WASHINGTON, D.C. — The National Limousine Association and its lobbying group, Cornerstone Government Affairs, recently sent out a message to members explaining changes to the federal Troubled Asset Relief Program (TARP) and how to communicate with customers affected by the new regulations.
The memo defines “excessive or luxury expenditures.” Those terms are crucial to navigating the new business travel landscape since outrage over AIG excesses has trickled down to even those businesses that did not receive TARP funding but fear the effects of clients cancelling corporate travel and incentive programs.
According to the Cornerstone memo, the definition is as follows:
The term “excessive or luxury expenditures” means excessive expenditures on any of the following to the extent such expenditures are not reasonable for staff development, performance incentives, or similar measures conducted in the normal course of the TARP recipient’s business operations: 1) Entertainment or events; 2) Office and facility renovations; 3) Aviation or other transportation services; and 4) Other similar items, activities, or events for which the TARP recipient may reasonably anticipate incurring expenses, or reimbursing an employee for incurring expenses.
This definition now clarifies to TARP recipients that travel services such as those provided by the chauffeured transportation industry are a value-added service to their businesses. The NLA and Cornerstone suggest operators write to their clients explaining that although corporate travel and meetings were previously unfairly criticized, the new rules show that these expenditures are allowable. The NLA and Cornerstone have drafted a form letter to help clarify the issue to clients who have received TARP funding.
The meeting and events industry and its suppliers felt the effects of intense media scrutiny on companies that received TARP funding. Meeting planners nationwide canceled or moved events sometimes at high cost of cancellation or additional expenses instead of incurring media wrath. The TARP rule clarifications give TARP companies the leeway to continue to do business with the business travel and transportation industries.
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Source: Linda Moore, LCT Magazine