Auditors say Florida Keys’ tourism agency paid thousands to a company that doesn’t exist

A second critical audit into the taxpayer-funded office that promotes tourism in the Florida Keys accused a long-time public relations firm of regularly double billing Monroe County by reimbursing a company that investigators say doesn’t exist.

The first audit from the county in November resulted in the paid suspension of Tourist Development Council marketing director Stacey Mitchell, who is responsible for approving expenditures at the agency.

The report sent shockwaves throughout the county after revealing what investigators said was lack oversight over how the agency, known as the TDC, spends the roughly $60 million it receives annually through a 4% tax levied on every hotel and short-term rental room booking in the Florida Keys.

Two contracted entities run the bulk of the TDC’s operations. Visit Florida Keys is a not-for-profit company that runs the agency’s executive office and handles goods and services. The other is NewmanPR, the TDC’s public relations firm.

The work done by the TDC is seen all around the world. Any TV commercial advertising the allure of the Florida Keys was almost certainly funded and produced by the TDC and its contractors.

Both audits, from the county comptroller, detailed what investigators consider to be questionable invoices and reimbursement requests from NewmanPR. The company has handled the Tourist Development Council’s public relations needs since the 1980s, when it was known as Stuart Newman Associates, named after current president Andy Newman’s late father, who founded the company.

The latest audit, however, focuses entirely on NewmanPR, stating the company made “materially misleading and inaccurate claims for reimbursement by certifying that they had made a payment in full to a vendor that did not exist.”

In 1986, the TDC paid the company $100,000, plus reimbursable expenses. In the ensuing years, the TDC has created a financial windfall for NewmanPR. In the last fiscal year — from Oct. 1, 2022, through Sept. 30, 2023 — the TDC paid the company $1.9 million, County Comptroller Kevin Madok told the Miami Herald in November.

Of that amount, $733,688 was for the annual public relations fees and $1,170,834 was for reimbursements the company requested, Madok said.

Graphics 71

One of the contractors for which NewmanPR regularly submits reimbursement requests is called Graphics 71. For the audit, investigators looked at random samples of reimbursement requests, but the total amount the TDC paid Graphics 71 for the three-year scope of the audit — Oct. 1, 2020, through Sept. 30, 2023 — was not available.

But Madok told the Miami Herald on Friday that from May through the end of September 2023, the total payments made to Graphics 71 was $31,965.

Newman, in an email to the Herald, disputed these amounts, saying that total “attributed to Graphics 71 was $10,634” for that time period.

Newman told auditors, according to the November report, that his father created the company 35 years ago for services he provided directly to NewmanPR, such as production, production supervision, distribution supervision and photography.

The problem, according to the audit, is that Graphics 71 isn’t an actual company, and those services “could be considered within the scope of services that TDC is expected of NewmanPR.” The clerk’s office said NewmanPR and Graphics 71 are one and the same. Auditors said they could find no record of the company, and its mailing address mirrors that of NewmanPR’s at 2140 S. Dixie Hwy. in Miami’s Coconut Grove.

“In other words, NewmanPR used a nonexistent company as a conduit to claim they made payments eligible for reimbursement when, in fact, no payments were made for there to be valid reimbursable expenses,” auditors wrote in the 187-page February report. “The President of NewmanPR appeared to use this nonexistent company as a method to pay himself in addition to the agency fee NewmanPR received monthly from Monroe County.”

Newman called that statement, “absolutely false.”

“Funds collected were allocated to NewmaPR’s income ledger. We provided the clerk’s auditor ledger sheets, as he requested, to show that,” Newman said.

Newman responds

Newman also released a statement this week in response to the latest audit, saying that he and his staff “were stunned and saddened by the improper attacks on our company and the Monroe County Tourist Development Council. They reflect a hostile bias which is evident in many of the Clerk’s office recommendations.”

Madok’s office is recommending the TDC reopen bids for its public relations contract. NewmanPR is still working for the TDC, but invoices that auditors have questioned are not being paid by the county.

Newman said that he “retained legal counsel” after the November audit, which also questioned the veracity of Graphics 71. Newman said that report “contained blatant inaccuracies and mischaracterizations about NewmanPR and was issued without response from us. Given our unwavering commitment and sincere love for the Florida Keys for more than four decades, it is impossible for us not to challenge the spiteful attacks in both audits.”

Red flags

One of the invoices that caught auditors’ attention was for the July 2023 Hemingway Days Festival in Key West, a four-day event for which Newman and his team of photographers regularly shoot photographs and videos that are sent around the country and world.

NewanPR submitted a Graphics 71 invoice for reimbursement from the TDC for 16 hours or work at a rate of $155 an hour, plus a digital transmitter rental of $225, for a bill to the county totaling $2,705, according to the audit.

“The Graphics 71 work was for news photography of the event plus distribution to news wire sources and social media platforms,” the auditors wrote.

Newman also submitted a request for reimbursement for his travel to Key West that was listed on the Graphics 71 invoice, the auditors stated. The total bill, which included a hotel stay, mileage reimbursement and meals, was $1,207, according to the report.

“The Graphics 71 invoice and Mr. Newman’s overlapping travel reimbursement request clearly demonstrate Mr. Newman’s duplicative efforts during the 2023 Hemingway Days Festival,” the auditors wrote.

“For example, on Thursday, July 20, Mr. Newman left Islamorada at 2 p.m. to travel to Key West as a NewmanPR employee. At some point on July 20th, Mr. Newman turned into a Graphics 71 employee for four hours but then reverted back to a NewmanPR employee to be reimbursed for supper and lodging. This co-mingling of roles that are not interchangeable occurred throughout his four-day stay in Key West.”

State attorney investigating

Rita Irwin, chair of the nine-member board that oversees the TDC, declined to comment on the audit, saying Friday that she was still going through the document, and that there is an emergency meeting on the matter on Tuesday, Feb. 20 in the Middle Keys city of Marathon.

Both audits caught the attention of the Monroe County State Attorney’s Office, which hired its own forensic auditor to go over TDC records. Keys State Attorney Dennis Ward told the Miami Herald that the audit should take around four months.