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Warren McLaughlin, President of the Palm Beach County CVB, Resigns Under Pressure;
Failed to Detect an Employee Who Stole $1.5 million Over a Three Year Period

By Peter Franceschina, South Florida Sun-SentinelMcClatchy-Tribune Business News

Nov. 14, 2006 - Warren "Mac" McLaughlin, president of the Palm Beach County Convention and Visitors Bureau for almost two decades, resigned Monday during increasing pressure surrounding his administration's failure to detect an employee who stole $1.5 million over a three-year period.

McLaughlin's exit follows that of the tourism bureau's finance vice president, Lee H. Davis, 55, who resigned Friday, two days after he informed the bureau's executive committee about how much was taken. McLaughlin is leaving without a hefty severance package.

Several county commissioners, including Burt Aaronson, were upset by last week's revelations that the money went missing and that neither McLaughlin nor Davis caught it. County Clerk and Comptroller Sharon Bock, the steward of the county's tax dollars, cited a complete lack of financial controls at the bureau.

Aaronson said Monday that McLaughlin had to go, in part to restore credibility in the county's tourism operations.

"I think he should have resigned. If he didn't resign, I think he would have been asked to resign," Aaronson said.

The tourism bureau is a private nonprofit organization that contracts with the county to market Palm Beach County as a tourism destination, primarily using hotel bed-tax dollars, about $9.6 million this year.

McLaughlin resigned after intense behind-the-scenes maneuvering by the bureau's board members. One prominent member, developer Llwyd Ecclestone, said last week that he hoped McLaughlin would do the right thing by resigning.

McLaughlin, 72, was paid $157,000 last year. He submitted a two-paragraph retirement letter Monday to Rick Konsavage, chairman of the bureau's executive committee.

"I think it's important for him to realize this was the way for him to go," Konsavage said. "More now than ever, a new set of eyes is needed."

McLaughlin didn't mention the financial scandal in his letter.

"I am proud of the almost 20 years I have served with the bureau and its many accomplishments over that period. I wish continued success to the bureau and the entire Palm Beach County tourism industry," McLaughlin wrote.

When contacted, McLaughlin declined to comment. "I don't think so. Talk to you later," he said before hanging up.

Board members would not say that McLaughlin was forced out, but the bureau's executive committee is set to meet Wednesday and the full board is set for an emergency meeting called for Friday, when McLaughlin's tenure was sure to be a hot topic.

"We are taking the position Mac had the opportunity to retire, and he took it," said Casey Steinbacher, vice chairwoman of the executive committee.

McLaughlin will receive his salary through this month, his health benefits will be covered until the end of the year and he will get his accrued vacation time from this year, Konsavage said. "I assure you it is not a golden parachute," he said.

McLaughlin took the phone call that would lead to his resignation on Oct. 23. A bank official was on the line to inform him that financial irregularities had been found involving the bureau's controller, Donna M. Duffer, a six-year employee.

When confronted by McLaughlin, Davis and the bureau's attorney, Duffer, 54, allegedly admitted to forging checks and said she had a gambling problem. She was escorted from the building, and police were called.

Police still are investigating; Duffer has not been charged with a crime. Auditors are going through the bureau's books.

Davis began piecing together financial information and soon discovered millions were missing. Board members were not informed until this week that $1.55 million was identified as missing.

McLaughlin and Davis faced tough questioning from board members about why they did not detect the theft, and McLaughlin was criticized for jetting off to a London trade show in the midst of the scandal.

Board members say they now will focus on the day-to-day operations of the bureau while searching for McLaughlin's replacement. An interim president could be chosen this week, Konsavage said. A national search will be conducted for the new leader.

McLaughlin came to the Convention and Visitors Bureau as its president in 1987 after working for Eastern Airlines and a rental car company. He quickly gained a reputation as an effective marketer of the county in the tourism industry. He generally is credited with helping to raise hotel occupancy rates, and thereby increasing the amount of bed taxes.

"Tourism is the No. 1 industry here in Palm Beach County, and the CVB plays a central role in that," said David Semadeni, secretary of the Palm Beach County Hotel & Lodging Association. "Mac is a friend of mine, so this isn't a happy time. ... I know this may not be the way he wanted this to happen, but what can I say."

Konsavage and Steinbacher had praise for McLaughlin's accomplishments over the years, but they said it is time for the bureau to find new leadership and direction.

"We have some things we have to deal with as a board now, and we will," Konsavage said. "Our bureau will move forward and continue to run and take care of the tourists and the members."

Three teams of auditors are examining the bureau's books. County commissioners expect to make changes to improve financial controls at the bureau, and two other organizations that promote local tourism with county dollars, the sports and film commissions. Aaronson said all three organizations, especially the tourism bureau, can expect close scrutiny.

"I want to find out who was rubber-stamping everything Mac and Lee [Davis] did. I think the county is going to have some say in this," Aaronson said. "We have to make sure the CVB is running in the right way in the future."

Peter Franceschina can be reached at pfranceschina@

sun-sentinel.com or 561-228-5503.

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Copyright (c) 2006, South Florida Sun-Sentinel

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