World OutGames Miami organizers raised more than $1 million as they planned for the 10-day event. Yet despite meeting around half of their budget, organizers told thousands of registered athletes on opening day May 26 that they didn’t have the money to stage most of the scheduled sports competitions or opening and closing ceremonies.
The fundraising figure, one of the new details emerging in the third week of a criminal investigation into the collapse of the event, shows organizers had taken in more money than prominent LGBTQ community members originally thought. What remains unclear is where that much money went as the OutGames’ debts continue to plague angry athletes.
Other alarming facts that have surfaced:
▪ OutGames’ checkbook went unbalanced for at least the last year.
▪ More than $90,000 was lost on nonrefundable deposits for Marlins Park stadium and The Fillmore Miami Beach, venues leased for OutGames activities that were canceled.
▪ Large bills remain unpaid, including Beach hotel charges now being passed on to stunned athletes who’ve returned to homes as far away as Australia.
“What I can tell you at this point is there has been a gross mismanagement of money,” said Miami Beach Detective Juan Sanchez, the department’s liaison to the LGBTQ community, adding that such mismanagement doesn’t necessarily indicate criminal behavior.
This week, Sanchez shared details of the investigation with members of the city’s LGBTQ advisory board, a citizen panel tasked with making recommendations to elected Beach officials on LGBTQ affairs. Police are waiting to see the results of a full audit by Miami Beach City Hall, which is 80 percent complete, before the cops take their findings to the Miami-Dade state attorney’s office.
The group’s financial picture is so muddy that the Beach has put four auditors on the case to sort through it all. The latest revelations are fueling a fraud investigation that began three weeks ago, immediately after the fiasco came to light.
“I can tell you they received well over $1 million,” Sanchez said of OutGames coffers. He said the organization collected registration fees for at least one competition that had already been canceled.
Meanwhile, the fallout continues. Beleaguered competitors expecting a LGBTQ-themed showcase of athletics instead found a large-scale mess. Now, several are caught in the middle of a billing dispute between the event’s official hotel, the National on Collins Avenue, and OutGames organizers, nearly all of whom have since resigned.
Miami Beach taxpayers are out $200,000 after the city gave seed money to OutGames. Now Beach leaders say they want to re-evaluate how large sponsorships are doled out.
I’m waiting to see what the investigation is going to come out with. I don’t think anyone stole a big amount of money.
Jerry Torres, a former board member who resigned the day of the fiasco
Questions abound about what happened to the money raised, including hundreds of thousands of dollars in registration fees — and what knowledge the OutGames Miami board of directors had about how the organization operated and its severe financial troubles in the four years leading up the May debacle.
Steve Adkins, president and CEO of the Miami-Dade Gay and Lesbian Chamber of Commerce, and a former board member for the OutGames predicted the case “will be left to the courts to sift through everything … If there’s enough stuff out there, it may lead to litigation. A judge will have to mediate all this.”
Amid the disappointment and angst, many of the athletes are feeling the full force of the event’s failure.
FOOTING THE BILL
At first, David Helliwell thought he was one of the lucky ones.
A swimmer who made the 9,331-mile trek from Australia, Helliwell’s aquatics events went on as scheduled at Ransom Everglades School in Coconut Grove. He and his husband, Mark Holmes, arrived to an organized competition, unlike the hundreds of others who were forced to improvise.
After almost all of the games and both opening and closing ceremonies were canceled, City Hall pitched in to help athletes organize their own tournaments. Angel donors and local tourism agencies swooped in to sponsor a welcome reception and closing ceremony for athletes, among other last-minute donations to assist visitors from all over the globe.
But it turns out Helliwell and several friends didn’t dodge the financial impact from OutGames’ collapse. Some costs still linger. He and Holmes were hit with a $798 National Hotel credit card charge — an expense they’d already paid when they booked their trip directly through OutGames.
“We tried to be as supportive of the OutGames as possible, hence booking through them — it was really sad that the games failed, and I can understand these things sometime happen,” Helliwell said. “What really disappoints me is that they took our money for a specific thing, i.e. our accommodation, but appear not to have paid it forward or [earmarked] the funds.”
Helliwell and others were billed by the National after OutGames failed to pay the hotel what it owes under a contract, according to the National’s ownership. In a prepared statement provided to the Miami Herald this week, the National’s management said World OutGames “tendered three untimely partial deposits for its master accounts, but has never paid the entire amounts due, thereby leaving a substantial balance.”
When Helliwell and others confronted OutGames officials, they said the group had paid guests’ bills through a $112,000 payment to the National.
“It is suggested that you immediately dispute this charge with your credit card holder,” OutGames wrote to the outraged athletes.
The unpaid hotel bills reveal deeper issues with OutGames management. Among those problems: OutGames did not get its expected nonprofit status that would’ve exempted guests from state and local taxes on their hotel bills.
“Additionally, [World OutGames] failed to properly qualify for the tax exempt status they represented they maintained, thereby increasing its liabilities to The National Hotel and their booked participants,” reads the National’s statement.
The corporation that produced OutGames Miami is the Miami Beach-Miami LGBT Sports & Cultural League, which formed for that specific purpose in 2012, about six months before Miami was awarded the 2017 games. Ivan Cano, former director of Miami Beach Gay Pride, was named CEO, and Keith Hart, a manager at American Express, was appointed chief operating officer.
The Miami-Dade Gay and Lesbian Chamber of Commerce’s foundation agreed to act as the league’s financial agent for the purposes of securing grants, but the league was supposed to qualify for nonprofit status to get tax exemptions on other expenses, such as hotel bookings.
That didn’t happen. Chamber officials said OutGames improperly used the foundation’s nonprofit status to seek sales-tax exemptions.
Cano and Hart did not respond to the Herald’s requests for comment.
WHERE WAS THE OVERSIGHT?
The picture that is emerging of the OutGames breakdown includes a small, ambitious but overwhelmed team of organizers and a seemingly disengaged board of directors, some of whom resigned years ago and say they were largely unaware of mounting money problems.
Warning signs were there as early as 2015, leading two prominent board members to send resignation notices. The two said they didn’t have decision-making powers and weren’t being given financial updates. Neither sounded alarms publicly and OutGames, apparently, never forwarded their board resignations to the state of Florida.
Michael Góngora, then a Miami Beach commissioner, and Cindy Brown, a leader in the LGBTQ community, were among those who lobbied to bring OutGames to Miami. Both later joined the LGBT Sports and Cultural League board after the group incorporated with the state.
“The board I served on in 2015 only met a couple of times, three at the most,” said Góngora, who is running for his old seat on the Miami Beach commission in November. “No financials were provided whatsoever. We really had no decision-making authority.”
Góngora told the Herald he did not know why the organization listed him or Brown in the latest state filings done in March 2016. He insists he was not involved as planning continued and the event approached.
“While I certainly consider myself a friend of the World OutGames, I really have no idea what the inner workings were, and who was doing what,” he said.
The OutGames Miami official program identifies Góngora and Brown as past board members, but state records show them still on the board.
“This was another example of what [organizers] didn’t do,” Brown said. “They didn’t file an updated report with the state.”
Other members who remained on the board told the Herald they simply weren’t aware of the issues because the board took a hands-off approach.
“We had a few board meetings throughout the year, but the board decided [Cano and Hart] would run it because they were staff,” said Jerry Torres, now executive producer for the Faena Group and an OutGames board member who resigned the day of the fiasco.
The board also included local bigwigs in the LGBTQ community, including George Neary, director of cultural tourism for the Greater Miami Convention and Visitors Bureau. Neary was not available for comment this week because he was away on business in Basel, Switzerland, but his boss at the bureau told the Herald that Neary was not aware of the money issues until the event imploded.
“That was not communicated by the organizers,” said Rolando Aedo, the bureau’s chief marketing officer.
Aedo noted the bureau covered costs in arranging alternative events for the athletes. The bureau also helped promote OutGames over the last few years, making the end result a major disappointment that he acknowledged does not reflect well on the Miami area.
“At the end of the day, we are viewed as a community,” he said.
OutGames Miami board members
In its official program guide, World OutGames Miami recognized:
Current officers and board members
▪ President: Bruce Townsend
▪ Vice President: Ivan Cano
▪ Treasurer: Keith Hart
▪ Secretary: Jerry Torres
▪ Director: George Neary
▪ Director: Nick Tierno
Past board members
▪ Steve Adkins
▪ Bob Balsam (deceased)
▪ Cindy Brown
▪ Karen Brown
▪ Michael Góngora
▪ Richard Murry
▪ Jose Sotolongo