Timeshare industry to pay hundreds of thousands of dollars in fines, refunds to settle federal allegations

By Dan Christensen, BrowardBulldog.org

Campaign contributions typically go to politicians, but timeshare owners in Broward, the state and across the country will soon split $562,000 – an amount equal to the illegal contributions collected by the political fundraising arm of the U.S. vacation industry from 2003-2007.

The payout is part of a deal between the industry and the Federal Election Commission to settle civil allegations of wrongdoing in the solicitation and distribution of millions of dollars in political contributions.

The American Resort Development Association – Resort Owners Coalition PAC will also pay a $300,000 civil penalty. It is the largest fine imposed by the FEC since 2007.

In a statement released Friday, ARDA conceded that “errors were made” in the collection of contributions but called them “unintentional and unfortunate.”

“ARDA has taken proactive steps to suspend any improper practices and rectify past errors in an open and transparent way,” ARDA’s Washington attorney Mark Braden said in the statement. 

The sale of vacation timeshares is a $10 billion-a-year business, with a large footprint in South Florida. In 2008 4.7 million households owned one or more weekly interval or points-equivalent timeshare properties, according to ARDA’s web site. Florida has more timeshare resorts than any other state.

ARDA is the industry’s Washington-based trade association and a major lobbying force on Capitol Hill and in Tallahassee. Federal records show that since 2006, ARDA has spent more than $1.1 million on Washington lobbyists to oppose such things as mortgage reform legislation, including the expansion of truth-in-lending requirements to timeshare buyers.

ARDA-ROC PAC has contributed hundreds of thousands of dollars to Republicans and Democrats.

Nearly all that political money, and millions more, came from tens of thousands of timeshare owners who paid them in small amounts to their property management companies as part of their regular bills. The individual contributors were not identified in records sent to the FEC.

Boca Raton’s Bluegreen, one of the nation’s largest timeshare companies, collected money that way for the PAC. The charges were billed to timeshare owners only as “the ARDA fee.”

Company general counsel Michael Kaminer did not respond to a request for comment on Friday about how the settlement will impact its billing practices.

The FEC began its inquiry after an audit of ARDA-ROC PAC’s books turned up irregularities. The PAC’s treasurer, ARDA vice president Sandra Yartin DePoy, was also a respondent in the case.

In 2008, the FEC disclosed that timeshare owners here and elsewhere had been misled into donating to ARDA-ROC PAC while paying their regular property fees. The charges, most $3 to $5, were billed to individual timeshare owners along with tax and maintenance charges.

Political contributions are voluntary, and federal law requires solicitations to make that clear. But at least three of ARDA-ROC PAC’s solicitations lacked that information, according to the eight-page settlement deal released Thursday.

The small donations, not itemized by the PAC, totaled $8.4 million between 2003 and 2007, records show.

The PAC acknowledged in its agreement with the FEC that about $562,000 were illegal contributions from foreign nationals and corporations. The payout to the homeowners associations is equal to that amount.

[In January, the Supreme Court ruled 5-4 that the government cannot ban such corporate political spending.]

The PAC has 90 days to comply with the settlement order that was approved unanimously by the six-member, bipartisan commission on July 29.