Members of the Visit Durango board of directors and city officials have agreed to conduct a forensic audit of the destination management and marketing organization as it moves toward what leaders say could be a significant reorganization.
The move comes after two events.
On May 27, former Executive Director Rachel Brown announced she would resign, effective June 3, as the board considered whether to keep her in the role. Later that week, Durango and La Plata County officials were tipped off that the board’s chairwoman, Jenny Roberts, had a criminal history spanning at least 15 years. Roberts has been convicted on multiple felony counts of forgery, identity theft and illegal use of a credit charge, including theft from employers, in 1999, 2007 and 2013.
When confronted about her criminal history on June 1, Roberts resigned her position on the board voluntarily “for the good of the organization,” said newly named board chairman Ken Stone.
Nobody involved has any indication that there were illegal or unauthorized withdrawals from Visit Durango’s accounts, city officials and Visit Durango board members and staff say. Roberts said she has been open about her past with many people in the community and never had the ability to access Visit Durango’s money.
Roberts, a manager at the Strater Hotel, never informed her fellow board members at Visit Durango of her past because she was there to represent the lodging industry and it did not occur to her that it might be relevant.
“I didn’t have anything to do with the finances,” she said in an interview with The Durango Herald. “I didn’t sit on the Finance Committee. I didn’t sign checks.”
Board Treasurer Cristina Della Grave confirmed Roberts did not have any access to the organization’s money.
For about a year, city officials have requested more transparency with respect to how the organization spends an annual budget of $3.2 million, around 90% of which comes from lodgers tax revenue, said city spokesman and liaison to Visit Durango Tom Sluis.
And the city has not gotten what it asked for, a failure that Visit Durango has attributed to growing pains as it adapts to new accounting demands.
The city experienced it differently.
“The more questions that the city was asking, the more pushback there seemed to be from the organization,” Sluis said.
The lodgers tax revenue is collected on short-term rental stays, meaning it is paid by outsiders and is generally used to promote sustainable tourism.
City officials are sensitive to any appearance that funds could have been misappropriated, given that a former city finance director admitted in 2020 to embezzling $710,000 from city coffers over an 11-year period, City Manager José Madrigal said.
He informed city councilors of Roberts’ past on May 31.
Given the broad context of the situation, both Visit Durango and city leaders say the optics of the present moment are not good.
“You had (an executive director) – who is beholden to a board – who has failed to account for the public dollars that ran her agency, and then we find out that there’s a history of misappropriation and fraud by the president of the board,” City Attorney Mark Morgan said. “So we don’t know how bad it could be. It could be nothing.”
The real question at hand is whether Visit Durango is spending taxpayer money in accordance with the ballot language that went into approving the lodgers tax, and in accordance with the wishes of the public.
With respect to the second question, the county has already begun to ponder a potential ballot question that could ask voters to redirect up to half of the 2% lodgers tax it collects, from which all of the revenue is currently directed to Visit Durango.
Roberts, who said she herself called on the board to exert more oversight over Brown and the organization’s expenditures, was supportive of the forensic audit and did not anticipate it would turn up any illegal activity. Stone, on the contrary, said he was satisfied with the board’s level of involvement in budget management.
However, Roberts said she felt the organization has not been spending taxpayer dollars “as frugally as they could.”
Expenditures in question include over $100,000 spent to have the Natural Selection Tour snowboarding competition filmed at Purgatory (the resort’s general manager sits on the Visit Durango Board, and athletes made a stop at Durango Hot Springs Resort & Spa, where Stone is the marketing director), as well as international business trips to Mexico, Turkey and New Zealand.
Visit Durango spokeswoman Rachel Welsh said the Natural Selection Tour aligned with the organization’s mission to promote sustainable, offseason tourism, and said the international trips were a part of recruiting diverse visitors to the town.
The forensic audit will be conducted by an outside firm as soon as possible, Morgan said. Its results will be made public unless they must be withheld because of an ongoing criminal investigation, he said.
Although Visit Durango conducts an annual external audit anyway, Stone attributed the request for a forensic audit to a need for public officials to respond to public scrutiny.
In May, County Commissioner Marsha Porter-Norton was among several officials who received an anonymous letter lambasting some of Visit Durango’s marketing expenditure choices. The email contained information that was “simply not right,” but nonetheless “set off a little bit of a firestorm,” Stone said.
“It does create concern on the part of people who received the letter … and being under scrutiny of the public, they need to take action,” he said.
In the meantime, leaders at Visit Durango are gearing up for change.
Madrigal said the city is “seriously considering” bringing the organization under the formal umbrella of city government so that officials can exercise the oversight they desire.
“Visit Durango is going to change very, very dramatically,” Roberts said.
Stone and Welsh both indicated they hold a positive outlook for the future, and say they look forward to working closely with the city to meet the organizations’ mutual needs.
As Stone put it, there are many different models for how Visit Durango could be governed going forward, and said the board is “looking for the best model that would fit.”
rschafir@durangoherald.com
