PORTLAND — The state Department of Economic and Community Development is auditing a Portland advertising agency that has failed to pay clients who ran Maine tourism ads.

The state announced the probe Monday after Swardlick Marketing Group notified the Maine Office of Tourism and the DECD of its inability to pay its suppliers and media companies.

A DECD official expressed confidence that the situation would not impede the state’s ongoing tourism publicity campaigns.

Swardlick, based at 7 Custom House St., was selected by the Office of Tourism to market the state in 2009 and 2010. It created the “There’s More to Maine” campaign to promote the state, and received $3 million from the state last year.

President David Swardlick said the two one-year contracts ended Dec. 31 and a new contract has not been negotiated.

“The challenging economic conditions over the last few years have really added to the problem,” Swardlick said Tuesday. “This announcement really comes from discussions we’ve been having with our clients over the past week or so. We wanted to make sure our clients and the Office of Tourism were aware of our challenges.”

Swardlick said he could not characterize how much money is owed to clients, but said a “handful of our larger media placement clients” are affected.

“There is a lot owed to us and by us,” he said.

The Office of Tourism pays Swardlick for design and placement of ads. Swardlick then places the ads with print and broadcast clients, who are supposed to be paid by the agency.

Swardlick said the marketing group has had difficulty keeping current with purchases, but there has been no interruption in service.

“It is in everyone’s best interest that we are fully public about our situation,” Swardlick said. “We wanted to do it and the (DECD) wanted to make sure people knew they were overseeing the situation.”

Elaine Scott, marketing and communications director at the DECD, confirmed a new contract has not been awarded to Swardlick for this year. She said the contract is awarded through a bidding process and each year the state has the option to renew or not.

“The timing of the announcement does not impact the state because the plans are set in advance,” she said. “Everything will go on as planned and won’t impact the program at all.”

Scott said the state wants to ensure that when a contract is awarded, every party gets what is expected. She said the DECD needs to ensure contracts are executed properly, but would not speculate about the Swardlick situation.

“There is an audit going forward, but we don’t know what will happen until the audit is done,” she said.

The program to market Maine includes a public relations firm and a website design firm; Swardlick is the marketing piece of the program, Scott said.

She deflected questions about the impact Swardlick’s failure to pay clients may have on the state’s ongoing relationship with publishers and broadcasters that sell the ad space and air time.

“This program markets to consumers all around the country and we will see no negative impact whatsoever,” she said.

Swardlick said his firm is reaching out to the vendors and media clients to work out the situation. He said after 30 years in business, the company has an open and positive working relationship with clients locally, regionally and nationally.

“Our team is working every hour of every day full steam ahead,” he said. “We are working with the Office of Tourism to keep them fully engaged with all of the client programs. The commitment to our clients is 100 percent.”

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