Industry Goes to the Mat Over GSA Scandal
Industry Goes to the Mat Over GSA Scandal

Industry Goes to the Mat Over GSA Scandal

Travel and meeting industry leaders are engaging in all-out damage control to minimize the impact of a Government Services Administration meetings scandal that has triggered outrage on Capitol Hill.

The scandal involves a 2010 meeting in Las Vegas of the government watchdog agency. The $823,000 bill for the GSA meeting included expenses for clowns, magicians, a $75,000 bike-building session, among other expenditures considered over-the-top – all this from an agency whose mission is to monitor government spending.

The travel industry could face “significant challenges” as a result of the GSA’s actions, Roger Dow, CEO of the U.S. Travel Association, wrote in a letter to the travel industry on Friday.

“It is clear during this election year we can expect the value of meetings and conferences to be a visible political football to be kicked around.”

History repeated?
Three weeks after news of the meeting broke, the industry hopes to avert a repeat of fallout from a 2008 meeting that also made negative headlines – a pricy trip by AIG executives, shortly after the firm was bailed out with taxpayer dollars.

Uproar over AIG’s ill-timed expense crippled the meetings business, with effects that linger to the present.

“The worst-case scenario is that this could bleed into the private sector as it did in 2009,” said Erik Hansen, director of domestic policy for the U S. Travel Association.

Aggressive action
U.S. Travel has been aggressive in seeking to counteract negative reaction to the GSA situation. “A number of our members have already jumped to the defense of meetings,” Hansen told Travel Market Report.

While Congressional hearings this week focused largely on “irresponsible decision making,” Hansen said, U.S. Travel is concerned about legislation and other actions being proposed in response to the GSA fiasco. (See sidebar.)

“We don’t want anything put in place that will damage meetings or government travel in general. We will monitor any pending legislation,” Hansen said.

“The issue should be poor decision making by conference officials – not the value of conferences themselves. We’re just as opposed as members of Congress to overspending.”

Planners worried too
One veteran meetings professional who anticipates damage from the scandal is Joan Eistenstodt, founder of Eisenstodt Associates.

“It adds to the entire AIG piece and to muffingate,” she said in an email. (Muffingate was last year’s uproar over a government meeting where muffins that supposedly cost $16 each were served.)

“How could any corporate or association or nonprofit executive see the coverage and not question how their meeting dollars are spent? There are shareholders and members and community to consider. People are unemployed and homeless; jobs are still being cut.”

Such scrutiny is not undeserved, she suggested.

Deeper issues for industry
“If one sees, like I do at all our industry meetings, lavish displays of food, board members being feted with lavish dinners, gifts given, etc., I wonder why the industry doesn't right now say, ‘Halt!’ Let’s take a step back and consider what we are doing and what we project as an image.’”

The hotel industry and other vendors should be engaged in difficult talks about this, Eisenstodt said.

While reaction has been centered on government waste, “the issues go far deeper and get to the heart of how meetings are planned and looking at the purpose/objectives, budget and appropriateness of activities,” Eisenstodt said.

“The industry should put out statements about what constitutes an appropriate and ethical way to plan a meeting.”

Bad name for all?
Pat Ahaesy, a planner who heads up P&V Enterprises, blogged about the GSA scandal on her website. “This is singled out because it deals with government spending and our tax dollars. Clearly there are events held that are over the top. Yes, there were many missteps,” she wrote.

“I have some major concerns. The biggest one of all is that this debacle gives everyone else in the meetings and events industry a bad name. There are events, probably 1%, that could be considered to be over the top.

“But let’s think of the other 99% of meetings and events, including those surrounding incentives. Most budgets are carefully planned and responsible, with good content, using the best way to deliver the message and thus a budget that is appropriate,” she blogged.

SGMP: ‘It’s unusual’
The Society of Government Meeting Professionals also weighed in. “This apparent instance of excessive spending is newsworthy in part because it’s unusual. . . . the vast majority of government conferences are productive and cost effective,” said executive director and CEO Charles Sadler.

Sadler noted government travel’s “significant role” in the U.S. economy. “No one will want to endure the economic hardships individuals and businesses would experience if leaders take the knee jerk approach and drastically reduce or shut down government meetings and travel,” he said.

Call to action
Ahaesy urged her colleagues to let Corporate America and the government know about “the value of meetings and events.”

She recommended they forward industry reports about the value of meetings to the media and “non-industry friends.”

Ahaesy posted links to two such reports: an MPI report on the Business Value of Meetings and a USTA study on the value of the meetings industry.

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The worst-case scenario is that this could bleed into the private sector as it did in 2009.

Erik Hansen, U S. Travel Association

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