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Report: Investigation Into Allegations of Wrongdoing of Certain Individuals Associated with the Christopher Columbus Quincentenary Jubilee Commission [1]
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C.C.
Quincentennial
Committee
Hearings
Info.
(This report has not been officially approved by the commit-
tee, and therefore, may not reflect the views of all of its mem-
bers.)
102d Congress
}
COMMITTEE
2d Session
COMMITTEE PRINT
Print 102-9
INVESTIGATION INTO ALLEGATIONS OF
WRONGDOING OF CERTAIN INDIVIDUALS
ASSOCIATED WITH THE CHRISTOPHER CO-
LUMBUS QUINCENTENARY JUBILEE COM-
MISSION
A REPORT
PREPARED BY THE
SUBCOMMITTEE ON CENSUS AND
POPULATION
OF THE
COMMITTEE ON
POST OFFICE AND CIVIL SERVICE
U.S. HOUSE OF REPRESENTATIVES
JANUARY 1994
Printed for the use of the Committee on Post Office and Civil Service
U.S. GOVERNMENT PRINTING OFFICE
68-005
WASHINGTON : 1994
For sale by the U.S. Government Printing Office
Superintendent of Documents. Congressional Sales Office. Washington. DC 20402
ISBN 0-16-043408-4
,
WILLIAM L. CLAY, Missouri, Chairman
PATRICIA SCHROEDER, Colorado
BENJAMIN A. GILMAN, New York
GUS YATRON, Pennsylvania
FRANK HORTON, New York
MARY ROSE OAKAR, Ohio
JOHN T. MYERS, Indiana
GERRY SIKORSKI, Minnesota
DON YOUNG, Alaska
FRANK McCLOSKEY, Indiana
DAN BURTON, Indiana
GARY L ACKERMAN, New York
CONSTANCE A. MORELLA, Maryland
MERVYN M. DYMALLY, California
THOMAS J. RIDGE, Pennsylvania
THOMAS C. SAWYER, Ohio
ROD CHANDLER, Washington
PAUL E. KANJORSKI, Pennsylvania
CHARLES A. HAYES, Illinois
MICHAEL R. McNULTY, New York
JAMES P. MORAN, JR., Virginia
ELEANOR HOLMES NORTON, District of
Columbia
BARBARA-ROSE COLLINS, Michigan
GAIL E. WEISS, Staff Director
ROBERT E. LOCKHART, General Counsel
DORIS MOORE-GLENN, Deputy Staff Director
JOSEPH A. FISHER, Minority Staff Director
SUBCOMMITTEE ON CENSUS AND POPULATION
THOMAS C. SAWYER, Ohio, Chairman
MERVYN M. DYMALLY, California
THOMAS J. RIDGE, Pennsylvania
MICHAEL R. McNULTY. New York
ROD CHANDLER, Washington
TERRIANN LOWENTHAL, Subcommittee Staff Director
(II)
ONE HUNDRED SECOND CONGRESS
THOMAS c. SAWYER ONE CHAIRMAN
- M SUMMILLY, CALIFORNIA
- & RIDGE PENNEYL
MICHAEL a new VONE
- CANCLER, WASHINGTON
H.S. House of Representatives
COMMITTEE ON POST OFFICE AND CIVIL SERVICE
SUBCOMMITTEE ON CENSUS AND POPULATION
608 HOUSE OFFICE BUILDING ANNEX I
Mashington, DC 20515-6245
TELEPHONE (son 220-7623
November 23, 1992
Honorable William L. Clay
Chairman
Committee on Post Office and Civil Service
309- Cannon House Office Building
Washington, D.C. 20515
Dear Mr. Chairman:
We are pleased to transmit to you a report prepared by the
Subcommittee on Census and Population concerning its investigation
into allegations of wrongdoing on the part of certain individuals
Commission. associated with the Christopher Columbus Quincentenary Jubilee
The report summarizes the evidence gathered by the
subcommittee. during its year long investigation and presents
recommendations for strengthening the organization and management
of federal holiday commissions in the future. It is the product of
many hours of hard work on the part of committee and subcommittee
Members and staff. Fe are grateful, as well, for the strong
support we received from you and Congressman Ben Gilman.
We want to acknowledge the work of committee and subcommittee
staff, both majority and minority, in conducting the investigation
and preparing this report. In particular, we want to recognize Ms.
Jan Chisolm-King for her outstanding efforts in drafting the
report.
We hope that our review of the Columbus Commission will help
prevent similar problems from occuring at federal commissions in
the future.
Sincerely,
Comstawyne THOMAS C. SANYDR
Tom Roge
THOMAS J. RIDGE
Chairman
Ranking Minority Member
(IT)
CONTENTS
Page
Statement of Purpose
1
Executive Summary
1
Background
3
Chronology of Events
5
Biographical Index
6
The Investigation
9
A. Christopher Columbus Licensing Group, Inc. (CCLG)
9
B. John Goudie
13
C. Manuel Gonzalez
18
Findings and Conclusions
22
Department of Justice Referral
23
Recommendations
23
Appendix
25
(V)
INVESTIGATION INTO ALLEGATIONS OF
WRONGDOING OF CERTAIN INDIVIDUALS AS-
SOCIATED WITH THE CHRISTOPHER COLUM-
BUS QUINCENTENARY JUBILEE COMMISSION
STATEMENT OF PURPOSE
Under Rule 22 of the Rules of the Committee on Post Office and
Civil Service, the Subcommittee on Census and Population is
vested with jurisdiction over holidays and celebrations. Pursuant to
that authority, the subcommittee conducted an extensive inquiry
into the activities of the Christopher Columbus Quincentenary Ju-
bilee Commission.
The subcommittee did not engage in a comprehensive investiga-
tion of potentially illegal activity, believing instead that the Execu-
tive Branch has the appropriate responsibility to identify and de-
velop all of the evidence needed for any possible prosecutorial
action. Rather, the subcommittee's investigation was necessary to
assess fully the need for corrective legislation with respect to feder-
al holiday commissions.
The subcommittee is pleased to note that the Christopher Colum-
bus Quincentenary Jubilee Commission is now under the direction
of Chairman Frank Donatelli. Mr. Donatelli was appointed to the
Commission and subsequently elected Chairman in February, 1991.
At that time, the Commission's image was tarnished, at best. It's
financial position was unstable and many of its planned activities
were in disarray.
The subcommittee believes that Chairman Donatelli has worked
diligently to develop and coordinate activities that will focus atten-
tion on the anniversary of Christopher Columbus' maiden voyage
to the New World. In addition, the subcommittee is confident that,
under Chairman Donatelli's leadership, the Commission is operat-
ing in a fiscally responsible manner.
EXECUTIVE SUMMARY
The Christopher Columbus Quincentenary Jubilee Commission
(the "Commission ") was established by Congress in 1984 (Public
Law 98-375), to coordinate appropriate ceremonies through local,
national, and international obser vances, that would educate the
public, as well as focus attention on the 500th anniversary of Co-
lumbus's voyages to the New World. It is composed of 30 members,
ten of whom are appointed by the President. The Chairman is se-
lected by the entire Commission from among the ten Presidential
appointees that serve on the Commission.
(1)
2
Under the chairmanship of John N. Goudie, who served in that
position from September, 1985, through December, 1990, the Com-
mission, its licensing activities, and the Christopher Columbus Li-
censing Group (CCLG) 1 were the subject of numerous allegations
of misconduct and probable wrongdoing.
In the summer of 1990, the subcommittee was approached by in-
dividuals who were concerned about their dealings with the Com-
mission. In particular, those individuals believed that the Commis-
sion's efforts to raise funds through a program to market the offi-
cial Quincentenary logo had gone badly astray.
In an effort to learn the true status of plans for the Quincenten-
ary celebration, the subcommittee posed a series of G iestions to
then-Commission Chairman Goudie. The answers, received in Octo-
ber, 1990, were at best evasive; at times nonresponsive; and at
worst, a misrepresentation of the truth.2
The subcommittee became alarmed at the possible state of affairs
at the Commission. It immediately requested assistance from the
General Accounting Office, General Government Division, to deter-
mine the financial position of the Commission and the true status
of planned activities for the rapidly approaching Quincentenary
year. Representatives of the GAO reported their findings to the
subcommittee at a hearing held on April 23, 1991.3 A thorough
audit of the Commission revealed a widespread lack of administra-
tive controls.4
In particular, the audit revealed that Commissioners and staff
traveled without the requisite authorization. Records of compensa-
tion and benefits for Commission staff were inadequate. Receipt
and expenditure of funds were recorded in four separate sets of
books. None of those recordings were consistent. Equally troubling,
the Commission was seriously in debt. Its efforts to raise private
funds to support the Quincentenary celebration had been unsuc-
cessful. The Commission had managed to keep its head above water
only by soliciting contributions from Commissioners themselves.
In December, 1990, Chairman Goudie resigned from his position
amid a rush of negative publicity. On the same day, The New York
Times ran a front page story detailing his longstanding financial
and legal troubles in his home state of Florida.⁵
As news of Mr. Goudie's troubles appeared in the media, people
who had been involved with efforts to plan and carry out the Quin-
centenary celebrations began to come forward. The allegations they
brought to the subcommittee were serious and enormously disturb-
ing. They included:
bribery;
conflicts of interest;
abuse of authority;
1 The Christopher Columbus Licensing Group. Inc. (CCLG) was a New York corporation.
formed in 1989, to market the Commission's official Quincentenary logo.
2 See Appendix I for letter dated October 4, 1990. to then- Commission Chairman John Goudie
and Mr. Goudie's response dated October 17. 1990.
3 See April 23. 1991, hearing entitled. "Oversight Hearing to Review the Activities of the
Christopher Columbus Quincentenary Jubilee Commission." Serial Number 102-10.
4 See National Archives and Records Administration. Office of the Inspector General. report
entitled, "Audit of the Christopher Columbus Quincentenary Jubilee Commission," dated Sep-
tember 30, 1991. Report No. 91-8.
5 See Appendix II for The New York Times article, dated December 18, 1990, page Al.
3
fraudulent contracts;
mismanagement of contracts; and
solicitation of campaign contribution exchange for favors.
In the course of its efforts to explore these allegations and con-
sider appropriate corrective action through the legislative process,
the subcommittee, in January, 1991, requested additional assist-
ance from the General Accounting Office, Office of Special Investi-
gations (OSI).6
During the course of its investigation, the subcommittee on
Census and Population authorized the issuance of 25 subpoenas;
held five days of hearings in Executive Session took two deposi-
tions; and held two days of public hearings, to examine allegations
of misconduct on the part of certain ind. viduals associated with the
Christopher Columbus Quincentenary Jubilee Commission.⁷ In ad-
dition, the OSI interviewed over 75 individuals and reviewed rele-
vant bank, telephone, and corporate records. The evidence which
the subcommittee developed covers the period 1989 through 1991.
BACKGROUND
Public Law 98-375, the Act creating the Commission, limited fed-
eral funding to an annual appropriation of $220,000 per year. This
modest appropriation forced the Commission to rely on private and
corporate donations for most of its financial resources. However,
these donations were limited by law to $25,000 per person and
$50,000 per corporation. These were aggregate limits that applied
to the life of the Commission.
The Act also prohibited the use of any symbols, marks, or logos
designed and certified by the Commission in any commercial ven-
ture. House Committee Report 95-150 specifically stated:
To protect against commercializing and trivializing this event through the sale of
the type of memorabilia that inundated the public during the American Revolution-
ary Bicentennial in 1976, the bill bans the use of any symbols. marks or logos de-
signed and certified by the Commission in any commercial venture. Stiff penalties
shall be imposed for the unauthorized use of the logo.
Public Law 100-94, the Christopher Columbus Quincentenary Ju-
bilee Act Amendments, increased the amount of donations that the
Commission could seek from individuals to $250,000 per year per
person and from corporations to $1,000,000 per year per entity. The
Act also authorized the expanded use of the Quincentenary logo.
Those amendments were enacted at the request of the Commission
in response to the difficulties that the Commission was experienc-
ing in raising private funds.
It appeared that the Commission had envisioned some very excit-
ing activities to recognize the quincentennial anniversary of Co-
lumbus' first voyage to the West. Unfortunately, John Goudie was
not capable of securing adequate financial backing for those activi-
ties. Mr. Goudie centralized most of the fundraising in his own
6 See Appendix III for February 11. 1991, letter to the Honorable Charles Bowsher, Comptrol-
ler General of the United States, General Accounting Office.
7 Transcripts of hearings held in Executive Session and depositions taken may be found in the
Committee on Post Office and Civil Service files. For additional information, see November 21-
22, 1991, hearings entitled. "Investigative Hearings to Review Allegations of Wrongful Conduct
of Certain Individuals Associated With the Christopher Columbus Quincentenary Jubilee Com-
mission." Serial Number 102-36.
4
hands, but he did not have a high public profile and lacked ready
access to corporate chief executive officers. More than half of the
total cash donations to the Commission during Mr. Goudie's tenure
were received from members of the Commission itself. At the time
of Mr. Goudie's resignation in December, 1990, the Commission's
cash on hand was drawn down to a balance of $43,000, while liabil-
ities amounted to $764,000.8
Texaco Agreement
The Commission and Texaco entered into an Agreement in Sep-
tember, 1989. The Sponsorship Agreement provided that Texaco
would make an annual donation of $1,000,000 per year for five
years, beginning in 1989 and running through 1993. These monies
would be used by the Commission to fund its participation in the
Tour of the Columbus Caravels.9 Under the agreement, seventeen
percent of all payments by Texaco could be retained by the Com-
mission to defray its operating expenses.
House Committee Report 95-150 stated that in order to avoid
any undue influence on the Commission or its activities, or undue
commercialization of events, no one corporation or entity should
become too prominent in the Commission activities. It appears, as
a result of Mr. Goudie's poor judgment and his inability to attract
an appropriate range of sponsors, that Texaco's Sponsorship Agree-
ment allowed this very situation to occur.
For example, the Sponsorship Agreement provided, in part, that
Texaco would be the only petroleum company to be designated an
Official Sponsor of the Commission, as well as the exclusive nation-
al sponsor of the Tour of the Caravels. In addition, the Agreement
stated that no other sponsor would have the right to place logos,
insignia, or other corporate identification on or in direct proximity
to the Caravels. Finally, Texaco was granted the right to consult
with the Commission with regard to all other corporate sponsors.
Through the fall of 1990, Texaco had donated $1.5 million to the
Commission towards fulfillment of the Agreement. $1.2 million of
that amount was paid to Spain and $300,000 was retained by the
Commission to assist in covering its operating expenses. In Septem-
ber, 1990, Texaco suspended its Agreement with the Commission,
claiming that the Commission was in breach of its contract. Texaco
still owed the Commission $600,000. As a result, the Commission
was in default on its contract with Spain for $600,000, and Spain
subsequently cancelled its Agreement with the Commission. 10
The subcommittee believes that the Commission's financial pos-
ture was critical when the Texaco Agreement was signed, particu-
larly with regard to financing the Caravels, and that Texaco may
8 These figures were taken from the General Accounting Office's April 23, 1991, statement
before the Subcommittee.
9 The Columbus Caravels were replicas of Christopher Columbus' three famous ships: the
Nina, the Pinta, and the Santa Maria. They were to travel to approximately 30 ports through-
out the United States and the Caribbea The Tour of the Caravels was to be a centerpiece and
highlight of the Quincentenary activities
10 Largely through the efforts of Chairman Frank, Donatelli, matters relating to the Tour of
the Columbus Caravels were resolved when he facilitated a new agreement among the parties
involved. The agreement provided that the Sociedad Estatal (Spain's Quincentenary Commis-
sion) would take over management of the Tour of the Columbus Caravels, with the U.S. Com-
mission providing assistance and outreach support while the Caravels were in the United States.
Texaco withdrew from the program. but remained a sponsor of the U.S. Quincentenary.
5
have benefited from that situation by negotiating an agreement
that was more favorable to the corporation than to the Commis-
sion. The failed Texaco sponsorship represents a clear example of
Mr. Goudie's ineptitude as a manager of a federal commission. It
also clearly points to the fact that Mr. Goudie did not keep the
Commission's best interests in mind when entering into agree-
ments that should have resulted in financial gain and sound pro-
gram options for the Commission.
CHRONOLOGY OF EVENTS
August, 1990. Tony Baltes, representing the Minority Stockhold-
ers of the CCLG, and Peter Dunev, President of Theta Marketing,
relayed their concerns about the CCLG's questionable activities to
the subcommittee.
October 4, 1990. Subcommittee Chairman Tom Sawyer and
Ranking Minority Member Tom Ridge wrote to then-Commission
Chairman John Goudie to learn the status of plans for the Quin-
centenary celebration.
October 17, 1990. The subcommittee received Chairman Goudie's
response to its letter dated October 4, 1990.
December 3, 1990. The subcommittee requested the assistance of
GAO in reviewing the activities of the Commission.
December 17, 1990. John Goudie resigned as Chairman of the
Commission.
February 11, 1991. Committee Chairman William Clay requested
additional assistance from GAO's Office of Special Investigations in
its review of the Commission's activities.
April 23, 1991. The subcommittee met in Executive Session to
consider the issuance of subpoenas for information relating to its
investigation.
April 23, 1991. The subcommittee held an oversight hearing to
review the present and future activities of the Commission. Testi-
mony was heard from Chairman Donatelli and GAO representa-
tives.
May 21, 1991. The subcommittee met in Executive Session to con-
sider the issuance of additional subpoenas.
June 12, 1991. First hearing held, in Executive Session, to review
allegations of misconduct or wrongdoing on the part of certain indi-
viduals associated with the Christopher Columbus Quincentenary
Jubilee Commission. Testimony was heard from Marlis Ellena and
Gunter Pfitzenmeier.
June 19, 1991. Second hearing held in Executive Session. Testi-
mony was heard from Isabella and Manuel Gonzalez, Alfredo
Vidal, and Dominic Primato.
July 25, 1991. Third hearing held in Executive Session. Testimo-
ny was heard from Peter Santiago, Joseph Goudie, and Randall
Heiman.
August 9, 1991. The subcommittee took a deposition from Robert
Coy in furtherance of its investigation.
October 17, 1991. The subcommittee took a deposition from Jef-
frey Stern in furtherance of its investigation.
November 20, 1991. The subcommittee held its first public inves-
tigative hearing to review allegations of misconduct or wrongdoing
6
on the part of certain individuals associated with the Christopher
Columbus Quincentenary Jubilee Commission. Testimony was
heard from Tony Baltes, Robert Coy, Peter Dunev, Edgar Mooney,
William Rolen, and Richard Stiener, Director, Office of Special In-
vestigations.
November 21, 1991. The subcommittee concluded its investigative
hearings. Testimony was heard from Jana Joustra and John
Goudie.
February 20, 1992. The committee referred to the Department of
Justice evidence that suggested possible criminal and unlawful con-
duct and warranted further investigation.
BIOGRAPHICAL INDEX
(Alphabetical)
BALTES, Tony. Secretary, Christopher Columbus Licensing
Group, Inc. (CCLG) and representative of CCLG's minority stock-
holders. Mr. Baltes appeared before the subcommittee on Novem-
ber 20, 1991.
COY, Robert. Target, along with Randall Heiman, of solicitation
by John Goudie and Peter Santiago to purchase the exclusive
rights to market clothing bearing the Quincentenary logo. Mr. Coy
appeared before the subcommittee on November 20, 1991.
DUNEV, Peter. President, Theta Marketing Corporation. Pur-
chased the exclusive rights to market clothing bearing the Quin-
centenary logo. Mr. Dunev appeared before the subcommittee on
November 20, 1991.
ELLENA, Marlis. Gunter Pfitzenmeier's companion. Ms. Ellena's
appearance before the subcommittee, in Executive Session on June
12, 1991, was compelled through the issuance of a subpoena.
GONZALEZ, Manuel. President, Latin American Consulting En-
gineers, Inc. (LACE). Self-described close and long time personal
friend of John Goudie. Mr. Gonzalez's appearance before the sub-
committee, in Executive Session on June 19, 1991, was compelled
through the issuance of a subpoena.
GOUDIE, Jack. John Goudie's younger brother.
GOUDIE. Joseph. John Goudie's younger brother who was em-
ployed by Manuel Gonzalez. He also is a close friend of Peter San-
tiago. Mr. Goudie's appearance before the subcommittee, in Execu-
tive Session on July 25, 1991, was compelled through the issuance
of a subpoena.
GOUDIE, John N. Chairman, Christopher Columbus Quincenten-
ary Jubilee Commission (September, 1985, through December,
1990). Mr. Goudie's appearance before the subcommittee on Novem-
ber 21, 1991, was compelled through the issuance of a subpoena.
HEIMAN, RANDALL. Target, along with Robert Coy, of solicita-
tion by John Goudie and Peter Santiago to purchase the exclusive
rights to market clothing bearing the Quincentenary logo. Mr.
Heiman appeared before the subcommittee, in Executive Session,
on July 25, 1991.
JOUSTRA, Jana. Deputy Director, Christopher Columbus Quin-
centenary Jubilee Commission (January, 1988, through present).
Ms. Joustra appeared before the subcommittee on November 21,
1991.
7
MOONEY, Edgar. Director of Licensing, Christopher Columbus
Licensing Group, Inc. (CCLG). Mr. Mooney appeared before the sub-
committee on November 20, 1991.
PFITZENMEIER, Gunter. President, Christopher Columbus Li-
censing Group, Inc. (CCLG). Mr. Pfitzenmeier's appearance before
the subcommittee, in Executive Session on June 12, 1991, was com-
pelled through the issuance of a subpoena.
PRIMATO, Dominic. Vice President, Christopher Columbus Li-
censing Group, Inc. (CCLG). Mr. Primato's appearance before the
subcommittee, in Executive Session on June 19, 1991, was com-
pelled through the issuance of a subpoena.
ROLEN, William. Represented Knoxville International Exposi-
tions, Incorporated (KIE). Mr. Rolen appeared before the subcom-
mittee on November 20, 1991.
SANTIAGO, Peter. Close friend of Joseph Goudie. Attempted,
with John Goudie, to solicit the exclusive rights to market clothing
bearing the Quincentenary logo. Mr. Santiago's appearance before
the subcommittee, in Executive Session on July 25, 1991, was com-
pelled through the issuance of a subpoena.
VIDAL, Alfredo. Owner of Vidal Travel Services, Inc. and a close
personal friend of Dominic Primato. Mr. Vidal's appearance before-
the subcommittee, in Executive Session on June 19, 1991, was com-
pelled through the issuance of a subpoena.
Following is a. chart depicting the relationship of the parties dis-
cussed in this report:
8
Relationship of the Parties
John Goudie
Former Chairman
$23,000
Christopher Columbus
LACE Consulting
Quincentenary Jubilee
Engineers, Inc.
$50,000
Commission
Manuel
Jana Joustra
Gonzalez
$122,900
$300,000
Director, Public Relations
$9,500
Christopher Columbus
Licensing Group, Inc.
Alfredo Vidal
$9,500
Gunter Pftzenmeier
$100,000
Jack Goudie
President
Travel
Dominic Primato
$46,000
Services, Inc.
Vice President
Peter Santiago
Edgar B. Mooney
Marlis Ellena
Executive Director
CCLG
$500,000
Anthony Baltes
Robert Coy
Secretary, CCLG
Peter Dunev
$50,000
Theta Marketing
President
William Rolen
Knoxville int'll
Expositions, Inc.
9
THE INVESTIGATION
A. CHRISTOPHER COLUMBUS LICENSING GROUP, INC. (CCLG)
On July 27, 1989, the Commission awarded a contract to the
Christopher Columbus Licensing Group (CCLG) for the exclusive
rights to market the official Quincentenary logo. 11 That contract
required the CCLG to pay an advance royalty of $300,000 to the
Commission. The contract also provided that the CCLG would re-
ceive 85 percent of the gross profits from marketing the official
logo, while the Commission would receive only 15 percent.
The principle officers of the CCLG were Gunter Pfitzenmeier
(President), Dominic Primato (Vice President), and Tony Baltes
(Secretary). Mr. Baltes also represented the minority stockholders,
who paid $500,000 to the CCLG for a 25 percent ownership interest.
The General Accounting Office audit revealed that Alfredo Vidal, a
close personal friend of Mr. Primato, loaned $100,000 to Mr. Pfit-
zenmeier to assist with payment of the advance royalty to the Com-
mission. The remaining $200,000 was paid out of monies invested
by the minority stockholders.
After careful review, the subcommittee believes that the contract
had the earmarks of a scam. The profits from the licensing venture
between the Commission and the CCLG were divided unfairly, as
compared with industry standards. The principles of the CCLG,
Gunter Pfitzenmeier and Dominic Primato. did not have any expe-
rience in promoting and licensing products for national events. or
in marketing and merchandising for celebrations. It was revealed
that neither Mr. Goudie nor Commission staff made any inquiries
to determine. acceptable industry standards for sharing profits
under this type of contract.
Gunter Pfitzenmeier
Mr. Pfitzenmeier, a citizen of Germany, was the President of the
CCLG. He claimed to have met John Goudie on an airplane travel-
ing from Europe to the United States.
The subcommittee believes that Messrs. Pfitzenmeier and Goudié
discussed the formation of a group to market the Quincentenary
logo. Subsequently, Mr. Pfitzenmeier, with substantial advice from
Mr. Goudie and Manuel Gonzalez. formed the Christopher Colum-
bus Licensing Group, Inc. (CCLG).
Mr. Pfitzenmeier's appearance before the subcommittee, in Exec-
utive Session on June 12, 1991, was compelled through the issuance
of a subpoena. During the course of questioning,
Mr. Pfitzenmeier asserted his Fifth Amendment privilege in re-
sponse to every question, except to provide his name, date of birth,
and place of residence.
Marlis Ellena
Ms. Ellena, a citizen of Switzerland, is Gunter Pfitzenmeier's
companion. She is listed as the owner of the house in which she
and Gunter Pfitzenmeier resided at 61 Curlew Road, in Point Man-
11 See Appendix IV for the contract signed by the Christopher Columbus Quincentenary Jubi-
lee Commission and the Christopher Columbus Licensing Group CCLG).
10
alapan, Florida. Her appearance before the subcommittee, in Exec-
utive Session on June 12, 1991, was compelled through the issuance
of a subpoena. Ms. Ellena asserted her Fifth Amendment privilege
in response to every question, expect to provide her name and date
of birth.
Dominic Primato
Mr. Primato was the Vice President of the CCLG. His appear-
ance before the subcommittee, in Executive Session on June 19,
1991, was compelled through the issuance of a subpoena. During
the course of questioning, Mr. Primato asserted his Fifth Amend-
ment privilege in response to every question, except to provide his
name, date of birth, social security number, and place of residence.
Alfredo Vidal
Mr. Vidal is the owner of Vidal Travel Services, Inc. and is a
close personal friend of Dominic Primato. His appearance before
the subcommittee, in Executive Session on June 19, 1991, was com-
pelled through the issuance of a subpoena. During the course of
questioning, Mr. Vidal asserted his Fifth Amendment privilege in
response to every question, except to provide his name and place of
residence.
SUBCOMIMITTEE FINDINGS
Evidence gathered by the subcommittee revealed that Gunter
Pfitzenmeier organized the CCLG, with the assistance of Mr.
Goudie and his close personal friend, Man el Gonzalez, with an un-
derstanding that the CCLG would be awarded the contract for the
exclusive right to market the Quincentenary logo. In other words,
the subcommittee believes that the CCLG contract was prear-
ranged.
In accordance with its contract, the CCLG paid the Commission
an advance royalty payment of $300,000: The advance royalty was
to be paid, according to the CCLG's contract, in $100,000 install-
ments in July, 1989, October, 1989, and January, 1990. In order to
make these payments, Mr. Pfitzenmeier received a loan of $100,000
from Alfredo Vidal and used $200,000 of the minority stockholder's
$500,000 investment. The subcommittee believes that Mr. Vidal
was repaid his $100,000 loan from funds invested by the minority
stockholders.
Neither Messrs. Pfitzenmeier nor Primato had any personal fi-
nancial stake in the CCLG. They declined to answer any questions
from the subcommittee about the activities of the CCLG or their
own financial transactions in relation to the Group. The subcom-
mittee concluded that the CCLG was insolvent.
Tony Baltes, who represented the minority stockholders, told the
subcommittee during his sworn testimony on November 20, 1991,
that Mr. Pfitzenmeier claimed that he paid Mr. Goudie an addi-
tional $150,000 in cash, "under the table," to secure the 'point of
sale' rights to the licensed merchandise. According to Mr. Baltes,
Mr. Pfitzenmeier also stated that Mr. Gonzalez received a share of
the $150,000. The minority stockholders believe that they were de-
frauded by Messrs. Pfitzenmeier and Goudie because they invested
11
in the CCLG to get involved in the 'point of sale,' which is Mr.
Baltes' area of expertise. Neither Messrs. Pfitzenmeier or Primato
had any experience in merchandising.
Another transaction representing an inappropriate use of CCLG
funds on behalf of Mr. Pfitzenmeier, and related by Mr. Baltes, oc-
curred in December, 1989. Mr. Pfitzenmeier contacted Merrill
Kane, the CCLG's Treasurer and a minority stockholder, and asked
to borrow $100,000 for a real estate venture involving Mr. Goudie.
Mr. Kane agreed to the loan and required Mr. Pfitzenmeier to sign
a note to repay the loan by March 1, 1990, the date CCLG needed
the money for projected operating capital. Mr. Pfitzenmeier re-
ceived the money by wire transfer and never repaid the loan.
Mr. Baltes also told the subcommittee that in January, 1990, he
expressed an interest to Mr. Pfitzenmeier in arranging a meeting
with Mr. Goudie to discuss CCLG's activities.
Mr. Pfitzenmeier told Mr. Baltes that Mr. Goudie was heavily in-
volved in trying to raise funds for the reelection campaign of then-
Florida Governor Bob Martinez. Mr. Pfitzenmeier indicated that he
could arrange such a meeting, provided that Mr. Baltes made a
contribution of $3,000 to the Governor's campaign.
Mr. Baltes complied with this request and mailed the check to
what he later learned was Manuel Gonzalez's business address.
When Mr. Pfitzenmeier failed to arrange a meeting between
Messrs. Baltes and Goudie, Mr. Baltes expressed his concerns to
Mr. Primato. Mr. Primato wrote Mr. Baltes a check for $3,600 from
the CCLG's account to repay him. The check was $600 more than
the initial $3,000 because Mr. Primato apparently did not want
anyone to connect the two transactions. Mr. Baltes said that Mr.
Pfitzenmeier instructed him not to mention the campaign contribu-
tion to anyone.
Records reviewed by the subcommittee and OSI revealed that
Mr. Pfitzenmeier inappropriately used CCLG funds to pay approxi-
mately $46,000 on the mortgage of his Florida home that was in
the name of his companion, Marlis Ellena. In addition, Manuel
Gonzalez told the subcommittee, during his sworn testimony on
June 19, 1991, that Mr. Pfitzenmeier paid him $28,000 for non-
CCLG work he performed on Mr. Pfitzenmeier's behalf. Bank
records revealed that these monies were paid out of CCLG funds.
Bank records also revealed that the CCLG issued checks totaling
approximately $16,000 to Vidal Travel Services, Inc., of New York
City. It is unclear why Mr. Vidal's company received these funds
because he asserted his Fifth Amendment privilege when ques-
tioned on this matter at his appearance before the subcommittee
on June 19, 1991. The subcommittee was able to determine that
Mr. Primato was listed as an employee of Vidal Travel Services,
Inc., for some portion of 1990. The subcommittee believes that Mr.
Primato was listed as an employee of Mr. Vidal's company so that
he could receive the $16,000 paid to Vidal Travel Services, Inc.
from the CCLG.
The subcommittee determined that the CCLG entered into nu-
merous sublicensing agreements that required royalty payments of
12
varying amounts. A list of CCLG sublicensees 12 revealed that roy-
alty payments ranged from $5,000 to $1,000,000. The investigation
revealed that there were several individuals who had sublicensing
agreements that did not appear on this list. This indicates that the
principles of the CCLG did not report all sublicensing agreements
to the Commission, as required by its contract. Therefore, the roy-
alty payments were not documented. The subcommittee believes
that the principles of the CCLG most likely diverted these funds
for their own personal use. Therefore, the Commission was cheated
out of its share of the profits.
The CCLG records and books subpoenaed by the subcommittee
were sorely lacking in standard financial information. There were
no:
copies of tax returns;
journal or ledgers of cash disbursements and receipts;
corporate minutes;
records of how officers were compensated;
records of the source of funds to start the corporation; and
records of any audits of the corporation's books.
In addition, the CCLG accountant only had copies of cancelled
checks and some bank statements.
Edgar Mooney, who has extensive experience in licensing and
marketing products for large scale celebrations, was hired as the
Director of Licensing by the CCLG. Mr. Mooney testified before the
subcommittee on November 20, 1991. The subcommittee wants to
make clear that while Mr. Mooney was an integral part of CCLG
activities for a period of time, he was not a target of the investiga-
tion of possible wrongdoing. Mr. Mooney has filed suit against the
CCLG for monies (approximately $400,000) he claims are owed him
under his contract, as well as punitive damages.
Mr. Mooney told the subcommittee that he was responsible for
negotiating contracts between sublicensees and the CCLG. He said
that he was perplexed as to why the Commission contracted with
the CCLG because it was glaringly apparent to him that Messrs.
Pfitzenmeier and Primato lacked any experience in licensing. Mr.
Mooney said that this fact became clear when he reviewed subli-
censing agreements that Messrs. Pfitzenmeier and Primato negoti-
ated without his assistance. He later found that the CCLG princi-
ples had negotiated several contracts without his knowledge. Pre-
sumably, this was done so that the CCLG would not have to pay
Mr. Mooney the percentage to which he was entitled for negotiat-
ing contracts.
Mr. Mooney also described an April, 1990, meeting at Mr. Pfit-
zenmeier's New York City residence, where he was introduced to
Manuel Gonzalez. Mr. Gonzalez was introduced as a close personal
friend of John Goudie. Mr. Mooney was told that Mr. Gonzalez was
an integral part of the CCLG and that he acted as a liaison be-
tween the Commission and the CCLG. According to Mr. Mooney, he
was instructed by Mr. Primato to send all items from sublicensees
needing Commission approval to Mr. Gonzalez. 13
12 See Appendix V for CCLG list of CCLG Sublicense Agreements. This list was obtained
through documents subpoenaed by the Subcommittee.
13 See Appendix VI for Edgar Mooney's memo regarding the process for gaining approval of
items submitted by CCLG's sublicensees.
13
Mr. Mooney told the subcommittee that, during his tenure as Di-
rector of Licensing, he ran into continual road blocks from the
CCLG and the Commission in his efforts to develop marketing
strategies for the Quincentenary logo. Mr. Mooney was fired from
the CCLG in September, 1991. At that time, there was growing
media attention concerning the lack of progress in the promotion
of the celebration. It appears that Mr. Pfitzenmeier sought to shift
blame to Mr. Mooney for the CCLG's troubles and subsequently
dismissed him.
B. JOHN N. GOUDIE
John N. Goudie served as chairman of the Christopher Columbus
Quincentenary Jubilee Commission from September, 1985, through
December, 1990. As mentioned previously, under Mr. Goudie's
tenure, the Commission suffered from poor management of finan-
cial resources and inadequate administrative controls.
Early in its investigation, the subcommittee tried to contact Mr.
Goudie on at least fifteen different occasions, to afford him an op-
portunity to tell his side of the story that was unfolding. 14 Mr.
Goudie refused to speak with the subcommittee or its representa-
tives. The subcommittee was puzzled by his refusal, in light of the
fact that Mr. Goudie had stated in May, 1991, on the NBC news
program, Expose, that he wanted to tell his story to Congress.
During the summer and fall of 1991, letters to Mr. Goudie went
unanswered. 15 The subcommittee was left with no choice but to
compel Mr. Goudie's testimony through the issuance of a subpoena.
Mr. Goudie appeared before the subcommittee at a public investi-
gative hearing on November 21, 1991.
The subcommittee believes that Mr. Goudie consistently abused
his authority as chairman of the Commission to achieve personal
gain. Evidence gathered indicates that he:
continually engaged in activities that posed serious conflicts of
interest;
received loans from close friends who had received substantial
sums of money from the licensing program;
inappropriately intruded into the management of contracted
activities, as well as represented himself as an agent of the CCLG;
and
attempted to sell the exclusive rights to market clothing bear-
ing the Quincentenary logo, despite the fact that the Commission
had awarded those rights to the CCLG.
SUBCOMMITTEE FINDINGS
Knoxville International Expositions. Incorporated (KIE)
William Rolen testified before the subcommittee on November
20, 1991. Mr. Rolen helped form KIE to develop a Christopher Co-
lumbus Quincentenary exhibit in the former U.S. pavilion located
14 See Appendix VII for the list of the Office of Special Investigations OSI attempts to con-
tact John Goudie on the Subcommittee's behalf.
15 See Appendix VIII for correspondence to Mr. Goudie regarding the Subcommittee's investi-
gation.
14
on the site of the 1982 Knoxville World's Fair. Efforts to finalize
this project were unsuccessful.
Mr. Rolen told the subcommittee that KIE received a written en-
dorsement from the Commission for its project in November, 1988.
In May or June, 1989, Mr. Rolen and his associates traveled to
Miami to meet with Chairman Goudie to discuss the KIE project in
more detail. Specifically, Mr. Rolen presented Mr. Goudie with the
estimated financial returns on the KIE project. Also, Mr. Rolen in-
formed Mr. Goudie that KIE was attempting to locate investors for
the project who would be able to secure a 33.5 million letter of
credit. Later that day,
Mr. Goudie introduced his close and long time personal friend,
Manuel Gonzalez, and his business associate, Gunter Pfitzenmeier,
as potential investors in KIE's project.
Mr. Rolen and his associate, Randy Tyree, attended a dinner at
Mr. Goudie's Coral Gables, Florida, home following the above men-
tioned meeting. At that time, Mr. Goudie solicited a 65 foot yacht
from KIE. He said that the yacht was needed for Commission en-
tertainment and that he wanted it to be tied up at the pier directly
behind his home. In a subsequent discussion, Jana Joustra, the
Commission's Deputy Director, informed- Rolen that Mr.
Goudie could not accept the yacht because it would present a con-
flict of interest.
Subsequently, Mr. Rolen met with Messrs. Gonzalez and Pfitzen-
meier to discuss the KIE project in more detail. When it was re-
vealed that Mr. Rolen would have a 51 percent controlling interest
in the project, Messrs. Gonzalez and Pfitzenmeier became disinter-
ested. A few days following that meeting; Mr. Goudie telephoned
Mr. Rolen and said that Mr. Rolen had offended his friends. Mr.
Rolen also received a call from Jana Joustra, the Commission's
Deputy Director, stating that the Commission was not going to
move forward with the project if he remained in control. In an
effort to salvage the project, Mr. Rolen's associate, Randy Tyree,
took over the management of KIE's activities.
Mr. Rolen testified that Mr. Goudie visited Knoxville in May,
1989, accompanied by three Argentines who owned radio stations.
Mr. Rolen took the group on a tour of the project and explained
how Argentina could be part of KIE's project. One of the Argen-
tines told Mr. Rolen that if KIE paid them $50,000 to advertise
KIE's project on Argentine radio, a deal could be struck. Mr. Rolen
refused to pay to have the project advertised by the Argentines and
his relationship with Mr. Goudie worsened.
From August, 1989, to October, 1990, Mr. Tyree worked to get
final approval from the Commission for KIE's project. However, an
agreement could not be reached and the project was abandoned.
Christopher Columbus Licensing Group (CCLG)
During Mr. Goudie's sworn testimony on November 2, 1991, he
stated that the Commission awarded the CCLG the exclusive rights
to market the official Quincentenary logo because the CCLG was
the only group that had agreed to pay a $300,000 advance royalty
to the Commission. The subcommittee does not believe that Mr.
Goudie seriously entertained other offers to market the Quincen-
tenary logo. Instead, the subcommittee believes that the CCLG ven-
15
ture was prearranged. Further, evidence gathered suggests that the
CCLG contract was solely a money making venture for Mr. Goudie
and his associates, and that it did not benefit the Commission.
Records revealed that Mr. Goudie indirectly received substantial
sums of money from the CCLG. As explained later in this report,
documents obtained by the subcommittee revealed that Manuel
Gonzalez received $122,000 from the CCLG. These monies were
either paid directly to him or to his company. During Mr. Gonza-
lez's sworn testimony on June 19, 1991, he told the subcommittee
that he made two loans to Mr. Goudie, totaling approximately
$28,000. Mr. Gonzalez said that the loans were made to assist Mr.
Goudie with the mortgage payments on his personal residence. The
loans were made informally and were not repaid.
The subcommittee also determined that Mr. Pfitzenmeier gave
Mr. Gonzalez a money order for $9,000 on July 31, 1989, four days
after the CCLG contract was signed. Two months later, on October
3, 1989, Mr. Gonzalez gave Jack Goudie, John Goudie's younger
brother, a check for $9,500. Jack Goudie told representatives of the
OSI that he used that money to pay the mortgage on his brother,
John's, home.
During the course of its investigation, the subcommittee learned
that Mr. Goudie inappropriately intruded into the management of
contracted activities. The evidence revealed that Mr. Goudie was
involved in the day-to-day affairs of the CCLG and that he tried to
assert control over the management of the CCLG.¹ 16 The subcom-
mittee believes that the evidence clearly indicates that the transac-
tions between the Commission and the CCLG were not at arms
length and represented a clear conflict of interest on the part of
the Chairman. Mr. Goudie held himself out as a representative of
the CCLG, which had a contract with the federal agency over
which he presided.
Theta Marketing Corporation
Peter Dunev testified before the subcommittee on November 20,
1991. Mr. Dunev is the President of Theta Marketing Corporation
("Theta "), located in Clearwater, Florida. He recounted his efforts
to obtain an exclusive sublicensing agreement to produce tee-shirts
bearing the Quincentenary logo. Mr. Dunev's testimony also de-
scribed the direct role of John Goudie, as well as that of Manuel
Gonzalez, in managing the licensing activities of the CCLG.
Mr. Dunev told the subcommittee that he met Mr. Goudie in
May, 1990. After learning of the Commission's planned activities,
Mr. Dunev expressed an interest in obtaining a sublicense to
market tee-shirts bearing the Quincentenary logo. Mr. Goudie indi-
cated that a New York group, which he did not identify, had al-
ready been awarded the clothing sublicense. He said that the New
York group had signed a $1 million contract with a $100,000 ad-
vance royalty payment.
16 See Appendix IX for excerpts from telephone conversations between Mr. Goudie and Tony
Baltes. These tapes were provided to the Subcommittee by Mr. Baltes. The Subcommittee pre-
sented the tapes to Mr. Goudie at its November 21, 1991, hearing for explanation: Mr. Goudie
exercised his Fifth Amendment privilege in response to all questions regarding the tape record-
ings.
16
Shortly after their initial meeting, according to Mr. Dunev, Mr.
Goudie contacted him and offered to let him match the New York
group's offer. Mr. Goudie said that he did not like the principles in
the New York group and that he would prefer to do business with
Mr. Dunev because he was Hispanic.
According to Mr. Dunev, Mr. Goudie described the structure of
the CCLG. He said that it was composed of three people: Manuel
Gonzalez, his best friend; Gunter Pfitzenmeier; and Dominic Pri-
mato. Mr. Goudie also stated that Messrs. Gonzalez and Pfitzen-
meier drew up the CCLG proposal and that Mr. Gonzalez ran the
CCLG out of Miami, Florida. In addition, Mr. Goudie assured Mr.
Dunev that he foresaw no problem in awarding Theta the contract
because he had final approval over all CCLG sublicensing agree-
ments.
Mr. Goudie introduced Mr. Dunev to Manuel Gonzalez in June,
1990. Mr. Dunev told the subcommittee that Mr. Goudie intention-
ally led him to believe that Mr. Gonzalez was the President of the
CCLG. Mr. Dunev questioned Mr. Goudie about his close personal,
as well as business, relationship with Mr. Gonzalez. In particular,
he asked Mr. Goudie if he thought that his relationship with Mr.
Gonzalez presented a conflict of interest. Mr. Goudie responded
that he saw no conflict of interest and that as long as all parties
involved continued to be pleased, there was nothing to worry
about.
Messrs. Dunev and Goudie agreed that Theta would pay the
$100,000 advance royalty in four installments of $25,000 each, with
the balance of the contract to be in $75,000 increments. Theta's
contract provided that the subsequent payments would not begin
until after the Caravels had arrived in American waters and the
tour of United States port cities had begun.
After Theta's contract was signed, Mr. Dunev said that he began
to see warning signs that things were not as they appeared initial-
ly. First, he recognized that Messrs. Goudie and Gonzalez's close re-
lationship did present a serious conflict of interest. Second, it
became increasingly difficult to contact Mr. Goudie to discuss the
Commission's activities. And third, when he did finally contact Mr.
Goudie, he always received conflicting information.
When Mr. Gonzalez came to pick up Theta's third installment
payment, Mr. Dunev began to raise his various concerns. During
the meeting, Mr. Gonzalez received a telephone call on his cellular
telephone from Mr. Goudie. Mr. Gonzalez related that Mr. Dunev
had not made the payment yet and had a number of concerns he
wanted addressed. Mr. Dunev told the subcommittee that he picked
up the telephone and Mr. Goudie was quite annoyed at Mr.
Dunev's reluctance to make additional payments.
Mr. Dunev testified that Mr. Goudie told him that if he caused
any problems, he would see to it that Mr. Dunev got into trouble.
Specifically, he threatened Mr. Dunev with unspecified Depart-
ment of Justice action. Other individuals told the subcommittee
that Mr. Goudie had threatened them with unspecified Department
of Justice action if they questioned him about his activities.
A few days following that meeting, Mr. Dunev received a letter
by fax from Gunter Pfitzenmeier, stating that Theta's sublicensing
agreement had been terminated.
17
The Theta arrangement clearly demonstrates that Mr. Goudie
did not protect the Commission's best interests in negotiating the
contract with the CCLG-a contract that was extraordinarily unfa-
vorable to the Commission. For example, Theta's agreement provid-
ed that the company would receive 90 percent of the profits from
the sale of tee-shirts, with only 10 percent going to the CCLG.
CCLG's contract with the Commission, in turn, provided that the
Commission would receive only 15 percent of the CCLG's profits. It
is estimated that Theta's contract could have been worth $550 mil-
lion. The Commission would have received only one and a half per-
cent of that amount.
Efforts to Market the Quincentenary Logo
On November 20, 1991, the subcommittee heard testimony from
Mr. Robert Coy of Miami, Florida. Mr. Coy's testimony related to
the direct role of John Goudie, as well as that of Peter Santiago, in
attempting to market the rights to produce clothing bearing the
Quincentenary logo.
Peter Santiago, of Coconut Grove, Florida, is a close personal
friend of John Goudie's younger brother, Joseph.
Mr. Santiago appeared before the subcommittee in Executive
Session on July 25, 1991. His appearance was compelled through
the issuance of a subpoena.
Mr. Coy told the subcommittee that a business associate of his
learned of an opportunity from an acquaintance, Randall
Heiman 17 , to purchase the exclusive rights to produce clothing
bearing the Quincentenary logo. The subcommittee learned that
the potential venture involved Messrs. Santiago and Goudie.
Messrs. Coy and Heiman and their associate arranged for a meet-
ing with Mr. Santiago in November, 1990. This meeting took place
at Mr. Santiago's residence. When the Coy group arrived for the
meeting, Mr. Santiago introduced them to John Goudie.
According to Mr. Coy, Mr. Goudie showed the Commission's pro-
motional tapes and discussed in great detail the Commission's
planned activities for the Quincentenary celebration.
Mr. Goudie told Mr. Coy that Mr. Santiago had purchased the
exclusive rights to market clothing bearing the Quincentenary logo
for $300,000. To lend credibility to this fact, Messrs. Goudie and
Santiago produced a document that they said was Mr. Santiago's
contract.
Mr. Coy told the subcommittee that Mr. Santiago conducted the
negotiations regarding the price of the sublicense:
Mr. Santiago said that the sublicense would cost $300,000 and.
that the money had to be paid, in full, within 48 hours. This state-
ment alone caused Mr. Coy to exercise considerable caution as the
negotiations continued.
Mr. Coy testified that he began to see more red flags and think
that Messrs. Santiago and Goudie were hustling him and his associ-
ates when Mr. Santiago could not agree to any specifics regarding
the split of profits. In addition, Messrs. Goudie and Santiago pres-
17 Randall Heiman appeared before the Subcommittee, in Executive Session on July 25. 1991.
His appearance was compelled through the issuance of a subpoena. His testimony fully cooberat-
ed the subsequent testimony of Mr. Robert Coy.
18
sured Mr. Coy and his associates to make a hasty decision that day
on whether or not they were going to purchase the license from
Mr. Santiago. Mr. Coy decided that they needed some time to think
about the offer.
Mr. Coy told the subcommittee that the day following their ini-
tial meeting, he requested more detailed information from Mr. San-
tiago about the Commission's plans. Mr. Coy said that Mr. Santiago
became very angry and abusive in his language. That was the last
contact that Mr. Coy had with Messrs. Goudie and Santiago.
As mentioned earlier, Mr. Santiago appeared before the subcom-
mittee on July 25, 1991. The subcommittee believes that Mr. San-
tiago's sworn testimony, regarding his involvement in attempts to
market the rights to produce clothing bearing the Quincentenary
logo, was both untruthful and misleading. During the course of
questioning, he experienced great difficulty in recounting any of
the events described above. Specifically,
Mr. Santiago stated on numerous occasions that he could not re-
member:
if he actually attended such a meeting;
who any of the other attendees were; and
the purpose of the meeting or what was discussed.
However, the subcommittee finds that Messrs. Coy and Heiman's
accounts of their dealings with Messrs. Goudie and Santiago were
clear and truthful. Accordingly, the subcommittee has concluded
that Messrs. Goudie and Santiago were attempting to extort
$300,000 for their own personal gain through the fraudulent sale of
rights to the Quincentenary logo over which they had no legal con-
trol.
In addition, evidence gathered revealed that during the same
time frame that Messrs. Goudie and Santiago were attempting to
market this exclusive licensing agreement, Manuel Gonzalez and
the CCLG were involved in an exclusive licensing deal with Peter
Dunev, who is discussed in an earlier section, for the same mer-
chandise. Mr. Dunev had already begun making advance royalty
payments on his contract.
C. MANUEL GONZALEZ
Manuel Gonzalez is President of Latin American Consulting En-
gineers, Inc. (LACE). He is a self-described close and long time per-
sonal friend of John Goudie.
Mr. Gonzalez appeared before the subcommittee, in Executive
Session, on June 19, 1991. His appearance was compelled through
the issuance of a subpoena. He testified that he was not an officer,
stockholder, agent, or representative of the Christopher Columbus
Licensing Group (CCLG); nor did he have any knowledge about
CCLG activities. However, the subcommittee received sworn testi-
mony from several witnesses on November 20, 1991, describing in
detail Mr. Gonzalez's role in the establishment, management, and
ownership of the CCLG.
Evidence gathered suggests that he:
was involved in the Commission's licensing activities prior to,
as well as following, the contract with the Christopher Columbus
Licensing Group (CCLG);
19
often represented himself as an agent of the Commission and/
or the CCLG; and
received improper financial gain resulting from his friendship
with former Chairman Goudie, and in turn, loaned Mr. Goudie
money that was never repaid.
SUBCOMMITTEE FINDINGS
Knoxville International Expositions, Incorporated (KIE)
As mentioned earlier in this report, William Rolen, KIE's repre-
sentative, testified before the subcommittee on November 20, 1991.
Efforts to finalize KIE's project were unsuccessful.
Mr. Rolen was introduced to Manuel Gonzalez and Gunter Pfit-
zenmeier by Chairman John Goudie. Mr. Goudie introduced
Messrs. Gonzalez and Pfitzenmeier as potential investors in KIE's
project. It is important to note that this introduction took place fol-
lowing Mr. Rolen's presentation of the estimated financial returns
from the KIE project. All parties agreed that Messrs. Gonzalez and
Pfitzenmeier would visit Knoxville for further discussions.
Jana Joustra, the Commission's Deputy Director, made arrange-
ments for the Knoxville meeting. She also attended the meeting as
the Commission's representative. Mr. Rolen testified that during
the meeting, Mr. Gonzalez presented himself as if he were the
Commission's spokesman. Upon reviewing the project,
Mr. Gonzalez informed Mr. Rolen that in return for his invest-
ment, he wanted a percentage of the project's profits. When told
that Mr. Rolen would have a 51 percent controlling interest in the
project and that KIE would negotiate a 10-25 percent interest in
return for their investment, Messrs. Gonzalez and Pfitzenmeier
became disinterested.
Several additional meetings were held in an effort to finalize
KIE's project with the Commission. However, no agreement could
be reached: Therefore, the Commission again failed to take advan-
tage of an opportunity that potentially could have yielded a sub-
stantial financial return, as well as contributed to the Quincenten-
ary celebration in a positive manner.
The subcommittee believes that Mr. Gonzalez's sworn testimony
on June 19, 1991, regarding the KIE project, was both untruthful
and misleading. He stated that:
he traveled to Knoxville, Tennessee, to discuss a real estate
venture;
he never had a business relationship with Gunter Pfitzen-
meier; and
he never discussed the KIE project with former Commission
Chairman John Goudie.
Christopher Columbus Licensing Group (CCLG)
The subcommittee believes that Mr. Gonzalez was instrumental
in organizing the CCLG and that he assisted in drafting the
CCLG's licensing agreement. In addition, evidence gathered by the
subcommittee suggests that Mr. Gonzalez was intimately involved
in the daily activities of the CCLG. Further, records, revealed that
he received $122,000 from the CCLG. Those funds were either paid
directly to him or to his company, LACE.
20
Tony Baltes, who represented the minority stockholders who
paid $500,000 to the CCLG for a 25 percent ownership interest, tes-
tified before the subcommittee on November 20, 1991. He discussed
the role of Mr. Gonzalez in the management and ownership of the
CCLG. His testimony described the direct role of Manuel Gonzalez,
as well as John Goudie, in managing the activities of the CCLG.
As mentioned earlier in this report, according to Mr. Baltes,
Gunter. Pfitzenmeier claimed that he paid John Goudie an addi-
tional $150,000 "under the table" for the right to control the li-
censed merchandise where it was sold. Mr. Pfitzenmeier indicated
that Mr. Gonzalez received a share of the $150,000.
Mr. Baltes told the subcommittee that he attended a meeting at
the Florida home of Gunter Pfitzenmeier in January, 1990. The
purpose of this meeting was for Mr. Baltes to receive a formal in-
troduction to Mr. Goudie and to discuss CCLG's activities. Howev-
er, Mr. Gonzalez attended the meeting in Mr. Goudie's place. Mr.
Gonzalez introduced himself as John Goudie's assistant. In particu-
lar, according to Mr. Baltes, he said that he was "John's right arm
on Commission matters."
When the minority stockholders raised concerns about CCLG's
participation with the Texaco tour of the Caravels,
Mr. Pfitzenmeier provided them with an interpretation of Tex-
aco's agreement with the Commission that he said came from a
Miami attorney. It was later revealed by Mr. Gonzalez that he ac-
tually wrote the interpretation. Mr. Gonzalez also told Mr. Baltes
that he had a significant role in drafting the CCLG contract.
Mr. Baltes testified that. Mr. Pfitzenmeier subsequently con-
firmed Mr. Gonzalez's role in drafting the contract.
Mr. Baltes told the subcommittee that in March, 1990, the Com-
mission suspended its agreement with the CCLG. Following the
suspension, Mr. Baltes said that he and Mr. Kane were notified by
Mr. Pfitzenmeier that they were relieved of all duties and responsi-
bilities involving the CCLG. Mr. Baltes then contacted Mr. Gonza-
lez who said that he could address their concerns.
According to Mr. Baltes, in April, 1990, Mr. Gonzalez proposed a
reorganization of the CCLG that would place Mr. Gonzalez in con-
trol of all CCLG activities. Mr. Gonzalez said that his proposal had
been approved by Mr. Goudie. 18 The minority stockholders did not
agree with Mr. Gonzalez's proposed reorganization of the CCLG.
Shortly thereafter, Mr. Pfitzenmeier relieved them of their duties
as officers of the Group and denied them any further role in the
Group's activities.
The subcommittee believes that Mr. Gonzalez's sworn testimony
on June 19, 1991, regarding his involvement in the activities of the
CCLG, was both untruthful and misleading. He testified that he
was not an officer, stockholder. agent, or representative of the
CCLG, when clearly he was directly involved in the activities of the
Group with John Goudie's full knowledge.
The subcommittee presented Mr. Gonzalez with various docu-
ments discussing CCLG activities. Each document bore Mr. Gonza-
18 See Appendix X for document entitled "CCLG Proposal by MG." The document was ob-
tained from the Minority Stockholders.
21
lez's name or initials. Upon review, Mr. Gonzalez stated that he
was not familiar with any of the documents shown to him.
Mr. Gonzalez did acknowledge receiving a finders fee of $49,000
from the CCLG for his efforts to identify a tee-shirt sublicensee.
However, he could not recall the exact reason why he received an
additional $73,000 out of CCLG funds. He indicated that the
$73,000 may have represented payment for engineering work his
company performed for Gunter Pfitzenmeier. If this was the case,
then the CCLG clearly misused its corporate funds to benefit
friends of Chairman Goudie.
Theta Marketing Corporation (Theta)
As mentioned earlier in this report, Peter Dunev, Theta's presi-
dent, testified before the subcommittee on November 20, 1992. His
testimony described the direct role of Manuel Gonzalez, as well as
John Goudie, in managing the activities of the CCLG.
In May, 1990, Mr. Dunev learned of the Commission's planned
activities from Mr. Goudie and expressed an interest in obtaining
the rights to market tee-shirts bearing the official Quincentenary
logo. Shortly thereafter, Mr. Goudie gave Mr. Dunev the specific in-
formation about the CCLG. According to Mr. Dunev, Mr. Goudie
said that:
the CCLG was composed of three people, one being Manuel
Gonzalez, his best friend;
Mr. Gonzalez was instrumental in drawing up the CCLG con-
tract; and
Mr. Gonzalez actually ran the CCLG out of Miami, Florida.
In addition, Mr. Dunev told the subcommittee that Mr. Goudie
led him to believe that Mr. Gonzalez was the President of the
CCLG.
In June, 1990, Luis Uriarte, Mr. Dunev's business partner, met
with Mr. Gonzalez to propose an installment plan for the payment
of the $100,000 advance royalty. Mr. Gonzalez rejected Theta's ini-
tial proposal. Subsequently, Messrs. Dunev and Goudie reached
agreement on a payment plan that was acceptable to all parties.
According to Mr. Dunev, Mr. Gonzalez told him that he was one
of four CCLG shareholders, each with 25 percent ownership. How-
ever, when asked for clarification, Mr. Goudie said that there were
only three shareholders with Mr. Gonzalez holding 33 percent of
the stock.
Mr. Dunev paid two installments (totaling $50,000) on the exclu-
sive licensing agreement for tee-shirts bearing the Quincentenary
logo. Mr. Gonzalez collected those checks on behalf of the CCLG,
and in return received a finders fee of $49,000 from the CCLG.
Therefore, the royalties that the CCLG was collecting were being
used not to benefit the licensing program or the Commission, but to
benefit personal friends of Mr. Goudie.
Mr. Dunev told the subcommittee that, after Theta's contract
was signed, he began to see warning signs that things were not as
they appeared initially. First, he recognized that Messrs. Gonzalez
and Goudie's close relationship presented a serious conflict of inter-
est. Second, it became increasingly difficult to contact Messrs. Gon-
zalez and Goudie. Third, Mr. Gonzalez told Mr. Dunev that he
22
would entertain offers run Commission events at the ports when
the minority stockholders already had that right.
After receiving continually conflicting information from Messrs.
Gonzalez and Goudie regarding the CCLG and the Commission's
planned celebrations, Mr. Dunev refused to make additional royal-
ty payments. In September, 1990, Mr. Dunev received a letter from
Gunter Pfitzenmeier saying that since its third advance royalty
payment was late, Theta had defaulted on its agreement. Mr:
Uriarte contacted Mr. Gonzalez and requested an extension of the
deadline! On October 10, 1990, Mr. Dunev received a letter on
CCLG letterhead, signed by Mr. Gonzalez, stating that CCLG would
not grant Theta an extension. On that same day, an additional
letter was received from Gunter Pfitzenmeier stating that Theta's
contract had been terminated.
FINDINGS AND CONCLUSIONS
The unfortunate result of the widespread mismanagement and
ineptitude described at the subcommittee's hearings was a taxpay-
er-funded Commission that was unable to carry out its mandate of
planning activities in recognition of the Columbus Quincentennial,
in which the entire nation could take part and enjoy.
The subcommittee believes that John Goudie was not qualified to
serve as Chairman of the Columbus Commission. He had no experi-
ence in planning, coordinating, and executing events on a national
scale. He clearly lacked the skills necessary to manage the fiscal
and administrative functions of a federal agency. He also lacked
the skills to conduct a successful fundraising program, which was
necessary to supplement the modest annual federal appropriation
the Commission received.
The subcommittee believes that Mr. Goudie awarded the licens-
ing contract to the CCLG (which clearly was not qualified to
manage such a program) either because he desperately needed the
cash the CCLG was willing to give upfront to rescue the financially
unsound Commission or because he simply saw an opportunity to
achieve personal finan gain from the contract. Either way, the
CCLG contract was unsound, at best, and fraudulent, at worst. Mr.
Goudie must bear direct responsibility for the failure of the licens-
ing program, which ultimately tarnished the Commission's reputa-
tion and placed a cloud over the entire effort to conduct a national
Quincentenary celebration. 19
Based on evidence gathered during its investigation, the subcom-
mittee reached the following conclusions:
John Goudie abused his authority as chairman of the Commis-
sion;
widespread conflict of interest in planning Commission activi-
ties existed during John Goudie's tenure;
John Goudie inappropriately intruded into the management of
contracted activities;
19 Fortunately, after Mr. Goudie's resignation. the Commission was able to salvage some of
the previously planned programs under the direction of Chairman Frank Donatelli and his staff.
and to prepare a series of activities that capture the significance of Columbus voyages 500 years
ago.
23
bribery and fraud existed with respect to the awarding of li-
censes to market the official Quincentenary logo; 0 the CCLG inap-
propriately used corporate funds to benefit some of its officers,
John Goudie, and friends of Mr. Goudie; and
the CCLG was insolvent.
DEPARTMENT OF JUSTICE REFERRAL
Because criminal prosecutions are the responsibility of law en-
forcement agencies of the Executive Branch, on February 20, 1992,
the subcommittee referred to the Department of Justice evidence
that suggested possible criminal and unlawful conduct and war-
ranted further investigation. 20
RECOMMENDATIONS
The subcommittee has concluded that the Commission's authoriz-
ing legislation, as amended, may have contributed in part to the
difficulties that the Commission experienced in raising the neces-
sary funds to mount a proper celebration. The concept of providing
only seed money to a holiday commission through federal appro-
priation should be reevaluated. Federal commitment to a particu-
iar celebration or event perhaps should be supported by enough
funds to allow a programmatic, rather than fundraising, focus.
The subcommittee strongly suggests that future legislation pro-
posing to establish a federal holiday commission should be re-
viewed carefully. In particular, any future legislation should in-
clude safeguards and oversight mechanisms to ensure that taxpay-
er dollars are spent wisely in planning and preparing for activities
and events in honor of that event. Examples of these safeguards in-
clude:
the appointment of the chairman by the President, rather than
the selection of a chairman by a group of Commissioners who may
not be acquainted with each other;
requiring the Inspector General of the General Services Ad-
ministration (GSA) to conduct annual audits of the commission,
and report those findings to the President and the Congress;
requiring the Commission to submit an annual report to Con-
gress, including an accounting of funds received and expended;
prohibiting the licensing of any logo or symbol certified by the
commission for the purpose of raising revenues for commission pro-
grams or for any other commercial venture. Such efforts have
proven to be unmanageable in the past and have not added to reve-
nues for federal holiday commissions;
shorten the length of time for planning commemorative events.
(The Columbus Commission was established eight years before the
Quincentenary celebration-clearly an unnecessarily long period of
time to plan and prepare for such an event.)
Early in 1992, the subcommittee asked the General Accounting
Office to conduct a review of federal commissions, committees, and
boards. GAO is preparing to make recommendations on the appro-
priate structure and organization of federal commissions.
20 See Appendix XI for February 20. 1392, letter of referral to the Department of Justice.
O'IF HUNDRED FIRST CONGRESS
Appendix I
THOMAS C SAWYER, OHIO, CHAIRMAN
MB/VY a STMALLY CALIFORNIA
THOMAS & MOOR PENNSYL VARIA
MOVE a NEW -
ROB CHANGLER WASHINGTON
H.S. Douse of Representatives
COMMITTEE ON POST OFFICE AND CIVIL SERVICE
SUBCOMMITTEE ON CENSUS AND POPULATION
608 HOUSE OFFICE BUILDING ANNEX I
Hasbington, BC 20515-6245
TELEPHONE (202) 226-7823
October 4, 1990
Mr. John N. Goudie
Chairman
Christopher Columbus Quincentenary
Jubilee Commission
1801 F Street, N.W.
Washington, D.C. 20026
Dear Mr. Goudie:
As you know, October 12, 1992, will mark the 500th
anniversary of Christopher Columbus' maiden voyage to the "New
World." The Christopher Columbus Quincentenary Jubilee
Commission was established in 1984 to coordinate an exciting
celebration, through local, national, and international
observances, that would serve to educate, as well as focus
attention on the significance of this historic event.
As the nation approaches the quincentennial of the
voyages of discovery of Christopher Columbus, the Subcommittee
on Census and Population, which has oversight responsibility
for the Commission, believes this an appropriate time to
review the Commission's past and present activities, as well as
its plans over the next two years.
Your response to the enclosed set of questions would
greatly assist the subcommittee in its review of the
Commission's activities. We would appreciate receiving your
responses to these questions no later than October 12, 1990.
Thank you in advance for your cooperation with this
request. We look forward to working with the Commission as it
continues its work toward developing appropriate ceremonies
that would pay special tribute to the man who was responsible
for bringing a diverse group of people to the land we now call
America and the islands of the Caribbean.
Sincerely,
Tom Redge
THOMAS C. SAWYER
THOMAS J. RIDGE
Chairman
Ranking Minority Member
Enclosure
TCS:jc
CC: Honorable Neal Smith
(25)
26
QUESTIONS FOR THE
CHRISTOPHER COLUMBUS QUINCENTENARY
JUBILEE COMMISSION
1)
Section (c) of Public Law 98-375 requires that the
Commission submit an annual report to the Congress on the
activities of the Commission, including an accounting of
funds received and expended. To date, the Committee has
received two such reports.
(a)
Please explain why the Commission has submitted only
two reports to Congress in five years.
(b)
What is the specific role of the Commission in
planning and coordinating events and activities it
has recommended or cited in its most recent report
to Congress?
2)
Section 10(a) of Public Law 98-375 prohibited the
commercialization of any symbols designated by the
Commission for use in connection with the commemoration of
the quincentennial. Public Law 100-94 amended this
section to permit licensing of the Christopher Columbus
Quincentenary Logo, in order to raise money for Commission
sponsored events.
(a)
What contracts have been executed by the Commission
to license the use of the logo?
(b)
Were such contracts competitively bid?
(c)
If contracts have been executed, what has been the
experience of the licensee in promoting the sale of
goods using the logo?
(d)
What are the terms of any such contracts that relate
to the Commission's share of the proceeds? How will
sales be monitored?
(e)
Are there competing logos relating to the
Quincentennial sponsored by other entities or
governments?
If so, what effect may this have on the value of the
Commission's logo, and hence, the income of the
Commission?
(f)
Where and how will these goods be marketed?
(g)
How will sales at Commission sponsored events be
managed, and by whom?
27
-2-
3) The Congress was explicit in its desire to avoid
commercialization of the Quincentennial celebration.
What has the Commission done to ensure that events and
activities are conducted for purposes of education,
recognition, and a celebration of our common history?
4)
The Christopher Columbus Quincentenary Jubilee Act
Amendments authorized the Commission to seek sponsorships
from corporations in an amount not to exceed $1 million
per year.
(a) How many such sponsorships have been arranged and in
what amounts?
(b) How, and by whom, are sponsorships solicited?
5)
You may recall that, at the hearing to review the
amendments to Public Law 98-375, the Chairman of the
Subcommittee stated that in order to avoid any undue
influence on the Commission or its activities, or undue
commercialization of events, that no one corporation or
entity should become too prominent in the Commission and
in its activities.
How is the Commission ensuring that any corporate
involvement is broad based?
6)
It is the subcommittee's understanding that the
Commission's contract with the Christopher Columbus
Licensing Group (CCLG) provided authority for the CCLG to
seek sponsorships on behalf of the Commission. We further
understand that subsequent to the execution of the
agreement, the Commission withdrew the right for the CCLG
to seek sponsorships.
(a) Please provide the subcommittee with a copy of the
contract with the CCLG.
(b) Under what authority did the Commission withdraw the
right from the CCLG to seek sponsorships?
(c) What action did the Commission take, in lieu of CCLG
involvement in securing sponsorships, in order to
ensure broad based support for the Commission's
activities?
68-005 0 - 94 - 2
28
-3-
7)
The Government of Spain has constructed replicas of
Columbus' ships, the Nina, the Pinta, and the Santa Maria
(collectively called the "Caravels"), which will visit up
to 30 ports in the Americas in connection with Commission
sponsored events. We understand that the Commission has
executed agreements with representatives of the Government
of Spain relating to these ships. What do these
agreements provide regarding:
(a)
Ownership of the vessels while in U.S. waters?
(b)
Control of the itinerary of the vessels?
(c)
Access to sites and income from visitor fees or
sales of goods at events at which the vessels are
present?
8)
Please provide the Committee with an itinerary for the
visit of the Caravels to the Americas, indicating which
cities have signed firm agreements, and under what
conditions these visits can take place.
9)
The law creating the Commission mandated that it serve as
a clearinghous for all quincentenary information and
encourage participation through local, national, and
international observances.
What specific assistance has the Commission provided to
State Columbus Commissions in thier planning for 1992?
10) The Commission held a series of regular business meetings
on September 11 - 12, 1990, that were listed in the
Federal Register as "closed."
(a)
Is it common practice for the Commission to conduct
meetings that exclude anyone with an interest in the
Commission's work other than Commissioners?
(b)
Under what circumstances are these meetings closed
to the general public?
(c)
For what reason were the meetings of September 11 -
12, 1990, closed to the public?
CHRISTOPHER
COLUMBUS
5++
OCT
QUINCENTENARY
JUBILEE
COMMISSION
October 17, 1990
Mr. Thomas C. Sawyer
Chairman
Mr. Thomas J. Ridge
Ranking Minority Member
U. S. House of Representatives
Subcommittee on Census and Population
608 House Office Building Annex I
Washington, D.C. 20515-6245
Dear Mr. Sawyer and Mr. Ridge:
Enclosed please find the responses requested in your
correspondence of October 4, 1990 concerning the activities
of the Christopher Columbus Quincentenary Jubilee
Commission.
It is my understanding that a member of your staff
corrected the due date for the responses from October
12, 1990 to October 18, 1990. I hope you will find the
explanations completed in a thorough and timely manner.
of course, please do not hesitate to contact our
office should you have additional questions. Thank you for
your consideration.
bordially,
John N. Goudie
Chairman
1801 F STREET NORTHWEST, WASHINGTON D.C. 20006
202-632-1992
30
RESPONSE TO QUESTIONS FROM THE
U.S. HOUSE OF REPRESENTATIVES
SUBCOMMITTEE ON CENSUS AND POPULATION
1.
(a) The Commission has attempted to submit an annual report
to Congress each year, updating its information as its number of
endorsed projects grows, its involvement with other commissions
and Quincentenary organizations increases, etc. However, it is
important to note that each of these reports must be cleared
through the Office of Management and Budget. The last annual
report, for example, was in OMB for eighteen months before a
final draft was approved.
This, in addition to the fact that the staff of the
Commission numbers only seven, and has in the past been as low as
three, has made it extremely difficult to turn out a report of
this size and breadth each year.
It should be understood, however, that the two reports that
are in print are a good representation of the Commission's
activities, and with the exception of recently endorsed projects
at have been added to the Commission's roster as of its last
meeting, is a fairly current representation of its program
involvement.
(b) Depending upon the source of the initiative behind each
event, activity or program, the role of the Commission changes to
meet needs. Projects submitted by others to the Commission for
endorsement as Official Quincentenary Programs are generally
permitted use of the Commission's Official Logo in printed and
publicity materials, identifying them with national and
international activities of the Commission.
In some cases, the Commission participates directly in
details of projects they have endorsed. The Georgia State
University recently found itself short of funds to put the final
touches on an endorsed film project. The Commission put the
producers in touch with a firm known to have interest in
sponsoring such projects. The necessary funding was provided.
Individual members of the Commission participate in endorsed
academic symposia and conferences, offering their expertise to
the issue.
As proposals are considered for endorsement, members of the
Commission and/or staff frequently offer suggestions to
proponents that increase the effectiveness. of the project or
cause it to fit the themes of the Quincentenary. The
Commission's Program Committee recently reviewed a project that
contained several items of educational interest to young
children, all pertaining to the voyages of Columbus. The
31
recommendation was made to include materials relating to
indigenous people of the Americas at the time of Columbus'
arrival. The producers expressed their appreciation for the
suggestion and have implemented it in the development of the kit.
The Commission assists organizers of musical events by
referring performers and groups as participants. An endorsed
theatrical group in New York was referred to the organizers of a
regional festival in Memphis that is also endorsed as an Official
Quincentenary Project. A music composer who had submitted a work
for endorsement was chosen by the Commission to prepare a work
for use in the caravel tour program.
The Columbus Scholars Program is being developed and
directed by the Commission as a lasting memorial to the
achievements of Columbus and the spirit of learning he
exemplified. The organizational plan, curriculum,
accreditation, funding and long-term management of this program
are currently being addressed by the Commission, its Columbus
Scholars Advisory Committee and staff. A pilot program for the
New World Summer segment was organized by the Commission and was
held in the Dominican Republic in 1990 for sixty-four American,
Dominican and Japanese students with valuable knowledge gained
regarding details of the program. New World Summer for 1991 is
currently under development by the Commission including the
establishment of an adequate interim financial base.
Legislation to authorize the striking of a commemorative
Columbus coin and the establishment of the Columbus Scholars
Foundation was prepared by the Commission for submission as
Senate Bill 2925. The bill is currently in the Banking, Housing
and Urban Affairs Committee and action is expected this session.
Legislative support and backup services are provided to Senate
offices by the Commission regarding this crucial legislation.
The long term future of the Columbus Scholars Program rests on
this authorization.
The Columbus Quincentenary Commission, in a joint venture
with the Spanish Government will tour reproductions of the NINA,
the PINTA and the SANTA MARIA to more than fifty port cities in
the Americas. The Commission and its staff provide tour
organization planning, coordination with federal, state and local
agencies, ground and marine support services, and negotiations
with sponsoring agencies.
Accompanying the tour of the caravels is to be a program of
cultural exhibitions, performances and events that will broaden
the experiences of a visit to see the caravels. Themes cited in
the Report. to Congress are major themes of the exhibition
program. This program is being developed by the Commission which
will maintain responsibility for its management.
32
Grand Regatta Columbus '92 - Quincentenary, a flotilla of
tall ships from all continents is represented in the United
States by the Columbus Quincentenary Commission. The Commission
coordinates all relations between the Grand Regatta and U.S.
federal, state and local agencies and offices, including the U.S.
Navy, U.S. Coast Guard, various harbor managers and host cities.
The 1992 Universal Exposition, wit.. the theme of "The Age of
Discovery," to be held in Seville. Spain is administered by USIA
and supported by funding from federal appropriation and from the
private sector. The Columbus Quincentenary Commission became
directly involved in recent dealings with Congress regarding the
authorization to commit funds to the stalled program.
2. (a) The Commission executed a licensing agreement with an
organization called the "Christopher Columbus Licensing Group,
Inc., (CCLG), authorized to issue sub-licensing contracts on
behalf of the Commission, for purposes of developing
commemorative merchandise for sale at Commission events. The
CCLG is currently developing a full line of such merchandise in
cooperation with a number of entities. The terms and benefits of
these sub-licensing agreements with relation to the Commission
and its expected royalties are laid out in the CCLG Agreement
with the Commission, which is appended to this report.
In addition, the Commission has an agreement with a direct
mail organization, "MWM, Inc.," which provides for a direct
response campaign on behalf of the Commission, including the use
of the Official Logo. A copy of this agreement is also attached
herewith.
(b) These contracts were selected from a number of
proposals that had been received by the Commission offering
similar services, because they were determined by the Commission
members of appropriate committees and by staff to be the best
overall packages for the benefit of the Commission and the
commemoration as a whole.
It should be noted that the Commission, by virtue of a
Comptroller General opinion attached herewith, is not obligated
to go through the competitive bid process when seeking such
services from vendors, because it is inherent in the Commission's
legislation that it be free to consider proposals that may
include a donation of funds or services, or reduced rates for
services, as more desirable than others.
Because the Commission's mission includes seeking such
donations for the benefit of the Quincentenary, the competitive
bidding process was seen as inappropriate in this case. For
example, of all the licensing proposals received by the
Commission, CCLG's was the only one to offer an up-front cash
donation to the Commission in addition to a royalty on future
sales. In like fashion, MWM, Inc: was the only such direct mail
organization to present to the Commission a proposal in which all
33
start-up costs for the program were borne by the Agent.
(c) The reputations of both the above-mentioned
organizations, as presented in their resume materials, indicated
to the Commission that they were more than adequately qualified
for their respective duties. Both organizations were, although
not as widely-known as other groups who submitted proposals, seen
by the Commission to be capable of executing tasteful programs
that would protect the integrity of the Quincentenary effort.
In many other instances, particularly with regard to the
licensing agent category, organizations submitting proposals were
seen to be, in the view of both Committee members and staff, too
commercial in their approach, and in others, downright tacky.
(d) As noted above, both the aforementioned agreements are
attached to this report, and the financial terms may be found
therein. Procedures for monitoring sales are laid out in both
agreements.
(e) As the members of this subcommittee are undoubtedly
aware, a myriad of organizations focusing on the Quincentenary
have sprung up in the last several years, both for-profit and
non-profit, as well as many which are related to a state, local,
or foreign government. It may be assumed that many, if not all,
of these organizations will attempt to license their respective
marks and logotypes, in an attempt to raise funds and make money.
However, the Commission is the official Presidential entity
charged with overseeing all activities for the Quincentenary on
behalf of the United States, and this fact surely carries a great
deal of weight with corporations and the public at large.
Consequently, the Commission is of the opinion that its licensed
products will suffer no great hardship from the presence of these
marks in the marketplace.
(f, The Commission's commemoratives will be marketed in a
number of ways: on-site sales at official Commission events;
mail-order; retail or discount venues; and, where appropriate,
they will be used as premiums by corporate sponsors who have
requested such an arrangement in their sponsorship agreements.
(g) Sales at Commission-sponsored events will be monitored
by Commission-paid staff who will be retained expressly for this
purpose, in conjunction with CCLG, staff. Where appropriate,
these staffers may be joined by representatives of corporate
sponsors.
3. Each project submitted for endorsement by the U.S. Columbus
Quincentenary Commission passes through a rigid process of
examination and evaluation to assure that cultural significance
and educational value are maintained. The five themes cited in
the Report to Congress serve as a basis of evaluation by review
committees -- made up of Commission members -- before proposals
34
receive Commission endorsement as Official or Registered
Projects. No projects receive Official Quincentenary Project
endorsement that have not passed through this review process. As
necessary, proponents of projects that are marginal in cultural
significance are given suggestions by Commission members to
improve project quality. Most projects are revised to include
these recommendations and are re-submitted for endorsement.
4.
(a) The Commission's primary sponsor at the present time is
Texaco, Inc. The Sponsorship Agreement between the Commission
and Texaco provides for an annual donation of $1 million per year
for five years, beginning in 1988 and running through 1993.
In addition to Texaco, Bacardi Imports provides ongoing
support, both cash and in-kind, on a project-by-project basis.
For example, Bacardi donated $10,000.00 in cash for a recently-
completed Native American project of the Commission, a film
produced by Georgia State University entitled, "Voices in the
Wind."
(b) Because the Commission's annual appropriation is so
small, it could not afford to hire an agency on a retainer basis,
as many organizations do, to solicit sponsors. Therefore,
sponsorship solicitation has been conducted by Commission members
and staff.
In addition, the Commission is currently working with
individual contractors who are willing to seek corporate
sponsorships at their own expense, in exchange for a commission
on any deal successfully completed. Their sponsorship
solicitation is limited to one corporation at a time, for a
period of ninety to one hundred and eighty days:
It is important to point out that, in addition to the
sponsors already signed, Official Sponsorship agreements
involving a donation level of $1 million per year each are
currently pending with a major automotive and soft drink company.
The Commission is also currently negotiating with a hotel chain
and a national transportation company, as well as a major
utility.
5. The Commission takes great pains to see that no corporate
entity becomes so invasive in its Quincentenary involvement that
it overshadows the mission of the Commission or diminishes the
integrity of the commemoration. In order to ensure that this
does not happen, the Commission's Finance Committee carefully
reviews all sponsorship proposals before they are finalized.
In addition, an Advisory Council of corporate sponsor
representatives has been created to ensure that corporate
involvement is broad-based, and to assist with oversight on
commercial activity by Commission sponsors.
35
6.
(a) Attached.
(b) The Commission withdrew CCLG's authority to solicit
corporate sponsors because sponsorship solicitation by the same
organization that was attempting to develop the licensing program
for the Commission was found, in practice, to be confusing to the
public, especially when members of the Commission and its staff
were often in contact with the same corporate representatives
contacted by CCLG.
The provision regarding sponsorship solicitation was
withdrawn from the agreement by mutual consent of the Commission
and authorized representatives of CCLG.
(c) As stated, the Commission's sponsorship activities are
conducted by both Commission members and staff in a manner
seeking broad-based corporate support for the Commission and its
programs.
7.
(a) With regard to the three replicas of Columbus's ships
that will sail from Spain to the Americas next year, ownership of
the vessels, in order to facilitate all necessary Coast Guard
certification and approval, will remain with the Spanish
Government. If ownership were to pass to the Commission,
certification requirements on U.S. owned vessels would be
prohibitive on such historic ships, and they would, in all
likelihood, never receive the necessary authorization to sail
U.S. waters.
However, it should be noted that, pursuant to the terms of
the Commission's written agreement with Spain concerning these
ships, the Commission maintains control over the ships while they
are in the western hemisphere, thus enabling the Commission to
take the tour to as many ports as possible.
(b) Again, based upon its agreement with Spain, the
Commission will establish and manage the itinerary of the vesseis
in the western hemisphere, in cooperation with the Spanish
Government.
(c) With regard to access to sites and income from visitor
fees or sales of goods at events at which the vessels are
present, the Commission will share any proceeds from income
related to visitor fees equally with the Spanish Commission, only
after all expenses for the tour have been paid. The Commission
will dedicate any such proceeds of its share to the Columbus
Scholars Program.
With regard to sales of goods, the Commission will divide
its income from these sales according to the terms of its
agreement with CCLG. The Spanish Commission has a separate
merchandising arrangement, and will divide its proceeds with its
licensing agent accordingly.
36
All these terms are subject to arrangements with the
appropriate governing entities in each port city and it is
expected that the port city contracts for each visit of the
Caravels will be signed over the next two months.
8.
A copy of the draft itinerary for the ships is attached.
This calendar will not be final until the Spanish Commission has
approved it (this is expected October 20), and until the city
contracts have been signed with each port.
9.
The Columbus Quincentenary Commission has entered into an.
agreement with Millersville University (Pennsylvania) to process
data that makes up the Quincentenary Calendar. The Calendar will
be in a constant state of up-dating, revision, completion as new
information becomes available from sources across the country and
around the world. The Calendar will be available to subscribers
to CIRS (Computerized Information Retrieval System) at
Millersville University and to those who inquire at the
Washington offices of the Commission. The Calendar may be
presented as a running chronology of events and programs, as a
state-by-state chronology, or as a chronological list by
category; museum exhibitions, festivals, maritime events, etc.
The program allows up to 30 single categories, any number of
states and nations chronological listings of any period length.
Hard copy print-outs will be made available through the Columbus
Quincentenary Commission offices for mail or FAX to users.
The Calendar development system has been tested and data is
currently being processed by Commission staff. This data is
transferred to Millersville University by phone line and entered
into the main file storage system for processing.
State, local and regional Quincentenary organizations,
institutions, agencies and Quincentenary Commissions of other
nations have been contacted regarding the Calendar and
information is currently being received in the Commission office
for entry.
Maintenance of the Calendar is constant and will continue
for the entire Quincentenary period; until December 31, 1993.
Data will be permanently filed with the Quincentenary archive
under development at the University of New Mexico.
The Commission maintains constant contact with Quincentenary
commissions or offices in thirty-nine states, eleven cities, the
major federal cultural agencies and twenty-five other nations.
Information of all types is exchanged in both directions. The
Commission serves as liaison between foreign Quincentenary groups
and U.S. agencies. State and city Quincentenary groups exchange
information with the U.S. Commission that also provides
coordination between regional groups and Washington, D.C.
agencies. The Chairman and other Commission members represent
the Commission at events and observances throughout the nation on
a regular basis. All groups receive encouragement and assistance
37
from the U.S. Commission regarding local projects.
10. (a) It has not been common practice for the Commission to
exclude non-members from its meetings. The meeting of September
12, 1990 was the first to be listed as "closed."
(b) and (c) The meeting o1 September 12, 1990 was closed to
the general public to allow. the Commission to catch up with its
growing log of work to be done. In all past meetings, plenary
sessions had been held on at least two consecutive days with time
made available to groups and agencies with an interest in the
Quincentenary to make presentations to the Commission regarding
local projects. Commissioners recognized that, as 1992 comes
closer, the number of matters to be considered during meetings
grows rapidly as dces the desire of the general but interested
public to have contact with the Commission. As a result of this
growing concern, the Chairsan, the Executive Committee and
members of the Commission chose to nake September 12, 1990 a
"strictly business" meeting.
It is the plan of the Commission to schedule future meetings
as one-day plenary sessions with tightly-regulated agendas. The
general public and those with interest in Commission proceedings
will not be excluded from attendance by the Commission.
38
IFWIC 1999
Comptroller General
of the United States
27 FEB 1079
Washington, D.C. 20648
B-211149
February 9, 1982
The Honorable Constance A. Morella
llouse of Representatives
Dear Ms. Morella:
BY letter dated October 14, 1988. you asked whether the
Christopher Columbus Quincentena Y. Jubilee Commission
(Commission) must comply with the Federal Property and
Administrative Services Act of 1949 (PPASA) or the Federal
Acquisition Regulations (FAR) when contracting with donated
funds. You also asked whether the Commission may deposit
donated funds in non-Treasury, interest bearing accounts.
For the reasons stated below, we conclude that the
Commission is not required to comply with the FPASA and the
FAR for contracts financed From private donations. we
further conclude that donated funds may be deposited in non-
Treasury interest hearing accounts.
We received similar requests from Representatives Dante B.
Fascell and Robert Garcia and are providing identical
responses to them.
BACKGROUND
The Christopher Columbus Dilncentenary Jubilee Act, Pub. 1,.
No. 98-375, 98 Stat. 1257 (1984) (act) established the
Christopher Columbus Quincentenary Jubilee Commission "to
plan, encourage, coordinate, and conduct the commemocation
of the voyages of discovery of Christopher Columbus. "1/
Section 8(b)(3) of the act authorizes the Commission, under
such rules and regulations as It adopts, to procure
supplies, services, and property, make contracts, and expend
the funds It receives in furtherance of the act.
1/ The act was amended by Puh. 1.. No. 100-94, 101 Stat. 700
(1987). The 1987 amendments address nonvoting participants to
the Commission. increased the maximum donations allowed, and
authorized the Commission to pay certain expenses, among
other things.
39
To provide for the Commission's expenses, the act
authorized to be appropriated $220,000 for each of the
fiscal years beginning after September 30, 1983 and ending
before October 1, 1992. and $20,000 for the period between
October 1 and November 15, 1992. Total appropriations
authorized for the purposes of the act were not to exceed
$2,000,000.2/
To help fulfill Its statutory purpose, section 7 of the act
authorizes the Commission to accept donations of money,
property. or personal services. The aggregate amount of
donations the Commission may accept annually may not exceed
$250,000 from an individual or $1,000,000 from a foreign
government, corporation, or partnership.}/
DISCUSSION
As a general rule, when a Federal entity expends both
appropriated and donated funds to accomplish a statutory
purpose, the expenditures from both sources are viewed an
appropriated fund expenditures subject to all statutes and
regulations governing such expenditures. However, in a
letter to the Nonorable Sidney R. Tates, B-211149, December
12, 1985, we recognized that this rule 19 not without
exceptions. 1.1 that letter, - concluded that the Bolocaust
Memorial Council (Council) need not comply with certain
statutes and regulations generally applicable to the
expenditure of appropriated funds by Federal agencies.
Our conclusion In the case of the Council was based on two
reasons equally applicable to the Commission. First, we
noted that statutes, such as 11 U.S.C. S 3302(b), which
require government officials to deposit funds in the
Treasury, are Intended to prevent the augmentation of direct
appropriations with funds from outside sources resulting in
a level of operation heyond that authorized by Congress.
2/ Congress appropriated $220,00 for fiscal years 1984 and
1987 and $212,000 for fiscal years 1988 and 1989 for the
Commission. The amounts appropriated remain available until
November 15, 1992. No funds were appropriated for fiscal
years 1985 and 1986.
3/ In recognition of the substantial expense of fund-
raising activities and the limited contribution to this
effort provided by appropriated funds, these amounts were
enacted by Public Law 100-94 as an Increase to the
allowable amount of donations initially enacted by Public
Law 98-375. H.R. Rep. No. 254, 100th Cong., 1st Sess. 4 (1987).
2
B-211149
40
Since the Holocaust Memorial Council in an entity which
carries out major, continuing functions using only donated
funds, the concern with augmentation of appropriations that
underlin statutes such as 11 U.S.C. 5 1102(b) were not for
application to an entity such an the Council. Second, we
felt that the legislative history of the Holocaust Act
supported the conclusion that Congress intended to allow the
Council to expend donated funds subject only to the
directives of its governing board, (ree of the strictures
generally applicable to Government funds. Accordingly, we
concluded:
(1) The Council in free to Invest the donated funds in
Interest-bearing securities to the extent not needed.
for immediate payments for construction of the museum
and related costs.
(2) Federal procurement requirements such as those
found in the Federal Property and Administrative
Services Act of 1949, and its Implementing regulations,
the Federal Acquisition Regulation, as well as other
procurement-related statutes in not apply to any
Council procurements Involving the expenditure of Its
donated funds.
We believe these conclusions apply equally to the
Commission. First, the Commission carries out its statutory
purposes largely through the une of donated funds. noth the
report of the House Committee on Post office and civil
Service and the report of the Senate Committee on the
Judiciary which considered the bills entablishing the
Commission state: "This bill is a modest proposal which
provides for limited Federal funding. The Commission will
have to look to private and corporate donations for the
hulk of its funding If It is to operate successfully and
fulfill its duties and obligations under the bill." H.R.
Rep. No. 150, 98th Cong., 1st Sens. 3 (1983); S. Rep. No.
194, 98th Cong., 1st Sess. 5 (1983). In fact, Congress
later realized that the statutory limits on the amount of
donations the Commission could receive precluded the
raising of sufficient funds and subsequently raised the
limits on the amount of donations the Commission could
accept. Pub. ... No. 100-94, 101 Stat. 700 (1987), H.R. Rep.
No. 254, 100th Cong., 1st Sess. 4 (1987). In light of
Congress' clear Intent that the Commission's activities be
financed primarily from sources other than Federal funds,
and for the reasons discussed above in connection with the
Holocaust Memocial Council, we conclude that the Commission
may Invest donated funds In non-Treasury, Interest-bearing
accounts.
3
n-211149
41
Second, mection 8(h)(3) of the net states: "Subject to
such rules and regulations AA may be adopted by the
Commission, the Commission-may procure supplies,
services, and property; make contracts; expend in
furtherance of this Act funds appropriated, donated, or
received In pursuance of contracts hereunder
There
is nothing in the act or Its legislative history indicating
that Congress Intended the Commission's authority to Issue
procurement rules and regulations to he constrained by the
requirements In the FPASA or the FAR. Like the Holocaust
Memorial Council, W? think that the Congress Intended the
Commission to expend donated funds free of the strictures
generally applicable to government funds. There is little
reason to believe that Congress, In creating a Commission
which relies primarily on private sector donations and has a
limited life to fulfill a limited purpose, Intended that the
Commission be required to comply with the formal procurement
procedures contained in federal law, or be prohibited from
obtaining goods and services by taking advantage of informal
relationships developed as part of the private sector's
participation in the Commission's activities. Accordingly,
we conclude that the Commission is not required to comply
with FPASA or the FAR when contracting with donated funds.
As with the Holocaust Memorial Council. however, we
recommend that the Commission use the body of Federal
procurement 100 and regulations an models in developing its
own Internal procurement policies.
Unless you publicly announce its contents carlier, we plan
no further distribution until 30 days from the date of this
opinion. At. that time, wr will make copies available to
others on request.
Sincerely yours,
Milton f
Actine Comptroller General
United States
4
n-211149
42
AGREEMENT
This Agreement is made this 10 day of DCCT 1990, by and
between MWM, Inc., 505 Capitol Court, N.E., Suite 100, Washington,
D.C. 20002 (HEREINAFTER REFERRED TO AS THE "AGENT") and the
Christopher Columbus Quincentenary Jubilee Commission, 1801 F
Street Northwest, Washington, D.C. 20006 (HEREINAFTER REFERRED TO
AS THE "CLIENT").
WHEREAS, Client is a non-profit organization that is entitled
to engage in fundraising activities;
WHEREAS, Agent has experience in direct response fundraising;
and
WHEREAS, Client is desirous of retaining the services of Agent
to perform such fundraising.
Therefore, in consideration of the foregoing and of the mutual
covenants, terms and conditions of this Agreement, it is agreed as
follows:
1. Appointment and Authorization of Agent.
Agent is hereby authorized to represent Client to carry out its
Direct Response Programs. For purposes of this Agreement, "Direct
Response Programs" shall mean fundraising and public education
programs utilizing the direct solicitation or contacting of the
public (by mail, telephone, brochures, electronic mail or
otherwise) which is intended to elicit a direct response or
contribution of funds for or on behalf of the Client or any other
designee. Direct response programs shall not include the
solicitation or contacting in any manner of any corporate entity,
unless such solicitation or contacting is specifically authorized
in writing by the Commission. Client agrees that its appointment
of Agent shall be an exclusive appointment, that is, during the
term of this Agreement, Client shall not authorize, license, or
appoint any person or entity other than Agent to conduct Direct
Response Programs on behalf of Client or using the name or Marks of
Client.
2. Agent Activities. For mailings produced for the Client,
Agent shall act as the Client's exclusive Agent and may perform,
upon authorization hereby granted, any or all of the following
services to the extent necessary to meet the Client's needs, which
needs shall be determined by mutual agreement of the parties:
A. Plan, create, write and prepare layouts and actual copy
to be used. in Direct Response Programs. Client shall have
the right to approve all such layouts and actual copy,
which approval shall not ureasonably be withheld.
43
B. Coordinate and develop Direct Response Programs.
C. At Client's request, Agent will prepare line item budgets
for each Direct Response Program, which are subject to
Client's reasonable approval prior to implementation of
the program. Agent may, in conformity with any such
budget, negotiate, arrange and enter into agreements on
behalf of the Client for any special material and talent
required and for all photography, models, special
effects, layouts, art work, printing, and any necessary
technical material for use in the Direct Response
Program. Agent shall have the sole right to select all
vendors from which services and/or materials shall be
obtained, provided that Agent shall take all reasonable
steps to assure that the vendor's services and/or
materials are of competitive quality. Agent recognizes,
however, that Client has certain agreements with other
parties which pre-date the execution of this Agreement
with Agent, and will do everything in its power to work
with those parties to ensure Client's compliance with
said preexisting agreements. Agent specifically agrees
to work with CCLG, Client's official licensing agent, and
with BGW, Inc., who is producing a coin for the
Commission, on the development of premium items that are
within the scope of their agreements with the Commission.
It is understood and agreed that Agent shall be billed
directly by the vendors for all such services and/or
materials.
D.
Among other programs, Agent shall seek to enroll members
in Client. Upon payment of the membership fee, a Member
shall receive a fulfillment package containing a
membership card, a commemorative coin and the newsletter
"Discovery" and such other materials as Client and Agent
shall agree. Agent shall be responsible for providing
fulfillment items and for mailing the package at Agent's
expense ("Agent's fulfillment Costs"). Client shall
provide Agent with such materials as the parties agree to
provide at Client's expense.
3.
Routing and Distribution of Returns.
A. All returns, including, without limitation, all
membership revenues, contributions of funds, and
Housefile Income (as defined below), generated by any of
the Direct Response Programs conducted pursuant to this
Agreement shall be directed to Agent's cager of choice
("Cager"). Cager shall tabulate all returns and deposit
all funds received by Cager in an escrow. account to be
established and maintained in Agent's name at Agent's
bank of choice. Checks and drafts shall be drawn on this
Account solely to effect the purposes of this Agreement,
and shall be subject to approval by the client.
44
B. It is understood and agreed that any funds advanced
by the Agency or others for postage or other approved
expenditures shall be immediately reimbursed before any
returns are disbursed to the Client and/or other parties,
including vendors.
C. For purposes of this Agreement, "Housefile Income"
shall mean all funds paid to Client in the form of
membership renewal payments, contributions or otherwise,
by any person, organization or entity that previously
paid or contributed any funds to Client via a direct
marketing appeal created and produced by the Agent on
behalf of the Client, subsequent to the date of this
Agreement.
D. It is understood that the determination of
distribution of fees and rate of payment for Agent shall
be mutually agreed to by the parties at a date subsequent
to the completion of the first test mail. ng, and after
start-up expenses borne by Agent have been recouped.
Such agreement as to fees shall be agreed to in writing
within 30 days after the completion and evaluation of the
first test mailing.
4.
Creation/Administration of Data nase.
Agent will, directly or through independent
contractors of its choosing, establish and administer a
data base containing the file of members in and
contributors to Client (the "Database"). It is
understood and agreed that, for the first three months of
the program, file maintenance costs will be paid out of
the proceeds of housefile and prospect mailings. At the
end of three months, Client and Agent shall meet to
assess whether Client shall assume responsibility for
file maintenance charges, as an administrative expense.
At such time as Client agrees in writing to assume
responsibility for file maintenance charges, Agent will
submit bills for these charges to Client, on a monthly
basis.
5. Vendors.
Client shall have no liability for payment to
Agent's vendors. In no event shall Agent be responsible
for any liability, fee, costs or expense arising under or
resulting from any agreement entered into by Client
unless Agent specifically agrees in writing to assume
such responsibility.
45
6.
Pre-Termination List Rental.
A.
In the event Agent experiences "Net Losses" (as
defined below) in performing the services contemplated by
this Agreement, and subject to the terms and conditions
set forth in subparagraphs B and C of this Paragraph,
Agent shall have the right, which Agent may exercise
through its affiliated company, Pinnacle List Company, or
such other person or entity as Agent shall reasonably
select, to rent to any person, entity or organization the
use of those names and addresses that Agent has generated
in the course of conducting any Direct Response Programs
under this Agreement.
B.
For purposes of this Agreement,
(i) "Net, Losses" shall mean the amount by which
Agent's costs in conducting Direct Response
Programs under this Agreement, such costs to
be calculated on a quarterly basis within
thirty (30) days after the close of each
calendar year quarter, exceed the receipts
paid to Agent pursuant to Paragraph 3 of this
Agreement during said calendar year quarter;
and
(ii) Agent's costs shall be conclusively presumed
to be: $1950 per housefile package mailed for
creative copy/design; $2250 per prospect
package mailed for creative copy design; $.035
per piece mailed for production management;
plus any other reasonable cost incurred by
Agent specifically in the performance of this
Agreement (including without limitation out-
of-pocket travel and courier costs, and
Agent's Fulfillment Costs), but excluding
Agent's overhead costs.
C. In the event Agent experiences Net Losses, it shall
so advise Client and provide Client with a statement of
the costs incurred and compensation received during the
immediately preceding calendar year quarter. It shall
thereafter be entitled to exercise the rental right
described in subparagraph A of this Paragraph until the
accumulated income from such activities equals or exceeds
all accumulated Net Losses.
7. Confidentiality. Both Agent and Client shall maintain in
confidence all information related to the costs of implementing the
Direct Response Programs conducted pursuant to this Agreement, the
revenues generated for Client by those programs, and the
compensation received by Agent for its services under this
Agreement. It is agreed, however, that all such information can be
provided by either Agent or Client (the "Disclosing Party") to
46
governmental agencies upon receipt of a lawful, formal request from
such disclosure. The Disclosing Party shall immediately notify and
provide the other party a copy of any such formal request along
with copies of the information to be provided by the Disclosing
Party.
8. Term and Termination.
A.
This Agreement shall become effective upon execution
and continue thereafter for a period of three years
unless terminated as provided herein.
B.
Either party may terminate this Agreement without cause
forty-five (45) days following written notice to the
other party. In recognition of the fact that Agent is
advancing substantial funds on behalf of Client pursuant
to this Agreement in the anticipation of future returns,
Client agrees that should Client terminate this agreement
without cause: and if said termination shall occur within
the first twelve months of this Agreement, Client shall
pay to Agent the sum of the amount by which Agent's
aggregate costs in performing this Agreement (ii) exceed
the aggregate receipts paid to Agent during the term of
this Agreement pursuant to Paragraph 5 of this Agreement.
C. Upon receipt of notice of termination, the Agent shall
not commence any new Programs, but it shall complete all
mailings and place all lists and advertisements
previously approved. All other rights and duties of the
parties shall continue concerning any contracts,
agreements, or mailings previously approved by Client.
In the event the Client desires to terminate all work in
progress on any mailings approved and commenced before
the Agent's receipt of notice of termination, it may do
so. only upon the parties' mutual consent and the
determination of compensations to be received by the
Agent for partially completed work.
D. Agent shall not enter into any new contract (s) on
Client's behalf after receipt of a notice of termination,
provided however that Agent shall have the right to enter
into contracts which are necessary and incidental to the
performance of contracts approved prior to receipt of
notice of termination.
E. This Paragraph 8 shall survive the termination of the
Agreement.
9. Agent's Post-Termination Compensation.
In the event this Agreement is terminated or expires, and
a direct mail package developed by Agent in part or in whole
before such termination or expiration is used thereafter by
Client (or any other party acting on behalf of Client) for any
47
purpose whatsoever, Client agrees to direct all returns
generated by such direct mail package to Cager and to pay
Agent compensation calculated in accordance with paragraph 3
of this Agreement with respect to such returns. This
Paragraph shall survive the termination or expiration of this
Agreement.
10. Disposition of Property and Materials.
A. Upon termination of this Agreement, all property and
material produced and used under this Agreement shall be
considered the property of the Client. All shipping and
transportation costs associated with moving said property
from the Agent or a third party to the Client shall be
borne by the Client. These provisions shall apply
whether the items in questions are in the possession of
the Agent or third parties.
B. The Client agrees that the Agent shall have joint
ownership in any list(s) (the "Lists") of contributors
and non-contributors compiled for the Client during the
term of this Agreement, including, without limitation,
the Database: Client hereby assigns a joint interest in
the Lists (and any rights therein) to Agent. During the
term of this Agreement, the Agent may not rent, sell or
exchange any such list other than upon Client's specific
authorization or as provided for in Paragraph 6. Upon
termination, Agent may rent, sell, exchange or barter the
List (s) without limitation, except that the List(s) shall
not be marketed, advertised or promoted as the
Christopher Columbus Quincentenary Jubilee Commission
list. Client hereby appoints Agent its exclusive
marketing agent of the List(s) (through such subagents or
brokers as Agent may select) for the period commencing
on the date this Agreement is terminated and terminating
three vears after termination of this Agreement.
C.
This Paragraph 10 shall survive the termination or
expiration of this Agreement.
11. Regis ion. Client and the Agent shall be seve ly and not
jointly responsible for their own registration, reporting and
related obligations, arising out of any solicitation conducted by
the Client pursuant to this Agreement, that are imposed by
applicable Federal, State and/or local law. The Client and the
Agent shall keep the other apprised of the jurisdictions in which
each of them register and/or make periodic reportings pursuant to
a charitable solicitation law.
12. Assignment and Delegation. Neither party may assign any
rights or delegate any duties hereunder without the express prior
written consent of the other.
13.
Claims. Each party (the Indemnifying Party) agrees to
48
indemnify and hold harmless the other party from any and all claims
of third parties, of any nature whatsoever arising out of this
contract, resulting from or arising out of (a) any breach of the
Indemnifying Party's obligations under this Agreement, (b) any
action or conduct by the Indemnifying Party outside the scope of
authority of such Indemnifying Party, and (c) any negligent or
intentional act or omission of any employee, agent or
representative of the Indemnifying Party. Client shall be solely
responsible for all representations made in copy prepared for
Client by Agent provided Client has been given a written copy of
the representation and approved its contents, and Client shall hold
Agent harmless from claims arising out of such approved copy.
14.
Controlling Law. The validity, interpretation, and
performance of this Agreement shall be controlled by and construed
under the laws of the District of Columbia applicable to contracts
made and to be performed therein.
15. Waiver. The failure of either party to this Agreement to
object or to take affirmative action with respect to any conduct by
the other which is in violation of the terms of this Agreement
shall not be construed as a waiver of any future breach or
subsequent wrongful conduct.
16.
Notices. All notices required or contemplated by or
pertaining to this Agreement shall be in writing and shall be
transmitted either by personal hand delivery, overnight courier or
by certified mail, return receipt requested, through the facilities
of the U.S. Postal Service. The addresses set forth above for the
respective parties shall be the places where notices shall be sent,
unless written notice of a change of address is given. Notices
given under this contract are effective when received, and a signed
returned receipt of the U.S. Postal Service shall be conclusive
proof of such receipt.
17. Modification. This writing contains the entire Agreement of
the parties. No presentations were made or relied upon by either
party, other than those that are expressly set forth. No agent,
employee; or other representative of either party is empowered to
alter any of the terms hereof, unless done in writing and signed by
an executive officer of the respective parties.
18. Additional Terms.
A.
Any party to this contract shall have the right to
institute legal proceeding to settle any claim or
controversy arising out of this contract. All parties
agree that such proceedings may be brought before a court
of competent jurisdiction in the District of Columbia,
and that such Court shall have jurisdiction over the
parties.
B.
The Client and the Agent agree that should either use the
49
service of an attorney in enforcing any provision of this
contract, that the prevailing party shall be entitled to
recover the attorney's fees and costs so incurred.
C.
The Client agrees not to solicit, in any manner, any
employee of the Agent during the pendency of the
contract.
ATTEST:
MWM, INC.
By: They there 10/10
Meg Walker
(Date)
President
ATTEST:
CHRISTOPHER COLUMBUS
QUINCENTENARY
JUBILEE
COMMISSION By John Chairman Goudie (Date) 10/12/96
50
LICENSE AGREEMENT
THIS AGREEMENT, made as of the 17 day of July, 1989, by and
between the LICENSOR, Christopher Columbus Quincentenary Jubilee
Commission, a Federal Commission established by the United States
Government in 1984 to be the official group organizing,
coordinating and directing the United States Quincentenary
Calebration in 1992, and located at 1801 F Street Northwest,
Washington, D.C. 20006. and the LICENSEE, The Christopher Columbus
Licensing Group, Inc., a corporation organized under the"laws of
the State of New York and residing at 344 East 63rd Street, New
York, New York 10021.
WITNESSETH:
WHEREAS, The Licensor is the owner of all right, including
copyright, to the Trademarks, Tradenames and Logotypes of the
Christopher Columbus Quindratenary Jubilee Commission and/or has
the power and authority to grant the rights granted hereunder and;
WHEREAS, the Licensee desires to utilize the Trademarks,
Tradenames and logotypes of the Christopher Columbus Quincentenary
Commission (hereafter referred to, whether separately or
collectively, as the PROPERTY) in connection with exclusive
manufacturing, contracting. marketing, sale and distribution of
those articles hereinafter described;
NOW, THEREFORE, in consideration =t the mutual promises herein
set forth, Licensor and Licensee do hereby respectfully grant
covenant and agree as follow:
-1-
PS
51
A. GRANT OF LICENSE.
1. ARTICLES: Licensor hereby grants to Licensee upon the
terms and conditions hereinafter set forth the exclusive right to
license, sub-license or otherwise stilize the Property solely upon
or in association with the Articles group below and described in
Schedule "A" of the Annex:
a. Drinkware and service items
b. Auto signage, flays and pennants
C. Pins and Keyholders
d. Bags
e. Wearing appare) and headgear
f. Writing instruments
g. Timing devices
11. Dolls, sculptures, figurines, model and toys
and novelty items of every sort.
2. CORPORATE SPONSORS, Licensor hereby also grants to
Licensee, upon the terms and conditions hereinafter set forth, the
non-exclusive right to license or sub-license the Property to
persons, corporations, associations, state and municipal
governments and departments and agencies thereof and any other
entity to be utilized i:: connection with products and services and
promotions and events of every kind and nature, labeling, packaging
and displays. organizations, dealer sales, industry and public
meetings, conventions and sales claims and meetings, print,
-2-
K
52
point of sale and sail-order advertising, publicity, radio and
television programs and comsercials. Licensee agrees, however, that
it will actively coordinate with Licensor, and receive approval in
writing from Licensor prior to contacting any such persons,
corporations, associations, governmental departments or agencies,
so as not to impinge upon or hamper Licensor's own corporate
sponsorship development program.
3. PAYMENT
a. ROYALTY FATE During the term of the Agreement,
Licensee shall pay to Licensor as royalty a sum equal five (5%)
5%
percent of all gross sales by Licensee or any of its affiliates,
associates, or subsidiary companies of the articles covered by this
Agreement. The term "gross sales" shall be define as all sales less
return items and trade quantity discounts. Five (s4) percent of all
royalties, fees and advances and other fees or monies paid to the
Licensee pursuant to all Sub-License Agreements entered into by or
on behalf of the Commission during the term of the Agreement and
all renewals, extensions or such Sub-License Agreements or any
other applicable Agreements
b. TERMS or PAYMENT
Licensee agrees to pay as a minimum guarantee
against royalties to be paid Licenser during the initial tera
hereof and as advance payment applicable to said minimum
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guarantee the sum of THREE HUNDRED THOUSAND ($300,000.00) DOLLARS.
Advance royalty payment is to be paid as follows:
1. ONE HUNDRED THOUSAND ($100,000.00) DOLLARS by
July 31, 1989.
11. ONE HUNDRED THOUSAND ($100,000.00) DOLLARS by
October 30,1989.
111. ONE HUNDRED THOUSAND ($100,000.00) DOLLARS by
January 31,1990.
No part of such minimum royalties shall in any event be
repayable to Licensee.
C. Payments above the minimum guarantee due to
Licensor shall commence on the 15th day following the initial six
month period under this Agreement and shall thereafter continue to
be made on the 15th day of each six month period during the entire
term of this Agreement. Such payments shall be accompanied by a
statement certified by the Licensee showing the calculation of the
amount of the payment then being made. It is essential that any
and all payments required under this License actually be received
by Licensor no later than the due date. It is understood, however,
that overnight mail service will satisfy this request.
54
4. TERRITORY
The Territory of the License hereby granted extends
to any and all areas of the United States, its Territories and any
of the Countries participating directly or indirectly in the
Celebration.
5. TERM
This Agreement shall remain and continue in full force
and effect for a period of five (5) years from the date first above
written; unless sooner terminated in accordance with the provisions
hereof.
B. EXCLUSIVITY
Licensor agrees that, except as provided herein, it will
grant no other licenses for the Territory and for the Property for
which this License extends effective during the time of this
License.
c. GOOD WILL., ETC.
Licensee stipulates the great value of the good will
associated with the Property and acknowledges that the Property and
all rights therein and good will pertaining thereto belong
exclusively to Licensor.
D. LICENSOR'S TITLE AND PROTECTION OF LICENSOR'S RIGHTS.
1. Licensee acknowledges the ownership or control of
Licensor in the copyright trademarks, tradenames and logotypes
which underlie this License and Licensee agrees that it will
JJ
not
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during the term of this License attack the Licensor's right of
ownership and/or control. Licensor represents and warrants that it
holds all such rights and interests in the Property as are required
to enter into this License and warrants expressly that the rights
granted herein to the Licensee to use the Property do no infringe
those of any other person or entity.
2. Each party agrees to provide the other with thirty
(30) days notice to correct any alleged breach by the other and
each party further agrees that it will not commence any action
against the other without giving the other thirty (30) days prior
notice of such suit.
E. QUALITY OF MERCHANDISE
1. Licensee agrees that the Articles covered by this
License shall be of high standard and of such quality, style and
appearance as to be adequately suited to take advantage and to the
protection and enhancement of the Property and the good will
pertaining thereto. Licensee also agrees that each Article shall
be approved by Licensor in writing on paper or actual pre-
production sample prior to its distribution. Any item submitted to
Licensor for approval shall not be deemed approved unless and until
the same is approved in writing. Once approved, Licensee shall not
depart therefrom in any material respect without Licensor's prior
approval. From time to time after Licensee has commenced selling
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68-005
33
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the Articles and upon Licensor's written request, Licensee shall
furnish to Licensor at cost no more than thirty six (36) additional
random samples of each item requested. Cost of these random samples
shall be deducted from the corresponding period royalty payment
statement.
2. It is understood that Licensor shall have the right
to take samples at random from production runs twice a year by
that, if quality problems are encounter as a result of the
examination of samples, Licensor shall have the right to take such
sample more frequently than that in an effort to assure proper
quality control has been established.
F. INDEMNIFICATION BY LICENSEE AND PRODUCT LIABILITY
INSURANCE.
Licensee hereby indemnifies Licensor and undertakes
to defend Licensee and/or Licensor against and hold Licensor
harmless from any claims, suits, loss and damage arising out of any
unauthorized use of any patent, design, mark, process, idea, method
or device by Licensee (none of the same being included in Property)
in connection with the Articles covered by this License and also
from any claims arising out of alleged defects in the Articles, any
alleged inadequacy or failure to perform, or personal injury
resulting from use of the licensed Articles. Licensee agrees that
it will obtain, at its own expense, product liability insurance
providing adequate protection for Licenson as well as Licensee
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against any claims, suits, loss or damage arising out of any alleged
defects in Articles. Licensee agrees to provide Licensor a copy
of such Certificate of Insurance naming Licensor as an insured
party prior to the actual distribution and sale of any Articles.
G. RECORDS
Licensee agrees to keep accurate books of account and
records in a form meeting the generally accepted standards of the
CPA profession covering all transactions relating to the License
hereby granted, and Licensor and its dully authorized
representatives shall have the right at reasonable hours of the day
to examine said books of account and records and related supporting
documentation. Licensee agrees to keep these records after
termination of this License for a period of no less than one year,
during which period Licensor shall retain the right to examine or
cause to be examined such records.
H. DISTRIBUTION
1. Licensee agrees that during the term of this License it
will diligently and continuously manufacture, sell, distribute and
promote Articles covered by this License and that it will make and
maintain adequate arrangement for the distribution of Articles.
9
BS
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2. Licensee agrees that it will sell and distribute the
Articles covered by this License outright at a competitive price
and at no more than the price generally and customarily charged in
the trade and only to jobbers, wholesalers, and distributors for
sale and distribution to retail stores and merchants, and to retail
stores and merchants for sale and distribution direct to the
public. Licensee will also sell and distribute the Article through
any and all other channels of trade and or modes of distribution
and delivery including but not limited to all special markets
including Premium, Military, Direct Mail, Electronic Shopping,
Catalogues, and Vending Machines. Licensor shall assist Licensee
in the selling and distribution of Articles for the express use for
publicity or promotional tie-in purposes, combination sales,
premiums, giveaways or similar methods of merchandising to any and
all other licensees, sponsors, patrons and participants of the
Quicentenial Celebration. Special assistance will be provided by
the Licensor where possible, to the Licensee in promoting the use
of Articles at, in and together with the exhibition halls planned
for (Knoxville, Tennessee, the Columbus Space Sail Cup) and the
Tour of the Caravels and Regattas. A list of exhibitors, shops,
principals and key personnel associated with and involved in the
effort being put forth at Knoxville and any other joint
participation of the Licensor with a State, Country, Corporation
or Group where the Articles could or would be used, distributed or
sold, would be made available by Licensor to Licensee. It is
understood by Licensee that at the time of the execution of this
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document final approval of the Knoxville and Space Sail Cup
projects is still pending. Should for whatever reason, final
approval of these projects, not be forth coming the Licensor would
be under no obligation to promote and assist with the use of
Articles in connection with these projects.
3. Licensee agrees to sell Licensor such quantities of
the Articles as Licensor shall request at as low a rate and on as
good a term a Licensee selis these Articles to the general trade.
Licensor agrees to use, whenever possible and applicable, the
Articles covered by this License for its OWN promotions. Licensor
further agrees to refrain from buying Articles included in this
License from anyone but the Licensee provided the conditions of
sale, delivery, and other requirements can be met by the Licensee.
G. TECHNICAL AND PROMOTIONAL MATERIAL
1. Licensor agrees to provide Licensee, at no cost to
Licensee, all technical material in connection with its use of the
property. Any authorized use or application of property by
Licensee to produce design variations suitable for the reproduction
on Articles will be borne by Licensee. Licensor shall be entitled
to use any design variations or applications of property created
by Licensee provide such use does not conflict or compete with or
impair or diminish Licensee's use thereof. Licensee is entitled to
the use of any design variations or application suitable for the
reproduction of property in Articles which have been created by
22
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68-005 o - 94 - 3
under the approval of Licensor as long as its use does not
interfere, impair or diminish the rights of Licensor or any of its
endorsed projects. Any such design variations or applications of
property created by Licensee shall require full approval of
Licensor in writing. The term "technical materials" as used herein
shall mean all artwork and designs, pictures, dyes, mold,
separations, creation, production and/or reproduction of Articles
identified with the Property.
2. Licensor shall have the right, but shall not be
obligated, to use the Property and/or name of Licensee so as to
give the Property, Licensee and Licensor full and favorable
prominence and publicity.
J. FINAL STATEMENT UPON TERMINATION OR EXPIRATION
Ninety (90) days before the expiration of this License and,
in the event of its termination, forty-five (45) days after receipt
of notice of termination or the happening of an event which
terminated this License where no notice is required, a statement
showing the number and description of Articles covered by this
License on hand or in process shall be furnished by Licensee to
Licensor. Licensor shall have the right to Physically verify such
inventory and statement. Refusal of Licensee to submit to such
physical Inventory by Licensor shall forfeit Licensee's right
dispose of such inventory.
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61
K. DEFAULT AND TERMINATION
1. If a petition in bankruptcy is filed by or against
Licensee, or if Licensee becomes insolvent, or makes an assignment
for the benefit of it's creditor or an arrangement pursuant to any
bankruptcy law, or if License discontinues its business, to the
fullest extent permitted by law at the time of the occurrence, the
License granted herein shall automatically be terminated.
2. If Licensee shall fail to pay when due any and all
payments required under this License or fails to perform any of its
other obligations under the terms of this License or breaches any
covenants contained in this License, Licensor shall have the right
to terminate this License upon thirty (30) days notice in writing,
except that with regard to breaches relating to Property
notification, royalty payment, royalty statements, the notification
period shall be ten (10) days.
3. Licensee small have the right to terminate this License
Agreement by giving Licensor written notice with no less than
ninety (90) days In advance. Licensee in such anievent, will assist
Licensor in screening, searching and securing a new Licensee if
this assistance is requested by the Licensor.
L. EFFECT OF TERMINATION OR EXPIRATION
upon and after the expiration or termination of this
License, all the rights grante to Licensee hereunder shall
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forthwith revert to Licensor, who shall be free to license others
to use the Property in connection with any of the Articles covered
hereby. Licensor is free to negotiate, at any time during the term
hereof, with any other prospective licensee on the use of the
Property on the Articles within the Territory without violating
any of the rights of the Licensee, provided the Licensor fully
notifies the Licensee of the reasons and circumstances prompting
that negotiation and provided that it is contemplated that such
prospective license shall commence after termination or expiration
of this License.
M. DISPOSAL OF STOCK
1. After termination or expiration of the License under
provision hereof, Licensee, except as provided otherwise herein,
may dispose of Articles covered by this License which are on hand
or in process at the time, for a period of thirty (30) days
thereafter, on a non-exclusive basis, provided royalty payments are
up-to-date and statements are furrished for the current period.
All applicable royalties shall be paid on Articles sold during the
sell off period within thirty (30) days of the expiration of said
sell off period.
2. In. the event changes, modifications cancellation or
Glimination of any 05 the Property already reproduced or in process
or being reproduced on Articles cover by this License which are
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unsold at the time of the change, modification, cancellation or
elimination, Licensor will be responsible for any Articles which
cannot be sold, distributed or used because of it. Licensee will
attempt to dispose of such affected Articles for a period of ninety
(90) days, after that sell off period any inventory still on hand
will be the property of the Licensor and its reasonable
cost/selling price will be deducted from subsequent royalty
payments by the Licensee.
N. NOTICES
All notices shall be given or made at the respective
addresses of the parties as set forth above unless notification of
a change of address is given in writing, and the date of the
mailing shall be deemed the date of the notice or statement given.
All statements of royalties and payment hereunder shall be made to
the name and address indicated for Licensor on page one (1) of this
License.
O. LICENSOR'S REMEDIES
1. Licensee acknowledges that its failure to commence in
good faith to manufacture and distribute in substantial quantities
any one or more of the Articles and to pursue in good faith and to
the best of its ability Subcontract Licensing agreements for items
which are in the opinion of Commission Chairman, logical and
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68-005 O - 94 - 4