Discuss Among Yourselves
Ed Note: There are two cross-comments today that deserve posting to further the discussion on the Chestnut Hill Community Fund, the Chestnut Hill Community Association and the inter-related cluster-f that it encompasses. As an aside, Keintz has not been replaced as treasurer despite his obvious incompetence (he is a walking joke) and Sullivan (BDD-prez), Piotrowski (VP Operations) and Aiello (VP Physical Division) take us back to the Maxinista years. Incompetency has its reward. But at least the board has fall guys now. As an aside, word has it Pat Moran has resigned. Nancy Hutter moves up to the board. How long will Phil retain the Community Manager slot? And with Richard Snowden on the CHCA board, the tragi-comedy is complete.
Also, a small collection of commenters from familiar IPs keep sending "give it up" and "move forward" messages. It's much like the Coulter-Malkin-Limbaugh refrain we hear about the Cheney-Bush years. Guys, make your own blog to tell people what you think. Because you don't sign your posts or request "no name," you don't get posted. You may as well know that as moderator, I get a lede that gives me the first seven words. I delete it as to not waste time. I never see the rest of your BS. Keep your auto-erotism to yourselves. Please, make your own site.
Scott Alloway, Waylaid Pilgrim
Posted by Jeremiade
Jim: Insider manipulation? The change in the Fund (CHCF) that happened in the 1990's was a decision by the trustees to move from bonds (bond funds) to stocks (funds also). It was an attempt to earn more on the substantial holdings of the Fund. It can not be characterized as manipulation. The trustees are chosen by the CHCA board to make those decisions. Perhaps the trustees decisions were poor (known only in hindsight) but I doubt that the trustees gained personally. Who hasn't lost money in this market? You owe an appology to the trustees for your comparison to Madoff.
As far as financial information withheld from board members, that is the responsibility of the Treasurer. CHCA boards elect the treasurer and he has access to the brokerage statements which are mailed to both the CHCF and the CHCA at Town Hall. It was wrong for any treasurer to withhold such information from board members and, to this day, I have no idea why that was done. You had an incompetent treasurer who was elected by the board, the same board that elected the Fund trustees. As far as the Fund loans to the CHCA, the fake signature was that of the CHCA president who was also elected by the board. (I do not believe this act will be determined to be anything but sloppiness and laziness, not wrongdoing.) The Fund should not have made any loans not directed to do so by the CHCA board. Problematic cash flow must be reported to the board by the treasurer, who should present a resolution to borrow money from the Fund.
I can agree with you that the CHCA boards have acted improperly (not just in financial matters) but your spin of these financial matters is just plain wrong. If Trustee McGuckin and Treasurer Keintz are not doing their jobs properly, then replace them.
The purchase of 8431 Gtn Ave was never intended to make money. CHCA boards never carried through on their original plans for the building and ultimately sold it. Sure the whole thing was a mistake, but again, there was no wrongdoing. And the mistake was one made by the CHCA board in not having a realistic plan.
I think you meant well but you are too off base factually to be effective. Sadly, you are right that there is little left to respect in the CHCA. That's why the CHRA is trying to take root. But there's always hope and another election next year.
Jeremiade
Note: May 31. The Foster repsonse has been corrected for typos.
Response by Jim Foster:
The title of the post I recently made was “Deflection and Self-Protection,” [since corrected - ed.] and not Self-Reflection and it was intended to characterize the words of Messrs. McGuckin and Nottingham that were published in the Local, and many of the actions and manipulations of by-laws and process over the years.
To respond to Jeremaide who does properly outline what the well structured CHCA and CHCF guiding documents require of its officers and directors, I will state the following:
There are no existing minutes from CHCF trustees or CHCA board meetings where the decision to move to high yield investments took place. In fact there are no existing minutes in the Fund minute book going back 23 years as per notation in the current minutes provided by this group of trustees. That declaration is in the handwriting and signed by the Secretary of the current trustees. No minutes for 23 years! Believe me, we searched for the minutes of the trustees for the entire period from the late 1990s up through 2006-07 and found none (also many CHCA board meeting minutes were missing from that same period)
My personal 3 hour interview with Trustee President Butler in 2007 included questions about those minutes and trustee meetings where the loans were authorized using Fund assets as security and his reply was “I have no recollection when we ever met, and those loans should not have been made.” He further commented that while he knew they were moving money from the trust without proper oversight, that he should never have let it happen. “They were robbing the piggy bank and I did not stop it” was the quote I believe. However, he made specific reference to the final use of the Fund-owned building at 8431 to secure a $50,000 loan to an out-of-area bank claiming he had no knowledge it was made. Not only does that loan have a signature of the CHCA President claiming she was the CHCF President, but an accompanying notarized signature on a separate document is where that person swears she holds that title with the Fund. Clearly there is no accident here, and it was done by a knowing individual who was not naïve or uninformed as to process, corporate structure, and responsibility.
It must be noted here that the transfers of funds from CHCF accounts to CHCA were frequent and were done through the simple signatures of bookkeepers and clerks on checks. Not one officer ever signed those transfers and check writing authority in any amount on any account was held by three employees who could sign individually, and did so. It was not until after we implemented the first group of recommendations of the Oversight Committee in 2007 that two signatures were required and officers were to be the signers.
Bottom line, a part-time bookkeeper and a part-time administrator had full check signing authority in any amount at any time on any account. Not only was that a fact, but the tax returns (1120s) and non-profit annual returns (990s) were never signed by an officer during that period despite the fact that the federal forms used state “Signature of Officer” directly under that line.
Tell me how a 45 year old organization and 25 year old trust fund in a community where most folks are college graduates and above, that runs a million dollar newspaper and a two million dollar trust fund, and makes all those mistakes accidentally. Compounding the problem is that denial that these things ever happened is alive and well to this day. Some have even charged that members of the reform board of 2006 forged those documents. No proper audit was ever done for 2005 and 2006 for either entity and it was during those fiscal years that most of the money was moved from trust to CHCA without controls. It is not just the treasurer alone who failed here. As the Oversight Committee stated in its summary report, we felt that the trustees were the final security, protector of assets and firewall for the money in the tax exempt trust, and had they followed only the minimum standards by holding meetings and keeping records, none of the rest could have happened. Even if the board was easily manipulated (and they obviously were) if they could not get to the trust fund money, the whole process would have ground to a halt in 2005 at the latest.
As to the purchase of 8431 and the claim that it was never intended to make money for the Fund, I was not there, nor did we find minutes that support that claim. What we did learn was that it was supposed to “break even” after expenses and debt service through rentals, but then provide space for community events in one portion. What financial records do show is that it lost money virtually every month it was owned and was rarely fully occupied for years. Now, if the Fund chooses to be in the real estate business, it is to monitor its assets, and clearly it did not. I would call that another trustee failure, but again no minutes or records they ever took it up exist, and they owned the building. Now, the board did discuss this from time to time, but no remedial action that moved the building into at least break-even was ever accomplished, and furthermore the use of it for public purposes never happened either. For that reason when they sold the building the IRS penalized the fund $70,000 or so as it violated the rules for a non-profit owning real estate. When will these administrative accidents stop happening?
Sure a better treasurer would have helped, but so would a board that was interested in performance more than resume enhancement, so would trustees whose names we never really knew for sure, as there were no documents or complete board minutes which stated for certain who was a trustee and for what period. Mr. Butler claimed he knew at the 11th hour when he sold the building to Bowman properties and dragged two individuals to a meeting who “supported” his actions, but it was never verified that they were serving according to the Trust Indenture, and when questioned about that Mr. Butler stated that an emergency provision in that document let him make that decision on his own.
All the reform group ever requested was a true outside audit by a professional independent auditor who was familiar with non-profits and the laws that accompanied them when there were affiliated for profit relationships. After that was done, we suggested filing amended tax and non-profit returns, tightening up the inside financial rules, and moving ahead on sold footing - - something that definitely did not exist in my view for at least the previous 7-8 years. No one wanted anyone prosecuted, nor did we want to continue the debate, just make the corrections and admit they needed to be made. It was that “admitting” part that sent shock waves through Chestnut Hill.
Instead a massive push back against any action but the minor office procedures began and in the process it has destroyed the CHCA and CHCF credibility to the point that it is now the tool of another group who want to use if for their own narrow agendas, not the “quality of life of Chestnut Hill and the surrounding areas” as the documents so well drawn years ago state.
The problem in nutshell is that some very educated folks think those documents are a joke and the fund, with its tax free shelter, is their financial sandbox
Just a few accidental administrative errors - - not a chance.
Jim Foster.
Labels: Blue Dog Democrats, CHCA Board, CHCF, Chestnut Hill
posted by Anonymous at 5/30/2009 08:45:00 PM
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