Though several industry groups last month filed formal comments seeking to modify the U.S. Treasury Department's new rules governing some meeting, event, incentive and travel expenses for companies that received assistance through the Troubled Asset Relief Program, the final rule is unlikely to heed the industry's suggestions.

Echoing U.S. Travel Association president and CEO Roger Dow, who in June upon the release of the interim final rule said, "We do not expect these rules to change in any material way," another Washington lobbyist who has been monitoring the issue for travel industry clients this month said, "I don't think we expect any changes to the proposed rules."

Still, a number of industry groups, anchored by USTA, last month sought clarification for Treasury's rules prior to the close of the public commentary period on Aug. 14. The end of the public commentary period frees Treasury to implement the rules, but the department at press time had yet to set a formal compliance date for TARP recipients.

Although the rules focused on executive compensation and corporate governance, they also would require TARP recipients "to eliminate excessive and luxury expenditures," as defined by the Treasury Secretary. Those could include "entertainment or events, office and facility renovations, aviation or other transportation services, and other similar items, activities or events," the interim final rule stated.

According to the guidelines, TARP-recipient companies will have to identify expenses, establish policies, set approval processes, require "prompt internal reporting of violations" and "mandate accountability for adherence" to such policies.

Several industry groups, including the American Hotel and Lodging Association, Meeting Professionals International, National Business Travel Association, Professional Convention and Management Association and SITE, in a jointly filed comment asked the Treasury Department to "provide additional guidance to TARP companies as to how meetings and events are 'conducted within the normal course of the business operations of the TARP recipient,' as the statute says—and, to revive business travel, the department must do so in its final rule."

Those associations have jointly drawn up their own best practices for what constitutes excessive meetings and travel, and what would constitute the "normal course of the business," which they encouraged Treasury to adopt.

"Without guidance from Treasury in the final rule, TARP companies do not and will not have any confidence that their boards have adopted policies that will survive substantive scrutiny from the Department or other regulatory agencies, as well as any political and media scrutiny that will occur," the associations stated in the comments. "Without clarification from Treasury, TARP companies will not even know where to start to develop a policy which comports with the statute and the final rule, and will adopt myriad different policies which will prolong extraordinary confusion in the marketplace. The end result for TARP companies will be further retrenchment and fewer meetings and events across the country, with a corresponding strain on their businesses in a most difficult business environment."

Former president Bill Clinton as part of his address to attendees at the NBTA International Convention & Exposition in San Diego last month said the government should not be making policy around private enterprise business travel spending.

"This is an optional expense, and in hard economic times businesses will cut where they have to cut, but there is no point in going beyond that because people that have business enterprises are not in the habit of throwing away money," Clinton said. "They are going to invest in their employees traveling because they think it makes the enterprise more productive, more profitable and the government either in law or rhetoric shouldn't be second-guessing those decisions."

Originally published Sept. 21, 2009 This page is protected by Copyright laws. Do Not Copy