- In July, 2003, the Sarbanes-Oxley Act
of 2002 was signed into law. It was born of the public's fury after watching
leaders of corporations like Enron rape their workers and customers for
private gain and benefit through a new kind of "domestic terrorism."
Enron cooked their books and illegally pursued annual profits rather than
maintaining sound business practices.
-
- Maybe Sarbanes-Oxley should have been
named "The Ken Lay Act of 2002."
-
- The law calls for companies to conform
to new standards in governance, financial transactions and audit procedures.
-
- It calls for the establishment of an
independent audit committee, policies that address insider trading and
conflicts of interest, spells out the responsibilities of auditors, requires
certified financial statements, mandates the disclosure of tax returns
in an "easily accessible way," provides whistle blower protection
and addresses document destruction so as to prevent criminal obstruction.
-
- There is talk that the Sarbanes-Oxley
act will lead to a similar federal law that will be drawn up for non profits
to abide by. For now, there are two provisions of the Sarbanes-Oxley Act
that apply to non-profit corporations; whistle blower protection and document
destruction.
-
- Whistle blowers are protected if they
chose to act like Enron's s former Vice President Sherron Watkins did when
she wrote to then-CEO Ken Lay in August 2001 about accounting irregularities,
warning him that Enron "might implode in a wave of accounting scandals."
-
- Today, it is illegal for a corporate
entity, both for-profit and nonprofit alike, to punish, intimidate or retaliate
against the whistle blower in any manner.
-
- Secondly, the Sarbanes-Oxley act makes
it a crime for non profit groups to alter, cover up, falsify, or destroy
any document (or persuade someone else to do it) to prevent its use in
an official proceeding (e.g., federal investigation or bankruptcy proceedings).
-
- What does Sarbanes-Oxley mean for non
profit whistle blowers like Vernon Hill? The past three years, he has questioned
both his temple leadership as well as the top corporate leaders about the
Shriners financial accountability. According to Hill, his letters and emails
have been ignored.
-
- In January, 2002, Hill claims that he
was not reappointed and by inference, was "removed" from his
position on the temple's PR committee. On July 25, 2002, the leader of
Hill's Sudan Temple, Potentate Stewart W. Lewis, did get an answer of sorts,
in the form of a letter that states:
-
- "Enclosed please find a letter received
from one of your nobles (Vernon Hill). I am forwarding this to you for
whatever action you deem appropriate.
-
- Fraternally yours,
-
- Charles G. Cumpstone Jr. Shriners executive
vice president"
-
- Two years later, in March, 2004, a frustrated
Hill wrote to Cumpstone, asking him 25 financial and management questions
including:
-
- "Exactly how much money goes to
the Shriners Hospitals of every dollar taken in?"
-
- "Please send me a listing for each
Imperial Potentates travel allowance for 1995 through 2004."
-
- "Explain how the immediately Past
Potentate for 2002 2003 was allowed a total of $126,000 expenses
for his 12 month reign?"
-
- "How can you spend a total of $1.6
million for the 2003 Convention and $1.5 million for travel expenses so
the corporate officers and temple leaders can attend? Would you advise
if this is allowable under the IRS rules for Shriners? Why do the leaders
get paid twice?"
-
- "Can any Officers of the 190 temples
move money from the transportation fund without any accountability of why
and the purpose of? There was a Secretary in Sudan Shriners who was terminated
for asking this question and for informing approximately 35 Road runners
of this situationseveral of us asked the same questions and the leadership
refused to provide the answers, as usual."
-
- "How can a non profit and tax exempt
organization legally let 'secret groups' (the Royal Order of Jesters and
Order of Quetzalcoatl) be involved with the Shriners? Most Shriners are
not aware that this goes on and that you have to "be invited and voted
on to participate." One would think that this contradicts the Masonic
Oath and Shriners Creed along with the ruling for non profit and tax exempt
groups." (1)
-
- "With reference to the 1986 series
of stories done by the Orlando (FL) Sentinel on the Shriners abuse of the
money, if an audit was done to see how much is wasted on Officers benefits
and fringes, would you be happy? Do corporate and the 190 temples abide
100% by the guidelines and laws of nonprofit organizations?"
-
- Much of the information Hill requested
should have been listed on the Shriners annual 990 tax returns or included
in financial statements, budgets or annual audits. IRS non profit disclosure
law states that when a 501c3 non profit group is asked for such information,
they have 30 days to provide it. Two years later, Hill's questions and
requests for financial information have yet to be acknowledged, let alone
answered.
-
- Instead Hill received a letter dated
May 16, 2004 that said:
-
- "A copy of your letter dated March
2, 2004 to Mr. Charles Cumpstone, Jr., executive Vice President of Shriners
International in Tampa, Florida was recently shared at a meeting of the
Sudan Roadrunnersthe membership voted to remove your name from the Associate
Membership List. I regret to inform you that you are no longer a Sudan
Roadrunner.
-
- Sincerely, Thomas Forrest, Director,
Sudan Shrine Roadrunners."
-
- The Roadrunners is a unit of volunteer
Shriners who drive needy children to and from the Shrine Hospitals for
their free medical care. Hill had been a Roadrunner for over two years.
He drove over 30,000 miles as he transported about 100 sick and needy children
to Shriners Hospitals in Greenville, South Carolina and Cincinnati, Ohio.
He is passionate about helping the needy children get to the hospitals
because he knows the high costs of getting sick.
-
- This is the second Shriner committee
that Hill had been "removed" from.
-
- "I was treated for colon cancer
five years ago," he revealed. "I know how scary going to the
hospital can be, not only for the kids, but for us adults too. It breaks
my heart to think that when we work so hard to raise money for the hospitals,
it might not be going to help these sick little kids who really truly need
it. How many more sick little children could we help if things were well
managed, all the money accounted for and all the financial records were
out in the open for everyone to see?"
-
- On September 14, 2005, Hill asked a Shrine
officer for some contact information. Instead of trying to help or answer
Hill's questions, the reply states:
-
- "All questions should be routed
to the Executive Vice President, Charlie Cumpstone As an Imperial Officer,
I donate my time to this cause whether it be for the Hospitals or
the Fraternity, but we also operate under a chain of command that
you as a Shriner I'm sure respect as well.
-
- Thanks, Mike Severe, Imperial Officer,
Shrine of America"
-
- The past year and a half, Hill has been
working with tax consultant and former IRS revenue officer Paul Dolnier,
who runs the "Charity Watch" website. Dolnier reports that he
met with three high ranking officials from the Pennsylvania Charities Special
Investigations unit in Fort Lauderdale for six hours while they were in
Florida on other business.
-
-
- Dolnier and Hill have wondered why some
of the returns, specifically for Shrine Temples in the State of Pennsylvania,
were not clear if the was money raised for fraternal purposes or for charitable
purposes or if the temples were keeping money that should have been sent
to the hospitals.
-
- A point of clarification here.
-
- The Shriners Hospitals for Children and
Shriners Temples are two different groups that have different tax exempt,
non profit classifications.
-
- The temples fall under the jurisdiction
of the Imperial Council of the Ancient Arabic Order of the Nobles of the
Mystic Shrine for North America, which is the temples' parent 501c10 fraternal
group. They are incorporated in Iowa.
-
- The hospitals fall under the jurisdiction
of the Shriners Hospitals for Children, which is the hospital's parent
501c3 non profit charitable group. They are incorporated in Colorado.
-
- Both groups are classified by the IRS
as non-profit groups and therefore, must obey the IRS's disclosure laws.
-
- A board of twelve directors oversees
the charitable Shriners Hospitals group and their $9 billion in assets.
Four of the Shriners who sit on the hospital's board currently sit on the
Shriners fraternal board.
-
- Each of the hospital's board of directors
has, at one time or another, sat on the Shriners Imperial Divan, the fraternities'
equivalent of the hospital's board. Additionally, both groups share the
Shriners headquarters building in Tampa Florida. This arrangement might
draw scrutiny from the IRS and other law enforcement agencies if the "conflict
of interest" section of the Sarbanes-Oxley law is applied to non profit
groups and strictly enforced.
-
-
- So, the Shriners Temples are individual
fraternal groups that raise money for the Shriners Children's Hospitals,
the charitable group. According to Pennsylvania charity law, 100% of the
Shriners Temples net proceeds, after expenses are paid, must go towards
the hospitals.
-
- Twenty years ago, the Orlando Sentinel
ran a series of investigative articles that discovered that the Shriners
circuses had raised over $23 million but only about 2% of the money or
$346,251 actually went to the children's hospitals.
-
- According to some of the Pennsylvania
tax returns posted on the Charity Watch site, it appears that the hospitals
may not be getting their fair share and some Pennsylvania investigators,
auditors and attorneys may be interested.
-
- The website reads:
-
- "Attorney General's Office of Charitable
Registration for the State of PA is looking at this group as a 'matter
of great interest' concerning past and current charity fundraising policies
and procedures throughout the entire State of PA which includes ALL Shrine
Temples and Groups and Clubs located within the State of PA. We discussed
in great detail the way the fundraising works, the breakdown percentages
and where the money goes after it leads the State of PA"
-
- Hill kept on trying to get answers. He
wanted someone to review and respond to the Shriners tax returns posted
on the "Charity Watch" website, so he contacted the Shriners
managing attorney, Jay Fleisher.
-
- On May 10, 2006, Hill wrote:
-
- "Noble Fleisher,
-
- Please visit www.help-page-nonprofit.org
and look at the page for Pennsylvania. I would suggest that you make contact
with the person that does this page as he had three (3) officials from
the State of Pennsylvania Attorney General to visit him in Ft. Lauderdale
recently.
-
- Fraternally yours, Vernon Hill"
-
- According to Hill, an email reply from
Fleisher stated that he had called Mark Pacella, Chief Deputy Attorney
General of the Pennsylvania Attorney General's office and that Pacella
told him that the Pennsylvania Attorney General was not investigating the
Pennsylvania Shriners.
-
- According to Hill, Fleisher wrote to
him that a member of the Board of Governors of at least one Shriners Hospital
for Children received an e-mail which stated that:
-
- "The State of Pennsylvania Attorney
General is looking into 'The Money Trail of The Pennsylvania Shriners'
and how the Millions of Dollars raised annually have been used and to see
whether or not the Shriners Hospitals have gotten their money . . . "
-
- "After over three years of asking
questions, this was the first reply I've received," Hill said. "Fleisher
asked me to provide him with the name, title and telephone number of an
official within the Pennsylvania Attorney General's office who could confirm
there was an investigation. I initially told Fleisher to go to the website
so he could look at the tax returns and read what Paul had written about
conferring with the Pennsylvania authorities. A few hours later, I got
another email from Fleisher that described how I had written that 'the
Attorney General of the State of Pennsylvania is investigating the Pennsylvania
Shriners.' He wrote that I'd not informed him of any official representatives
who could back up that statement and that he had, at the same time, been
directly advised by a named, high official in the Attorney General's office
that no investigation of Pennsylvania Shriners Temples is being made by
the Attorney General."
-
- "He respectfully requested that
I stop alleging any such investigation and that I was supposed to retract
my statement to everyone I sent it to," Hill explained. "I thought
that it was most unusual that someone high ranking like Pacella would tell
Fleisher that there was no investigation when everyone else is told that
they can't confirm or deny an investigation."
-
- The standard answer to "Is there
an investigation?" is, according to Leslie Amoros of the State of
Pennsylvania's Press Office of Secretary of State, is "We cannot confirm
or deny there is an investigation."
-
- So what did Pacella really tell Fleisher?
-
- According to Barbara Petito, Deputy Press
Secretary for the Pennsylvania Office of Attorney General, "Mr. Pacella
told Mr. Fleisher that he'd too heard this erroneous information and that
Mr. Fleisher was told to call the Department of State to ask them if they
were investigating Pennsylvania Shriners."
-
- "I don't understand how anyone could
get 'we are not investigating' from 'call the department of state and ask
them'," Hill concluded. "Mostly, I just can't understand why
no one will answer my questions or provide me with the financial documentation
like they are supposed to. Instead, I get kicked off committees when all
I want is to help the poor little kids. I know of hundreds of cases where
a Shriner will ask financial questions and either be kicked off committees
or be kicked out of the Shriners entirely. I just wonder what they are
trying to hide; I wonder why they keep begging for money when their assets
are valued over $9 billion dollars."
-
- (1) One must first be a Master Mason
to become a Shriner. For example, all of the board members for both the
Shriners hospitals (charity) and Shriners (fraternity) are Masons.
-
- Next: Numbers here, numbers there, numbers,
numbers everywhere! But do they add up?
-
-
- Cassandra "Sandy" Frost is
an award winning e-journalist who has investigated the nonprofit claims
of the International Remote Viewing Association the past three years. Her
articles can be found at: http://blogs.salon.com/0003531/ and http://blogs.salon.com/0004117/. She is the author of upcoming "The Cassandra
Frost Collection" which will be published by Dandelion Books.
-
-
- Read my blog at: http://thecassandrafrostcollection.blogspot.com/
-
- Shriners Part 1: Shriners In Hot Water Again?
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