HONOLULU, Hawaii (6 Aug 2003) -- Hawaii's tourism bureau has spent hundreds of millions of dollars over the years to promote the Aloha State as an exotic destination where visitors can enjoy palm trees, hula dancers and tropical weather. But there's trouble in paradise these days at the Hawaii Visitors & Convention Bureau, a nonprofit private agency that receives most of its funding from state contracts. A scathing state audit released last month said the agency has "run amok" with public funds, handed overly generous severance packages to executives who quit, and made questionable arrangements for promoting the state. In addition, the bureau's director, who reportedly was earning close to $400,000 a year, resigned over allegations he violated the agency's rules by using bureau funds to pay for in-room hotel movies, speeding tickets and travel by relatives. "We want to be able to market Hawaii in a very positive light, and some of this news coming as a result of the audit is not that positive," said Senate Tourism Chairwoman Donna Mercado Kim. The Hawaii Tourism Authority, a state agency, added to the tumult when it announced it would sign contracts with four foreign marketers for the work the bureau had been doing in Japan, the rest of Asia, other Pacific islands and Europe. That still left the bureau with the biggest slice of the market, covering the U.S. mainland and Canada, as well as global convention business. Tourism officials insisted the change was an effort to revitalize the marketing of Hawaii abroad and had nothing to do with the audit or resignation of bureau chief executive Tony Vericella. The audit triggered separate investigations by the state attorney general and the tourism authority, which issues $35 million in annual contracts for promoting Hawaii. It also has stirred concern among state legislators who likely will launch their own inquiry. The audit accused the bureau of having "a blank check to spend state funds for self-serving purposes," citing huge severance pay given to executives who quit and questionable arrangements set up for others. | | One bureau vice president was also president of a Taiwan public relations company that was awarded a $242,000 contract to promote Hawaii, while the salary of another vice president was being paid by his former employer, Japan Airlines, creating an apparent conflict of interest. Les Enderton, interim head of the visitors bureau after Vericella's resignation, defended the bureau's actions. "I have not personally observed anything that could be construed as running amok from this organization," Enderton said. With foreign companies taking over the marketing contract for Asia and Europe, the Japan bureau is expected to close, and the future of Hawaii promotion offices in Australia, New Zealand, China, Korea, Taiwan and Germany also is in doubt. The governor expressed skepticism whether Hawaii's image can be effectively promoted with the breakup of the contract, and the visitors bureau is jockeying to continue to play a coordinating role. "We've worked for a hundred years to create the image of Hawaii that we want," Lingle said after the change was announced on July 25. "How do you maintain that consistency of image now that you have broken this up into five contracts?" Enderton acknowledged the challenges the agency faces in restoring public confidence and regaining its position as the official worldwide marketing arm for Hawaii. "Obviously, whenever your image is tarnished, you do your best to correct the factors that were responsible for that," he said. "In our case, our executive committee and our board of directors are working very diligently to ensure that internal controls are in place." |
