How Online Travel Agency Lobbyists Helped Kill Florida Hotel Tax Lawsuit

In the flurry of hotel tax lawsuits filed against the major online travel agencies over the last decade, some prevailed, others died based on the merits, and at least one, filed by the Florida state attorney general’s office, never made it to a court hearing as a lobbying firm for the OTAs exerted what appears to be undue influence over the outcome.

That’s the conclusion of an exhaustive New York Times investigative piece on the inappropriate influence that lobbying firms exert over state attorneys general, an area that appears to get scant attention from regulators.

The New York Times report, based on research and 6,000 emails obtained through various open records statutes, contains information about how big-time lobbying firm Dickstein Shapiro, which represented Priceline and Travelocity, seemingly swayed Florida state attorney general Pam Bondi to drop the hotel tax lawsuit against the OTAs that her predecessor had announced in 2009 even as several Florida counties still seek legal remedies against the OTAs for allegedly not remitting their share of hotel taxes.

Florida Versus Expedia and the Others

State of Florida Attorney General v. Expedia Inc., which was announced in November 2009 and amended the next year to include Orbitz, Priceline, Travelocity and other OTAs, accused the defendants of deceptive practices in their hotel tax recovery methods, but Bondi filed to voluntarily dismiss the suit in April 2013.

There isn’t a smoking gun in the story about the Florida hotel tax lawsuit, which was not the sole focus of the report, but lots of fodder and plenty of appearances of impropriety.

In one of the emails that The New York Times obtained, Christopher Tampio, who was not a registered lobbyist in Florida, but worked for Dickstein Shapiro in its state attorneys general practice, sent a January 2012 email to Bondi’s deputy attorney general, Patricia Conners, that reads: “Thank you so much for chatting with me last week about the online travel site suit.”

The New York Times story adds: “A year later, a second round of emails arrived in Ms. Bondi’s office: first, one inviting Ms. Bondi or her top aide to dinner at Ristorante Tosca in Washington, and then one from a Dickstein Shapiro lawyer pointing out that similar online travel cases had recently been dismissed by Florida judges.

“The email records provided to The Times show no response to Dickstein, other than a terse ‘thanks.’ But two months later, Ms. Bondi’s office moved to do what the firm had sought.

“Dismissed before hearing, the state court docket shows, as the case was closed in April 2013 even before it was officially taken up by the court.”

The Wooing of the Florida Attorney General

Dickstein Shapiro’s courting of Bondi was wide-ranging. The wooing included political contributions to Bondi, who the Times describes as a rising star in the GOP, an invitation to address Dickstein Shapiro clients in Washington, a favorable editorial placement, and sponsorship of a fundraising event for her at Donald Trump’s Mar-a-Lago Club in Palm Beach.

In 2011, the story states, at least one Florida state legislator wrote to the attorney general estimating that the state was losing out on $100 million per year because the OTAs allegedly were remitting taxes on the net rates they got from hotels instead of based on the higher retail rate they received from travelers’ hotel bookings.

Asked for its reaction to the New York Times story about the demise of the Florida attorney general’s hotel tax lawsuit against the OTAs, a spokesperson from VisitFlorida declined to comment to Skift other than to say: “As a tourism marketing entity, our board doesn’t take a position on legal or policy issues, so we wouldn’t have anything to offer for your story.”

Bondi’s Denial

For her part, Florida’s Bondi told The New York Times that Dickstein Shapiro’s lobbying efforts had no bearing on her decision to drop the lawsuit. “My office aggressively protects Floridians from unfair and deceptive business practices, and absolutely no access to me or or my staff is going to have any bearing on my efforts to protect Floridians.”

A spokesperson for Bondi told the Times that she withdrew the lawsuit that her predecessor filed because state law was too ambiguous and the attorney general’s office called on the state legislature to draft legislation to clarify the issue.

It should be pointed out, however, Florida’s Broward, Leon and Volusia counties apparently don’t agree with Bondi’s analysis and are separately pursuing their own lawsuits against the OTAs.

Representatives from the American Hotel & Lodging Association and the Travel Technology Association, which represents the OTAs on the hotel tax issue, separately didn’t immediately respond to a Skift request for comment about the hotel tax lawsuit.

Las Vegas Sands

The OTAs weren’t the only travel industry companies to lobby and nurture a relationship with Florida’s Bondi.

The Times notes that at a Republican governors conference, Andy Abboud, a lobbyist for Las Vegas Sands, which hoped to get state attorneys general to come out against online gambling, started a conversation with Bondi at the lavish event.

“What are you going to be doing today?” Abboud asked her, according to the Times account.

“Sailing,” Bondi said.

“Great, I want to go sailing, too,” Abboud replied, and the Times reported that the two agreed to meet later that day.

When it comes to influencing state attorneys general on public policy issues, that’s just the way the wind blows.