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Pacific Asia Travel Association

PATA in a pickle over what’s public

Don Ross l TTR Weekly  Jun 02, 2008

The Pacific Asia Travel Association (PATA) is so healthy these days its financial statements make for good reading. That is if you can get your hands on one.

A clerical lapse may have placed the influential Pacific Asia Travel Association in danger of defaulting on strict disclosure rules set by the US Internal Revenue Service to ensure US registered non-profit organizations practice good governance.

Registered as a non-profit organization in the US since the early 50s, the association is required to have in its possession, at its principal offices, copies of the three latest annual information returns (Form 990 Return of Organization Except from Income Tax) that are filed with the IRS on an annual basis.

PATA’s principal office is its headquarters, based in Bangkok, where the CEO and president, Peter de Jong and 25 executives reside.

TTR Weekly’s investigation revealed that until last week the association’s headquarters was not in possession of the annual information returns for 2004, 2005 and 2006, leaving it open to criticism that it would not have been able to provide the documents if requested by the public or a member. The association has a global membership exceeding 1,000 private travel companies, governments, hotels and airlines.

Public disclosure compliance is considered an important feature for maintaining good governance under IRS rules for non-profit organizations. In various website instructions on good governance, the management of non-profit organizations is told that complying with the IRS instruction on disclosure tops the “must-do list.” Based on those guidelines, PATA could be found wanting, although Mr. de Jong appears to disagree with that assessment.

“The information in public domain is fairly limited and there is no obligation to go beyond that,” he explained.

Under disclosure rules, a non-profit association must make available, to the public, copies of the three latest annual information forms. The forms provide financial information, details of operations and project revenue and membership figures. They also identify the names and addresses of trustees and directors ultimately responsible for good governance and even salaries of top executives.

Failure to comply with the disclosure rules could result in an association facing a daily fine of US$20 and a maximum fine of US$10,000, until the error is rectified.

Disclosure rules cover four pages of the IRS document that provides instructions on how non-profit organizations complete their annual information returns 990 form.

The rules state that copies of the annual information returns must be made available at the organization’s principal offices during regular business hours, allowing the public to request copies in person or in writing. A small charge can be levied for copying the forms.

To streamline the disclosure procedure, non-profit organizations often place the forms in a PDF format on their websites, in addition to having the statements available at their offices.

PATA’s principal office, as stated on its website, is in Bangkok and as of last week, the three most recent filings were not available.

They are now. TTR Weekly forwarded PDF copies of the IRS returns for 2004, 2005 and 2006 to PATA’s head office, 26 May, based on an admission that the office was not in possession of all three documents.
Mr de Jong, however, in a letter to TTR Weekly, 26 May, assured the publication that the 990 filing for 2007, due to be filed in coming months, would be available on request.

He also stated that “financial records that are required for our US reporting obligations are kept at our US-based finance office rather than our Bangkok head office.”

However, the US office address is not publicized in association literature, or posted on its website, making it difficult for people outside of the organization to contact it.

(end of part one)

PATA in a pickle over what’s public

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