National Park Service: William Graham

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Tuesday, January 4, 2011

$1.0 Million in Public Funding from the Delaware River Port Authority ("DRPA") to the Independence Visitor Center Corporation (IVCC)

Private Benefit and Inurement - Public Dollars Serving Private Interests: Independence Visitor Center Corporation ("IVCC") Is Not A "Small, Emerging and New Business" as per DRPA's Grant Requirements; DRPA's and IVCC's Corporate Governance - Conflicts of Interest with Funding when John Estey Chairs Both DRPA and IVCC

On November 19, 2010, the Philadelphia Inquirer reported that the "DRPA funneled more than $13 million to groups, some with ties to board,"

"DRPA [Delaware River Port Authority] officials repeatedly have said in the last two years that they were out of the economic-development business... That followed the DRPA's pledge in July 2008, during public hearings for bridge toll increases, to end its spending on such projects."

On November 15, 2010, the Philadelphia Inquirer Editorial Board published the following,

"The Delaware River Port Authority has finally proven the existence of an alternate universe in which it must be located. In an era of dire government budgets and municipal bankruptcies, it's somehow sitting on a gigantic pile of spending money.

Despite the temptation to keep found cash, many people actually try to return it to whomever it belongs. One might even be so starry-eyed as to hope the DRPA would give its extra money back to the public - a notion likely to make one of its officials laugh so hard as to choke on his toll-funded wasabi-and-panko-crusted ahi tuna steak at the Palm."

On August 9, 2010, the Philadelphia Industrial Development Corporation ("PIDC") reached an agreement ("Funding Agreement") with the Independence Visitor Center Corporation ("IVCC") whereby PIDC would funnel $1.0 Million in economic development funds from the Delaware River Port Authority ("DRPA") to the IVCC.

The details of this Funding Agreement reveal the inherent conflict of interest that has emerged through the entangled web of allegiance and responsibility between two agencies designed to serve the public--DRPA and IVCC.

John Estey is the Chairman of the Board of of Directors of both the DRPA and the IVCC. His law firm, Ballard Spahr, has represented both of these organizations for years. The PIDC Funding Agreement appears to show the ways in which public funds may have been used for the personal gain of those involved in these organizations.

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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).