Lt. Governor Peter Kinder voted to give $2.5 million in taxpayer money to the non-profit company running the Tour of Missouri bicycle race -- even while he served as the company's chairman.
And that's a conflict of interest, says the state auditor. In a newly released audit of the Missouri Division of Tourism, Missouri State Auditor Thomas Schweich
takes the tourism division -- and Kinder -- to task in a number of areas.
Kinder served as chairman of the Tourism Commission, which administers the state tourism division's $20 million annual budget, until November 2009. (He is still a member.) But though Kinder has blamed Democrats
for some of the other bad headlines about him this year (pantless party
, anyone?) it's gonna be much harder to do so in this case: Auditor Schweich is a fellow Republican.
The audit criticizes the commission for spending more money than it has,
failing to properly oversee its contractors and paying its advertising
agency large lump sums that were then "passed through" to other vendors
-- an action that the auditors believe reduces transparency.
But it's the Tour of Missouri that seems to take up the most space in the audit.
The bicycle race was held from 2007 to 2009, drawing elite racers from all over the country. It was considered Kinder's pet project -- and, financially, a big success. (Organizers claimed it generated $30 million for the state's economy, even as it only cost the Division of Tourism $1.5 million annually.) The race moved to Colorado this year
after the Tourism Commission, no longer under Kinder's control, declined to fund it
. Kinder's people blamed Governor Jay Nixon.
The audit doesn't get into whether the race was a moneymaker. But it does pinpoint a number of troubling areas in Tourism's management of it:
* More than $3.2 million was paid to the Tour of Missouri without "defining what costs were allowable, requiring a list or documentation of actual expenses, or providing penalties if Tour of Missouri Inc. did not follow contract terms.
* Kinder did not abstain from voting on the funding of the Tour of Missouri, despite his role as chairman of the non-profit company running it. He never disclosed that role on his state-mandated disclosure forms. And the auditor found that "at least some commission members" were not aware of his role.
* The tourism division paid at least $87,000 for an individual to "perform coordination duties" for the Tour of Missouri. The commission had voted to give a lump sum to the Tour; apparently some members were not aware that they were also funding a state employee who worked on the event.
* The tourism division did not receive financial reports from the non-profit running the Tour of Missouri in 2009 and 2010. There was so little oversight that the division never even got a budget for the Tour.
* The tourism division did not perform any independent economic analysis on the Tour, nor did it set performance goals or measures.
Governor Jay Nixon had previously asked accountants
to take a look at the Tour's books. They found a number of questionable expenses, including nearly $20,000 on a kickoff party and more than $20,000 on a wrap party at J Bucks in Clayton.
And it's worth nothing that Kinder's failure to disclose his management of the Tour of Missouri non-profit company could put him in legal hot water: Omitting a fact like that from disclosure forms is a class B misdemeanor, which carries up to six months in jail and a $500 fine.The auditor's report
identifies a number of other improprieties unrelated to the bike race, including that the tourism division paid its advertising agency a staggering $586,056 for website development, which was not in the scope of its initial bid solicitation, "without soliciting bids or showing the rates were competitively established."
And, the audit said, two other Tourism Commission members also failed to
recuse themselves from budget decisions that led to taxpayer money being
given to entities they represent. Those members, Marcia
Bennett-Hazelrigg and James Divincen, represent local tourism agencies
that received money from the commission.