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Chick Urges L.A. to Redo Visitors Bureau Contract

October 18, 2002|Patrick McGreevy | Times Staff Writer

City Controller Laura Chick called Thursday for Los Angeles to renegotiate its contract with the Convention and Visitors Bureau, citing an audit that concluded that a lack of controls may have contributed to "extravagant" spending by the agency.

The final audit released Thursday was commissioned by Chick from a private consultant after The Times ran a series of articles on the bureau's spending, including luxury travel and entertainment costing as much as $3 million per year, paid for by the city-financed bureau.

At the same time, there has been a steep drop in the number of conventions booked in the city, and 48 have canceled in the last three years.

"Lavish and extravagant spending of taxpayer money must be a thing of the past," Chick said Thursday, adding that the current city contract with the bureau contains "broad and undefined objectives that literally make any expenditure related to Los Angeles tourism allowable."

In a letter to Mayor James K. Hahn and the City Council, Chick recommended Thursday that the city renegotiate its contract to set "measurable performance goals." The bureau was paid $16 million by the city in 2001 to bring conventions and tourists to Los Angeles. The sum represented about 65% of its budget. The rest came from industry dues and payments.

Chick said a renegotiated contract should include more oversight of spending, including a prohibition on the disproportionate spending of city funds on administrative overhead.

Bureau Board Chairman Alan Rothenberg said in a written statement that the nonprofit agency had begun implementing reforms and would consider the audit's additional recommendations.

"This audit will provide us with further guidance for reforms that are already underway," Rothenberg said. "Given the opportunity, these reforms will help make our operations as efficient as possible and attract more conventions and tourists to Los Angeles."

Rothenberg declined direct comment through a spokesman on the audit's conclusion that some of the bureau's expenses from industry funds "appear extravagant."

Those include Bureau President George Kirkland's $350,000 package of salary and incentives, which the audit noted is significantly higher than the $240,000 average provided to chief executives in other major bureaus nationwide.

The audit also questioned a $230,000 annual premium paid by the bureau on a $3.3-million life insurance policy for Kirkland.

Other extravagant expenditures, the audit said, included "luxury travel and meals."

In particular, the audit noted that the bureau had spent more than $250,000 on a dinner at the Dorothy Chandler Pavilion for event planners holding a convention in L.A. in 2000.

One document indicated that the retail value of the entertainment, food and planning had exceeded $1 million, but that many venders had donated services.

The bureau bill included $120,000 in food and alcohol, with the Patina Group handling the catering. There were 28 bartenders at the dinner. The party featured a Las Vegas-style show featuring the Blue Man Group, comedian Rita Rudner and singer Sheila E and her band.

Chick said there is a value in entertaining event planners who can bring business to the center, but she was uncomfortable with the amount spent.

"As city controller I have always believed we should err on the side of being conservative in spending on parties," she said. "This [party] is a little bit like show biz."

The bureau's executive vice president, Michael Collins, defended the party as necessary to "showcase" the city to the important event planners.

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