Kerry's world's fair dream crushed by debt
Dozens of vendors built a chic U.S. pavilion at last year's Milan expo, but no one knows how to pay them.
By Sarah Wheaton
politico.com
02/24/16 05:50 PM EST
Updated 02/24/16 08:15 PM EST
John Kerry attends a reception for U.S. companies based in Italy that are donors and potential donors for a U.S. Pavillion at the 2015 Milan expo, in Rome on Mar. 27, 2014. | Getty
Thinc Design, a New York firm whose credits include the 9/11 Memorial Museum, designed exhibits along a boardwalk brought in from Coney Island and hung living plant “chandeliers” to create a distinctive look for the U.S. pavilion at last year’s World Expo in Milan, a big success for its State Department sponsors.
The problem is nobody paid for it. Thinc Design is in the hole $1 million, after the State Department failed to raise enough private money to fund the display — and its owner wants John Kerry to help pay him back, a humiliating end to what was supposed to be revitalized international tradition that would evoke comparisons to the aspirational and future-embracing 1939 and 1964 World’s Fairs.
“A lot of us just feel like we did our part and now we’re kind of being abandoned,” said the owner, Tom Hennes. His firm is just one of nearly 40 other merchants in Italy and the United States whose unpaid invoices total $26 million.
The huge shortfalls in funding for last year’s World Expo exhibit, which drew 6 million people, now loom as a big embarrassment for the State Department and its leader. Officials will hold a conference call on Thursday to try to appease dozens of creditors.
Kerry, for his part, didn’t have the luxury of using State Department funds to pay for the exhibit, which was widely considered an important part of the department’s public diplomacy efforts. A penny-pinching law from the 1990s bans the use of department funds for world’s fairs. But the nonprofit Kerry chose to run it — with the promise of major fundraising help from himself and his political allies — fell about $26 million short of covering its bills.
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“This was an incredible success for the U.S. government, for the Department of State, and the idea that individuals, including me, are paying for that is simply unconscionable,” said James Biber, whose architecture firm has collected only half of its $2 million bill. “That is a huge amount of money for a company of my size and it’s not something that we could ever afford to just write off. ... We’ve already had to lay people off.”
Kerry commissioned the agreement in 2013 with a one-off nonprofit, Friends of U.S. Pavilion, to design, build, operate and pay for the U.S. display in Milan. The group was created with the understanding that the State Department would do the heavy lifting on fundraising. That’s what then-Secretary of State Hillary Clinton had done for the 2010 Shanghai World Expo, making personal pitches to CEOs to collect more than $60 million in just nine months.
But many people familiar with the fundraising effort note that Clinton’s enormous range of contacts, plus her still-simmering presidential ambitions, had donors lining up quickly in response to calls from her and the cadre of longtime aides she enlisted to help raise the money.
Kerry, by contrast, wasn’t viewed as having a political future, and was scrambling to work out a cease-fire between Ukraine and Russian-backed separatists in Crimea.
“We were repeatedly told by the State Department that Secretary Kerry was unable to be involved because he was focused on things that were of greater, and more grave global importance,” said one of the U.S. fundraisers, speaking on the condition of anonymity.
“We were on a critical path and repeatedly alerted the State Department that both the U.S. and Italy-based teams needed more support and reachout from principals within this administration,” said the fundraiser. “On the rare occasion those calls were made, the fundraising team provided the names of whom to call, did the staff work behind those calls, created the narrative for donors to participate, negotiated the contracts and managed the relationships throughout Expo.”
In the end, Kerry’s efforts could muster only around $40 million for a project whose budget ballooned to more than $60 million.
Now, Friends of USA Pavilion is about $26 million in debt, according to a confidential financial overview obtained by POLITICO. It’s in arrears to nearly 40 companies.
It owes two of the nonprofits that drove the effort from the start, the James Beard Foundation and the International Culinary Center, more than $1.6 million each. It owes the Italian EXPO corporation more than $1 million in rent. And it owes Nussli, the Swiss construction company that built the pavilion, $13.6 million.
State Department officials insist the agency is looking for ways to pay the bills, even though it can’t use any of its own money. Nearly four months after the exhibition closed, Kerry is still making fundraising calls, they say, while officials acknowledge that lining up new donors will be nearly impossible with no sponsorships and other perks to offer.
But the department is quick to challenge the idea that Kerry failed to push hard enough for private funding.
“Secretary Kerry was personally engaged in seeking and securing contributions for the USA Pavilion,” department spokesman John Kirby said. “He engaged vigorously with key business leaders, hosted round tables and made numerous calls to support the fundraising effort. His direct engagement resulted in a substantial portion of the funding for the pavilion.”
Behind the scenes, many in the State Department blame Congress for putting the secretary in this awkward position of having to rely on outside funding and inexperienced operators to mount a major public diplomacy initiative.
“You’re asking senior administration officials to essentially dial for dollars,” said one senior State Department official, speaking on the condition of anonymity.
Ironically, it was Democrats in Congress who pushed to have world’s fair pavilions privately funded, out of fear that lavish displays overseas would strike voters as wasteful and of benefit only to foreigners. They succeeded in getting the law passed in 1994 and signed by President Bill Clinton.
But by the time Hillary Clinton became secretary, in 2009, the law had become a major personal burden for anyone serving as the country’s top diplomat. |
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