Chamber of Commerce Changes Dinner Location But Can’t Change Record of Mismanagement and Malfeasance

By Robert Haugh

Tomorrow night, the Santa Clara Chamber of Commerce has their annual Pyramid Awards Dinner. They moved it from the Convention Center to David’s Restaurant. This change was announced on Monday — a few days after I sent an email to Chamber CEO Nick Kaspar asking him if the Chamber was getting a special deal for the event or paying full price. Coincidence?

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I asked the question because City staff had discovered all kinds of special deals and self-dealing by the Chamber during their management of the Convention Center. On July 3, the City put out a press release highlighting some of the early findings.

Here’s what the release said about special deals:

“the Chamber may have given itself and members undisclosed free and reduced rates for the use of the Convention Center, which results in lost revenue to the City.”

And some potential problems with tax returns:

“Staff’s review show material conflicts existed on legal documents regarding the Chamber of Commerce’s tax exempt status and whether the organization inappropriately filled out its tax returns to the State and Federal government when it stated that it did not maintain a Conflict of Interest Policy.”

And conflicts of interest:

“Specifically, while the Chamber claimed to manage conflicts and maintains a Conflict of Interest Policy, past year’s review of minutes shows no training or management of conflicts during the time when real or perceived conflicts have been raised and inquired about by the City.”  

And how they’re paying and/or reporting their rent:

“Additionally, a City’s legal contract includes rental payments of just over $91,000 per year, but does not show on the federal filings.”

This info has been circulating around City Hall for some time. It led to the loss of the Chamber’s $145,000 annual “management fee” that they increased for themselves without City Council authorization. It also caused them to lose the current Convention and Visitors Bureau contract for $1.5 million.

Here’s the bad news for the Chamber: the audit isn’t done yet. More damaging info may come out.  Sources close to the Chamber say that most of the fingers are pointed at outgoing chair Joe Siecinski (who’s being honored at the dinner “for his service”), treasurer Dave Tobkin and director/publisher/lobbyist Miles Barber for poor management and judgement.

The City Council really had no choice but to stop the bleeding of tax dollars. Vice Mayor Kathy Watanabe summarized this really well in a story that appeared yesterday on SanJoseInside.com

“We don’t want to continue to throw money at them knowing that there’s been self-dealing and questionable management practices,” the councilwoman says. “We may not know the extent of the problem right now, but we know enough not to risk giving them any more of our money.”

SinkingSHipSantaClara

 

 

5 comments

  1. Thank you Robert. I am happy the our City Council was proactive in saving 14 front line jobs (CVB) that had nothing to do with the Chamber Management – Board. And found this new solution. Kudos to our Mayor and City Council. The split is good and our Convention Center provides opportunities to our beloved city. Let’s ave this place too.

  2. Great reporting Robert—disturbing that the The outgoing leader is being honored with a dinner given the poor performance and questionable practices under his leadership.

    Glad that Kathy and the City Staff is taking a hard look at this and pushing for accountability—the chambers cooperation in the investigation, transparency and self reporting will earn the city’s trust again.

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