The Cronyism Board

Tourism board stacked with Obama cronies

May 24, 2012

The government-appointed board behind an aggressive overseas advertising campaign to promote tourism to the U.S. is little more than a corporate welfare program and a slush fund for wealthy Democratic donors, critics say.

Brand USA, formerly known as the Corporation for Travel Promotion, is a public-private partnership established by Congress to promote the United States abroad. It is governed by an 11-member board. John Connor, director of the Office of White House Liaison at the United States Department of Commerce, appointed the board members. He led Obama’s LGBT outreach efforts in the northeastern U.S. during the 2008 presidential campaign.

All of the board members Connor has appointed have donated to Democrats and Democratic organizations almost exclusively, if they have donated at all.

Brand USA board chairman Stephen Cloobeck is the CEO of the Las Vegas-based Diamond Resorts. Cloobeck donated at least $490,045 in political contributions since 2007, with only $9,700 going to Republicans. In 2011, Cloobeck gave $100,000 through one of his companies to the Majority PAC, which is run by operatives tied to Senate Majority Leader Harry Reid, according to the Las Vegas Sun.

In a YouTube video, Reid called the Travel Promotion Act "a wonderful piece of law that I was able to get through the Congress to help Nevada."

Brand USA board member Randy Garfield is executive vice president of worldwide sales and travel operations for Disney Destinations and the president of the Walt Disney Travel Company.

Garfield donated at least $4,720 to the U.S. Travel Association PAC, which spent $62,000 to Democrats in the 2010 election cycle—almost 40 percent more than on Republicans.

Brand USA Board Member Daniel Halpern is the president and CEO of Jackmont Hospitality. In the 2012 election cycle alone, Halpern has bundled at least $500,000 in donations to Obama and personally donated $54,555 to Democrats and Democratic organizations, according to the Center for Responsive Politics.

Brand USA Board Member David Lim is assistant vice president of Amtrak. The federal government heavily subsidizes Amtrak: It received $1.5 billion in federal appropriations last year, in addition to $1.3 billion in stimulus funding in 2009.

Brand USA recently drew fire from Sen. Jim DeMint (R., S.C.) for sending its board members to England for a business meeting. That business meeting only lasted two hours and was followed by a VIP launch party. Video of the party was later put on the organization’s Facebook page.

Sen. Tom Coburn (R., Okla.), who voted against Brand USA’s creation in 2009, also criticized the group for the England meeting.

"Every American, especially those who have been out of work for months, should be asking why their taxpayer dollars should subsidize conferences in London for board members of the Corporation for Travel Promotion," a spokesperson for Sen. Tom Coburn said in a statement to the Free Beacon. "This operation is about self-promotion, not travel promotion."

Brand USA insists no taxpayer dollars were spent on the event. While 50 percent of Brand USA’s budget must come from private funds, the rest is raised through a $14 tax on foreign visitors.

Free-market critics of the board contend the government should not subsidize corporations who already spend billions annually on attracting foreign business.

Citizens Against Government Waste spokeswoman Leslie Paige said tourism promotion should be left to the private sector. Brand USA is "easily poised to become another unnecessary corporate welfare offering," she said.

"The whole Brand USA endeavor looks like another excuse to create a new centralized travel bureaucracy within the Department of Commerce that will do what all bureaucracies do: Grow and require more revenues," Paige said. "Furthermore, private-public partnerships of this sort often evolve into corporate welfare giveaways to profitable corporations who don't need the money and can easily subsidize self-promotional activities on their own."

Andy Roth, the vice president for government affairs at the Club for Growth, also said the government has no business subsidizing corporations’ travel advertising.

"If this is such a good idea, then the companies should be doing it on their own, even if it's not costing the taxpayers money," Roth said in an interview with the Free Beacon. "The government should be creating conditions to allow the private sector to flourish, but it shouldn't be involved."

The Congressional Budget Office (CBO) projected in 2009 that the program would increase revenues by $135 million over 10 years and reduce direct spending by $290 million, for a combined budget deficit reduction of $425 million.

However, free-market advocates continue to say the corporation is a drag on the economy even though taxpayers are not directly subsidizing the program.

"Proponents of the bill say that it's not a tax increase because only foreigners will pay it. But the European Union and other governments have already announced that any TPA fee will trigger reciprocal fees for American travelers to their countries," DeMint wrote in a 2009 op-ed, when the legislation creating Brand USA passed. "Meanwhile, every $10 Washington takes from foreign tourists is $10 those tourists won't spend in local restaurants, shops, and hotels. This act is designed to help big businesses at the expense of small ones."