By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
According to the Greater Houston Convention and Visitors Bureau, it was all just a matter of timing. Last week, when the GHCVB announced the departure of its president, Eddie Webster, it noted that he had fulfilled a five-year commitment to the bureau. In the press release, GHCVB board chairman Lupe Fraga murmured soothing phrases about "the outstanding record of progress" Webster left behind, and how it was only with regret that the board accepted the change. Webster himself was also allowed a few words. In phrases couched to suggest that he had simply finished one task and was now ready to move on to another, the release quoted Webster as saying that "I am pleased to leave behind a strong organization" and that "my family and I have decided that timing is right for a new goal, that now is an opportune time to pursue a long held goal of working in the private sector."
An opportune time indeed. Missing in the official version was the rapidity with which Webster had apparently come to his decision. On Wednesday evening, June 25, Webster was expected at the Ritz-Carlton for a major reception for the World Energy Congress, a convention that will bring 8,000 international delegates to Houston next year. The reception featured Mayor Bob Lanier and County Judge Robert Eckels; it was also an obvious forum for Webster, the city's main convention salesman. But Webster was a no-show. Instead of schmoozing the convention planners, he was downtown, cleaning out his office. The next morning at 9 he met with the GHCVB board's personnel committee; at 1:30 p.m. he met with his staff. And by that afternoon he was gone.
Also missing in the official version was any mention of a city audit of the GHCVB -- the first in the bureau's 36-year history -- that had been released in April and which had raised numerous questions about the bureau's management. Likewise absent was any reference to the fact that the day before his departure, Webster was being quizzed by a Press reporter about what appeared to be a particularly egregious misuse of his bureau expense account, and that the bureau knew that a story focusing on Webster would be appearing soon.
So perhaps the timing truly was right for Webster to go after a new goal. To get out, in other words, while the getting out could still be massaged to look good.
The Convention and Visitors Bureau is one of the many quasi-governmental agencies that the city of Houston contracts with to carry out duties the city would just as soon not be saddled with itself. The purpose of the GHCVB is to attract conventions, with their many free-spending conventioneers, and tourists, with their tourist dollars, to Houston. To help it do so, the bureau currently receives $6.5 million annually from the city's hotel/motel tax and raises another$2 million from private sources. Though it has received millions in local tax money since 1961, the first time the bureau was ever audited by the city was last autumn, when a team from the city's department of finance and administration spent four months poring over the bureau's records for fiscal year 1995-96, trying to find out what the GHCVB had done with its money. The results, released at the end of April, weren't pretty.
Of all the issues the auditors raised, none stirred more resentment than the bureau's inability to account for its Rockets tickets. Maybe it was envy that provoked the questions to bureau president Eddie Webster, who had charge of four season tickets that had cost taxpayers $8,800. But as the Rockets headed toward the NBA playoffs, reporters pressed Webster to account for passes that were supposed to be used to woo big-spending convention and tourism clients and which, suspicion had it, were actually being used by GHCVB staffers; all Webster could say in response was that someone had thrown away the calendar on which he had written the names of those who had used the tickets.
Still, compared to other questions raised by the audit, the Rockets tickets were small stuff. The city auditors noted that the bureau had:
* commingled public money and private donations, in violation of its city contract;
* inadequately accounted for $30,000 in travel and other expenses;
* allowed a board member to vote on a financial matter in which his company had a stake;
* miscalculated its administrative expenses in such a way that they looked lower than they were; and
* based an employee bonus system on estimated data and subjective judgment.
One of the audit's biggest revelations was how well the bureau compensated its top employees. Since Webster had taken over in 1992, salaries within the bureau had mushroomed. Webster's vice president of finance and administration made $119,000 in salary, car allowance, pension and bonuses; his tourism vice president, a longtime friend, made almost $138,000; and his vice president for convention sales, also a former associate, made $128,000. At the top of the pyramid stood Webster himself. With an annual salary of $154,000, a car allowance of $8,400, pension benefits of $15,000 a year, an expense account worth close to $28,000 a year and a bonus worth $50,000, Eddie Webster enjoyed compensation and expenses worth a quarter of a million dollars a year -- a figure that made him the best-paid governmental or semi-governmental official in the city.
What the audit didn't reveal was equally troubling. During the last five years, and with the blessings of the bureau's board of directors, Webster had taken expensive trips to Europe, Mexico and Hawaii with his wife, billing all their expenses to the GHCVB, including in one instance what appears to have been personal items from a Paris boutique. At bureau expense, he frequently flew to his old home of Birmingham to attend meetings of a professional organization that seems to generate little business for Houston, but which put him within comfortable driving distance of where his daughter went to college. No expense has been too small or too large for Webster to claim, from a beer at Captain Benny's to a sandwich at Otto's to a $400 dinner for four at the Palm. During his tenure, Webster spent liberally, spreading the wealth at Carrabba's, Pappas Brothers Steakhouse, Anthony's, the Grotto and many other Houston restaurants. On a slow week, he spent $300 for expenses.
Of course, if Webster were to bring Houston plenty of money in the form of conventions and tourists, much of that could be justified. And Webster had plenty of statistics showing impressive growth in the Houston hotel industry, growth he was happy to take credit for. But according to some observers, Webster's data has to be viewed with suspicion. One point of contention is how much of that hotel growth was due to the efforts of the GHCVB and how much was due to the general improvement in the city's business climate since the early '90s. Professionals in Houston's convention industry have grumbled that rather than improve things, Webster destroyed a capable convention sales staff and that the business that matters, the large citywide conventions, has remained stagnant, with the city hosting no more than 35 to 39 major conventions a year for the last four years. And at least one major convention services company is laying off people because the bureau hasn't added any significant new convention business and none is on the horizon.
Two weeks ago, in his spacious corner office on the fourth floor of the GHCVB's headquarters on
Market Square, Eddie Webster said he welcomed a chance to tell what he has accomplished. At 51, Webster is an amiable Southern-style businessman who wears button-down shirts, single-breasted suits and large gold-rimmed glasses. A roll-top desk sat in the corner behind his big desk facing the door, and a black golf bag with an umbrella shaped like a golf club rested against the wall, a souvenir of the Shell Open.
In person, Eddie Webster is likable and persuasive, a salesman through and through. He is also, by all accounts, a devoted family man. Both those factors undoubtedly helped when he was being recruited to take over a troubled convention and visitors bureau in 1992. In 1989, then-mayor Kathy Whitmire fired the bureau's president, Don Vaughan, for making sexist comments, cut the bureau's staff and travel budgets and abolished the bureau's sports and film commissions, moves that her opponents used against Whitmire in her losing 1991 mayoral campaign. After Vaughan left the bureau, the next president lasted only a few months before being forced out as the result of charges of sexual harassment. For a time, the bureau was run by board officers.
All of that must have made Webster seem a breath of fresh air. Webster, for his part, says he was initially reluctant to take a job in Houston. He was recruited from the presidency of the Louisville, Kentucky, Convention and Visitors Bureau by then GHCVB chairman Marshall Tyndall, an executive with Texas Commerce Bank, and Jordy Tollett, director of the George R. Brown Convention Center. Tollett had met Webster at various trade shows and had been impressed by his manner. Married and the father of three children, Webster often talked of his career decisions in the context of what was best for his family, and hardly seemed destined to make the kinds of gaffes his predecessors had made. While Webster had never handled the kind of major convention business that Houston hoped to have, he seemed to be a perfect fit for the city: the consummate handshaker, greeter and easy Southern gentleman.
It wasn't a bad move for a small-town boy from Trustville, Alabama. After graduating from Auburn University, Webster had worked in Montgomery, Alabama's chamber of commerce before moving less than 100 miles north to spend 14 years at the convention and visitors bureau in Birmingham. After all that time in Birmingham, Webster says, he decided he wanted a "challenge," and took a job in Palm Springs, California, trying to build up a convention business in what was essentially a resort town. After three years in Palm Springs, he took the job in Louisville.
"When this job offer came to me, I was not interested," Webster said, but after a friend turned the job down and the bureau came back to him, he decided to give it a shot. After all, Houston might not be among the nation's top ten convention cities, but it's still a major market. With a major airport, international business centers and competitive convention facilities at the George R. Brown and Astrodome, Houston has strengths as a convention destination, though it still has a long way to go. The nation's top convention cities -- Las Vegas, Chicago and Orlando -- drew 2.6 million to 3 million convention delegates in 1995; Houston drew 600,000. With no tourist attractions comparable to those in Orlando and Las Vegas, and few downtown hotel rooms, Houston has scant chance of entering the top three, but it could chase Phoenix, which, despite a summer climate that matches Houston's horror for horror, is tenth in the country with 1.1 million delegates.
The chief reason to attract conventions is financial: There is gold in those delegates, who spend their money in a city's hotels, restaurants and entertainment spots. Conventions brought $264 million into Houston last year, according to the bureau's figures. The bureau figures an average of 2.8 people for each hotel room, and each delegate is estimated to spend $858 for a visit of 3.8 days. So a citywide convention -- defined as one that occupies 1,000 hotel rooms, thus requiring two or three hotels for accommodations and shuttle buses for transport, as well as the use of either the George R. Brown Convention Center or the Astrodome complex -- packs a financial wallop of at least $2.4 million or more.
Drawing citywide conventions is one of the prime reasons for creating convention and visitors bureaus in the first place, and though the GHCVB wasn't necessarily stellar when Webster was invited to take it over, it nonetheless had enjoyed its share of successes. Like many convention and visitors bureaus around the country, the Houston bureau grew out of a chamber of commerce operation. It's primarily funded by a percentage of the tax on hotels and motels that the city collects and pays to the bureau in quarterly installments, a cut that amounted to $6.5 million last year. (The hotel/motel tax also funds city convention and entertainment facilities, as well as the Cultural Arts Council of Houston and Harris County.) Another $700,000 comes from business memberships and $1.1 million is raised from other private sources, giving the bureau an annual budget last year of $8.4 million.
A 40-member board of directors is responsible for governing the bureau, and save for representatives from the city and county, most of its members are selected from the business community. But the full board meets only once a quarter; the real work of the board is done monthly by the 15 members of the executive committee, including Mayor Lanier and County Judge Eckels.
In 1983, before the collapse of oil prices, voters approved a $105 million bond election to build the George R. Brown to replace the aging Albert Thomas Convention Center. The design of the center was guided by a panel of convention planners recruited by convention center administrator Jordy Tollett, who had started in the business at age 19, setting up chairs in the Astrodome for Judge Roy Hofheinz. When the Brown opened a few days early and under budget, Tollett could point to a sparkling new building with state-of-the-art planning. The docks were planned to drastically cut unloading and loading time. The floor, which could sustain the weight of a locomotive, was fully plumbed and wired, enabling exhibitors to set up any sort of exhibition in nearly any configuration. It was a meeting planners' dream, and hundreds of them flew to town to check it out for new conventions and trade shows.
But some of the meeting planners had a major reservation: They would only commit their conventions if a 1,000-room "headquarters" hotel were built across the street from the George R. Brown. Unfortunately, during the oil bust, downtown had lost 4,500 hotel rooms, and hotel chains were reluctant to build anything new.
In the midst of these problems, the bureau -- undoubtedly aided by being in the home city of then-President Bush -- scored one of its greatest coups, snatching the 1992 Republican National Convention away from San Diego. To do so, Houston put up $10 million worth of goodies, funded in part by a one-cent increase in the city's hotel/motel tax that came to be referred to as the "Republican penny." This was the bureau Eddie Webster inherited: an organization suddenly flush with money thanks to a new tax and flush, for the first time in years, with a sense of its own capabilities. Despite all its problems, the GHCVB had collared one of the biggest conventions in the country and almost doubled the amount of hotel/motel tax revenue it would receive after the convention was over. Prior to the Republican penny, hotel/motel tax revenues to the bureau were around $3.6 million annually; now they're closer to $6.5 million.
The bureau had weathered its storms, and its veteran employees might have reasonably expected good times ahead with a new director. Instead, a lot of them would soon be rewarded with pink slips.
"We tried to save as many folks as we could," Webster said in his office two weeks ago, "but during those first two years, we had some people that left, that took other jobs. And I think we improved the morale and now have a pretty solid team effort here on staff."
Undoubtedly, Webster improved the morale of the new people he hired, if only because he used the bureau's newly rich circumstances to bump salaries well above what they had been in the past. Those let go, though, were considerably less sanguine. During the last five years, 35 people have left, Webster said, while the staff has grown from 52 to 62 employees.
One of Webster's first major changes was to hire someone to direct the bureau's tourism effort. Within six months, he had brought in an old friend from Birmingham, Ed Hall, at a salary of $100,000. Birmingham is hardly an international tourist town, but Hall, Webster said, rose to the occasion. "When we brought him in here," Webster added, "he pretty much started at zero, especially on the international basis."
But that's not exactly accurate. While it's true that prior to the Republican penny the bureau lacked the tourism resources it now has, it has always had a tourism program in place. Steve Moore, Houston's tourism director in the late '80s, was so effective that in 1989 San Antonio, a tourist mecca compared to Houston, hired him as director of its convention and visitors bureau. Moore's successor, Tom Anderson, left the bureau to go to Continental Airlines' Latin American operation.
But these tourism salesmen were paid salaries in the $50,000 range, while Hall not only came on at $100,000, but was also given $8,400 in automobile expenses for his Jaguar sedan. And last year Hall was given a $19,000 bonus and spent $27,000 in expenses, often for trips to Europe.
If Hall was among the first new people in, Bob Nowak, a young college graduate who had put together a visitors' information center on a shoestring, was among the first to go. Nowak had pieced together a computerized events calendar and hired four part-time college students who, among them, spoke several foreign languages to staff the center. Nowak's staff had manned the phones during weekdays, answered questions and sent out information for a budget of around $65,000; once Nowak was gone, the visitors' information system was farmed out to VSI, a Florida-based company whose owner was a friend of Ed Hall, and a service that once cost the bureau about $5,000 a month now costs about $10,000 a month. Webster said the contract was bid competitively, and provided a list of three other bidders as proof, but workers at the bureau remember the deal not being so open, but rather being put together behind closed doors.
Now when callers dial (800) 4-HOUSTON, they talk to someone in Florida reading from a computer screen. If the caller wants printed information, his name and address are sent electronically to the Texas prison system, where inmates stuff and address the envelopes. Many bureaus keep such services local, assuring they have quality control and that the people answering the phones are knowledgeable about the city. Webster said VSI and the prisoners had done a good job, and that an information and reservation hotline can be carried out anywhere a phone bank can be installed.
Nowak wasn't the only established employee let go when Webster arrived. The office manager of 23 years was forced out, as was the director of finance and administration, who was making about $50,000 a year. To replace the latter, Webster hired Rhonda Smith from the city at $85,000 a year. A comptroller, a human resources person and other assistants were added, with the result that the bureau's administrative costs have grown considerably. When arguing its budget before the city, the bureau claimed that its administrative costs were 15.9 percent of its costs, which would put it in the middle of similar bureaus. But the city's auditors came up with administrative costs of 22.5 percent, higher than any city to which the bureau compared itself.
Webster made his most significant staff changes in the convention sales department. Several of its key people were either fired or pushed out, and within three months of taking over, Webster created the position of vice president of convention sales at a salary of $93,000 a year. To fill the post, he passed over salespeople within the bureau, and instead brought in Kathy Abrash, who had worked with him in Palm Springs. Linda Schoene, who was the bureau's leading producer and who had directed the convention sales effort for the bureau while earning around $50,000, left to go to work for the Astrodome.
Other key employees in the convention sales area were cleaned out. Among them was Nancy House, a director of convention services who had received outstanding reviews. She was fired in February 1994 and replaced by Sara McPhillips, a close friend of board officer Sandy Hulver. Joyce Joe, an 18-year veteran and director of housing who booked rooms for conventions, was also forced to resign, in September 1994.
Some convention business owners were disturbed by the fact that board member Hulver, who owned a convention services company, had hired the husband of new convention sales chief Kathy Abrash. The concern was that Hulver's company might end up with more than her fair share of the convention business, and since one of the reasons businesses pay annual membership fees of $385 to belong to the bureau is for business leads, nobody was eager to see a competitor gain an advantage. Richard Einhorn, president of Production Transport, a company that provides hotel shuttle services for conventions, grew upset about the arrangement and shared his concerns with ten other companies, urging them to unite and confront Webster about the issue. In an August 15, 1996 letter faxed to Larry Schkade, president of IDEAS, ETC. Inc., Einhorn wrote "that certain member companies of the bureau have been given an unfair advantage over the rest of us. This advantage seems to stem from the fact that the managing parties of these companies have extremely close personal ties to employees of the Houston Bureau."
The "member company" Einhorn was pointing the finger at was rather obviously that of GHCVB board member Hulver, and after rounding up supporters from other convention services companies, he obtained a meeting last September with Webster and confronted him with charges of favoritism. Webster fired McPhillips shortly thereafter, and Kathy Abrash resigned last December.
Einhorn still has a beef with the bureau, though. Because he travels extensively for his business, his company's headquartered in Virginia with a branch office in Dallas. But not long ago, thanks to a new board policy, his dues were raised by $1,000 a year because he has no Houston office. Einhorn wants to keep doing business in Houston, but he's not about to lay out another thousand a year, in part, he said, because the bureau is not attracting a large enough number of citywide conventions that require his services.
"The only business we bid on are citywide conventions," said Einhorn, and the business from those "has gone down, no question." Executives in other citywide convention services, one of whom is laying off workers, confirm that business is flat. Jordy Tollett said that the city has booked no more than 39 citywide conventions a year since Webster arrived, and prospects for attracting more don't appear good. He keeps the George R. Brown profitable by attracting consumer shows such as gun shows, boat shows, sewing shows and others that pay rent, but don't attract large numbers of out-of-town visitors.
But being a good salesman, Webster knows how to convert a problem into an asset. The old bureau's problem, Webster said, was its obsession with getting conventions. "That's the only area this bureau was concentrating on when I got here," he said. "We've really taken a different approach. We've not only concentrated on citywide or big convention business ... we have concentrated on more medium-sized and smaller groups so that we can send leads to get bookings to every size of facility in Houston and not just the majors."
"The year before I got here," he added, "the number of room nights booked was around the 225,000 level. We jumped it to 331,000 the first year, 453,587 the next."
The numbers sound good, but some critics suggest they need to be looked at closely. It's true, as Webster said, that the bureau's confirmed bookings list for future meetings lists dozens of small meetings at hotels. For example, a booking filed on April 5 confirms 25 rooms for the sales meeting of Manhattan National Life at the Houston Airport Marriott two weeks later. A booking filed the same day confirms 15 rooms for four days for a training seminar at the Galleria Marriott. Dozens of these sales meetings, training seminars and other hotel gatherings go into the bureau's impressive tally of convention room gains over the past five years.
But Donald Ward, a former bureau employee who helped get the Republican convention for Houston, practically snorted at Webster's characterization of the bureau's efforts. In the past, said Ward, the bureau would have paid little attention to such small bookings; these, according to him, are what the 150 or so sales representatives of Houston's hotels should be booking. The GHCVB should be focusing on the big conventions only they can attract. Ward, who left the bureau three and a half years ago because of ill health, said that during his time at the bureau, any meeting of fewer than 50 rooms was not considered a piece of business that the bureau should take credit for.
In fact, it seems that Webster's statistics appear so robust because the bureau is taking credit for rooms booked by the city's hotels. Previous bureau administrations kept separate data on bookings that the bureau created and those done by "others " -- that is, by the city's hotels. Before Eddie Webster came, hotels jealously guarded information about their bookings, but buoyed by the improved business climate, and Webster's persuasive manner, hotels are now sharing their data and making the bureau look good. There is no longer any listing for bookings by "others" in the bureau's confirmation sheets.
The growth of such numbers was good to Webster for a very important reason: bonuses. Webster said that at the request of his board, he constructed a bonus system for the bureau's top salespeople based on room nights booked and business leads generated.
As for leads, the definition of what constituted a legitimate lead for a citywide convention got to be so fuzzy that the convention sales vice president Kathy Abrash wrote a memo in March 1993 to straighten things out. "A citywide lead," she wrote, "or a Bureau initiated bid only occurs when the client confirms that Houston is under serious consideration for specific dates and you are asked to hold these dates on a tentative basis."
But that didn't clarify the situation. Bonus-hungry salespeople wanting confirmed leads started reserving so many nebulous dates at the George R. Brown Convention Center that Jordy Tollett put an end to the practice and demanded written confirmation from meeting planners that Houston was being seriously considered for a convention.
The bureau's most implausible convention lead was circulated as a confirmed booking notice on November 20, 1995. It was for the Women's Settlement Conference, a meeting of women involved in breast implant lawsuits. The meeting, the first of its kind, was supposed to attract 245,000 visitors with 96,000 room nights, using the George R. Brown, the Astrodome or possibly Rice Stadium. If the meeting had happened as promoted, it would have been the biggest convention the city had ever seen. Instead, when the gathering finally took place, it required one meeting room in one hotel. Yet as a confirmed booking, the bigger, nonexistent convention could be included when figuring bureau bonuses.
With no third-party checks on hotel rooms actually booked, and a system that rewarded leads rather than closings, the GHCVB sales staff received generous bonuses last year, ranging from a low of $3,240 to $14,000 and $20,000. All told, the bureau paid out $358,423 in bonuses in fiscal year 1995-96, including more than $900 for a mailroom clerk.
While emphasizing small meeting bookings -- real or imagined -- Webster said he has also made another major change in the GHCVB: He has boosted Houston's tourism trade.
The emphasis, Webster said, is "first and foremost Mexico, Central and South America, and secondarily, but a close second, is Europe. Europe is the market that the bureau and the city never concentrated on. And because of the nonstop flights that we have, it's a natural....
"Not to oversimplify it, but it is really pretty simple. We weren't packaging Europe, and Europeans travel in packages ... and our packages weren't on the shelf there."
So both Webster and vice president for tourism Ed Hall have been going to Europe at least a couple of times a year, Webster taking his wife, Hall flying alone. While the tourism talk certainly rationalizes European travel for the bureau's top people, Europe is hardly a close second for Houston travel, and the emphasis on it has, by Webster's own admission, produced only a modest number of room bookings. Something like 80 percent of Houston's international travel market is from Latin America, not Europe, and more is coming, with or without the help of the bureau. Continental Airlines is clearing out terminal space to prepare the way for more direct flights to South and Central America. But neither Webster nor Hall has expensed trips for travel anywhere south of the border other than Mexico.
In fact, last month, when Continental Airlines hosted the consul generals of eight Latin American countries to announce Spanish signage throughout Bush Intercontinental Airport and a push for new routes and tourism between Houston and the countries, neither Webster nor Hall was present, leaving some of the city's Latin American trade advocates wondering whether Webster was taking their business for granted or just preferred spending time in Europe.
As a board member of two professional organizations, the International Association of Convention and Visitors Bureaus and the Professional Conference Managers Association, Webster has traveled extensively for other reasons as well. The IACVB, which consists of convention and visitors bureau managers such as Webster, holds meetings several times a year, to which Webster has traveled, staying at first-class hotels and entertaining at restaurants. But who was he entertaining but other executives like himself? The real work of a convention salesman is meeting professional meeting planners in New York and Washington, and cutting good deals on room rates, shuttle buses and other convention services.
Webster also serves on the education foundation of the PCMA, which is headquartered in Birmingham and run by an old friend, Roy Evans. The foundation is interested in improving the education of professional hotel managers and conference planners, and Webster has seen to it that the GHCVB has donated money to the foundation, in the amount of $13,000 over the last five years. Many other bureaus and hotels contribute to the foundation, Webster said, "which is one of the most successful foundations in the hospitality industry."
Webster's preferred mode of travel to Birmingham and for some other trips wasn't Houston's major air carrier, Continental, but Delta. Although Continental provides the bureau with free ticket vouchers for its use, during the last four years Webster has spent more than $15,000 on Delta tickets, most of them first class, to domestic destinations such as Palm Springs, Cincinnati, Pittsburgh and Memphis -- all cities served by Continental. In August 1994, for example, Webster charged $5,516 worth of tickets to take him, his wife and then-GHCVB board chairman Milton Scott and his wife to a meeting of the American Society of Association Executives in Washington, D.C. Though there's no question that the ASAE meeting, which brings together meeting planners from all over the country, is an important one, there's also no question that Webster and his party could have flown free on Continental. Except maybe they couldn't have flown first class; the Continental vouchers are good for coach and can be upgraded to business class if seats are available.
In defense of his practice, Webster said that Delta is a corporate member of the bureau and deserved some support, and that he occasionally bought tickets from Continental as well. But former GHCVB executive Donald Ward said that he used the Continental vouchers without a hitch for flights all over the country and seldom had to buy a ticket.
Such discretionary purchases seemed common practice; perhaps the reason they weren't noticed was, as the city's audit pointed out, some members of the board of directors who should have been keeping an eye on Webster at times profited from their connection to the GHCVB. The audit noted that the bureau had signed a $400,000 note with Texas Commerce Bank while TCB executive Marshall Tyndall was serving as a board member. While the note may have been a good deal for the bureau, and the city auditor pointed out that the practice didn't necessarily violate the bureau's contract, it did create an impression of one hand washing the other.
The audit, however, didn't point up all the interconnections between board and bureau. For example, the board's chair for the last two years has been Lupe Fraga, brother of City Councilman Felix Fraga. Along with Webster and his wife, Fraga and his wife have flown to Mexico City at bureau expense to meet with Mexican customers. Considering that Fraga is a longtime Houston businessman, speaks fluent Spanish and could be an effective salesman for the city, the trip may well have been justified. But when Fraga was the man assigned to cast a critical eye on Webster's expense accounts, such chumminess might cause questions.
Also, Fraga's company, Tejas Office Products Inc., has regularly sold office supplies to the GHCVB, billing $19,000 during the last two years. Though Webster said that the office purchases are done by oral solicitation of bids, and that the office supplies are spread among three other companies besides Fraga's, his vice president for finance and administration, Rhonda Smith, said that the bureau doesn't actually request bids. Rather a supply clerk, equipped with a list of office needs, reviews catalogs and price lists on a weekly basis and determines the best prices, "keeping in mind the Minority, Women and Disadvantaged Business Enterprise requirements of the city," for which Fraga's business qualifies. For his part, Fraga said that the purchases are a completely hands-off deal, and that he is not even aware of when the orders come in or what they are for.
Last Wednesday, the day before he decided to, in the words of GHCVB's press release, "inform the board of his desire to pursue opportunities in the private sector," Webster responded calmly to queries about what, to some, might appear to be conflicts of interest. While maintaining that nothing untoward had happened, he said the GHCVB board was creating a much stiffer conflict of interest rule that would prohibit board members from voting on matters that might affect them financially. He was unfailingly polite even as he answered questions about what appeared to be a truly unusual expense report. This one in particular concerned a $42 item signed for by his wife on August 5, 1994 , at a shop in Paris called Sommeil d'Orphee, Linge de Maison. The first part of the name translates as the Sleep of Orpheus, while linge de maison means bed linens. At first, Webster said he recalled the shop as being a sidewalk cafe that wouldn't take his American Express card, so his wife had signed on her Visa card. Later, he amended his reply, saying that it was instead a bed and breakfast, and the sidewalk cafe was out in front. But when the Press called the Paris phone number on the charge slip and asked "Vous étes restaurant?" the manager replied "Pas de tout." Not at all.
Confronted with that information, Webster said, "I can't explain that other than what I'm telling you we did."
It had been a tough time for Webster. From riding high as one of the city's best-paid officials, he had suddenly become one of its most closely watched. "To be very honest with you," he said, "this situation that we are going through now with the audit has not helped morale. Because there are a lot of people here that know the good side of the story hasn't been told."
Telling it to Council as they scrutinized the city's contract with GHCVB later this summer might have been Webster's toughest sales job since arriving in Texas. But it's a sales job he ultimately opted out of. Last Thursday afternoon, he met with his staff and told them that he had worked hard, that he had never abused his expenses and that every change he had made was approved by the GHCVB board. But he also told them, family man to the end, that for the sake of his health and that of his family, it was time for him to go into the private sector.
What he likely didn't tell them is that he had an ace in the hole. His employment contract allowed him a comfortable severance package: a year's pay at $154,000. But then again, no one yet knows what will happen to the new BMW sedan that the bureau had leased for him.