The travel industry's meetings and conventions sector needs another scandal about as much as the Internal Revenue Service does. Therefore, in another demonstration of how perverse the universe can be, events have conspired to produce a fresh scandal about lavish spending on convention travel at the IRS.



The short version of the story is that the IRS arranged a $4 million, three-day conference in Anaheim, Calif., for some 2,600 employees in 2010 that featured 15 outside speakers, at a cost of $135,000. The IRS also employed two private-sector event planners who received $133,000 in commissions from three participating hotels.

They may well have earned it, but an audit by the Treasury Inspector General found that they were not under contract to the IRS and concluded that "the hotels' willingness to pay a commission to the planners indicates that additional room discounts may have been available to the IRS."

And then there's the business, which you've no doubt seen on TV news, about the Star Trek parody and the line-dancing video.

The real scandal here is not merely the "lavish spending" but the lack of accountability. Unbelievably, the IRS "did not have any guidelines requiring management to track and report the actual costs incurred for conferences" when this meeting was planned, according to the inspector general.

Further, the IRS did not follow its own procedures on site selection, nor did it follow federal contracting rules in its arrangements with the event planners.

It's not the worst case of government waste we've ever seen, but it's bad enough to cast yet another unwelcome shadow over the meetings business, which is bad news for hotels and for travel in general.

For Roger Dow, CEO of the U.S. Travel Association, it must have been a case of deja vu. When the General Services Administration was in the headlines last year for staging an over-the-top conference in Las Vegas in 2010, Dow found it necessary to issue a statement urging elected officials to greet the report with "a measured and appropriate response" rather than Draconian measures to curtail federal travel.

In a reprise of that statement, Dow last week reminded elected officials that "when conducted responsibly, government conferences, meetings and travel deliver important services to businesses and individual taxpayers."

He added that while Congress and the inspector general "should do all they can to root out wasteful spending, let's not hamstring the effectiveness of federal agencies in the process. We urge all parties to exercise caution."

To this good advice we would add the observation that there is some good news here, or at least some news that is not all bad.

First, these excesses were exposed by an internal review. The expenditures were brought to the attention of the inspector general, who conducted an audit and identified a number of mistakes and failures.

The IRS cooperated with the audit and agreed with all the inspector general's recommendations for reform.

Secondly, as the Treasury Department noted, a conference such as the 2010 IRS event could not happen today, owing to new restrictions on government travel and meetings adopted by the Obama administration in 2011.

The system, in other words, is somewhat self correcting. Unfortunately, it is the nature of corrections to occur after the error. For that, we blame the universe.
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