Left: Former Visit Philadelphia CFO Joyce Levit Right: Visit Philadelphia CEO Meryl Levitz

Left: Former Visit Philadelphia CFO Joyce Levit Right: Visit Philadelphia CEO Meryl Levitz

Philly’s more fun when you… embezzle? What’s next for Visit Philly

No doubt you’ve seen Visit Philadelphia’s ubiquitous marketing campaigns that include billboards dotting the I-95 corridor with splashes of red and text that looks like a handwritten note: “With Love, Philadelphia.”

Since Visit Philly’s inception in 1996 under former Mayor Ed Rendell who wanted to put Philly tourism on the map, more people have come to Philadelphia than ever before to visit. They’ve stayed longer, paid more to sleep in our hotels and booked more tours to take in this city.

But the nonprofit agency with its own governing board — which is almost entirely funded through the city’s hotel tax — has also been mired in controversy, not the least of which is that a grand jury says the former chief financial officer allegedly embezzled $200,000 over multiple years to pad a luxurious lifestyle of fur, expensive skin care and high-end restaurants.

Joyce Levitt, the former CFO, was charged this month and an investigating grand jury put partial blame on Visit Philly, CEO Meryl Levitz and the city for “lax oversight” it says allowed the embezzlement to occur. Had it not been for a reporter for a now-defunct nonprofit news outlet who dug up the story and a district attorney willing to prosecute, Levitt may have never been charged.

There have also been questions raised over the years as to how and why Visit Philly exists. It’s the second of two tourism agencies funded by the city and there’s been a chorus of voices calling for the two agencies — Visit Philly and the Philadelphia Convention and Visitors Bureau — to merge into one organization with one administration and one messaging campaign.

For now, Visit Philly says its oversight structure is just fine and it contends it’s made changes to ensure something like this doesn’t happen again. But some city officials say they’ll heed District Attorney Seth Williams’ calls and reevaluate it anyway.

Mostly because there’s $10 million of annual taxpayer money at stake.

What Visit Philly’s done for the city

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Visit Philly

Center City has seen a 287 percent increase in leisure hotel demand since 1996, Visit Philly’s inception, and there’s been a 90 percent increase in overnight leisure travel since the same time.

Visit Philly considers itself a success. Those figures don’t lie, and they correspond with massive economic impact to the city and the region. But a lot’s changed in the city in the last 20 years and, since then, both Rendell and former Mayor Michael Nutter put an emphasis on improving Center City and marketing the city to tourists.

Visit Philly has an annual budget of about $11 million that’s largely spent on marketing. More than $9 million of their funds come from the city’s hotel tax. That tax is split among the Pennsylvania Convention Center Authority, the PHLCVB and Visit Philly, the last of which receives the smallest cut of the hotel tax dollars.

The tourism agency has objectively increased the city’s visibility, especially within 200 miles of Philly — where the agency focuses almost all of its efforts. And it’s almost impossible to talk about those successes without talking about Levitz, the CEO of Visit Philly and a well-known face in tourism and civic leadership circles.

Levitz has been with the organization since the beginning and made Visit Philly, originally known as the Greater Philadelphia Tourism Marketing Corporation, her baby. Leaders in the city have said there are few people who have done more for the city in the last two decades than Levitz, a hands-on leader and a frequent guest at city functions.

Tax records show she’s been well-compensated for that high profile. In 2013, Levitz made $458,000 for leading Visit Philly, or more than twice what the mayor of the city made last year. In a letter to the Inquirer this week, Rendell defended the agency and Levitz in wake of charges being announced against the former CFO and questions being raised about how Visit Philly operates.

“As the Inquirer said, Visit Philly is not without its flaws. But isn’t that true of almost any organization?” Rendell wrote. “Visit Philadelphia should be very proud of all the men and women who work there and particularly of Levitz.”

A tale of two agencies

The Convention and Visitors Bureau that was created in the 1940s has a different target audience. It’s looking to draw in conventions, business travel and international leisure tourists. CVB also has a higher annual budget than Visit Philly and spends about $17 million yearly.

Philadelphia is the only major city Billy Penn could find that has two separate marketing and tourism agencies. Other major cities like New York, Chicago and Houston have consolidated their tourism-related efforts into one agency over the years and have seen better results in terms of increases in visitors. Most cities depend entirely on their convention and visitors bureau to market the city to tourists.

Instead, Philly has two agencies. That means competing campaigns and dual messages.

City Controller Alan Butkovitz released a report in 2014 examining the structure of the city’s two tourism marketing agencies and recommended the mayor convene a group of stakeholders to work toward merging the two. His report suggested at least $1 million could be saved in efficiencies. Butkovitz said this week that under Nutter, that convening never happened. He says he’d still recommend Kenney take similar steps.

Bill Gullan, a Philadelphia branding expert who has been critical of the city’s dual marketing campaigns, called the structure “non-sensical” and said from a branding perspective, putting two messages out there — one being “With Love, Philadelphia” and another being “PHL: Here For the Making” — doesn’t benefit consumers or the city.

“It doesn’t coalesce and Philadelphia loses for that reason,” he said. “When you look at other cities that do this in a unified way… the expression of those cities and regions leaves the marketplace with a much clearer sense of what they’re known for and how they regard themselves.”

Gullan says he prefers the CVB’s marketing campaign. Butkovitz hinted that people in the city think Visit Philadelphia has done a better job. Whatever the case, they both say the city needs to pick one.

“What has been lacking, generally speaking, has been a “referee,” in the words of a hospitality leader,” Butkovitz wrote in his 2014 report. “Without strong, strategic leadership focused on the good of the sector as a whole, Philadelphia’s hospitality sector has not yet achieved its potential.”

There’s another person who has thoughts on the city’s multiple tourism agencies: Joyce Levitt, the former CFO now facing criminal charges. She still has active social media accounts, including a LinkedIn profile where she’s removed the names of her last two employers. Her Facebook page shows that she commented on an NBC10 story in 2013 about a report done by Butkovitz that concluded police overtime spending was “out of control.”

“…since additional police are always necessary for any sports, concert, parade, etc. why not allocate some of the tax collected on hotels, restaurants and tickets sold for these events to the police budget?” Levitt wrote. “That is where the funds are needed. Instead they are designated for advertising to multiple organizations all doing the same thing! It is about time the city took a look at where the tax dollars are really going.”

Was there a cover-up?

Left: Joyce Levitt Right: Meryl Levitz

Left: Joyce Levitt Right: Meryl Levitz

It was an internal audit that found some $200,000 missing over the years in Visit Philly’s budget.

In 2012, when leaders of Visit Philly went to Levitt and told her she’d been busted, she agreed to pay back the $210,000 and resign without the authorities being notified. Visit Philly didn’t make a public announcement that Levitt had exited (and paid full restitution) in February 2012. And there was a single note 30 pages into a tax return noting the cash that came back to the agency after Levitt paid it back.

Visit Philly and its board, which at the time included former Mayor Michael Nutter and then-Councilman Jim Kenney, contends lawyers told them this was the best course of action in order to be fully paid back. Members of the Visit Philly board Billy Penn reached declined to comment.

In 2014, a story popped up on the now-defunct AxisPhilly detailing what had gone down at Visit Philly, and by August of that year, the DA’s office had launched an investigation. The case was referred to a grand jury in January 2015.

The grand jury didn’t buy that Visit Philly leaders were just listening to their lawyers. It came to the conclusion that the agency covered up the alleged embezzlement because it didn’t want the public finding out that Levitz — a well-known community figure — didn’t catch what her CFO was allegedly up to.

“It was Levitz’s negligence and the city’s lack of oversight,” the grand jury wrote, “that led to Levitt’s continuous embezzlement.”

DA Williams said in a press conference announcing the charges that he’d reached out to Kenney to express his concerns about the oversight of Visit Philly, saying the city should re-evaluate how it keeps tabs on its tourism organization gone rogue.

“Visit Philadelphia let Joyce Levitt watch the ledger books and $200,000 of the agency’s money charged out the door,” Williams said in a prepared statement. “Thank you to the men and women of my Economic and Cyber Crime Unit and the Investigating Grand Jury who, like me, are disgusted by Joyce Levitt’s embezzlement of money that was meant to benefit the people and City of Philadelphia and not her lifestyle.”

Williams’ spokesman Cameron Kline wouldn’t comment beyond that, and when asked why Levitz or anyone else from Visit Philly isn’t facing charges as well, Kline said “we don’t discuss the methodology behind our investigations, who is charged or why they’re charged.”

But Visit Philly says Levitz isn’t responsible.

“Joyce Levitt was responsible for the misappropriation,” Visit Philly spokeswoman Paula Butler said in a prepared statement. “The Grand Jury’s presentment clearly and unequivocally did not recommend any charges against Meryl Levitz. The wording of the presentment is simply the opinion of the prosecutor. We disagree with the ADA’s opinion.”

There’s also a legitimate question here: Even with a different oversight structure, is it possible Visit Philly still wouldn’t have confronted Levitt until 2012?

Doug Karpp, a California-based underwriter for crime insurance and an expert in corporate embezzlement, said employee fraud is much more common than most people think, and easy to miss if certain safeguards aren’t in place. He said he understands Visit Philly says it was heeding the advice of legal counsel to not go to the police — but he would have probably done things differently.

“They’re setting a tone that they’re not going to be hard on any embezzlers in the company,” he said. “They should make these people do the perp walk and publicize within the organization that ‘we caught this person, and we don’t put up with that.’”

Changes could be ahead

Visit Philly says it’s made internal changes since 2012 to ensure embezzlement of taxpayer dollars doesn’t happen again. But Williams and Butkovitz say the city should step in to make a change. Maybe that change would finally be that Philadelphia has just one tourism and marketing agency.

When asked if Visit Philly would be in favor of merging with the Convention and Visitors Bureau, Butler said in a prepared statement: “We have said repeatedly that we are always open to strengthening the industry.”

Butkovitz says it would be up to mayoral leadership and council legislation to make a merger happen. Kenney’s spokeswoman said the mayor supports merging Visit Philly with the PHLCVB and “additional oversight would be built into that new structure.” A spokeswoman for Council President Darrell Clarke said the councilman doesn’t typically comment on potential legislation before it’s introduced.

So at least the mayor is on board. The City Controller says it should happen. But when?

In 2014, Levitz’ contract was extended until 2018 when she’ll be 71. It’s conceivable the agency could phase in a new leader at that time, as Levitz is approaching retirement age.

“The board voted unanimously to extend Meryl’s contract because it felt she was the best person in the country to lead the organization,” Visit Philly board chair Manuel Stamatakis said at the time of her contract extension. “Meryl has led the way in redefining leisure tourism in our region, and her success… is unparalleled.”

Gullan said he’s still support change over time in terms of how Philadelphia markets itself. But he has his doubts that it will come.

“It’s politics and it’s money and fiefdoms and kingdoms and personal brands,” he said. “Which is not to say these folks don’t care about the city. The net effect is that our potential as a brand is constrained by the fact that organizations work in parallel ways.”

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