Big companies cooking the books seems to be a theme in the news this week, with the latest accusations coming from a former Disney employee. Sandra Kuba tells MarketWatch she has filed information with the Securities and Exchange Commission alleging the company has been overstating amusement park and resort revenue for years.
The SEC didn’t offer comment to Marketwatch, but Disney did: “The claims presented to us by this former employee — who was terminated for cause in 2017 — have been thoroughly reviewed by the company and found to be utterly without merit.”
Kuba told Marketwatch she has gotten the typical whistleblower treatment. She first alerted the company to accounting problems in 2013. Unhappy with the response after four years, Kuba went to the SEC in August 2017. She was fired a month later. From the story:
In October 2017, Kuba filed a whistleblower-retaliation complaint with the Department of Labor’s Occupational Safety and Health Administration. Disney’s response to the department’s whistleblower office investigator’s inquiry said that Kuba’s employment was terminated because “she displayed a pattern of workplace complaints against co-workers without a reasonable basis for doing so, in a manner that was inappropriate, disruptive and in bad faith.”
The information she shared with the SEC charges that employees allegedly boosted earning by falsely recording revenue for free golf rounds. Kuba also told the SEC that the company counted revenue for $500 gift cards which had been discounted to $395. Small money, but she said it could add up to billions. Disneyland had 18.7 visitors last year. More from the story:
The most recent tip alleges some Disney employees reclassified guest revenue from high-sales-tax items such as hotel rooms to lower-taxed items such as food and beverages with the purpose of significantly reducing sales tax liabilities in Florida, California and Hawaii. MarketWatch has reviewed the three filings and supporting documentation that was sent to the SEC.
Disney Parks and Resorts is just one part of the iconic company’s sprawling entertainment empire. Along with DisneyLand and Disney World, the company runs six “resort destinations” including 12 theme parks, 52 resort hotels and a cruise line. Yahoo News reports that attendance at domestic theme parks fell by 3% in the third quarter of 2019. More on that from The New York Times.