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The TDC audit | Good intentions go sideways in the Keys

By Linda Grist Cunningham, editor and proprietor

Linda Grist Cunningham is editor and proprietor of Key West Island News and KeyWestWatch Media LLC. She and her husband, a park ranger at Fort Zach, live in Key West with their Cat 5s.

11/13/2023

The shocking Monroe County audit of its Tourist Development Council dropped publicly Nov. 1, just days after Fantasy Fest ended its 2023 run and one day after the death of the TDC’s longtime director, Harold Wheeler, who retired in September 2017.

The 32-page audit report called for by Monroe County Comptroller and Clerk of Circuit Court Kevin Madok spanned five years of TDC operations and financials and came down hard on the county’s primary marketing arm.

“The audit,” Madok wrote to county Mayor Craig Cates and TDC chair Rita Irwin, “found repeated noncompliance with Monroe County’s Purchasing Policy by Visit Florida Keys [a branch of the TDC] as well as a significant lack of internal controls and management oversight over TDC’ s financial transactions and annual financial reporting. The audit includes recommendations focused on providing Visit Florida Keys opportunities for improvement.

“In addition, our audit revealed appearances of potential self-dealing by certain Visit Florida Keys
employees as well as possibly one of TDC’s Agencies of Record. Based on the audit’s findings,
Internal Audit recently began audits to review the financial records of TDC’s three Agencies of Record (i.e., Spiart Newman Associates, Inc.; Two Oceans Digital; and Tinsley Advertising & Marketing, Inc.). These audits are on-going and will be released under separate cover.”

Real Key West

TDC audit | How did this happen?

Then on Nov. 8, the Monroe County Board of County Commissioners voted to bring in an outside auditor and recommended the suspension of a top-level TDC executive. A day later State Attorney Dennis Ward said he would bring in a forensic auditor and refer the results to a grand jury.

It’s clear that everyone and anyone with ties to the TDC and the potential repercussions are doing whatever they can to reassure the public that the TDC is worthy of saving.

With its $100,000,000 fund balance, the TDC is an inexorable political and financial force in Monroe County and Key West. It funds millions of dollars annually for out-of-market national and international tourism advertising. There are few local event sponsors and nonprofits who don’t receive TDC direct dollars to promote their events. The TDC and one of its three Agencies of Record, Two Oceans Digital, are the primary sponsors of Fantasy Fest.

To say the TDC’s marketing has increased tourism in the Keys is an understatement. It is beloved by those needing funding and benefiting directly from the tourist onslaught. It is enthusiastically reviled publicly on social media and privately by those apprehensive of the detrimental effects of tourism on overburdened infrastructure and quality of life.

Established on June 16, 1981, the TDC’s mission is clear: Use tourist tax money to “assure long-term economic stability resulting from visitor-related revenues. The TDC pledges to benefit residents and visitors by utilizing those financial contributions to improve the Florida Keys environmental and community resources. The tourism council also prioritizes working to enhance residents’ quality of life and minimize their property taxes through safeguarding the health of the county’s primary industry.”

Its board of directors and district advisory councils are a who’s who of Monroe County and Key West elected, appointed and self-anointed movers and shakers, some of whom have been involved almost since the beginning.

I am neither surprised at the audit’s results nor am I inclined without evidence to the contrary to believe that this TDC debacle was some malicious, intentional defrauding of the public trust for private gain. Instead, the results were inevitable. This happens too often with small-grown-too-large organizations with little to no active oversight, with the same players calling on their friends’ companies as vendors and with virtually unlimited funds.

The handshake and a discussion over happy hour that was good enough in 1981 simply doesn’t work 42 years later. That’s how Fantasy Fest among others got its start. Do good. Keep it simple. Have fun. Make some money, split it with nonprofits. Rinse. Repeat.

Who needs contracts, policies, procedures, privacy statements, annual audits, personnel management and proactive board member oversight when things are going along just fine? I look at all those inattentive TDC board and district members and know exactly what they’ve done: Pretty much nothing, because things are going along as expected; they’re busy with real jobs and their lives, and asking pointed questions just makes the meetings go longer. I know because I’ve been guilty of being just that kind of board member.

Now it’s Comptroller Madok’s job to ferret out the details that inevitably will shake the TDC to its core and build a strong, accountable organization. That’s a good thing.

I’d encourage him to broaden his audits to include the Key West Tourist Development Association, the Florida nonprofit that owns the Fantasy Fest name and logos. It’s not that I believe there’s wrongdoing. It’s that there are too many questions about who is doing oversight and making policy decisions for Fantasy Fest.

The State of Florida administratively dissolved the TDA in 2023 for failing to file its annual report. The last report was in 2022. Its three board members list as their addresses 922 Caroline St., which is also the address for We’ve Got the Keys, which produces Fantasy Fest, POSH for the Florida Keys SPCA, Songwriters Festival and Taste of Key West. It’s easy to fix that dissolution, of course. Pay a fine and file the report. Maybe someone forgot to do the paperwork.

But forgetting to do the paperwork, like not having comprehensive contracts with vendors, is what happens when boards aren’t paying attention. Good things go sideways.

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Avatar of Linda Grist Cunningham

Linda Grist Cunningham

Linda Grist Cunningham is editor and proprietor of Key West Island News and KeyWestWatch Media LLC. She and her husband, a park ranger at Fort Zach, live in Key West with their Cat 5s.

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