To: IRS EO Classification

Mail Code 4910 DAL

1100 Commerce Street
Dallas, TX 75242

RE: CALL FOR OPEN INVESTIGATION INTO VISITDALLAS CORRUPTION,

FINANCIAL MISMANAGEMENT, AND VIOLATIONS OF STATE LAW

Dear IRS EO Classification,

A preliminary review of public records revealed that certain members of VisitDallas (EIN 75-
2456622), personally and substantially, as part of their public official duty to promote tourism to
Dallas, to have had a substantial effect on their private financial interests through unreported
personal loans, excessive executive compensation, corrupt attempt to influence a public official,
and violation of State of Texas law, Title 3; Local Taxation, Chapter 351: Municipal Hotel
Occupancy Taxes, Section 351.101 for the last 6 years.

Reporting by The Texas Monitor and other news organizations indicates previous CEO, Phillip
Jones, of VisitDallas has engaged in a pattern of self-dealing transactions through unreported
personal loans, financial mismanagement, and an utter lack of transparency. See Steve Miller,
“VisitDallas Failed To Clearly Report CEO Loans In Tax Filings”, The New Yorker, Apr. 17,
2019, available at https://texasmonitor.org/visitdallas-failed-to-clearly-report-ceo-loans-in-tax-
filings/

Additional reporting shows that Phillip Jones received a, “pay advance” of $35,000 (to cover
healthcare costs for his adult son) and two separate loans for $100,000 and $35,000 without any
documentation or rationale detailing why the two latter loans were given. State law does allow
nonprofits such as VisitDallas to make loans to their officers when it, “may reasonably be
expected to directly or indirectly benefit the [nonprofit].” The $225,000 loaned to Phillip Jones
has never been proven to have benefited VisitDallas which is in direct violation of State of Texas
law, Title 2; Business Organizations Code, Chapter 22. Nonprofit Corporations, Section 22.055.
See Tim Rogers, “Phillip Jones’ Debt to VisitDallas Has Grown to $225,000”, D Magazine,
January 17, 2019, available at https://www.dmagazine.com/frontburner/2019/01/phillip-jones-
debt-to-visitdallas-has-grown-to-225000/

Revelations from VisitDallas Form 990 regarding executive compensation shows evidence of
excessive compensation. Excessive compensation violates IRS federal tax laws and fiduciary
duties of public stewardship and also suggests lax governance and oversight by the Board. In an
audit of VisitDallas released on July 4, 2019, the City of Dallas found:

“VisitDallas compensation, as documented, for director level and above is not consistently
correlated to performance based on VisitDallas’ compensation policies. In addition, VisitDallas
compensation policy does not: (1) address compensation adjustments for the actual results (of
previously booked) groups/events; and (2) include national performance comparisons/rankings
when establishing the President/ Chief Executive Officer’s (CEO) performance goals.”
Since compensation is tied to performance, it cannot be confirmed that executive compensation
for VisitDallas was reasonable and therefore in accordance with IRS federal tax law and
fiduciary duties of public stewardship which suggests lax governance and oversight by the
Board.

In that same audit, various financial mismanagement practices were highlighted that violate
Texas state law and unnecessarily exposed the City of Dallas to potential legal liabilities. A few
of them are:

• “… the city may not be able to clearly identify the source of funds used for various
VisitDallas activity expenses, and the city could be exposed to legal liability as well as
reputational damage.”

This is in direct violation of State of Texas law, Title 3; Local Taxation, Chapter 351:
Municipal Hotel Occupancy Taxes, Section 351.101.

• “VisitDallas is contractually obligated to make a $500,000 capital contribution to cover

capital improvements. This capital contribution is due on January 1 of each year.

… Additionally, the capital contributions are sourced from the Dallas Tourism Public
Improvement District (DTPID) funds, which is not allowable per the State of Texas Local
Government Code for Improvement Districts in Municipalities and Counties.”

This is in direct violation of The State of Texas Local Government Code for
Improvement Districts in Municipalities and Counties Chapter 372.003(b)(13).

• “VisitDallas does not consistently follow VisitDallas’ established policies and procedures
and State of Texas laws for HOT and DTPID expenses. The policies and procedures also
do not include adequate guidance in certain areas. Additionally, expenses are not properly
classified on a consistent basis (see Appendix II and Appendix III). As a result, there is
an increased risk that VisitDallas use of HOT funds is not in compliance with State of
Texas law and the City will not achieve the expected benefit from expenses from HOT
and DTPID funds.”

This is in direct violation of State of Texas law, Title 3; Local Taxation, Chapter 351:
Municipal Hotel Occupancy Taxes, Section 351.101.

In an ethics filing by Dallas-area retired attorney, Barry Jacobs, it was alleged VisitDallas
engaged in “corrupt motives” by providing six event tickets listed between June 3, 2016, and
December 17, 2018 to Dallas City Council member Casey Thomas. The Ethics Advisory
Commission agreed in a 6 – 1 vote. See Hayat, Norimine, “Dallas Council Member Violated
City Code With VisitDallas Tickets, Ethics Commission Says”, The Dallas Morning News,
October 15, 2019, available at https://www.dallasnews.com/news/2019/10/15/dallas-council-
member-violated-city-code-with-visitdallas-tickets-ethics-commission-says/
Additional supporting documents are listed below:
• Audit of VisitDallas, City of Dallas, Office of the City Auditor, January 4, 2019,
available at https://dallascityhall.com/departments/auditor/DCH%20Documents/A19-
006%20Audit%20of%20VisitDallas.pdf
• “VisitDallas Audit Reveals a Well-Run Trough for Piggish Top Executives”, D
Magazine, Tim Rogers, January 8, 2019, available at
https://www.dmagazine.com/frontburner/2019/01/visitdallas-audit-reveals-a-well-run-
trough-for-piggish-top-executives/
• “New Questions Produce New Mysteries About VisitDallas”, The Texas Monitor, Steve
Miller, September 26, 2019, available at https://texasmonitor.org/new-questions-produce-
new-mysteries-about-visitdallas/
• Phillip Jones Payout Schedule https://www.scribd.com/document/399029872/Phillip-
Jones-Payout-Schedule
• VisitDallas Form 990 https://assets.dmagstatic.com/wp-content/uploads/2019/01/2016-
VisitDallas-990.pdf

Accordingly, and for the reasons set forth, the IRS should immediately and without delay
commence a public investigation into former CEO Phillip Jones, former CFO Matthew
Jones, current and previous VisitDallas executive leadership, the VisitDallas Board of
Directors as to whether it (i) violated the federal laws governing 501(c)(6) charitable
organizations, (ii) violated Texas state laws governing nonprofits (iii) violated laws
governing Hotel Occupancy Tax (HOT) funds or Dallas Tourism Public Improvement
District (DTPID) funds (iv) if so, immediately revoke Tax-Exempt 501(c)(6) status.