National Park Service: The Independence Visitor Center Corporation ("IVCC") Appears to Peddle Influence by Offering to Sell a Seat on the IVCC’s Board of Directors to a For-Profit Company

Thursday, July 14, 2011

The Independence Visitor Center Corporation ("IVCC") Appears to Peddle Influence by Offering to Sell a Seat on the IVCC’s Board of Directors to a For-Profit Company

For $125,000.00, “A Seat on the IVCC Board of Directors for a Commerce Bank Executive.”

From 2000 to the present, the Independence Visitor Center Corporation ("IVCC") has touted its Board of Directors, which has had an impressive array of powerful and connected individuals including the Director of the National Park Service ("NPS"), a Managing Director with the Pew Charitable Trusts, the President & CEO of the Center City District, a Deputy Vice Dean of The Wharton School of the University of Pennsylvania, the Mayor of Philadelphia, a representative for the Governor of Pennsylvania and the Governor of Pennsylvania's former Chief of Staff.

The Federal and state funded Independence Visitor Center Corporation operates the Independence Visitor Center ("IVC") at Independence National Historical Park ("INHP"), a unit of the NPS, in Philadelphia. The IVC is owned and operated by the United States of America - National Park Service, which then sub-contracts with the IVCC, a taxpayer supported public charity, to manage the IVC.

In a 2004-2007 sponsorship proposal that the IVCC developed entitled, “Commerce Bank’s Partnership with the Independence Visitor Center Corporation,” the IVCC appears to have proposed a $125,000.00 three-year promotional sponsorship agreement to Commerce Bank, a for-profit company.

Given the clandestine nature of the IVCC, we do not know what was agreed upon between the IVCC and Commerce Bank, but suffice it to say that Commerce Bank has been one of the long-term paid-for sponsors of the IVCC as evidenced by its Commerce Bank branded ATM in the main entrance (now a TD Bank ATM, since TD Bank acquired Commerce in March 2008), Commerce Bank signage at the IVC, Commerce Bank promotions at the IVC and INHP, Commerce Bank logo and ad on the backs of IVC sold tickets, Commerce Bank logo on the IVC Web site, Commerce Bank promotion on the IVCC's Facebook page, etc. (all similar to what was outlined in the proposal entitled "Commerce Bank’s Partnership with the Independence Visitor Center Corporation").

Demonstrating the value that the IVCC has attributed to a party being a member of the IVCC's Board of Directors, the following was included in the proposal to Commerce Bank: “A seat on the IVCC Board of Directors for a Commerce Bank executive.”

While we have been unable to find any evidence that a "Commerce Bank executive" ever served on the Board of Directors of the IVCC, Commerce Bank may have exerted influence to place another person on the IVCC's Board of Directors or derive other favorable treatment from the IVCC's politically connected leaders. Despite the IVCC being an organization charged with overseeing public resources, the IVCC has repeatedly refused to release numerous corporate records including its Bylaws and Meeting Minutes which might very well discuss the details of the IVCC's relationship with Commerce Bank. As a result, the extent and nature of the relationship between Commerce Bank, IVCC's Board of Directors and Bill Moore, the IVCC's former President and CEO whose leadership period oversaw the relationship with Commerce Bank, is hidden from public knowledge and government oversight. Additionally, because of the IVCC's clandestine nature, it is unknown whether the IVCC may have possibly tried to leverage other seats on the IVCC's Board of Directors in exchange for some type of financial or non-financial consideration.

By promoting such a "connected" Board of Directors, the IVCC has capitalized on the many direct and indirect benefits bestowed upon the IVCC's Board of Directors: power, prestige, funding, legitimacy, influence, connections, etc. To that end, the IVCC has certainly tried to leverage the benefit of the bargain whereby in exchange for power, influence, funding and seemingly not providing any meaningful and independent fiduciary oversight of the non-profit company, the IVCC appears to grant politically connected insiders access to its exclusive Board of Directors. As such, the taxpayer-funded IVCC appears to be using its public dollars to serve private interests, possibly including those of Commerce Bank, professional service providers like Ballard Spahr, the IVCC's legal counsel, and other sponsors.

Instead of developing a Board of Directors that would ensure that the IVCC conducts business in a legitimate, fair, open and transparent manner deserving of the public trust and funding, the IVCC has created a Board of Directors that appears to be little more than a networking and business forum for the well-connected and powerful business people of Philadelphia. For example, according to the IVCC's 2010 Annual Report, the IVCC's insular Board of Directors includes a representative for Philadelphia Mayor Michael Nutter as well as Mayor Nutter's campaign finance director, Scott Freda, which may help to make a seat on the IVCC Board of Directors very valuable to corporations seeking to access the leaders in Philadelphia's government.

Corporate Governance - Executive Leadership & Accountability
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. Therefore, for most of the last decade, including while the IVCC attempted to sell a seat on its Board to Commerce Bank, a senior partner at Ballard Spahr was in charge of corporate governance at the IVCC. Additionally, Ballard Spahr has served as the IVCC's paid-for legal since at least 2005.

A full list of the IVCC's Board from 2004 to 2007 -- the period which the Commerce Bank sponsorship proposal covered -- can be seen in the IVCC's Annual reports for 2004, 2005, 2006, and 2007.

On February 4, 2009, over a year beyond the term specified in the Commerce Bank proposal, Bill Caughlin, National Park Service Ranger wrote a letter to the editor of The Philadelphia Inquirer that explained the dire consequences of the IVCC's pandering to for-profit corporate interests:

"In its editorial pages, the Philadelphia Inquirer sings the praises of exiting CEO of the Independence Visitor Center Corporation, Bill Moore. Allow this [National] park ranger's dissenting view: In the past 10 years Mr. Moore turned the sacred ground of the birthplace of our nation into a circus; by allowing anyone and everyone to sell their wares in anyway they pleased, as long as they paid a price. On any given day one might see at the Independence Visitor Center scantily clad women advertising beer, or Commerce Bank employees handing out balloons and trinkets. Imagine my surprise upon walking into the East Wing to do a tour of Independence Hall and having the place wall-to-wall with balloons advertising a bank!... There was a time when the story of the founding of the nation and the price paid by those who came before us was treated with respect. Bill Moore allowed the money changers into the temple and thereby desecrated it. It is hoped that the next CEO will exhibit a proper attitude toward our national shrine." (emphasis added)

From November 19, 2001 to April 26, 2010 -- including the entire 2004-2007 term of the proposed Commerce Bank sponsorship -- the IVCC's operation of the Independence Visitor Center was governed by the NPS's Special Use Permit through which the IVCC managed the IVC "subject to the supervision of the [NPS's] Superintendent" and "consent of, the National Park Service." Further, NPS senior officials have served on the Board of Directors of the IVCC. For example, according to the IVCC's 2007 Annual Report, both Mary A. Bomar, former Director of the NPS, and Dennis R. Reidenbach, then Superintendent INHP (currently Regional Director, Northeast Region, NPS) served on the IVCC's Board of Directors. The IVCC and NPS have even proclaimed that they would like the public-private partnership between the IVCC and NPS to serve as a model for other parks in the NPS system across America.

While not pertaining to the IVCC directly, Reuters reported on June 29, 2007 that, under the leadership of Vernon Hill, former Commerce Bank Chairman and CEO, Commerce Bank "engaged in unseemly deals."

Especially considering the actual and/or potential conflicts of interest present on the IVCC's Board of Directors as well as what appears to be a willingness to put a seat on the IVCC's Board of Directors up for sale, transparency is absolutely essential so that the public and government officials can oversee the IVCC, which has seemed to lack objective corporate oversight for years. Unfortunately, the taxpayer supported IVCC has proven litigious, clandestine and defensive when information is sought under the Pennsylvania Right to Know Law and Freedom of Information Act about its operations.

Conclusion
The IVCC has seemingly abandoned its responsibility to establish effective oversight. Instead, the IVCC has developed what appears to be a conflict-ridden, preceived or actual, Board of Directors whose membership could be for sale in Pennsylvania's pay to play political culture. Corporate governance is a journey, not a destination; that said, the bottom line is that effective and efficient corporate governance is not conducted in this manner, especially in this day and age.

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Exhibits:
*Board of Directors of the Independence Visitor Center Corporation.

*Branded TD Bank (formerly Commerce Bank) ATM in IVC, near the main entrance.

*Copy of double-sided ticket formerly distributed by the IVCC, which features a Commerce Bank logo (2005).

*Sponsorship proposal for 2004-2007, "Commerce Bank's Partnership with the Independence Visitor Center Corporation."

*IVCC Annual Report for 2004.

*IVCC Annual Report for 2005.

*IVCC Annual Report for 2006.

*IVCC Annual Report for 2007.

*IVCC Annual Report for 2010.

*Biography of John Estey, Chief of Staff to Governor Ed Rendell, from the Commonwealth of Pennsylvania's website.

*Special Use Permits issued by NPS to the IVCC for the operation of the Independence Visitor Center.

*The Board of Directors of the IVCC.

*Op-Ed pieces in the Philadelphia Daily News from The Constitutional Walking Tour and, in response, from Jim Cuorato, President and CEO of the IVCC, December 2009.

*Letters to the Editor, "Respect History," Bill Caughlan, The Philadelphia Inquirer, February 4, 2009.

*Axelroth, Lynn; Proclamation for Five Years as Chairperson of the Independence Visitor Center Corporation, issued by Governor Ed Rendell, December 22, 1996.

*"Commerce Bank CEO Presided over Innovation, Scandal," Joseph A. Giannone, Reuters, June 29, 2007.

*Commerce Bank logo on the IVC Web site.

*Commerce Bank promotion on the IVCC's Facebook page.

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).