National Park Service: Independence Visitor Center Corporation ("IVCC") Appears to Have Engaged in Eight-Year Effort to Marginalize The Constitutional Walking Tour and Keep the Evidence Secret

Friday, August 19, 2011

Independence Visitor Center Corporation ("IVCC") Appears to Have Engaged in Eight-Year Effort to Marginalize The Constitutional Walking Tour and Keep the Evidence Secret

The IVCC Has Spent at Least $515,626.00 on Legal Fees to Ballard Spahr over the Period from July 1, 2003 to June 30, 2010

Overview
On July 21, 2003, Bill Moore, President and CEO of the Independence Visitor Center Corporation ("IVCC"), sent a critical evaluation of The Constitutional Walking Tour of Philadelphia ("The Constitutional") to Pennsylvania Governor Ed Rendell allegedly in response to a request from the Office of the Governor ("2003 Memorandum"). The 2003 Memorandum was finally revealed by the Office of the Governor on July 26, 2011 after a lengthy legal battle spearheaded at least in part by the IVCC. In the 2003 Memorandum, Mr. Moore revealed his apparent dislike for The Constitutional since Mr. Moore appears to have perceived The Constitutional as a threat:

"My conclusions on this tour are as follows: ... Copycat idea - not unique to Philadelphia - difficult to separate the product from the Boston [Freedom Trail] experience ... would be confusing to customers ... Philadelphia is almost over-burdened with disjointed products that consumers find hard to understand and use." (emphasis added)

In stark contrast to Mr. Moore's conclusions, The New York Times published a supportive Travel Advisory article about The Constitutional Walking Tour on October 26, 2003 in which it stated:

"A new walking tour of Philadelphia [The Constitutional] helps visitors find their way to sites relating to the city's history and its key role in the creation of the United States.The self-guided, three-mile tour, the Constitutional, features more than 30 historical sites, including churches, museums, former taverns and old hospitals."

Background
Efforts by the City of Philadelphia and the Commonwealth of Pennsylvania to battle transparency, protect the secretive interests of the Independence Visitor Center Corporation, and thwart the evident intent of the Pennsylvania Right to Know Law (“RTKL”) have previously been detailed on this blog.

On January 11, 2010, The Constitutional Walking Tour of Philadelphia requested various documents from the Office of the Governor of the Commonwealth of Pennsylvania under the Pennsylvania Right to Know Law. On February 19, 2010, the Office of the Governor denied in part The Constitutional's request; specifically, the Office of the Governor wrote,

"We did not provide a 2003 memorandum from Mr. [Bill] Moore to Governor Rendell under 65 P.S. § 67.708(b)(11) because it revealed confidential proprietary information of the Independence Visitors [sic] Center Corporation."

On August 3, 2010, The Constitutional Walking Tour requested additional documents from the Office of the Governor under the Pennsylvania Right to Know Law, including the "2003 memorandum from Mr. Moore to Governor Rendell about the IVCC" that was specifically denied in the February 19, 2010 letter from the Office of the Governor under the pretext that it revealed the IVCC's confidential proprietary information.

In the midst of fighting transparency and hiding information, the Office of the Governor and the Independence Visitor Center Corporation have revealed what appears to be the IVCC's long-standing prejudice against The Constitutional Walking Tour.

On May 10, 2007, former IVCC President and CEO William ("Bill") Moore testified to the Philadelphia City Council, that “The hallmark of any visit to a great historic city is a great tour.” However, Mr. Moore's actions appear to have not always matched his words.

As part of their business planning and due diligence in anticipation of offering guided tours with The Constitutional Walking Tour in 2005, Jonathan Bari and Leslie Bari communicated and met with numerous third parties, including management from the IVCC, the Independence National Historic Park ("INHP")/National Park Service ("NPS"), and the City of Philadelphia. At that time, management of both the INHP and the Independence Visitor Center, including the IVCC and Bill Moore, as well as Moore’s senior staff, including Christine Keates (nee Gasper), General Manager of the Independence Visitor Center ("IVC"), and Kathleen Ries, former Director of Marketing of the IVC, were very supportive of The Constitutional Walking Tour. They recognized that The Constitutional would enhance the “visitor experience,” be relevant to INHP sites and complement existing INHP offerings. They accordingly helped develop, and then approved, The Constitutional’s tour marketing and staging location inside of the IVC, as well as various marketing and sales initiatives at the IVC Main Information and Ticket Sales Desk. On April 5, 2005, Ms. Ries emailed Leslie Bari:

“You [sic] plans for guided tours are marvelous! We’ll be very excited to work with you in developing a strategy surrounding a new tour, particularly one as well-respected [already!] as the Constitutional Walking Tour. Preliminarily, I’d like to meet with you to discuss the marketing logistics of your plan...” (emphasis added)

Secret Memo
Despite the outward appearance of helpfulness and cooperation, it appears that the IVCC and Bill Moore were secretly working behind The Constitutional's back to protect their own interests. Mr. Moore already had a potential conflict of interest, perceived and/or real, in his position as the President and CEO of the IVCC, since Mr. Moore was also concurrently the former Chairman of the Board of Directors of Historic Philadelphia, Inc., and Mr. Moore appears to have had no intention of letting The Constitutional compete on an equal playing field with Historic Philadelphia, Inc.

When the existence of the clandestine 2003 Memorandum from Mr. Moore to Governor Rendell about the IVCC was discovered, The Constitutional Walking Tour filed a supplemental information request under the Pennsylvania Right to Know Law on August 3, 2010 for both the "2003 Memorandum" and the Meeting Minutes of the IVCC's Board of Directors on which the "Governor's Representative" has served at the pleasure of the Governor since March 2003. Until July 25, 2011, the IVCC and the Office of the Governor had aggressively fought the release of both the 2003 Memorandum and the Meeting Minutes.

Curiously, it turns out that the 2003 Memorandum was not about the IVCC (as one could have easily inferred from the February 19, 2010 denial letter from the Office of the Governor as quoted above) after all. Instead, the 2003 Memorandum was about The Constitutional Walking Tour. On February 10, 2010, James Cuorato, President and CEO of the IVCC, stated in a sworn affidavit trying to block the release of the 2003 Memorandum:

“On July 21, 2003, William W. Moore, then-President and Chief Executive Officer for IVCC, authored a memorandum to Governor Edward G. Rendell regarding the Constitutional Walking Tour. The memorandum evaluated the Constitutional Walking Tour as a commercial product in and around the Independence National Historical Park.”

In the IVCC's January 3, 2011 Commonwealth Court Brief in support of the Office of the Governor's effort to oppose transparency, the IVCC contended:

“The 2003 memorandum is a critical evaluation of The Constitutional Walking Tour, a commercial product in the same industry as IVCC, made to the Office of the Governor in response to a request by that office” (emphasis added).

Therefore, the IVCC had admitted that in 2003, Governor Ed Rendell of Pennsylvania showed sufficient interest in The Constitutional Walking Tour that the Governor officially commissioned a “critical evaluation” of the private company, only to later use public money to prevent the owners of that company from discovering what that publicly funded “critical evaluation” entailed. It appears that both the IVCC and the Office of the Governor were in cahoots with one another dating back to at least 2003 to damage The Constitutional. It appears that tax dollars – generated, in part, by business, payroll, and income taxes stemming from the work of The Constitutional – have been used to damage The Constitutional, perhaps to the benefit of the IVCC, the National Park Service and/or their preferred vendors.

The Constitutional's request for the IVCC's documents which the Office of the Governor possessed were denied most significantly on the grounds that the records contained “confidential proprietary information.” The Constitutional appealed the denial of the Office of the Governor to the Pennsylvania Office of Open Records, and on September 13, 2010, the Office of Open Records granted the request and ordered the Office of the Governor and the Independence Visitor Center Corporation to release the relevant records. The Office of the Governor, along with the intervener IVCC, filed suit in Commonwealth Court to block the release of the records. Unfortunately, the Commonwealth Court of Pennsylvania ruled that the IVCC's Meeting Minutes were protected from disclosure. However, Commonwealth Court also directed that the Office of Open Records must hold a hearing regarding documents requested by The Constitutional and denied by the Office of the Governor including the 2003 Memorandum, specifically to determine whether these documents are in fact "confidential proprietary information" and therefore exempt from disclosure or whether the documents must be publicly released. Tellingly, the original 2003 Memorandum sent by the IVCC to the Office of the Governor was not even marked "confidential", and the IVCC also sent this 2003 Memorandum to separate third parties which have some affiliations with the IVCC.

A Heavy Burden of Proof for the IVCC
Had the IVCC not withdrawn its objections to releasing what they had previously argued was confidential proprietary information and the case continued with a subsequent Hearing by the Office of Open Records as ordered by the Commonwealth Court of Pennsylvania, the IVCC would have had the burden of proof by a preponderance of the evidence to show that: a) the withheld information is privileged or confidential; and b) the disclosure of which would cause substantial harm to the competitive position of the person that submitted the information, under Section 102 of the RTKL’s definition of “confidential proprietary information.”

There are two major reasons why this test would have been very hard for the IVCC to pass. First, Bill Moore was the “person” who submitted the information. It is virtually unfathomable how Bill Moore – who no longer works for the IVCC, no longer lives or works in Pennsylvania and submitted the document eight years ago – could have suffered a competitive harm from the release of this otherwise public record. Second, even if the “person that submitted the information” was determined to be the IVCC and not Bill Moore, the IVCC and Office of the Governor would have had to explain how the competitive position of the IVCC would be harmed by the release of the information, including the 2003 Memorandum. To that end, The Constitutional has not built a competing visitor center and does not have a competitive presence at or near 6th and Market Streets where the IVCC is located.

Presumably, the IVCC realized that it would have had a highly difficult time meeting its burden of proof, so finally, after eight long years the truth has surfaced, in part because the IVCC withdrew its legal objections to the 2003 Memorandum's release. On July 26, 2011, the July 21, 2003 Memorandum authored by Bill Moore about The Constitutional Walking Tour was publicly released. Clearly, there was nothing in this document that met the standards set forth under the Pennsylvania Right to Know detailing what constitutes "confidential proprietary information." Rather, the 2003 Memorandum provided a list of arbitrary reasons why Bill Moore did not like The Constitutional:

"As requested by your [Governor Rendell's] staff member, Abass Kamara, I have reviewed the concept of the Constitutional Walking Tour, ... The walking tour is based on the well known Boston Freedom Trail.

"My conclusions on this tour are as follows: ... Copycat idea - not unique to Philadelphia - difficult to separate the product from the Boston [Freedom Trail] experience ... would be confusing to customers ... Philadelphia is almost over-burdened with disjointed products that consumers find hard to understand and use." (emphasis added)

Interestingly, Meryl Levitz, the President and CEO of the Greater Philadelphia Tourism Marketing Corporation ("GPTMC") and a member of the IVCC's Board of Directors since its founding, appears to have viewed The Constitutional in a different light at that time (April 24, 2003). Despite being one of the people copied on Moore's 2003 Memorandum, Ms. Levitz wrote to Leslie Bari at The Constitutional on April 24, 2003:

"We applaud your efforts to give something back to the community and help the City of Philadelphia, Commonwealth of Pennsylvania and Independence National Historical Park, among others, better showcase Philadelphia's historic treasures to the world when people visit Philadelphia. The Constitutional Foundation's goals and mission dovetail quite nicely with Greater Philadelphia Tourism Marketing Corporation's mission: To develop and implement effective marketing programs that promote a positive and consistent regional brand image and overnight leisure visitation to the Philadelphia region.

"Because The Constitutional initiative symbolizes Americana and aims to drive economic benefits for the area, we will be happy to help you work with the various constituents named above. In addition, we would be happy to help with marketing efforts, including putting a link from our web site GoPhila (www.GoPhila.com) to The Constitutional's web site (www.TheConstitutional.com). Please let us know what we can do to further support you in this worthwhile endeavor. Thank you for your efforts."

Curiously, Ms. Levitz did not agree with Mr. Moore's analysis that The Constitutional was "not unique" or "confusing."

The Pennsylvania Right to Know Law does not shield documents from the public just because the documents may be embarrassing and/or damaging to a third party who voluntarily submitted information to a government agency - the Office of the Governor - which is subject to the Right to Know Law. This begs the question: why did the IVCC spend thousands of taxpayer dollars on legal fees just to prevent an evaluation from going public? It appears that the IVCC felt it had something to hide.

Ballard Spahr: The IVCC’s Law Firm
From 2001 to the present, a senior partner at Ballard Spahr, LLP (“Ballard Spahr”) has been in charge of the corporate governance with the Board of Directors of the IVCC. From approximately January 1, 2002 to December 31, 2006, Lynn Axelroth, Esq., senior partner at the law firm Ballard Spahr, served as the Chairwoman of the IVCC. After Ms. Axelroth had completed her five-year term as Chairwoman, Ms. Axelroth concurrently continued to practice with Ballard Spahr, the IVCC’s primary paid-for law firm providing legal counsel, and has continued to serve on the IVCC’s Board of Directors according to the IVCC’s 2010 Annual Report.

From approximately January 1, 2007 to the present, John Estey, Esq. has served as the Chairman of the IVCC. While serving as Chairman of the IVCC, Mr. Estey was also: i) Chief of Staff to Pennsylvania Governor Ed Rendell from January 21, 2003 to February 14, 2008 and ii) senior partner at Ballard Spahr from February 15, 2008 to the present.

On January 24, 2011, just one week after Pennsylvania Governor Rendell left office, Ballard Spahr announced that Governor Rendell was rejoining Ballard Spahr where “The governor will focus his practice on public-private partnerships...” On information and belief, Governor Rendell will work with Mr. Estey, his former chief of staff, and fellow partner at Ballard Spahr, by focusing on “public-private” partnership clients like his firm’s seemingly lucrative public-private client, the Independence Visitor Center Corporation, whose Board of Directors Mr. Estey now chairs.

Despite the what appears to be a potential conflict of interest (perceived and/or real) between Ballard Spahr and the IVCC, it appears that the IVCC has spent at least $515,626.00 with Ballard Spahr in legal fees over the period from July 1, 2003 to June 30, 2010. In total, the IVCC has paid $871,886.00 in legal fees during that same time period, some of which was likely spent on protecting the secrecy of the 2003 Memorandum that should have been publicly available, all while being supported by taxpayer dollars. (Figures for legal fees are detailed in the IVCC’s 990 Forms which the IVCC filed with the IRS for 2003, 2004, 2005, 2006, 2007, 2008, and 2009).

The IVCC even admitted that it had spent a significant amount of money fighting this lawsuit when one of its Ballard Spahr attorneys wrote:

"After careful consideration of the cost of proceeding with this hearing, the Independence Visitor Center Corporation ("IVCC") has elected to withdraw any objection to the release of the two documents at issue [including the 2003 Memorandum] by the Office of the Governor. IVCC will therefore not provide any further information as part of this proceeding. Unless the Office of the Governor has any objection, I believe the records can be released and the appeal then can be dismissed as moot." (emphasis added)

Ballard Spahr went as far as boasting on its Web site about how it managed for years to keep the IVCC's documents private that arguably should have been public. Michael D. Fabius, one of the Ballard Spahr attorneys who has represented the IVCC on various matters, wrote this article on May 19, 2011 on Ballard Spahr’s Web site which appears to be sales pitch or in other words an effort to generate more legal fees by protecting Ballard Spahr's "public-private" clients (and prospective "public-private" clients) from having to abide by the concept of transparency which should in theory accompany the receipt of public taxpayer funding, stating:

"In the two years since Pennsylvania enacted its new Right-to-Know Law, litigants have seemingly tried to stretch the law into a form of private discovery... The impact of this decision on private third parties who interact with government is significant... this decision reinforces the protection appropriate for third-party private records. Ballard Spahr’s Government Relations, Regulatory Affairs and Contracting Group continues to track efforts to wield the Right-to-Know Law against private third parties, and assists private clients with understanding how the law affects them in their interactions with government and government officials." (emphasis found in original document)

Background on The Constitutional’s disputes with the NPS and Independence Visitor Center

The Constitutional Walking Tour of Philadelphia (“The Constitutional”) offers guided walking tours of the Independence National Historical Park area by providing a primary overview of Independence Park and visiting more than 20 of Independence Park’s most historic sites including the Liberty Bell, Independence Hall, Carpenters’ Hall, Declaration House, etc.

From 2005 to 2010, the Independence Visitor Center Corporation sold tickets for The Constitutional’s various tours only at the IVC’s main information and sales desk. The IVCC has received a 20.0% (twenty percent) sales commission on each ticket that it has sold for The Constitutional (ranging on average in gross price from $12.50 to $17.50). Since 2005, The Constitutional has requested to also license a dedicated ticket sales booth from the National Park Service and IVCC on fair, reasonable and non-discriminatory terms commensurate with Ride the Ducks and Philadelphia Trolley Works, for example. Additionally, since 2005, The Constitutional has requested to also license marketing opportunities and commercial use authorizations from the National Park Service and IVCC on fair, reasonable and non-discriminatory terms.

The Independence Visitor Center (“IVC”) is owned and operated by the United States of America - National Park Service (“NPS”), which then sub-contracts with the Independence Visitor Center Corporation (“IVCC”), a taxpayer supported public charity, to manage the IVC.

The IVCC and NPS have preferenced third parties including Ride the Ducks and Philadelphia Trolley Works, and the IVCC and NPS have discriminated against The Constitutional Walking Tour. The National Park Service has enabled the creation of this unfair business environment. The National Park Service and the IVCC have ignored and circumvented Federal management and concessions laws for the sale of goods and services at Independence National Historical Park that require open, transparent, competitive and appealable processes awarding concessions contracts for the sale of goods and services including tours.

To facilitate the administration of the National Park Service System, the Secretary of the Department of the Interior, acting through the NPS, is authorized under the National Park Service Organic Act (“Organic Act”) to carry out twelve categories of activities, none of which include transferring administrative responsibility to a private party [i.e., IVCC] or engaging in cooperative administration with a private party [i.e., IVCC]. 16 U.S.C. § 1a-2(a)–(l). Rather than grant the NPS discretion in its dealings with park concessioners, Congress established “carefully controlled safeguards against unregulated and indiscriminate use” of the parks in the National Parks Omnibus Management Act of 1998 (“Management Act”), which governs all national park public accommodations, facilities, and services. 16 U.S.C. § 5951 et seq.; see also 36 C.F.R. Part 51.2 (“policy underlying concessions contracts”). The safeguards are not limited to nationwide policy: Congress also manages the parks with significant visitor traffic on a park-by-park basis. See, e.g., 16 U.S.C. §§ 21–40c (Yellowstone), §§ 91–110d (Mount Rainier), §§ 212–218a (Abraham Lincoln’s Birthplace), and §§ 410z–410z-5 (Boston National). One of the dozens of national parks managed by specific statutes is Independence National Historical Park (“INHP”). 16 U.S.C. §407m–407s. As such, compliance here going forward would require the NPS, first, to reassume from the private IVCC the NPS’s duties “to administer, operate, manage, lease, and maintain” properties at INHP pursuant to 16 U.S.C. § 407s; second, to award “all proposed concessions contracts … through a competitive selection process” pursuant to 16 U.S.C. § 5952; and, third, to issue commercial use authorizations in a rational manner pursuant to a reasonable interpretation of 16 U.S.C. § 5966(c).

The IVCC and NPS have arbitrarily and randomly selected business partners in a non-competitive and clandestine manner; as such, the actions of the NPS and IVCC have from an economics perspective stifled competition, innovation and consumer choice. Ultimately the IVCC’s actions have enabled prices to increase for its preferred vendors to strengthen the for-profits’ financial performance. Visitors to Philadelphia will be better served when the IVCC’s management, manners and methods are fundamentally changed. This would include having the National Park Service abide by Federal concessions management laws. Specifically, this will entail only having the NPS award concessions sales contracts and not having the IVCC involved in any of the selecting, awarding, contracting and managing of Independence Park’s third party concessions, including inside the Independence Visitor Center. This is the model that is practiced in virtually every other of the 390 (three hundred ninety) National Park Service units across the United States (in 49 states) including at Yosemite, Yellowstone, Statue of Liberty, etc. Additionally, visitors and all stakeholders will be better served once the operation of the taxpayer funded IVCC is totally transparent and accountable. While part of the issue centers on a publicly funded charity competing against the private sector (i.e., by offering guided tours and services), it more so has to do with the manner in which the IVCC and NPS operate and discriminate against third party concessionaires, tour operators and vendors in a random and arbitrary fashion (i.e., with the licensing and leasing ticket sales kiosks by the IVCC to third party companies, for example).