Wednesday, May 11, 2011

Do's and don'ts in the land of the Free

In Tim Newman's world, you can put away that wallet. The tickets are comped and the drinks are free. Somebody always picks up the check.

It’s a world of corporate tents and arena suites, a world some of us get to see sometimes, if a friend of a friend shoots us an invite. But it’s fun when it happens, because who doesn’t like getting stuff for nothing?

Free is the fuel that revs the hospitality world. It’s what clients expect in the tents at big events. It’s what event organizers expect from the cities that woo them. And it’s where Newman, head of the Charlotte Regional Visitors Authority, excels.

Newman is tasked with bringing visitors and events to the arenas and convention centers the CRVA runs. And while some might debate how much our city wants or needs showpieces like the NASCAR Hall of Fame or 2012 Democratic National Convention, this much is true: Newman gets Charlotte things that other cities want.

He does it, in part, because he knows the power of Free. Take a peek at the CRVA’s expenses, and you’ll see some fine wooing – concert tickets and lavish parties for people who might help steer something to Charlotte someday.

It’s a necessary but sometimes unseemly endeavor, which is why some cities set up their CVRAs as private nonprofits, which have looser rules and harder-to-find financial statements. In Charlotte, however, the CVRA is public, and right now it’s a public mess.

The Observer, in recent weeks, has told you about some ethical iffiness at the tax-supported CRVA, including most recently how Newman has graced dozens of Charlotte business leaders, public employees and CRVA board members with gifts. Among the eyebrow raisers: $4,600 worth of tickets to see the New York Yankees.

Newman defends those gifts, saying they help people in Charlotte get enthused about Charlotte, and that’s good for everyone.

That’s the problem with Free – it’s easy to rationalize. Sure, it’s Public Employee 101 that you don’t take gifts from people who want to influence your decisions. But what if those freebies are coming from the chief of a public body, who just wants to say attaboy?

And if you’re a CRVA board member, what’s the harm in using the CRVA suite for a Bobcats game or concert? Board member Anthony Lindsey did so out of duty. He told the Observer he wanted to see how the arena worked, and he did some thorough investigating, using 44 tickets in two years.

Now, board members have concluded it might be a good idea to look at exactly how things work at the operation they oversee. They’ve hired a consultant – PricewaterhouseCoopers – for $25,000 plus expenses to report on how CRVA compares with everybody else operating out there in the Wild West of hospitality.

“We’ve got to know what the rules are,” said board member Geoff Durboraw on Wednesday, at a CRVA operations committee meeting. “We can’t come to you and tell you that you broke a rule if we don’t know what it is.”

Might that be something the board would want to know, say, back in 2004, when the CRVA was formed?

The board will provide PricewaterhouseCoopers with everything from financial statements and code of ethics to the employee newsletter. PricewaterhouseCoopers will get back to the board in mid-June, a remarkable turnaround for a critical report, which might make you wonder if this is one more check that shouldn’t have been written.

Because the CRVA already should know what it shouldn’t be doing.

You don’t offer public officials and employees gifts for doing something that’s part of their job.

You don’t allow board members to accept freebies from the people they need to supervise and, perhaps, discipline.

What you do is remove the temptation of Free. Because in Tim Newman’s world, someone actually is picking up the check.

That somebody is us.

17 comments:

Anonymous said...

PwC is in bed with the CRVA. Can't wait for that "unbiased" report.

pstonge said...

Good morning, all. We've just made a little switch on charlotteobserver.com -from the electronic version of my column that appeared in today's Observer to this blog.

The column is the same, but if you made a comment earlier this morning, it's still on that other file. Please feel free to repost it here and join the discussion.

Thx...

Peter

pstonge said...

Anon, 8:33: The CRVA board is paying PwC, so that certainly can color the relationship a little. I think the board really would like to hear about best practices throughout the industry, but I'm not sure PwC is the best place to go for a thorough look at how other orgs handle policies and ethical considerations. PwC's strength is market analysis - "Here's why you need a bigger convention center - not the issues CRVA is dealing with now.

Peter

Anonymous said...

My question is who did Tim Newman piss off in the uptown crowd? All these articles about Newman lately seem a little odd.

Anonymous said...

This mess is the city council's fault totally. The appointments to the CRVA board are solely political and have never been designed to engage competent business people. Derick Close is on there because he supports Democratics, as do most of the people on this board. If you analyze the people the city council has appointed, who has the MBAs or critical business experience to monitor a multi-million dollar enterprise. This board has just been "yes men" handpicked by the city council to accept gifts (in some cases in exchange for political contributions). I would love to see the Observer list every CRVA board member, their background, political leanings and political contributions. An article like this would be very telling about how the city council works. I'm not holding my breath because this would fall under the category "reporting".

Bill said...

Thanks, Peter! Great observation and commentary. I question why an independent, unbiased audit isn't a requirement.

Anonymous said...

What does the New York Yankees have to do with Charlotte?

Anonymous said...

Mr. Newman finds it awfully easy to tell us that all of these things he does makes it better for all Charlotteans. That simply isn't the case, and not everyone wants us to become another big nasty city. There are plenty of those already, and thats where we are headed. Maybe thats why he moved his family to SC.

IRA said...

Humpy Wheeler's comments in todays Observer Forum pretty much defines what will happen after the unbiased audit report comes out in June. Hit Tim Newman with the fly swatter a few times and tell him to be more careful next time and not get caught. After all Charlotte is a big city, and Tim's way is how big cities do promotion.

Anonymous said...

$25,000 dollars to PWC for consulting is nothing - I guess they aren't looking for a very thorough report.

discourser said...

I entertain clients on the company dime quite a bit. I realize that my experiences may not quite equate, but I do feel that someone needs to express the other side of the coin.

Back in the Hornets days, I was responsible for a skybox for 1/4 of the games. Yes - it was hoity-toity with high-end food and a bow-tied waiter ready to serve whatever you wanted to drink and a private bathroom to boot. The ticket prices and the amount spent on food and drinks would make a person drop their jaw. For me, though, it wasn't really fun. I would much rather have been out in the regular seats enjoying the game dressed in a t-shirt and jeans.

Where I currently work, we give away sports tickets and take people to very nice restaurants. It is an expression of appreciation and good will.

These types of events give you a chance to get to know your clients in a closer way than just business as usual on the phone. Since you are hosting them, they feel as though they must talk business with you for a while. You actually do usually get more business because of these affairs which more than justifies the costs.

Yes, I have some friends who are jealous of the things I do on the company tab. But they have no idea what it is like to take four clients out for dinner and drinks that speak little to no English. Or how it feels to listen to bigoted, ugly, or sexist remarks and having to keep your mouth shut. Or how you HAVE to take people out in the evening or on weekends when you would much rather be home with the family sitting on the couch.

Nothing is ever REALLY for free. There is a cost associated in one form or another.

James said...

I think most understand the need to wine and dine the occasional big time client that can bring some major activity to Charlotte. What people have a harder time understanding is why these govt employees are wining and dining each other apparently just to say "you are great" or whatever made up excuse they are now making.

Also, regardless of everything else, the fact this group can not accurately account for who went to what event and why is even worse. This indicates institutional malfeasance at a level that would get most of the people responsible for maintaining internal controls over how their funds are spent fired in the private sector.

When I read that they "don't know" who used certain tickets that clearly tells me that they do know but that they aren't willing to say because they have no reasonable excuse for who used them. It's time these pigs were removed from the trough and this organization was forced to start over with some noncrooks running things.

Ideally, some noncrooks who aren't in the pocket of the crooks uptown.

Anonymous said...

Peter,

I realize it's called the Charlotte REGIONAL Visitors Authority, but it sounds like Charlotte is on the only public entity footing the bill. Is the Anon 9:37 comment accurate that the person in charge of selling Charlotte to outsiders now lives in SC? To me, employing a person to sell Charlotte who refuses to live in Charlotte sends a poor message about Charlotte. Further, perhaps Mr. Newman would care more about the "freebies" he offers if it were his tax dollars buying those gratuities.

Thanks.

Anonymous said...

discourser, you may entertain clients lavishly, as does Mr. Newman. However, would the private entity for whom you work allow you to expense lavish dinners and entertainment for the folks who decide your salary and bonus? The CRVA has an advisory committee responsible for giving feedback to the CRVA's leadership team on "its success." Parks and Rec and Johnson&Wales are members of this advisory committee. Think that might have something to do with Newman's providing them with expense entertainment? I wish the Observer would tell us how many other members of this advisory committee Tim Newman has treated in the past fiscal year. How about it, Peter?

Anonymous said...

This might be an interesting article but quite frankly it's much to long to keep my attention. Can you post a cliff notes version?

Anonymous said...

In all this discussion, the practical is sometimes forgotten. Having a suite in the Arena as a necessity for the CRVA provides literally hundreds of tickets to be used and allocated annually. Having had access to one in my own business, it is nearly impossible to put all of those to use for every game and concert with the perfect prospects. This means that "extra" tickets will be available for other use -- with area business, civic and government leaders on a regular basis.

We have to be careful not be so idealistic in addressing this situation. Sure, there may be some opportunities for improvement and additional controls/ accounting, but let's not wreck the CRVA, our success as a tourist/convention destination or people's careers just to make headlines.

pstonge said...

Hi all,

Thanks for the good thoughts today.

Anon, 12:10: I'll pass your question on to Steve Harrison, who has been one of our reporters doing such a fine job looking into CRVA's books.

Anon,12:21: You make good points about the value of the CRVA - and I hope that, too, came across in my column. The problem, however, with giving even "extra" tickets to board members is the potential conflict that creates. The board supervises Tim Newman and could be called on to discipline him.

Remember, though, that the stories the Observer has written has involved more than unused tickets. Newman has purchased tickets for the board when the CRVA suite was filled. And gifts to Charlotte public officials have involved more than tickets.

Thanks,

Peter