A behind-the-scenes dispute involving members of the Brevard County Tourist Development Council over perceived conflicts of interest has become public, as Giles Malone and Bob Baugher repeatedly sniped at one another during Wednesday's council meeting.
Their debate focused on Malone's role in helping bring the Amateur Athletic Union Junior Olympic Games to Brevard County and his involvement in linking athletes with hotels. The games are scheduled for July 25 to Aug. 8 at various venues throughout the county,
Wednesday's debate could lead to a larger examination in the coming months of how the Tourist Development Council handles business dealings involving its members and their companies. That includes when TDC members must abstain from voting on certain matters and when they must formally declare they have a conflict of interest.
More: Brevard to host 2020 AAU Junior Olympic Games this summer
More: Space Coast officially named host of 54th annual AAU Junior Olympic Games
County officials plan to ask the Florida Commission on Ethics to help sort things out.
The TDC is a nine-member advisory board to the Brevard County Commission. It makes recommendations on how the county spends the more than $10 million a year generated by Brevard's 5% Tourist Development tax on hotel rooms and other short-term rentals.
Malone is a partner in Brevard Productions, which runs a variety of special events and sports events; and a partner in Maverick Multimedia, which operates the media company Space Coast Daily.
Baugher owns three hotels and other businesses in the Cocoa Beach/Cape Canaveral area.
Two employees of a company Malone operates are helping coordinate the housing of athletes who are participating in the games through the establishment of an "official host hotel" network for hotel room bookings.
Malone said he "donated" his employees for the project at no cost to the AAU or the county. Malone said commissions generated by the transactions would go to the AAU, and not to Malone or his businesses, and that his media company also would not benefit financially from having the Junior Olympics here.
Baugher asked for a special meeting of the TDC — which was held Wednesday by teleconference — to discuss this arrangement. Baugher said the arrangement was not disclosed on May 28, when the TDC and the Brevard County Commission both approved a grant to help bring the Junior Olympics to Brevard. Money for the grant will come from revenue generated by the county's Tourist Development Tax.
When Baugher learned Malone was involved in the housing coordination for the Junior Olympics, he said he suspected Malone or his company might be benefiting financially from the arrangement — which Malone said during Wednesday's meeting is not the case.
Malone said he volunteered to help the AAU and donate his staff's time to the effort to facilitate the efforts of the AAU to bring the games here, because one of his companies has experience in linking athletes to housing for other local sports events. Malone said the arrangement was made after the TDC already had approved the grant to the AAU. He said he was not aware the AAU needed such help when he and the other TDC members unanimously approved the grant on May 28.
"This is a fluid process," Malone said.
AAU First Vice President Rusty Buchanan, a resident of Cocoa Beach, confirmed the sequence of events that Malone detailed.
Buchanan said he felt working with Malone's company was the best option, given the condensed time frame for planning for the games, after they were moved here from Virginia.
The annual event originally was scheduled to be held this summer in the Norfolk/Hampton Roads/Tidewater area of Virginia. But the AAU was informed that some of the venues needed for the games likely would not be available, partly because Norfolk State University is shut down due to the coronavirus pandemic.
"I have no conflict of interest," Malone said, adding that he checked with the county attorney's office, and also has an advisory opinion from the Florida Commission on Ethics Office in a 2017 case elsewhere in the state involving a land donation that backs up his view.
"My sole intent was to help bring business to Brevard County," by helping hotels and other businesses gain revenue from the Junior Olympics being here, Malone said. "We're all trying to do the best we can for this county."
Baugher contends, however, that a correspondence from Malone's employee to local hotel officials gave no indication that Malone's involvement in the housing was a donation, and nothing more.
"It gives a perception that there's a giant conflict here," Baugher said. "Perception is a big issue."
Baugher said he wanted "public accountability" at a public meeting because of the potentially significant revenue from commissions that range from 5% to 15% for the hotel room rentals. Assuming 10,000 nights of hotel room rentals for the Junior Olympics and a room rate of $130 a night, a 5% commission would generate in $65,000 commissions and a 15% commission would generate $195,000.
"My whole objective is transparency for this," Baugher said.
Malone later questioned whether Baugher may have his own conflicts of interests by supporting projects and events as a TDC member that could benefit his hotels and other businesses.
"Transparency is a relative thing. Have you always been transparent?" Malone asked Baugher.
There currently are four hotel owners or general managers on the nine-member Tourist Development Council. That meets the requirement that either three or four TDC members are connected with hotels or other entities that collect the Tourist Development Tax.
The tax is expected to generate $10.8 million in the current budget year that ends Sept. 30, down from $16.02 million in the 2018-19 budget year, a drop resulting from of the coronavirus-related decrease in travel.
The largest share of the hotel tax money — 47% — is targeted for promotion and advertising of Space Coast tourism in an effort to attract more tourists. The rest of the money is allocated this way: 25% for beach improvement, 14% for capital facilities, 5% for the Brevard Zoo, 4% for cultural events, 3% for Space Coast Stadium and 2% for visitor information centers.
Baugher and Tourist Development Council member Tom Hermansen, another major beachside hotel owner, say they believe the county attorney's office's current interpretation of how hoteliers on the TDC handle conflicts of interest is more stringent that it previously was.
Malone said this also brings into question whether hoteliers must abstain from voting in any case in which a TDC-supported project could bring business to a TDC member's hotel.
Baugher said that could "make it impossible for me to sit on the board."
He said that's because he is not involved in the day-to-day operations of the businesses he owns, and would not know if a specific event generated hotel room rentals for one of his hotels, for example.
Baugher previously asked the TDC to no longer schedule events at his hotels because of the potential for a perceived conflict of interest.
Assistant Brevard County Attorney Christine Schverak said the "underlying relationship" between a TDC member's hotel and the event that brings tourists "can get muddy."
Schverak said the best way to resolve this issue is to get a ruling from the Florida Commission on Ethics, which she said has not previously issued opinions directly related to conflicts of interest by hoteliers sitting on a tourist council.
Schverak plans to work with TDC members and Space Coast Office of Tourism staff to prepare such a request for the ethics panel.
Other members of the TDC said they don't think anything was improper in the AAU housing matter — just a communications glitch.
"I don't believe there was any malicious intent by anybody," TDC member and County Commissioner Kristine Isnardi said. "Everyone appears on the up-and-up."
Isnardi said she appreciates the transparency that was created by Wednesday's public meeting.
"Now, the public is aware" of what's going on, Isnardi said.
TDC member Brian Anderson, who also is a member of the Palm Bay City Council, blamed the dispute on the short time frame involved in planning for the Junior Olympics.
"It was a very fast-moving train," Anderson said.
Dave Berman is government editor at FLORIDA TODAY.
Contact Berman at 321-242-3649 or dberman@floridatoday.com. Twitter: @bydaveberman
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