Report: City of Houston used shell company to pay out millions to Houston First employees Photo by George Rose/Getty Images
HOUSTON, TX - FEBRUARY 28: A new light rail corridor in downtown is viewed on February 28, 2016 in Houston, TX. Despite the plunge in oil prices, Houston, the corporate energy capital of the U.S., is adding millions of square feet to its convention center and constructing dozens of new highrise office buildings and condominiums. (Photo by George Rose/Getty Images)

An investigative report reveals the City of Houston employed a dummy corporation to funnel payments from city accounts to Houston First, the “quasi-governmental” agency charged with promoting tourism to the Bayou City.

According to a local TV news report, the city used a shell corporation, Convention and Cultural Services, Inc. (CCSI), to transfer payments between the city and Houston First. When an investigative reporter asked City Council members about CCSI, they claimed they’ve never heard of the company. References to CCSI also do not appear on budget documents or external audits for Houston First.

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The report uncovered at least $20 million in city funds went to CCSI to pay Houston First’s employees. Out of Houston First’s 232 employees, records showed 60 of them had annual salaries exceeding $100,000, with another ten earning salaries above $200,000.

Houston First was founded in 2011 as a consolidation of the city’s Department of Convention and Entertainment Facilities, which oversees the George R. Brown Convention Center and other major venues, and the Houston Convention Center Hotel Corporation, another governmental corporation launched in 2000 to build and manage the Hilton Americas Hotel adjoining the convention center. In 2014, Houston First also absorbed the Greater Houston Convention and Visitors Bureau.

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Brenda Bazan, the interim director of Houston First, was scheduled to replace the outgoing director, Dawn Ullrich, after Ullrich announced her retirement earlier this month and was ousted. Bazan now faces questions from City Council members about the reasons behind the use of CCSI as a payment broker between the city and Houston First.

“When it comes to requests for information, it’s my view and that of the current board chair, in transparency, that we will deliver that information,” Bazan said.

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