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Cotton Industry Promotions Questioned

Agriculture: Two agencies spend millions to boost fabric's image, but expenses for swank parties and topless clubs are drawing scrutiny.


WASHINGTON — On a chilly December night last year, gray-caped doormen stood sentry as more than 400 guests arrived in limousines and taxicabs at New York's Metropolitan Museum of Art for an annual black-tie event dubbed "A Celebration of American Style." A string quartet struck up at the bottom of the marble grand staircase when the guests ascended for a private showing of the museum's Edgar Degas exhibit, an elegant start to an evening of cocktails, dinner, fashion modeling and gifts that cost more than $450,000. The cause: cotton.

The atmosphere was considerably different at Thee Dollhouse, on the outskirts of Raleigh, N.C., part of a chain that claims it was voted the "No. 1 gentlemen's club in America" and features dancing by 100 topless women on tabletops, next to customers' tables or in showers. But over 18 months, at least $8,500 in adult entertainment was charged to the cotton industry at places like Thee Dollhouse--including $2,915 for what is listed on bills as "personal services."

The Cotton Board and Cotton Inc. collect $60 million a year from cotton farmers and importers under an act of Congress to promote the sale and use of cotton by Americans and in foreign markets. But the two quasi-public bodies spend the money with little government oversight or accountability.

Many Americans would instantly recognize the advertising campaigns underwritten by the Cotton Board and Cotton Inc.: the cotton-boll logo that appears on thousands of items, from towels to T-shirts; the slogan "Cotton, the fabric of our lives"; and sponsorship of Thursday's Macy's Thanksgiving Day parade. But some cotton industry officials question whether the marketing efforts actually contribute to higher cotton sales.

According to documents and interviews, the pot of money collected from farmers and importers--which has nearly doubled since 1991--has helped pay for the annual event at the Met, the evenings at Thee Dollhouse, and whatever else Cotton Board and Cotton Inc. officials deem will result in higher sales of cotton. This has included golf outings at expensive resorts, cars and country club memberships, large quantities of alcohol for entertainment, a $19-million headquarters building and a $215,000 consulting contract for a former top Cotton Inc. official.

Many of these expenses have not been clearly disclosed in company books, making it difficult to determine how Cotton Inc. and the Cotton Board spend their money.

"When there's so much money involved and no supervision, it's a scandal waiting to happen, if it hasn't happened already," said Laura E. Jones, executive director of the U.S. Assn. of Importers of Textiles and Apparel and an alternate member of the Cotton Board. "It's like a spendathon."

The Agriculture Department, which oversees the cotton-promotion program and 11 similar programs for products such as milk, pork and beef, has repeatedly failed to exercise its authority and determine how the money is spent, even in the face of critical reports from its own inspector general and the General Accounting Office.

In 1996, the inspector general criticized the annual party at the Met as wasteful and ineffective, but to no avail. Last month, the inspector general even recommended that the milk program, with its widely recognized milk-mustache ads, be suspended because of millions of dollars in expenses it questioned. The Agricultural Marketing Service, the USDA arm in charge of the promotion programs, rejected the recommendation.

"AMS has oversight of all these boards," said Roger C. Viadero, the inspector general. "How do they let it go on?"

Cotton Inc. and Cotton Board officials defend their stewardship of cotton producers' and importers' money, saying their expenditures were necessary and effective and helped to increase the demand for cotton products. Officials said the party at the Met, for example, is an opportunity to thank business executives who buy cotton and to network with them in the fashion industry's capital. They also cited the funding of dozens of research projects that they said studied how to make cotton stronger and more shrink-resistant.

"The program has been deemed to be a tremendous success over the years," said J. Berrye Worsham, chief executive of Cotton Inc. "Our job is very simple: To improve the demand and profitability of cotton through marketing and research. That's what we do."

Cotton Board and Cotton Inc. officials also said they have improved budgetary guidelines and have taken steps to curb entertainment expenses in response to the inspector general's concerns.

This week, after inquiries by the Washington Post, Secretary of Agriculture Dan Glickman asked Michael V. Dunn, undersecretary of agriculture, "to conduct an independent review of the oversight process of all the promotion boards," said Tom Amontree, a USDA spokesman.

"I am open to recommendations for us to consider regarding our oversight responsibilities," said Enrique E. Figueroa, who became head of the AMS about a year ago. "We don't think we run a perfect system here. . . . We will look at concerns seriously."

The Cotton Board, anticipating the publication of this article, earlier this month distributed a five-page list of "talking points" to board members and other cotton industry officials in case other news organizations make inquiries. Cotton Inc. also has sent a letter to its directors, saying it had consulted with Ogilvy & Mather crisis-management experts on ways to inspire a letter-writing campaign after the article appears.

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