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ARDA is under criminal investigation!

Jennie

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Posted on Mon, Nov. 24, 2008
Audit: Timeshare owners unknowingly paid political contributions
BY DAN CHRISTENSEN

Timeshare owners in Florida and elsewhere were misled into donating to the political fundraising arm of the U.S. vacation ownership industry while paying their regular property fees, according to a new federal audit report.
Tens of thousands of small contributions -- most $3 to $5 -- were collected by property management firms around the country and funneled to a political action committee set up by the American Resort Development Association.

The management firms billed the contributions to individual timeshare owners along with their tax and maintenance charges, but usually didn't mention the contributions were voluntary, say Federal Election Commission auditors.

The report calls the billing scheme, which went on through at least 2006, an "improper solicitation of contributions.''

Auditors found the American Resort Development Association-Resort Owners Coalition PAC also violated other federal election laws.

Their report, focusing on the 2003-2004 election cycle, says the PAC secretly raised and spent more than $1.8 million during that time. The PAC also accepted thousands of dollars of prohibited contributions from corporations and foreign nationals, it said.

PAC treasurer Sandra DePoy would not discuss the report's specific findings.

''The audit was initiated more than two years ago and helped us identify areas we needed to improve for more accurate reporting,'' ARDA said in a prepared statement. ``Since that time, we have used the feedback from the FEC to put into place more diligent reporting practices.''

The FEC does not comment on its audits. But similar findings about other PACs have led to civil enforcement actions by the agency, and even criminal probes by the Department of Justice.

The sale of vacation timeshares is a multibillion-dollar industry that's been hit hard by the nation's credit crisis. Last month, ARDA strongly supported enactment of the $700 billion bailout bill.

The FEC's unflattering audit of the PAC comes as ARDA has approached Washington for help in the bailout.

Howard Nusbaum, ARDA's president, said the trade group asked the Treasury Department to consider backing timeshare developers' short-term corporate loans in exchange for fees as part of a wider effort to vouch for ''commercial paper'' throughout the economy. Though timeshare developers usually borrow against the mortgages they issue to buyers, frozen credit markets have hampered those multimillion-dollar transactions, Nusbaum said.

''We don't want a bailout. We don't think we need a bailout,'' Nusbaum said. "We wanted to have a credit enhancement. We would pay the government for it.''

In 2007, 4.4 million households owned one or more weeks in one of 176,000 timeshare units at 1,600 U.S. resorts, according to ARDA's website. And Florida has more timeshares, by far, than any other state.

The timeshare industry is heavily regulated. And ARDA, its Washington, D.C.-based trade association, is a major behind-the-scenes player in both federal and state politics.

This year alone, ARDA spent $540,000 lobbying against mortgage reform legislation on Capitol Hill, including the expansion of truth-in-lending requirements to timeshare buyers.

ARDA also donated $814,000 to federal candidates and causes of both major parties.

In Tallahassee this year, ARDA paid its lobbyists up to $270,000. It spread another $237,000 by contributing to the campaigns of dozens of legislators, the Republican Party and the House and Senate victory committees of both parties.

The source of all that money, along with most of the funds ARDA raised in years past, is the river of cash that flows from the contributions of timeshare owners who pay them via the property management companies.

''Contributions are then forwarded to ARDA-ROC PAC without a record identifying the individual contributors,'' the report says.

Because of that anonymity, auditors conducted only a limited sampling of contributions. Specifically, they looked at 47,715 contributions totaling $235,517 -- about 10 percent of the amount donated to the PAC in 2003-2004.

The report says nearly 8 percent of that money, more than $18,000, came from illegal sources, corporations or foreigners.

In response to those findings, the PAC later turned that money over to the Treasury.

Miami Herald staff writer Douglas Hanks contributed to this report.
 

SueDonJ

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Hmmmm. Interesting. There is a thread up there in the TUG Marriott forum about these fees. I don't know how to link between here and there, anybody?

[ Here's the link:
http://www.tugbbs.com/forums/showthread.php?t=85719
Makai Guy, BBS Administrator]

Thanks,
 
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Fern Modena

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Why doesn't this surprise me? I've never paid ARDA/ROC fees. I figured ARDA benefits the developers more and they should be providing the money.

Once fooled, shame on you. Twice fooled, shame on me.

Fern
 

TUGBrian

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I saw this alert earlier today too, if all this is true, this is the 2nd time this year ARDA has really disappointed me.
 

frenchieinme

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one needs to understand what one is billed for...

One of my resorts always included a $5 donation but clearly listed it as voluntary. I always said NO THNAK YOU and had them remove this from my maint & taxes bill. I always read (or at least try to) what I am being billed and question that which I do not understand. Too often times that fine print is just mistyfying and incomprehensible and that is in reference to the readable fine print. :wall:

frenchieinme :hi:
 

Icarus

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Once fooled, shame on you. Twice fooled, shame on me.

Fern

Fern: Did you read the linked thread in the Marriott forum? :rofl:

That voluntary "contribution" thing has always been a scam IMHO. It's just another way for the developers to get the buyers to pay their costs. This time it's for their lobbying costs.

''We don't want a bailout. We don't think we need a bailout,'' Nusbaum said. "We wanted to have a credit enhancement. We would pay the government for it.''

:doh:

:rofl:


-David
 
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dioxide45

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That voluntary "contribution" thing has always been a scam IMHO. It's just another way for the developers to get the buyers to pay their costs. This time it's for their lobbying costs.

-David

Customers pay all the costs whether they like it or not. If they don't companies don't stick around long.

Whether you like it or not, part of your MF are being funneled to the ARDA. Many resort developers are also the resort management company and receive a percentage of your MF to manage the resort. Parts of those incomes are funneled to the ARDA as part of their membership in the ARDA.
 

pcgirl54

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I knew it was optional and I have always contributed. Thanks for the post. I may rethink this. I belived ARDA was working for the consumer's best interests.
 

Icarus

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Customers pay all the costs whether they like it or not. If they don't companies don't stick around long.

Whether you like it or not, part of your MF are being funneled to the ARDA. Many resort developers are also the resort management company and receive a percentage of your MF to manage the resort. Parts of those incomes are funneled to the ARDA as part of their membership in the ARDA.

Well, I don't pay any MFs anymore, so I'm not paying ARDA anything.

But, in a very round about way, that's true, I suppose. There is no line item that the association agrees to pay for, they just agree and negotiate a fixed amount or percentage amount for the management companies fees. If they aren't a captive resort, they are free to negotiate with a different management company if they don't like the fee or rate that company is asking for.

The management company, if they are timeshare developers, voluntarily elects to fund their PAC with some of the profits from those fees, and perhaps any other income they have if they choose to.

That's very different from the line item that appears on your Marriott MF bill, or for some people, the fact that they didn't even have a line item on their MF bills, and it was just automatically included for them.

You argued in favor of paying ARDA contributions in the Marriott thread. I don't know why you think it's a good thing (yes, I read your posts), but if you feel that way, by all means, keep sending them that money.

-David
 

Fern Modena

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I didn't read it till now. Wow! Marriott thinks its owners are rich enough that they can "suggest" $10. from them for ARDA? And I suppose it is included above the line, where you have to subtract if you don't want to pay? Heck, I didn't pay when it was only $1., way back when. When I was on a board I objected to it being on the bills at all.

Fern

Fern: Did you read the linked thread in the Marriott forum? :rofl:

-David
 

Icarus

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I didn't read it till now. Wow! Marriott thinks its owners are rich enough that they can "suggest" $10. from them for ARDA? And I suppose it is included above the line, where you have to subtract if you don't want to pay? Heck, I didn't pay when it was only $1., way back when. When I was on a board I objected to it being on the bills at all.

Fern

IIRC, I think it says something like total with and without ARDA contribution. But, yeah, if you don't know what it is, you might just pay it and it is above the line, but it is listed separately. If you read the materials, they do tell you it is voluntary. I think that many people believe that it helps owners and just pay it.

The part that I never liked was that they even include it as a voluntary item.

-David
 
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Wonka

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My Marriott billing included a voluntary contribution for ARDA, which I ignored (as I always have).
 

dioxide45

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I didn't read it till now. Wow! Marriott thinks its owners are rich enough that they can "suggest" $10. from them for ARDA? And I suppose it is included above the line, where you have to subtract if you don't want to pay? Heck, I didn't pay when it was only $1., way back when. When I was on a board I objected to it being on the bills at all.

Fern

The Marriott bill I received for MGV has two amounts on the payment coupon, you circle one, either the amount with the ARDA contribution or the amount without. It does indicate that if you don't indicate which one and you are charging to a credit card they will bill the amount with the ARDA contribution. The bill does clearly give you the option to opt out of the contribution.

In a capitalistic market any money saved by the developer should be passed on to the customer in the drive to remain competitive. Those who do pass those savings on to get ahead will leave those that don’t pass on those savings behind.
 

dioxide45

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Well, I don't pay any MFs anymore, so I'm not paying ARDA anything.

But, in a very round about way, that's true, I suppose.

I guess the same really holds true for any product or service you purchase. As long as there are lobbyists in Washington you will pay for those lobbyists with everything you buy.

You argued in favor of paying ARDA contributions in the Marriott thread. I don't know why you think it's a good thing (yes, I read your posts), but if you feel that way, by all means, keep sending them that money.

-David
I did argue several points as to the benefits of where that money goes and indicated that I paid them on with my 2008 MF payment. That doesn't necessarily mean I will continue to pay them or feel everyone else should pay them. I know many people don't and that is their choice just as paying them for 2008 was mine. As a resale purchaser I don't see where paying them can really cost me any more than the $10.

TIL laws wouldn't apply nor would other disclosures to myself. The mortgage industry will get bogged down with far more regulations with the mortgage meltdown. Unfortunately all those added costs would be passed on to the customers even though it is doubtful they will even read or understand those disclosures when signing all those papers.

If paying the $10 a year saves me $60 in transient taxes, then it is money well spent. Though I suppose they will still lobby against those without my $10 :shrug: .
 
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dougp26364

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We've owned since '98 and I've always understood the ARDA fee to be voluntary. What I have not liked is that it's automatically included in the total bill. Even though they've made clear it's not a mandatory fee, including it in the total is, IMO, a bit deceiving.

At first I contributed to ARDA. Then, as time went on, I realized that ARDA was looking out after the developers more than they were looking out for timeshare owners. I have not contributed to ARDA for several years and have no intention of doing so again.
 

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At a timeshare owners group meeting a few months ago, Shep Alshuler, editor of Timesharing Today magazine, which calls itself "The Trusted Independent Voice of Vacation Ownership since 1991" stated that TST was not allowed to attend the annual ARDA Convention in Las Vegas.

The year before, some developers and resale company owners (the upfront fee, no results genre) protested when a few representatives from a local owners group attended an ARDA meeting as guests (fees waived).
 

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If paying the $10 a year saves me $60 in transient taxes, then it is money well spent. Though I suppose they will still lobby against those without my $10 :shrug: .

Exactly. :)

When their interests happen to coincide with the owners, it's fine. When they don't, well, those that "contribute" are still paying to fund those efforts too.

-David
 

TUGBrian

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At a timeshare owners group meeting a few months ago, Shep Alshuler, editor of Timesharing Today magazine, which calls itself "The Trusted Independent Voice of Vacation Ownership since 1991" stated that TST was not allowed to attend the annual ARDA Convention in Las Vegas.

The year before, some developers and resale company owners (the upfront fee, no results genre) protested when a few representatives from a local owners group attended an ARDA meeting as guests (fees waived).


Did he mean in the future? next years is in orlando...not vegas.

I am pretty sure Shep and TStoday had a booth at the arda convention in vegas this year...as I went and met with them there.

ARDA actually gave me free admission to the event as well.

I will say that for the previous many many years before I came onboard here, ARDA had refused to allow TUG to join its ranks. But about two years ago we were approached by them with the offer of a free membership and they mentioned they were attempted to become more "owner oriented" and wanted to develop an online presence etc etc. I of course offered them an "Ask ARDA" forum to facilitate, and they declined.

However if they were truly going to make an effort to branch out and help the timeshare ownership community...I was certainly going to provide them anything they needed to facilitate that.

I am curious to see if TStoday has been banned from next years attendance, and if TUG will be provided the free admission again.

Ill have to give shep a call after the holidays.
 

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Did he mean in the future? next years is in orlando...not vegas.

I am pretty sure Shep and TStoday had a booth at the arda convention in vegas this year...as I went and met with them there.

Shep's remark was made around March 2008 at Ed Hastry's Baltimore Timeshare Owners Group meeting. It was a quick brief statement said as an aside during Shep's speech on another topic. He might have meant that they were not invited as a "freebie." I don't recall his exact words but he was clearly "miffed" about it and he stated that they had been able to set up a booth in prior years but were turned down the last time they applied.

Could be that ARDA changed their position on it at a later date. I do remember seeing some brief mention in a later issue of Timesharing Today magazine indicating that they attended a recent ARDA meeting (April???) and thinking that that was strange, in view of Shep's statement at the Baltimore meeting.
 

BocaBum99

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Anyone can attend ARDA. All you have to do is walk up and purchase a pass. I was there in Las Vegas this year and I didn't sense any hostilities toward the resale market or online venues whatsoever.

There were 2 scheduled resale meetings. And, there was a session devoted exclusively to the online media.

ARDA is for the Resort Developers. So, all of the sessions are related to issues important to resort developers. Resales weren't expressly discussed in sessions. It wasn't even important to the overall topics being discussed.

If someone is miffed at not getting a free pass. Well, that just doesn't seem appropriate.
 
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