7 Jul, 2008
Transparency Pressure Pressure Piles Up on PATA
Another former chairman of the Bangkok-based Pacific Asia Travel Association has backed calls for good governance and transparency, warning that “if things do go off the rails, and the law steps in, it can get very ugly.”
The comment by Jon Hutchison, the PATA Chairman between 1997/98, is doubly significant because he chaired a Task Force that issued an October 2004 report that was designed to do exactly that. Mr Hutchison’s comments follow an earlier call made by another former PATA Chairman, Mr Ram Kohli of India, who has called for an independent investigation into PATA’s finances.
Although PATA is headquartered in Bangkok, it maintains an office in California where it was once based, and is still registered as a non-profit organisation (NPO). That makes it subject to the regulations of the US Internal Revenue Service as well as the laws of the state of California.
In recent weeks, trade media investigations have brought to light inaccuracies in the filing of PATA’s financial statements with the IRS and potential lapses in financial disclosure requirements under the US laws governing NPOs.
Questions have also been raised about the way PATA board members are provided reports about the association’s financial status, and the fact that many members themselves do not have access to the information. PATA is a membership-based organisation funded to a large extent by taxpayers through various Asia-Pacific national tourism organisations, including the Tourism Authority of Thailand.
Mr Hutchison, Managing Director of the Sydney Convention and Visitors Bureau, also a non-profit joint venture between the New South Wales government and the state’s tourism private sector, said the Task Force report issued under his chairmanship was prompted by the ongoing publicity at that time about financial scandals at the now defunct US energy corporation Enron.
He said the need to ensure good governance and sound financial management in every organisation involving taxpayers, shareholders or membership dues was every bit true today, especially in the last year or so when many other global finance and accounting companies have come under scrutiny.
Mr Hutchison said he did not know what happened eventually to the Task Force’s recommendations because his preoccupation with running the SCVB and involvement with other international travel organisations saw him scaling back his links with PATA.
“I do say though, that regardless of what, or where an organisation is, governance and transparency should be an ongoing task of scrutiny and review for any Board today. When things are flowing along smoothly it may seem to be unnecessary.
“But I can assure anyone, (and I have the advantage of experience in this) that if things do go off the rails, and the law steps in, it can get very ugly. It’s a little like an approach to the environment, it’s everyone’s responsibility.
“I am not directing any criticism or concerns towards PATA, its management or Board specifically. It’s a general comment and it would be appreciated if it was kept that way. It is up to the PATA Board and management like any other organisation, to ask and answer these questions themselves, (or in fact tell me to mind my own business),” Mr Hutchison wrote in an email response.
The Task Force report had contained a key recommendation that PATA should consider appointing a dedicated Chief Financial Officer in order to enhance financial management and give “the membership at large the sense that there was independent oversight in place.”
This recommendation was never fully implemented after PATA President and CEO Peter de Jong wrote to the Executive Committee saying, “Given PATA’s modest budget and simple financials, it would be difficult to offer a qualified CFO a challenging position, and we would be hard-pressed to pay for it.”
Asked to comment, Mr de Jong said that the PATA Executive Committee during its meeting in Colombo in early April had authorised a major review “on the most suitable governance model for PATA as a not-for-profit association, to ensure that we maintain an effective decision-making body with transparent procedures, checks and balances.
“A comprehensive first report will be presented to the Executive Committee during their meeting in Hyderabad in September 2008.”
Meanwhile, another industry grouping, the American Society of Travel Agents, is also facing calls for more transparency and openness.
One of the candidates for elections to the ASTA board, Alan Fiermonte of “down2earth adventures” has written to the ASTA Northern California Chapter Members seeking their votes in order to “fight for a reform agenda.”
“You have been kept in the dark for so many years about certain facts that you probably don’t realize that ASTA is having major problems,” he wrote.
“ASTA has a $4.6 million operating deficit (built over 5 years of secretive budgeting) and some serious fiscal and management problems. Has anyone heard from the current Board on these matters even though they have a duty to report them? Anyone seen a released financial statement or ASTA treasurer’s report in the last decade? I have. They are not pretty,” Mr Fiermonte wrote.
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