Travel Expo a two-time loser

12/10/1990 3:13 PM

08/12/2014 2:50 PM

Yacov Bar-Gera didn't live long in Florida. He never owned property, never registered a car, never voted.

But he learned fast how to get the public's money.

He recruited the head of Dade County's tourism committee, Metro Commissioner Sherman Winn. And he hired a Tallahassee lobbyist, Winn's son, Stephen, to represent his for-profit Miami Beach company.

The Florida Legislature gave Bar-Gera's American International Exhibition for Travel $400,000 -- to promote "the expansion of Florida's economy."

Four months after his firm got the final check, Bar-Gera disappeared. His company owed at least $1 million to private creditors. The state money was gone.

The American International Exhibition for Travel illustrates everything that is wrong with how the Legislature awards grant money.

There is no system to check into the background of those who get the money. There is no method to determine what the money will be used for -- and no penalty if the money is used for something else. There is no monitoring of the money until after the grant is spent.

The Legislature appropriated the American International Exhibition for Travel's money in two $200,000 grants in 1986 and 1987. The money was placed in a special category under economic development in the Commerce Department budget -- even though commerce did not request it. The only restriction: the money was to be used by the firm to promote international tourism in Florida.

"The second year, we had some real reservations about it, but what were we going to do?" said Rob Lankford, the Commerce Department's director of administration. "We have no real power except to pay the bills."

The American International Exhibition for Travel put on two tourism trade shows in Miami Beach. Sherman Winn, head of the county's tourism committee and a former state senator, served as chairman of the host committee.

Winn endorsed the firm, sent out letters on county stationary recruiting support and curbed criticism from skeptics. "He was the advocate on the county level for this organization. When I raised concerns about the organization, he was the one who reassured us that everything was kosher. 'Not to worry, I'll take care of this myself.' Those were his words, " said Robert Dickinson, Carnival Cruise Lines senior vice president and the former chairman of the Miami Beach Visitors and Convention Authority.

Dickinson said he questioned the validity of the firm at an executive committee meeting of the convention bureau. Winn did not disclose to him that his son stood to gain financially from the company.

Stephen R. Winn and Associates got at least $52,625 from the American International Exhibition for Travel, a $20,000 consulting fee for each of the legislative sessions in which the money was appropriated, plus $12,625 more.

Sherman Winn provided The Herald with his public files on the organization, but refused to be interviewed. "He doesn't want to be implicated with something he had nothing to do with, " said his aide, Joe Bober.

Winn suggested through Bober that The Herald speak to Bar- Gera. He could not provide an address or phone number.

Bar-Gera closed his offices in December 1987 and hasn't been heard from since.

"It was probably the worst of the turkeys in our department that I was aware of, " said Jeb Bush, who was secretary of commerce at the time. "I felt the state wasn't getting its money's worth."

At Bush's request, the Department of Commerce's inspector general conducted an unusual investigation in late 1987 into the American International Exhibition for Travel.

The state could not find a contract from Stephen Winn to show what he did for the money. Auditors also do not know if they found all the payments to him. Stephen Winn did not return repeated phone calls from The Herald.

The state couldn't find Bar-Gera, either. A final copy of the investigation was sent back, stamped "Returned to Sender. Forwarding Order Expired."

The Herald found a telephone number for Bar-Gera and his wife in Tel Aviv. A man who answered the phone said the Bar- Geras had not lived there for several years.

He would not reveal the couple's whereabouts, but said he would pass a message to the couple through their daughters.

"If they want to return them, they do, " the man said.

The Bar-Geras never phoned.

This account of The American International Exhibition for Travel is based on public records and interviews.

It began in 1985 when Bar-Gera and his wife Kenda incorporated the company. They used a Hollywood lawyer, Lewis Cohen.

Bar-Gera's firm's literature said he ran a cargo company in Cologne, Germany and a tourism show in Tel Aviv in 1983. Kenda Bar-Gera had operated an art gallery in Germany.

The couple had a plan. They would put on an annual international tourism trade show in Miami Beach. Exhibitors would come from around the world, hoping to sell their countries to the thousands of people and travel agents who would attend.

Bar-Gera sold the plan to the Miami Beach Visitors and Convention Bureau.

"The concept was good, " said Ron Kent, the convention bureau official who worked with them. "The organization was not professional. They needed a lot of entree to the major tourism people in the area."

Enter Sherman Winn, an elected official who also was director of the Greater Miami Hotel and Motel Association.

The first show in January 1986 was not a success. Exhibitors came from around the world, but few customers showed up.

Some exhibitors complained. Some demanded refunds.

"Of course, they lost credibility after that show. Many people were still willing to give them a chance, " Kent said.

Winn was one of them.

Winn wrote a letter on behalf of the firm and sent it to travel agents and tourism officials around the world. Winn said in the letter that the organizers had approached him two years earlier with the idea of creating an international travel exhibition.

"As a county commissioner with over 30 years of experience in the tourism industry, I found the idea daring and intriguing. It required tremendous city and county cooperation, but the benefits both to the area and the international travel industry could be great. Together we worked to fill a gap on the travel scene, " he wrote.

Winn also praised the first show. Though the show had its pitfalls, "it confirmed my confidence in the idea of an annual international travel show here in the United States. As chairman of the first host committee, I took great pride in what we had accomplished."

Helge Glawischnig, director of tourism in Austria, wrote Winn a letter back:

"There is enough incriminatory evidence to disassociate oneself from this organization, " he wrote. "Your support could be misunderstood that you would (ap)prove their actions. We all have expected to get a written apology and refund for being misrepresented."

Glawischnig told Winn he wouldn't attend the second show. Nor would anyone else he knew.

"It is our moral responsibility to inform the German and Austrian press in order to protect new exhibitors (from) being misled."

Plans for the second show continued.

With the lobbying help of Winn's son, Bar-Gera's company received state money. It got a $200,000 state grant in July 1986, after the first show, and a second $200,000 grant in 1987, before the second show.

"They had funded this situation substantially with their own funds, " said Cohen, the lawyer. "The amount they got from the state was a very small portion."

The promoters promised exhibitors, who paid from $1,450 to $10,000 per booth, that attendance at the November 1987 show would exceed 6,000.

Pre-show literature predicted that the show would be "the largest event of its kind in the Western Hemisphere." One document boasted that "over 7,000 rooms have been booked." The registration packets listed at least 10 travel groups that allegedly scheduled meetings in conjunction with the show. None had.

The show began on Nov. 19. By the following day, it was clear the show would not succeed. The convention center hall was nearly empty. Exhibitors wanted refunds. They complained to Commerce Department representatives.

The state employees told them that the tourism agency was powerless to help them.

So the exhibitors banded together outside the company's exhibition hall offices. They began to clap and chant "Money back! Money back! Money back!"

It did no good.

Said the convention bureau's Kent: "The second show was worse than the first. Then they just quit. They had lost all credibility."

Dade County businesses lost, too.

The inspector general's report estimated that the company owed at least $1 million as of Dec. 12, 1987. The report concluded that the $400,000 grant went toward putting on the second show, but poor management ensured it would fail. The report estimated that the company spent $800,000 on the first show and probably would spend just as much on the second -- when all the obligations were paid.

That never happened. Some people sued. They could never find Bar-Gera to collect.

"I think he went back to Europe or Israel, " said Cohen, the firm's lawyer. "Both shows lost money. This wasn't a scam where they took the state's money and ran."

The state was also left in the red. The company owed it back taxes.

"They made promises to exhibitors they couldn't keep, " said Robert Holtzman, who did public relations for the firm. "They disappeared without paying a great deal of people. I was one of them."

Gelco Convention Services had moved the show into the Miami Beach Convention Center.

"They left town owing us some money, $10,000, $15,000, somewhere in that vicinity, " said Gelco president Bob Spiegelman. "We had called. They said we were going to get it."

Spiegelman said he had no idea the convention had received $400,000 in state money.

"That is mind-boggling, " he said. "I have a real good idea of what it takes to put on a trade show. I can't conceive of how they could have spent that much money."

Carnival Cruise Lines' Dickinson agreed. "You didn't have to be a rocket scientist to add up the costs of the booths, " he said. "It was just a major rip-off for the industry."

The state investigation concluded that the firm did not have internal controls to account for its money. The company had never even prepared a budget on how it would run the shows.

"Based on the findings of this audit review team, it is the team's opinion that it would not be in the best interest of the State of Florida or the taxpayers to continue to support this show with public funds."

The inspector general suggested that the attorney general and the auditor general review the report to see if further investigation should be done. Nothing more happened.

The auditors also made two recommendations to the Legislature:

* Include accountability requirements for all grants "to assure that the interests of the State of Florida and the taxpayers are protected;

* Give the Commerce Department the resources and the authority to determine whether a grant is effective, and the power to ask for the money back if the funds are not spent the way they should be.

The recommendations have not been followed.

"I think it's frowned upon to set up procedures to monitor, " former Commerce Secretary Bush said. "The attitude is, 'I got this through the Legislature. You are the flow-through entity. Don't bug me.' "

The last correspondence from Bar-Gera was a letter written to Sherman Winn on Dec. 13, 1987.

Bar-Gera blamed the show's problems on "an invisible hand." He said the state auditors had told him "everything is O.K. and done by the law and rules and even more than this."

The letter was dictated by phone. Bar-Gera wrote he was already on his way to London to find money for a third show in 1988.

"I hope to be back with positive results, " he said.

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