Audit reveals possible conflict of interest in Kinder's dual roles in Missouri bike race

Wednesday, September 21, 2011 | 5:25 p.m. CDT; updated 6:07 p.m. CDT, Wednesday, September 21, 2011

JEFFERSON CITY — Lt. Gov. Peter Kinder might have had a conflict of interest by serving as chairman of both the Missouri Tourism Commission and a nonprofit group that organized the 2009 Tour of Missouri bicycle race.

A state audit released Wednesday cited Kinder's dual roles as one of several potential conflicts of interest involving the tourism commission, which decides how to spend millions of dollars each year marketing Missouri to visitors and vacationers.

The audit also criticized the Missouri Division of Tourism's budgeting practices and said it lacks performance measurements needed to determine whether advertising efforts are meeting goals.

The audit gave the tourism division a "fair" rating, its second lowest category on a scale ranging from poor to excellent.

Tourism officials said in a written response attached to the audit that they were working to implement many of the auditor's recommendations.

The audit comes as Kinder, a Republican, considers whether to go ahead with a planned challenge of Democratic Gov. Jay Nixon in the 2012 election. The Tour of Missouri bicycle race, which attracted some of the top professional cyclists from around the world, has been a point of contention between the two officeholders. Kinder was the race's most public supporter since it began in 2007. But Nixon's administration, citing tight state finances, pulled the plug on state funding for the 2010 race, forcing its cancellation. The race has not returned.

The audit said that Kinder, in his role as tourism commission chairman, took part in discussions about funding the bike tour and voted to approve agency budgets that included $2.5 million for the 2008 and 2009 races. The audit says Kinder failed to disclose on forms filed with the Missouri Ethics Commission during those years that he was also chairman of the nonprofit, Tour of Missouri Inc., which received state funding to administer the race.

Kinder was replaced as commission chairman in November 2009, and the auditor's office said Kinder is no longer an officer with Tour of Missouri Inc.

"The accidental failure to include the nonprofit corporation information was an oversight that was corrected as soon as it came to light," Kinder's office said in an emailed statement provided Wednesday by office spokesman Jay Eastlick. "The Lt. Governor had no financial interest whatsoever in the nonprofit corporation."

Seizing on the audit's political implications, the Missouri Democratic Party said the audit shows Kinder funneled state money to an organization he ran "to facilitate his lavish lifestyle of fancy parties and expensive meals" used to promote the bicycle race.

"This is the kind of thing that makes Missouri taxpayers sick to their stomachs," said Democratic Party spokeswoman Caitlin Legacki. But the audit also includes criticism of Nixon's administration.

Repeating a theme from audits of other state agencies, the audit of the tourism division said it appeared inappropriate for the agency to have paid for $3,072 of airplane flights by Nixon, including ones to the Major League Baseball All-Star game in St. Louis and the 50th anniversary event of Silver Dollar City in Branson.

Nixon has defended his practice of billing agencies for his flights, saying his travels often relate to functions supported by those agencies. But legislators frustrated by the practice sought to put an end to it in the current budget by specifically prohibiting most agencies from paying for travel by statewide elected officials.

Although the tourism division audit bore the name of Auditor Tom Schweich, his office said Schweich recused himself from any involvement to avoid any appearance of a conflict of interest. Kinder was one of the largest contributors to Schweich's successful 2010 campaign.

Under its heading of conflicts of interest, the audit also cited cases in which two tourism commissioners voted on budget decisions related to the agency's Cooperative Marketing Program and First-time Marketing Events Program. Division staff later allocated part of that funding to local agencies the commissioners represented, the audit said.

In a written response to the audit, the tourism division said: "We agree that a conflict of interest policy should be established and maintained" for commissioners.

The audit also questioned the division's documentation on the state's costs and benefits of the Tour of Missouri and criticized the division for using an advertising agency as a pass-through for expenditures for the bicycle race. The division's written response said the advertising contract allowed such arrangements, but it agreed that such expenses should be handled in an open and transparent manner.

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