version of the Rosanne Cash song “Land of Dreams,” which was created specifically for a sweeping Brand USA promotional campaign.
Also among the expenditures, according to the documents, are $2,700 for 26 sets of business cards and $50,252 for giveaway materials at the International Pow Wow trade show, which was held at the Los Angeles Convention Center earlier this year. The agency spent nearly $35,000 on Chinese-made water bottles for the event.
And Brand USA spent close to $1 million on its posh launch party in London last year, including $69,300 on freebies for attendees. Almost $50,000 went to neck wallets, and the organization dished out a grand total of $13,101 for umbrellas.
Brand USA has also paid out approximately $1 million in severance pay to eight terminated employees, the documents show. (RELATED: GAO report says U.S. is on “unsustainable long-term fiscal path”)
In October, the Senate’s top Republican waste hawks released a report, titled “Initial Investigation of Brand USA and the Department of Commerce’s Oversight,” which detailed some of the agency’s lavish expenditures.
But Brand USA, which received $2 from the government for every $1 it received in cash and non-cash contributions throughout fiscal year 2012, seems to have lacked leadership, in addition to frugality.
A comprehensive audit of Brand USA, produced by KTS Business Consulting and exclusively obtained by TheDC, painted a particularly unflattering picture of the agency’s management.
“Although The Brand USA has a mission statement, not one staff member was able to recite it,” the audit reads. “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. … Staff spends money without any checks and balances or funds tied to a budget.”
Anne Madison, a Brand USA spokeswoman, explained to TheDC that trade shows are an important part of promoting travel to the United States, and maintained that the agency’s expenses are reasonable.
“All expenditures for [the London] event went toward raising awareness of and inspiring travel to the United States, and are on par with any good marketing strategy to increase awareness, engagement and loyalty from those who significantly influence inbound travel to the USA,” Madison wrote in an email.
Madison insisted that 85 percent of the organization’s funding goes to marketing and programs to meet its international travel goals. And, citing internal Brand USA numbers, she claimed that “intent to visit” the U.S. has increased 12 percent in Canada, 14 percent in Japan and 14 percent in the United Kingdom since the agency’s launch.
Brand USA’s funding comes in part from a $14 fee levied on visitors to the U.S. from countries that do not require a visa for entry.
“The entire team at Brand USA is focused on and dedicated to pursuing and fulfilling [its] mandate,” she said. “In the process, we will be able to strengthen our economy and create hundreds of thousands of new jobs across a variety industries. Every 33 new international travelers that visit the United States creates one new job for America. That’s something we are proud to be a part of.”
But a former Brand USA employee, who requested anonymity, told TheDC the agency was not particularly concerned about keeping an eye on its expenditures. (RELATED OPINION: Why is there so much government waste?)
“The government side of spending was just not at the fore — like [we were not thinking], ‘Oh my God, what would someone say if we had spent this much money on something?’ That was not the first question,” the ex-employee said, noting that the agency was initially focused mainly on getting off the ground, rather than saving money.
The former employee added that Brand USA’s spending slowed somewhat when the government began asking questions, but still remained excessive.
One Senate Republican staffer told TheDC that Brand USA’s expenditures are “very troubling,” adding that the agency “will likely be a continuing concern to members of the Republican Conference.”
“The only folks who are going to be able to put a stop to the wasteful spending at Brand USA is the leadership of the Department of Commerce,” the staffer said. “Unless someone over there is willing to grab Brand USA leadership by the lapels and tell them to knock it off or we’re not sending you any more checks, this type of stuff isn’t going to stop.”