Gov. Guinn to Diners Club: No free meal here

Thursday, May 11, 2000 | 10:44 a.m.

CARSON CITY -- The state Board of Examiners, headed by Gov. Kenny Guinn, refused Wednesday to renew a $6 million-a-year contract with Diners Club and sent the state's buyers back to the negotiating table with the credit card company.

An estimated 2,900 Diners Club cards are now in the hands of state employees who travel or incur other official expenses.

The state's relationship with Diners Club soured recently when it disclosed that it had to write off more than $57,000 in charges rung up over a two-year period by state workers who didn't pay their bills.

Because of the write-off, Diners Club did not give an $8,000 bonus to the state treasury.

Guinn said a subsequent proposal by Diners Club to charge the state $10 a card was not acceptable. The company, he said, should set limits on the amount of money a state employee can charge so it won't have to write off big unpaid debts.

Four years ago the state and Diners Club set up an agreement for the credit cards to be issued so employees who travel would not have to put up their own money. They could use the card, get reimbursed by the state, then pay off their balance.

Guinn and board members Attorney General Frankie Sue Del Papa and Secretary of State Dean Heller were critical of Diners Club and the system. Heller said Diners Club wants a "risk free" venture by charging the state $29,000 for use of the cards.

In the last three years, he estimated, Diners Club has made $750,000 on the $6 million annual billing by the state on the cards.

The board rejected the recommendations of state Treasurer Brian Krolicki and Budget Director Perry Comeaux that the contract be renewed. Krolicki said the system has been a "tremendous success" and has saved the state money.

But Heller said the system is a "nightmare" and that no money is being saved because each agency has to monitor the travel.

Individual agencies give cards to employees who travel. The cards are a contract between the employees and Diners Club. The state is not liable for any debts.

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