San Diego Why did the city use $250,000 of taxpayers' money to get the National Baptist Convention to come to San Diego? Blame MERF.
Why was Alcoholics Anonymous promised a similar quarter-million-dollar gift if they held their convention here?
How come the Meeting Planners International have accepted city pledges for $110,000 to assure they meet here this year?
MERF is the City of San Diego's little-known Major Events Revolving Fund. It uses moneys collected from the city's room tax, the so-called transient occupancy tax (tot), to "attract" major conventions to San Diego "that will have significant impact on the local economy."
"Attract" is the key word. If the city didn't hand out such massive gifts -- "incentives" in goods, services, or plain cash -- large conventions such as the National Baptist Convention (nbc) would find another town for their 30,000 conventioneers to meet in.
"It's really part of what goes on around the world," says Reint Reinders, head of the Convention and Visitors' Bureau, ConVis. "Whether it's right or wrong, or whether we should pay anything at all, the fact is you are competing with other cities around the world. These kinds of events have a price tag attached, [if you] want to host them. You have a certain set of competitive standards."
But should these "incentives" come from the public purse?
"No!" declares San Diego's "anti-corporate welfare" crusader, Bruce Henderson. "We need to eliminate the MERF. Our tourist industry is healthy! It is vigorous and perfectly capable of standing on its own feet. It doesn't need a government subsidy any longer."
But it's not just Henderson's blitz on public-financed convention center expansion plans that's brought MERF into focus. The National Baptist Convention, recipient of $250,000 of San Diego's money, has been under scrutiny since the February 25 indictment in St. Petersburg, Florida, of its president, the Reverend Henry Lyons. The St. Petersburg Times reports that Lyons has been charged with, among other things, stealing nearly $200,000 intended to help burned churches; swindling nearly $3 million from corporations by inflating the number of nbc members; extorting a half-million dollars from a cemetery company; and hiding $4.8 million dollars in a secret bank account.
Lyons, 56, also had an alleged "involvement" with onetime sales manager for San Diego's ConVis, Brenda Harris, 48. Following the June 1995 Baptist convention in San Diego, Lyons lured Harris away from ConVis to lead the nbc's office of conventions and meetings in Nashville, Tennessee.
Lyons and Harris did not return calls requesting comment, but in an interview with the Reader last year, Harris denied any hanky-panky. "Categorically, there is no romantic relationship between me and Dr. Lyons. There is a business-professional relationship. There is a friendship, but there is no romantic relationship."
But according to an April 30 story in the Tampa Tribune, Pinellas-Pasco State Attorney Bernie McCabe has released a series of documents that paint a sordid picture of the Lyons-Harris relationship.
"[Renee] Fagans was a friend of Brenda Harris, the convention's director of meetings and conventions who investigators identify as Lyons's 'paramour,'" according to the Tribune. "[Fagans] said Lyons and Harris carried on a 'torrid love affair' during the time Fagans worked at the convention from March 1995 to April 1996, and that Harris on one occasion asked her advice on improving a specific sexual technique that Lyons enjoyed.
"Another time, Fagans said, Harris called her in California and asked her to bring back some high-grade marijuana. 'Your president and I like to sit in the bathtub and smoke weed,' Fagans said Harris told her."
Another allegation by Fagans, according to the Tribune, was that "Lyons and Harris were getting secret 'kickbacks' from cities and hotels where the convention held its quarterly meetings. Fagans said cities and hotels would give the convention 'up-front rebates,' but then Harris and Lyons would negotiate a second rebate that would go to them directly."
The St. Petersburg Times added a juicy detail gleaned from the prosecutors' records: Harris and Lyons "often disappeared for romantic getaways, Fagans said. In December 1995, she said, they stayed together at the Waldorf Astoria hotel in New York City. When Harris returned, she showed up in a new full-length mink coat and hat. Lyons paid for them with cash, Harris told Fagans. Harris wore the coat constantly, Fagans told investigators."
With so much loose money apparently flying around the National Baptist Convention, and potential conflicts of interest, how wise was the San Diego City Council's decision to donate $250,000 of MERF money to the nbc's convention here?
"That's a fair question to ask," says ConVis's Reinders. "If, in fact, as is being alleged, [Henry Lyons] was crooked, he was crooked when he got into power. But the nbc convention was booked several years before [it took place]. There was a completely different set of people we dealt with three or four years prior to the convention, and then there was a great upheaval in the leadership just prior to the convention. All of a sudden Henry Lyons rose to power, and he became the person who was in charge of the convention. But that had very little influence on any of the arrangements or on Brenda's relationship.
"In terms of establishing their relationship, that didn't really happen until the convention came here. It wasn't a matter of Lyons trying to extort $250,000 from us and then figuring a way how he could [abscond with] the money. He wasn't even on the scene, never was involved with the MERF funds at all."
Reinders says the nbc's MERF funds were voted in at the end of 1994 by the city council, mainly at the urging of African-American city councilman George Stevens.
"[Stevens] felt that it was appropriate that we spend some money on a major black convention and underwrite some of their costs, because we've done it for other things," says Reinders.
Reinders adds that the nbc convention turned out to be one of the least organized in his ConVis experience. Was there any investigation into nbc's record?
"We did quite a bit," he says. "I know that our vice president of sales, Sandra Butler, certainly looked into their history. We call the other cities where they've met in the past. I went to the convention the year before. They were in Richmond, Virginia, and we made a welcome address to the convention and told them we were looking forward to having them in San Diego."
Reinders also handed the nbc checks worth $99,000 -- gifts to help their local and national committees organize for their visit the next year to San Diego.
"We paid a variety of subsidies to them at that particular time. We gave some money [around $35,000] to the national [committee] for their start-up costs, we gave some money [around $35,000] to the local [committee] for their start-up costs. We had advanced those funds from ConVis."
The rest of the quarter-million MERF money went to pay for use of the San Diego Sports Arena ($40,000), a "tent city" for entertainment outside the arena ($119,000), and $20,000 for the nbc's use of the old downtown convention center's Concourse.
Reinders says the decision to sweeten the pot for the Baptist conventioneers fit guidelines set down for donating MERF money. According to documents from the city attorney's office, a qualifying event must attract "a large number of visitors," generate publicity for San Diego, and ensure that MERF monies come back in the form of room-tax revenues from conventioneers.
"With 30,000 delegates," says the resolution presented to the council, "it is estimated that the National Baptist Congress [sic] will generate $308,000 in tot revenues and have an estimated $20,640,000 economic impact on the San Diego community."
Despite disappointing revenues from the nbc's 1995 convention and less-than-expected attendance, Reinders says the city got its money back in room tax.
Henderson is not impressed. "This is all corporate welfare," he says. "If the private sector wants the Baptist convention to come here and generate $20 million of benefits for the tourist industry, those businesses [that benefit] are capable of putting together a fund of money to provide the Baptist convention with $250,000, if that's what it takes to get them here. That should be a private sector decision, and it should use private sector money."
"That's completely unworkable," counters Reinders. "It would be difficult to collect, [and] when you consider how many conventions take place in San Diego, and look at how many we have underwritten with the MERF, it's a very minimal number. There have been years we haven't used any of it. And in those conventions where we have done this, it's because of the competitive nature of the particular event."
Reinders says in the end there'd be little difference between a room tax and businesses paying for such incentives. Either way, the San Diego taxpayer is not involved. "If we wanted to do away completely with anything from the tot fund, it would still be another amount that the customer would be paying. All the revenue a business gets, who pays these fees? The customer pays."
"If you are a community and you are dealing with an infant industry," argues Henderson, "a private sector-government partnership is legitimate. However, once you arrive at the point where it's no longer an infant industry -- and tourism is now a $4 billion-plus industry in this town -- it can stand on its own two feet. In the next few weeks I will be going through the city manager's budget line-by-line to identify the corporate welfare that needs to be eliminated to balance our budget here in San Diego."
MERF will be on Henderson's hit list, but Reinders shows no sign of panic. "This guy," he says, "is off the charts. He is a complete idiot. And you can quote me on that."