SSA in Crisis: Can It Heal Itself? [LONG]

(with apologies to non-U.S. readers)

Most of the postings on this subject follow a predictable pattern:
"what a bunch of stupid/unethical/indifferent (pick one) idiots we have
at SSA; why don't they just [fill in the blank with your favorite
brilliant solution]" A few (including mine) urge patience, support, and
a chance to let the process work.

Reluctantly I'm now changing my position from "be patient" to "do
something." For the specifics, skip to the ACTION ITEM at the end. The
rest of this is just a long-winded description of a discouraging
journey the past few weeks.

My new stance may seem like heresy given my past support of SSA. But
after more than three weeks of working with and communicating with SSA
directors, including the Executive Committee (ExComm), I confess I no
longer have complete confidence that the current organization can deal
properly with this crisis.

Like most, I learned about SSA's tax filing/remittance problems from
Dianne Black-Nixon's letter 3 1/2 weeks ago. While publicly urging
patience, I also offered help to directors I know, including ExComm
members. I agreed with most of their decisions but nevertheless had
concerns. Soon I found myself working behind the scenes with several
directors who shared these concerns, which were centered around
maintaining the confidence and trust of SSA members during a time when
their faith in SSA would be tested.

Disclosures by ExComm implied that certain SSA funds were
misappropriated by SSA's Chief Financial & Administrative Officer
(CFAO), who has since been fired. But even if the CFAO were guilty,
others may share responsibility for allowing this to happen. And as
ExComm continued their investigation, the primary reason for our
concern was conflict of interest.

In the corporate (and non-profit) world, a conflict of interest exists
whenever there is an incentive for people in positions of power and
trust to take actions contrary to the best interests of those who have
placed their trust in these individuals. It does not matter whether
said individuals are trustworthy or competent or even whether they
yield to these temptations. If there's an incentive for them to do the
wrong thing, they are said to be conflicted and those conflicts must be
properly addressed.

The conflicts of interest with SSA's crisis relate to the fact that
those working to resolve it--i.e., ExComm, the Budget and Finance
Committee (FinComm), and SSA's accounting firm--potentially share
responsibility for allowing it to occur. I would include SSA Executive
Director Dennis Wright (ED) in this group but ExComm has been careful
to give the impression that they are managing this situation, not the
ED.

Much outcry on this forum has focused on the decision to forgo annual
audits. In my opinion, this misses the mark. To the best of my
recollection as a former director (for nine years in the mid 1990s
through early 2002, including service on ExComm), previous FinComms
elected to have annual reviews performed by Johnson, Miller, SSA's
public accounting firm (CPA) because they were much less expensive than
a full audit (if I recall correctly, on the order of $20,000 less) yet
provided some assurance that material problems would be uncovered.

For those of you without financial backgrounds, there are three levels
of involvement by a CPA with a client. For a "compilation," the CPA
simply cranks out standard-format statements using the client's books
and records. If the numbers add up, the CPA doesn't do much checking;
they just make it look pretty. For a "review," (which is what I believe
SSA had in prior years), the CPA goes a step further and attempts to
uncover material problems. They offer no guarantees but at least the
accountants look under the hood, so to speak. An "audit" (called for by
the By-Laws) involves many more tests and checks based on which the CPA
expresses an opinion as to whether the results conform to generally
accepted accounting principles. An audit provides the highest level of
assurance but, of course, costs the most, because of the extra work
involved and also the liability assumed when expressing an opinion.

In the past, the annual review plus the close relationship between the
CPA and FinComm--who played a very active role in the SSA's finances at
that time--plus performing an occasional full audit made the question
one of economics as well as the By-Laws. In effect, FinComm made the
decision to self insure, judging that an occasional loss, though
unlikely, would still be less than the accumulated added cost of doing
an audit every year. I suspect that may still turn out to be true
despite the magnitude of the potential loss. I recall that the Board
was made aware of this policy (but not asked to approve it, per se) on
at least one occasion while I was a director but I cannot be certain.

In my opinion, then, the critical question is whether FinComm retained
Johnson, Miller to continue preparing SSA's annual financial
statements, and more specifically to do annual reviews. ExComm's
disclosures indicate they did not.

Here's where the potential conflicts arise. Good governance calls for
FinComm to retain the CPA, who would report directly to them (not to
the CFAO or the ED or ExComm or Board), to prepare the annual financial
statements (with a review or, under the By-Laws, an audit). ExComm
meeting minutes note that Johnson, Miller appears not to have been
retained to do any such work after 2002. If FinComm did retain them, in
writing or orally, then Johnson, Miller may (and I emphasize the word
"may") have some culpability and there is an inherent conflict with
their continuing to work on the SSA account. In that case, it gets
messier: ExComm meeting minutes indicate that Johnson, Miller selected
the lawyer in Hobbs that SSA engaged. This attorney quickly recommended
that SSA give Johnson, Miller "carte blanche to do what they needed
with the SSA financial records."

On the other hand, if FinComm did not retain Johnson, Miller, then
FinComm itself may (again, "may") have some culpability, perhaps shared
by ExComm and the Board (although directors could argue they acted in
reliance on FinComm) and there is an inherent conflict with their
playing a key role in this investigation.

It's very important to reiterate that competence and trustworthiness
are irrelevant to this discussion. It doesn't matter whether the CPA or
FinComm or ExComm did anything wrong, intentionally or otherwise. And
I'm not suggesting they did. On the contrary, I've been generally
impressed with the work done by ExComm so far. What matters is that
people who may have legal liability and therefore a vested interest in
the outcome are deeply involved in this investigation. That's a classic
conflict of interest. And it's a recipe for losing the confidence of
SSA members at a time when we need it most.

One remedy for conflict of interest is disclosure. Depending on your
point of view, disclosure to date has been adequate but sometimes
reluctant.

Another remedy is bringing in new people to do the investigative and
remediation work. This is risky. Those who know the most about SSA and
are in the best position to help are probably already involved. It's
difficult enough to get competent volunteers, much less to work for
free in Hobbs going through accounting records and meeting with
attorneys, bankers, the IRS, etc.

A third and, I believe, best remedy is an independent group to monitor
the actions of ExComm, the accountants, the attorney(s), staff, and
others involved. This is where the discussions with the concerned
directors quickly arrived. Ultimately this resulted in a formal
proposal for an Oversight Task Force (OTF). Four SSA members were
prevailed upon by these directors to serve on the OTF: myself and three
other individuals--a highly experienced accountant, an attorney, and a
successful businessman. Because of my prior Board service, I initially
declined to serve on the OTF but was persuaded by the two concerned
directors because of my knowledge of SSA, my business background, and
the fact that my tenure ended in early 2002, prior to the Larry
Sanderson affair.

The OTF proposal was made to the full Board by one of these concerned
directors approximately two weeks ago with, unfortunately, a generally
negative reaction.

How could this happen? Well, some directors had genuine questions about
certain provisions in the OTF proposal but I believe the negative
reaction was due in great part to misunderstanding the OTF's purpose.
Instead of oversight (i.e., monitoring, not decision making), some saw
this as an attempt to usurp power from the Board or ExComm. Some feared
it could interfere with and/or delay the investigation or reveal
confidential information. Others viewed it as a no-confidence vote. In
frustration, I "recused" myself from participation on the OTF and made
a direct appeal to the Board explaining OTF's purpose in more detail
and arguing that it was the Board's fiduciary duty to take action to
oversee the activities of ExComm, FinComm, and others who were
conflicted.

With this clarification, responses to our proposal were gratifyingly
more favorable. In fact, ExComm subsequently expressed their support
for the OTF. To be fair, at least some ExComm members (including Dianne
Black-Nixon) had voiced support all along.

That was nearly two weeks ago. Since then, nothing much has happened.
ExComm continues to manage the investigation and to make decisions. My
sense is that there may be debate even within ExComm on how to proceed.
More than a week ago, one ExComm member emailed me to say it would be
not be practical to hold a tele-conference special Board meeting for
all 26 directors and suggested delaying action on the OTF until the
scheduled Board meeting at the end of this month. My response was that
with every passing day, decisions were being made that could be
criticized by SSA members and should be overseen by an independent
body. I often participate in conference calls with at least that many
people dispersed over the U.S. and India and do not think a properly
managed special meeting--with one agenda item--would be terribly
difficult. Rightly or wrongly, I interpreted this as foot dragging. If
ExComm had supported the OTF with the same admirable alacrity with
which they jumped on the initial disclosure of the tax problems, the
OTF would already be at work and I would not be writing what some will
doubtless interpret as a disloyal or disruptive public posting.

ExComm believes it would be inappropriate for them to charter the OTF
without full Board approval. They have a point, but this reasoning
leads inexorably to the conclusion that, absent oversight, ExComm
should not be making major decisions about the investigation or
corrective action, either.

Ironically, with one troubling exception (see below), I'm less
concerned with what ExComm is actually doing in Hobbs than with how SSA
members may come to perceive or question their actions. To date, ExComm
has moved decisively to manage a tough problem and it's difficult to
quarrel with their actions.

But many members still have a sense that a previous ExComm attempted to
cover up the Larry Sanderson expense account scandal three years ago.
We cannot afford the same cynicism, or worse, now. While most members
understand that some things must remain confidential for legal reasons,
they are uncomfortable or angry if they suspect they are not getting
the real story. And on that score, ExComm's inaction is troubling.

I mentioned an exception, and it's a big one: how responsibility for
this problem is being assigned. ExComm's communications have emphasized
the ED's failure to inform the Board of the non-filing of tax
information returns. At the same time, however, ExComm has minimized
the "errors of omission" of the ExComm/FinComm/Board in not retaining
the CPA to examine the SSA's annual financial statements.

In fact, both lapses are errors of omission. Yet my impression is that
the ED is being positioned as the one most responsible for allowing
this crisis while FinComm's failure to act is being dismissed. For that
matter, ExComm admits that the CFAO reported directly to the Board, not
the ED, until mid 2005 so there is ample reason to share responsibility
for this. While I do not have the facts available to ExComm, the
questions raised are precisely the reason that independent oversight is
needed over those who find themselves in conflicted positions, for
their sake as well as the members'. And it is needed immediately, not
next week or the week after that or after the next major staff or
organizational decision is made.

If this were a public corporation, plaintiffs' attorneys would already
be circling like vultures with the prospect that directors could be
sued and found guilty of breach of their fiduciary duty, in particular
those on FinComm and, likely, ExComm. But there's not enough money here
to interest them. Nor do I believe we should necessarily seek to punish
whomever may have contributed to this debacle. This was a failure,
albeit a predictable one, of a flawed system. Yet I don't think we
ought to sweep anything under the rug, either. I believe most SSA
members would readily forgive the unwitting errors of volunteer
directors so long as they believe they are being dealt with
forthrightly.

I apologize to those I know and respect on the Board and ExComm who are
dedicated, well intentioned, and working hard in thankless positions.
But I fear that some of them do not fully understand the danger that
their inaction will increase the cynicism and apathy already evident in
many SSA members. The lack of urgency and reluctance to initiate
oversight by ExComm and the directors alike suggest that some of them
still don't "get it."

Despite protestations to the contrary, there is a tendency in times
like this for ExComm and the Board to "circle the wagons." It's a
natural human response to threats, both from the original problem and
from outraged SSA members who want someone, anyone, to pay in blood. It
is a tendency against which we must fight hard if we are to maintain
the trust of our members.

Sadly, at this point individuals who generously agreed to serve on the
OTF weeks ago are growing cynical about the willingness of SSA to
address its problems. Clearly I am, too.

On a positive note, I see this unfortunate crisis as a wonderful
opportunity to make major changes to SSA to improve its financial
position and increase its effectiveness. The current Board structure is
indeed cumbersome and ineffective. It also makes sense to examine which
functions the SSA should perform and whether some of these should be
outsourced. And I agree with those who believe we should explore
locations other than Hobbs. We have a chance to "start over" with a
clean sheet of paper...without losing those elements of SSA that are
critical. Yet what I have seen in the past 3+ weeks leaves me worried
that we will squander this opportunity.

ACTION ITEM: Please contact your directors and, while offering your
continuing support and trust, urge them to demand the Oversight Task
Force or something like it be put in place immediately. All of
us--members, directors, ExComm, and staff alike--need the clarity and
assurance that only an independent observer can provide.

In the meantime, please maintain the degree of civility on this forum
that I hope you would if the discussion were taking place in person.
Ironically, the offensive and irresponsible behavior of some
participants on rec.aviation.soaring alienates most SSA members and
encourages our leadership, with some justification, to dismiss these
critics as just a bunch of loudmouth idiots. Those who insist on
popping off indiscriminately with wild allegations, accusations, and
statements of opinion-as-fact serve no one but their own egos. Their
actions--presuming they actually care about the future of SSA and the
great things it has and can still do for soaring pilots in this
country--are counterproductive.

Chip Bearden
SSA Member since 1965

I apologise for responding to this at the top but if
I put it where I should it's a long scoll. As a complete
outsider I have to say that the biggest problem the
management of SSA face is one of credibility. It seems
to me as an outsider that every few years the SSA tries
to tear itself to bits on a public forum and this is
not very attractive. I can only hazard a guess as to
the feelings of the ordinary members.
Whichever way you look at this the only way to restore
credibility is to have the problem looked at by an
independent body who's credibility is unimpeachable.
This may prove to be a difficult task as those who
are most qualified could also be thought to be too
close to the organisation. Perhaps it might be considered
appropriate to second into the independent body a complete
outsider, a senior executive from a foreign gliding
or similar USA based GA organisation, not to judge
the detail or make pronouncements on USA law, but to
provide a completely independent person with no conflict
of interest or indeed interest in the outcome.
You may feel that as an outsider it is none of my damm
business and of course you would be right, it isn't,
but anything is better that seeing glider pilots at
each others throats. Right now perception is more important
than truth to many.
Of course there will be those who will never be satisfied
and that has to be accepted, you can only do the best
you can.

At 20:18 26 September 2006, wrote:
(with apologies to non-U.S. readers)

Most of the postings on this subject follow a predictable
pattern:
'what a bunch of stupid/unethical/indifferent (pick
one) idiots we have
at SSA; why don't they just [fill in the blank with
your favorite
brilliant solution]' A few (including mine) urge patience,
support, and
a chance to let the process work.

Reluctantly I'm now changing my position from 'be patient'
to 'do
something.' For the specifics, skip to the ACTION ITEM
at the end. The
rest of this is just a long-winded description of a
discouraging
journey the past few weeks.

My new stance may seem like heresy given my past support
of SSA. But
after more than three weeks of working with and communicating
with SSA
directors, including the Executive Committee (ExComm),
I confess I no
longer have complete confidence that the current organization
can deal
properly with this crisis.

Like most, I learned about SSA's tax filing/remittance
problems from
Dianne Black-Nixon's letter 3 1/2 weeks ago. While
publicly urging
patience, I also offered help to directors I know,
including ExComm
members. I agreed with most of their decisions but
nevertheless had
concerns. Soon I found myself working behind the scenes
with several
directors who shared these concerns, which were centered
around
maintaining the confidence and trust of SSA members
during a time when
their faith in SSA would be tested.

Disclosures by ExComm implied that certain SSA funds
were
misappropriated by SSA's Chief Financial & Administrative
Officer
(CFAO), who has since been fired. But even if the CFAO
were guilty,
others may share responsibility for allowing this to
happen. And as
ExComm continued their investigation, the primary reason
for our
concern was conflict of interest.

In the corporate (and non-profit) world, a conflict
of interest exists
whenever there is an incentive for people in positions
of power and
trust to take actions contrary to the best interests
of those who have
placed their trust in these individuals. It does not
matter whether
said individuals are trustworthy or competent or even
whether they
yield to these temptations. If there's an incentive
for them to do the
wrong thing, they are said to be conflicted and those
conflicts must be
properly addressed.

The conflicts of interest with SSA's crisis relate
to the fact that
those working to resolve it--i.e., ExComm, the Budget
and Finance
Committee (FinComm), and SSA's accounting firm--potentially
share
responsibility for allowing it to occur. I would include
SSA Executive
Director Dennis Wright (ED) in this group but ExComm
has been careful
to give the impression that they are managing this
situation, not the
ED.

Much outcry on this forum has focused on the decision
to forgo annual
audits. In my opinion, this misses the mark. To the
best of my
recollection as a former director (for nine years in
the mid 1990s
through early 2002, including service on ExComm), previous
FinComms
elected to have annual reviews performed by Johnson,
Miller, SSA's
public accounting firm (CPA) because they were much
less expensive than
a full audit (if I recall correctly, on the order of
$20,000 less) yet
provided some assurance that material problems would
be uncovered.

For those of you without financial backgrounds, there
are three levels
of involvement by a CPA with a client. For a 'compilation,'
the CPA
simply cranks out standard-format statements using
the client's books
and records. If the numbers add up, the CPA doesn't
do much checking;
they just make it look pretty. For a 'review,' (which
is what I believe
SSA had in prior years), the CPA goes a step further
and attempts to
uncover material problems. They offer no guarantees
but at least the
accountants look under the hood, so to speak. An 'audit'
(called for by
the By-Laws) involves many more tests and checks based
on which the CPA
expresses an opinion as to whether the results conform
to generally
accepted accounting principles. An audit provides the
highest level of
assurance but, of course, costs the most, because of
the extra work
involved and also the liability assumed when expressing
an opinion.

In the past, the annual review plus the close relationship
between the
CPA and FinComm--who played a very active role in the
SSA's finances at
that time--plus performing an occasional full audit
made the question
one of economics as well as the By-Laws. In effect,
FinComm made the
decision to self insure, judging that an occasional
loss, though
unlikely, would still be less than the accumulated
added cost of doing
an audit every year. I suspect that may still turn
out to be true
despite the magnitude of the potential loss. I recall
that the Board
was made aware of this policy (but not asked to approve
it, per se) on
at least one occasion while I was a director but I
cannot be certain.

In my opinion, then, the critical question is whether
FinComm retained
Johnson, Miller to continue preparing SSA's annual
financial
statements, and more specifically to do annual reviews.
ExComm's
disclosures indicate they did not.

Here's where the potential conflicts arise. Good governance
calls for
FinComm to retain the CPA, who would report directly
to them (not to
the CFAO or the ED or ExComm or Board), to prepare
the annual financial
statements (with a review or, under the By-Laws, an
audit). ExComm
meeting minutes note that Johnson, Miller appears not
to have been
retained to do any such work after 2002. If FinComm
did retain them, in
writing or orally, then Johnson, Miller may (and I
emphasize the word
'may') have some culpability and there is an inherent
conflict with
their continuing to work on the SSA account. In that
case, it gets
messier: ExComm meeting minutes indicate that Johnson,
Miller selected
the lawyer in Hobbs that SSA engaged. This attorney
quickly recommended
that SSA give Johnson, Miller 'carte blanche to do
what they needed
with the SSA financial records.'

On the other hand, if FinComm did not retain Johnson,
Miller, then
FinComm itself may (again, 'may') have some culpability,
perhaps shared
by ExComm and the Board (although directors could argue
they acted in
reliance on FinComm) and there is an inherent conflict
with their
playing a key role in this investigation.

It's very important to reiterate that competence and
trustworthiness
are irrelevant to this discussion. It doesn't matter
whether the CPA or
FinComm or ExComm did anything wrong, intentionally
or otherwise. And
I'm not suggesting they did. On the contrary, I've
been generally
impressed with the work done by ExComm so far. What
matters is that
people who may have legal liability and therefore a
vested interest in
the outcome are deeply involved in this investigation.
That's a classic
conflict of interest. And it's a recipe for losing
the confidence of
SSA members at a time when we need it most.

One remedy for conflict of interest is disclosure.
Depending on your
point of view, disclosure to date has been adequate
but sometimes
reluctant.

Another remedy is bringing in new people to do the
investigative and
remediation work. This is risky. Those who know the
most about SSA and
are in the best position to help are probably already
involved. It's
difficult enough to get competent volunteers, much
less to work for
free in Hobbs going through accounting records and
meeting with
attorneys, bankers, the IRS, etc.

A third and, I believe, best remedy is an independent
group to monitor
the actions of ExComm, the accountants, the attorney(s),
staff, and
others involved. This is where the discussions with
the concerned
directors quickly arrived. Ultimately this resulted
in a formal
proposal for an Oversight Task Force (OTF). Four SSA
members were
prevailed upon by these directors to serve on the OTF:
myself and three
other individuals--a highly experienced accountant,
an attorney, and a
successful businessman. Because of my prior Board service,
I initially
declined to serve on the OTF but was persuaded by the
two concerned
directors because of my knowledge of SSA, my business
background, and
the fact that my tenure ended in early 2002, prior
to the Larry
Sanderson affair.

The OTF proposal was made to the full Board by one
of these concerned
directors approximately two weeks ago with, unfortunately,
a generally
negative reaction.

How could this happen? Well, some directors had genuine
questions about
certain provisions in the OTF proposal but I believe
the negative
reaction was due in great part to misunderstanding
the OTF's purpose.
Instead of oversight (i.e., monitoring, not decision
making), some saw
this as an attempt to usurp power from the Board or
ExComm. Some feared
it could interfere with and/or delay the investigation
or reveal
confidential information. Others viewed it as a no-confidence
vote. In
frustration, I 'recused' myself from participation
on the OTF and made
a direct appeal to the Board explaining OTF's purpose
in more detail
and arguing that it was the Board's fiduciary duty
to take action to
oversee the activities of ExComm, FinComm, and others
who were
conflicted.

With this clarification, responses to our proposal
were gratifyingly
more favorable. In fact, ExComm subsequently expressed
their support
for the OTF. To be fair, at least some ExComm members
(including Dianne
Black-Nixon) had voiced support all along.

That was nearly two weeks ago. Since then, nothing
much has happened.
ExComm continues to manage the investigation and to
make decisions. My
sense is that there may be debate even within ExComm
on how to proceed.
More than a week ago, one ExComm member emailed me
to say it would be
not be practical to hold a tele-conference special
Board meeting for
all 26 directors and suggested delaying action on the
OTF until the
scheduled Board meeting at the end of this month. My
response was that
with every passing day, decisions were being made that
could be
criticized by SSA members and should be overseen by
an independent
body. I often participate in conference calls with
at least that many
people dispersed over the U.S. and India and do not
think a properly
managed special meeting--with one agenda item--would
be terribly
difficult. Rightly or wrongly, I interpreted this as
foot dragging. If
ExComm had supported the OTF with the same admirable
alacrity with
which they jumped on the initial disclosure of the
tax problems, the
OTF would already be at work and I would not be writing
what some will
doubtless interpret as a disloyal or disruptive public
posting.

ExComm believes it would be inappropriate for them
to charter the OTF
without full Board approval. They have a point, but
this reasoning
leads inexorably to the conclusion that, absent oversight,
ExComm
should not be making major decisions about the investigation
or
corrective action, either.

Ironically, with one troubling exception (see below),
I'm less
concerned with what ExComm is actually doing in Hobbs
than with how SSA
members may come to perceive or question their actions.
To date, ExComm
has moved decisively to manage a tough problem and
it's difficult to
quarrel with their actions.

But many members still have a sense that a previous
ExComm attempted to
cover up the Larry Sanderson expense account scandal
three years ago.
We cannot afford the same cynicism, or worse, now.
While most members
understand that some things must remain confidential
for legal reasons,
they are uncomfortable or angry if they suspect they
are not getting
the real story. And on that score, ExComm's inaction
is troubling.

I mentioned an exception, and it's a big one: how responsibility
for
this problem is being assigned. ExComm's communications
have emphasized
the ED's failure to inform the Board of the non-filing
of tax
information returns. At the same time, however, ExComm
has minimized
the 'errors of omission' of the ExComm/FinComm/Board
in not retaining
the CPA to examine the SSA's annual financial statements.

In fact, both lapses are errors of omission. Yet my
impression is that
the ED is being positioned as the one most responsible
for allowing
this crisis while FinComm's failure to act is being
dismissed. For that
matter, ExComm admits that the CFAO reported directly
to the Board, not
the ED, until mid 2005 so there is ample reason to
share responsibility
for this. While I do not have the facts available to
ExComm, the
questions raised are precisely the reason that independent
oversight is
needed over those who find themselves in conflicted
positions, for
their sake as well as the members'. And it is needed
immediately, not
next week or the week after that or after the next
major staff or
organizational decision is made.

If this were a public corporation, plaintiffs' attorneys
would already
be circling like vultures with the prospect that directors
could be
sued and found guilty of breach of their fiduciary
duty, in particular
those on FinComm and, likely, ExComm. But there's not
enough money here
to interest them. Nor do I believe we should necessarily
seek to punish
whomever may have contributed to this debacle. This
was a failure,
albeit a predictable one, of a flawed system. Yet I
don't think we
ought to sweep anything under the rug, either. I believe
most SSA
members would readily forgive the unwitting errors
of volunteer
directors so long as they believe they are being dealt
with
forthrightly.

I apologize to those I know and respect on the Board
and ExComm who are
dedicated, well intentioned, and working hard in thankless
positions.
But I fear that some of them do not fully understand
the danger that
their inaction will increase the cynicism and apathy
already evident in
many SSA members. The lack of urgency and reluctance
to initiate
oversight by ExComm and the directors alike suggest
that some of them
still don't 'get it.'

Despite protestations to the contrary, there is a tendency
in times
like this for ExComm and the Board to 'circle the wagons.'
It's a
natural human response to threats, both from the original
problem and
from outraged SSA members who want someone, anyone,
to pay in blood. It
is a tendency against which we must fight hard if we
are to maintain
the trust of our members.

Sadly, at this point individuals who generously agreed
to serve on the
OTF weeks ago are growing cynical about the willingness
of SSA to
address its problems. Clearly I am, too.

On a positive note, I see this unfortunate crisis as
a wonderful
opportunity to make major changes to SSA to improve
its financial
position and increase its effectiveness. The current
Board structure is
indeed cumbersome and ineffective. It also makes sense
to examine which
functions the SSA should perform and whether some of
these should be
outsourced. And I agree with those who believe we should
explore
locations other than Hobbs. We have a chance to 'start
over' with a
clean sheet of paper...without losing those elements
of SSA that are
critical. Yet what I have seen in the past 3+ weeks
leaves me worried
that we will squander this opportunity.

ACTION ITEM: Please contact your directors and, while
offering your
continuing support and trust, urge them to demand the
Oversight Task
Force or something like it be put in place immediately.
All of
us--members, directors, ExComm, and staff alike--need
the clarity and
assurance that only an independent observer can provide.

In the meantime, please maintain the degree of civility
on this forum
that I hope you would if the discussion were taking
place in person.
Ironically, the offensive and irresponsible behavior
of some
participants on rec.aviation.soaring alienates most
SSA members and
encourages our leadership, with some justification,
to dismiss these
critics as just a bunch of loudmouth idiots. Those
who insist on
popping off indiscriminately with wild allegations,
accusations, and
statements of opinion-as-fact serve no one but their
own egos. Their
actions--presuming they actually care about the future
of SSA and the
great things it has and can still do for soaring pilots
in this
country--are counterproductive.

Chip Bearden
SSA Member since 1965

don.. you wrote "It seems
to me as an outsider that every few years the SSA tries
to tear itself to bits on a public forum and this is
not very attractive.

it is the only forum we have.

I believe that a court appointed master is along the lines of what you are suggesting.
"Don Johnstone" wrote in message ...

I apologise for responding to this at the top but if
I put it where I should it's a long scoll. As a complete
outsider I have to say that the biggest problem the
management of SSA face is one of credibility. It seems
to me as an outsider that every few years the SSA tries
to tear itself to bits on a public forum and this is
not very attractive. I can only hazard a guess as to
the feelings of the ordinary members.
Whichever way you look at this the only way to restore
credibility is to have the problem looked at by an
independent body who's credibility is unimpeachable.
This may prove to be a difficult task as those who
are most qualified could also be thought to be too
close to the organisation. Perhaps it might be considered
appropriate to second into the independent body a complete
outsider, a senior executive from a foreign gliding
or similar USA based GA organisation, not to judge
the detail or make pronouncements on USA law, but to
provide a completely independent person with no conflict
of interest or indeed interest in the outcome.
You may feel that as an outsider it is none of my damm
business and of course you would be right, it isn't,
but anything is better that seeing glider pilots at
each others throats. Right now perception is more important
than truth to many.
Of course there will be those who will never be satisfied
and that has to be accepted, you can only do the best
you can.

At 20:18 26 September 2006, wrote:
(with apologies to non-U.S. readers)

Most of the postings on this subject follow a predictable
pattern:
'what a bunch of stupid/unethical/indifferent (pick
one) idiots we have
at SSA; why don't they just [fill in the blank with
your favorite
brilliant solution]' A few (including mine) urge patience,
support, and
a chance to let the process work.

Reluctantly I'm now changing my position from 'be patient'
to 'do
something.' For the specifics, skip to the ACTION ITEM
at the end. The
rest of this is just a long-winded description of a
discouraging
journey the past few weeks.

My new stance may seem like heresy given my past support
of SSA. But
after more than three weeks of working with and communicating
with SSA
directors, including the Executive Committee (ExComm),
I confess I no
longer have complete confidence that the current organization
can deal
properly with this crisis.

Like most, I learned about SSA's tax filing/remittance
problems from
Dianne Black-Nixon's letter 3 1/2 weeks ago. While
publicly urging
patience, I also offered help to directors I know,
including ExComm
members. I agreed with most of their decisions but
nevertheless had
concerns. Soon I found myself working behind the scenes
with several
directors who shared these concerns, which were centered
around
maintaining the confidence and trust of SSA members
during a time when
their faith in SSA would be tested.

Disclosures by ExComm implied that certain SSA funds
were
misappropriated by SSA's Chief Financial & Administrative
Officer
(CFAO), who has since been fired. But even if the CFAO
were guilty,
others may share responsibility for allowing this to
happen. And as
ExComm continued their investigation, the primary reason
for our
concern was conflict of interest.

In the corporate (and non-profit) world, a conflict
of interest exists
whenever there is an incentive for people in positions
of power and
trust to take actions contrary to the best interests
of those who have
placed their trust in these individuals. It does not
matter whether
said individuals are trustworthy or competent or even
whether they
yield to these temptations. If there's an incentive
for them to do the
wrong thing, they are said to be conflicted and those
conflicts must be
properly addressed.

The conflicts of interest with SSA's crisis relate
to the fact that
those working to resolve it--i.e., ExComm, the Budget
and Finance
Committee (FinComm), and SSA's accounting firm--potentially
share
responsibility for allowing it to occur. I would include
SSA Executive
Director Dennis Wright (ED) in this group but ExComm
has been careful
to give the impression that they are managing this
situation, not the
ED.

Much outcry on this forum has focused on the decision
to forgo annual
audits. In my opinion, this misses the mark. To the
best of my
recollection as a former director (for nine years in
the mid 1990s
through early 2002, including service on ExComm), previous
FinComms
elected to have annual reviews performed by Johnson,
Miller, SSA's
public accounting firm (CPA) because they were much
less expensive than
a full audit (if I recall correctly, on the order of
$20,000 less) yet
provided some assurance that material problems would
be uncovered.

For those of you without financial backgrounds, there
are three levels
of involvement by a CPA with a client. For a 'compilation,'
the CPA
simply cranks out standard-format statements using
the client's books
and records. If the numbers add up, the CPA doesn't
do much checking;
they just make it look pretty. For a 'review,' (which
is what I believe
SSA had in prior years), the CPA goes a step further
and attempts to
uncover material problems. They offer no guarantees
but at least the
accountants look under the hood, so to speak. An 'audit'
(called for by
the By-Laws) involves many more tests and checks based
on which the CPA
expresses an opinion as to whether the results conform
to generally
accepted accounting principles. An audit provides the
highest level of
assurance but, of course, costs the most, because of
the extra work
involved and also the liability assumed when expressing
an opinion.

In the past, the annual review plus the close relationship
between the
CPA and FinComm--who played a very active role in the
SSA's finances at
that time--plus performing an occasional full audit
made the question
one of economics as well as the By-Laws. In effect,
FinComm made the
decision to self insure, judging that an occasional
loss, though
unlikely, would still be less than the accumulated
added cost of doing
an audit every year. I suspect that may still turn
out to be true
despite the magnitude of the potential loss. I recall
that the Board
was made aware of this policy (but not asked to approve
it, per se) on
at least one occasion while I was a director but I
cannot be certain.

In my opinion, then, the critical question is whether
FinComm retained
Johnson, Miller to continue preparing SSA's annual
financial
statements, and more specifically to do annual reviews.
ExComm's
disclosures indicate they did not.

Here's where the potential conflicts arise. Good governance
calls for
FinComm to retain the CPA, who would report directly
to them (not to
the CFAO or the ED or ExComm or Board), to prepare
the annual financial
statements (with a review or, under the By-Laws, an
audit). ExComm
meeting minutes note that Johnson, Miller appears not
to have been
retained to do any such work after 2002. If FinComm
did retain them, in
writing or orally, then Johnson, Miller may (and I
emphasize the word
'may') have some culpability and there is an inherent
conflict with
their continuing to work on the SSA account. In that
case, it gets
messier: ExComm meeting minutes indicate that Johnson,
Miller selected
the lawyer in Hobbs that SSA engaged. This attorney
quickly recommended
that SSA give Johnson, Miller 'carte blanche to do
what they needed
with the SSA financial records.'

On the other hand, if FinComm did not retain Johnson,
Miller, then
FinComm itself may (again, 'may') have some culpability,
perhaps shared
by ExComm and the Board (although directors could argue
they acted in
reliance on FinComm) and there is an inherent conflict
with their
playing a key role in this investigation.

It's very important to reiterate that competence and
trustworthiness
are irrelevant to this discussion. It doesn't matter
whether the CPA or
FinComm or ExComm did anything wrong, intentionally
or otherwise. And
I'm not suggesting they did. On the contrary, I've
been generally
impressed with the work done by ExComm so far. What
matters is that
people who may have legal liability and therefore a
vested interest in
the outcome are deeply involved in this investigation.
That's a classic
conflict of interest. And it's a recipe for losing
the confidence of
SSA members at a time when we need it most.

One remedy for conflict of interest is disclosure.
Depending on your
point of view, disclosure to date has been adequate
but sometimes
reluctant.

Another remedy is bringing in new people to do the
investigative and
remediation work. This is risky. Those who know the
most about SSA and
are in the best position to help are probably already
involved. It's
difficult enough to get competent volunteers, much
less to work for
free in Hobbs going through accounting records and
meeting with
attorneys, bankers, the IRS, etc.

A third and, I believe, best remedy is an independent
group to monitor
the actions of ExComm, the accountants, the attorney(s),
staff, and
others involved. This is where the discussions with
the concerned
directors quickly arrived. Ultimately this resulted
in a formal
proposal for an Oversight Task Force (OTF). Four SSA
members were
prevailed upon by these directors to serve on the OTF:
myself and three
other individuals--a highly experienced accountant,
an attorney, and a
successful businessman. Because of my prior Board service,
I initially
declined to serve on the OTF but was persuaded by the
two concerned
directors because of my knowledge of SSA, my business
background, and
the fact that my tenure ended in early 2002, prior
to the Larry
Sanderson affair.

The OTF proposal was made to the full Board by one
of these concerned
directors approximately two weeks ago with, unfortunately,
a generally
negative reaction.

How could this happen? Well, some directors had genuine
questions about
certain provisions in the OTF proposal but I believe
the negative
reaction was due in great part to misunderstanding
the OTF's purpose.
Instead of oversight (i.e., monitoring, not decision
making), some saw
this as an attempt to usurp power from the Board or
ExComm. Some feared
it could interfere with and/or delay the investigation
or reveal
confidential information. Others viewed it as a no-confidence
vote. In
frustration, I 'recused' myself from participation
on the OTF and made
a direct appeal to the Board explaining OTF's purpose
in more detail
and arguing that it was the Board's fiduciary duty
to take action to
oversee the activities of ExComm, FinComm, and others
who were
conflicted.

With this clarification, responses to our proposal
were gratifyingly
more favorable. In fact, ExComm subsequently expressed
their support
for the OTF. To be fair, at least some ExComm members
(including Dianne
Black-Nixon) had voiced support all along.

That was nearly two weeks ago. Since then, nothing
much has happened.
ExComm continues to manage the investigation and to
make decisions. My
sense is that there may be debate even within ExComm
on how to proceed.
More than a week ago, one ExComm member emailed me
to say it would be
not be practical to hold a tele-conference special
Board meeting for
all 26 directors and suggested delaying action on the
OTF until the
scheduled Board meeting at the end of this month. My
response was that
with every passing day, decisions were being made that
could be
criticized by SSA members and should be overseen by
an independent
body. I often participate in conference calls with
at least that many
people dispersed over the U.S. and India and do not
think a properly
managed special meeting--with one agenda item--would
be terribly
difficult. Rightly or wrongly, I interpreted this as
foot dragging. If
ExComm had supported the OTF with the same admirable
alacrity with
which they jumped on the initial disclosure of the
tax problems, the
OTF would already be at work and I would not be writing
what some will
doubtless interpret as a disloyal or disruptive public
posting.

ExComm believes it would be inappropriate for them
to charter the OTF
without full Board approval. They have a point, but
this reasoning
leads inexorably to the conclusion that, absent oversight,
ExComm
should not be making major decisions about the investigation
or
corrective action, either.

Ironically, with one troubling exception (see below),
I'm less
concerned with what ExComm is actually doing in Hobbs
than with how SSA
members may come to perceive or question their actions.
To date, ExComm
has moved decisively to manage a tough problem and
it's difficult to
quarrel with their actions.

But many members still have a sense that a previous
ExComm attempted to
cover up the Larry Sanderson expense account scandal
three years ago.
We cannot afford the same cynicism, or worse, now.
While most members
understand that some things must remain confidential
for legal reasons,
they are uncomfortable or angry if they suspect they
are not getting
the real story. And on that score, ExComm's inaction
is troubling.

I mentioned an exception, and it's a big one: how responsibility
for
this problem is being assigned. ExComm's communications
have emphasized
the ED's failure to inform the Board of the non-filing
of tax
information returns. At the same time, however, ExComm
has minimized
the 'errors of omission' of the ExComm/FinComm/Board
in not retaining
the CPA to examine the SSA's annual financial statements.

In fact, both lapses are errors of omission. Yet my
impression is that
the ED is being positioned as the one most responsible
for allowing
this crisis while FinComm's failure to act is being
dismissed. For that
matter, ExComm admits that the CFAO reported directly
to the Board, not
the ED, until mid 2005 so there is ample reason to
share responsibility
for this. While I do not have the facts available to
ExComm, the
questions raised are precisely the reason that independent
oversight is
needed over those who find themselves in conflicted
positions, for
their sake as well as the members'. And it is needed
immediately, not
next week or the week after that or after the next
major staff or
organizational decision is made.

If this were a public corporation, plaintiffs' attorneys
would already
be circling like vultures with the prospect that directors
could be
sued and found guilty of breach of their fiduciary
duty, in particular
those on FinComm and, likely, ExComm. But there's not
enough money here
to interest them. Nor do I believe we should necessarily
seek to punish
whomever may have contributed to this debacle. This
was a failure,
albeit a predictable one, of a flawed system. Yet I
don't think we
ought to sweep anything under the rug, either. I believe
most SSA
members would readily forgive the unwitting errors
of volunteer
directors so long as they believe they are being dealt
with
forthrightly.

I apologize to those I know and respect on the Board
and ExComm who are
dedicated, well intentioned, and working hard in thankless
positions.
But I fear that some of them do not fully understand
the danger that
their inaction will increase the cynicism and apathy
already evident in
many SSA members. The lack of urgency and reluctance
to initiate
oversight by ExComm and the directors alike suggest
that some of them
still don't 'get it.'

Despite protestations to the contrary, there is a tendency
in times
like this for ExComm and the Board to 'circle the wagons.'
It's a
natural human response to threats, both from the original
problem and
from outraged SSA members who want someone, anyone,
to pay in blood. It
is a tendency against which we must fight hard if we
are to maintain
the trust of our members.

Sadly, at this point individuals who generously agreed
to serve on the
OTF weeks ago are growing cynical about the willingness
of SSA to
address its problems. Clearly I am, too.

On a positive note, I see this unfortunate crisis as
a wonderful
opportunity to make major changes to SSA to improve
its financial
position and increase its effectiveness. The current
Board structure is
indeed cumbersome and ineffective. It also makes sense
to examine which
functions the SSA should perform and whether some of
these should be
outsourced. And I agree with those who believe we should
explore
locations other than Hobbs. We have a chance to 'start
over' with a
clean sheet of paper...without losing those elements
of SSA that are
critical. Yet what I have seen in the past 3+ weeks
leaves me worried
that we will squander this opportunity.

ACTION ITEM: Please contact your directors and, while
offering your
continuing support and trust, urge them to demand the
Oversight Task
Force or something like it be put in place immediately.
All of
us--members, directors, ExComm, and staff alike--need
the clarity and
assurance that only an independent observer can provide.

In the meantime, please maintain the degree of civility
on this forum
that I hope you would if the discussion were taking
place in person.
Ironically, the offensive and irresponsible behavior
of some
participants on rec.aviation.soaring alienates most
SSA members and
encourages our leadership, with some justification,
to dismiss these
critics as just a bunch of loudmouth idiots. Those
who insist on
popping off indiscriminately with wild allegations,
accusations, and
statements of opinion-as-fact serve no one but their
own egos. Their
actions--presuming they actually care about the future
of SSA and the
great things it has and can still do for soaring pilots
in this
country--are counterproductive.

Chip Bearden
SSA Member since 1965

Well, no. I think Don is politely suggesting that other national soaring clubs like the BGA and perhaps the DAeC could offer useful outside views in the spirit of a concerned friend and neighbor.

If this is the case, I would take it as a good idea. An outsider can sometimes offer new perspectives and, having no ultimate stake in the matter at hand, may even be heard over the noise.

It would be nice if there were a forum less public than this one where internal matters of the SSA could be discussed by the membership. That there isn't such a forum is perhaps a small part of the problem.

Bill Daniels
"5-BG" 5-bghatesspam @ fake.com wrote in message ...
don.. you wrote "It seems
to me as an outsider that every few years the SSA tries
to tear itself to bits on a public forum and this is
not very attractive.

it is the only forum we have.

I believe that a court appointed master is along the lines of what you are suggesting.
"Don Johnstone" wrote in message ...

I apologise for responding to this at the top but if
I put it where I should it's a long scoll. As a complete
outsider I have to say that the biggest problem the
management of SSA face is one of credibility. It seems
to me as an outsider that every few years the SSA tries
to tear itself to bits on a public forum and this is
not very attractive. I can only hazard a guess as to
the feelings of the ordinary members.
Whichever way you look at this the only way to restore
credibility is to have the problem looked at by an
independent body who's credibility is unimpeachable.
This may prove to be a difficult task as those who
are most qualified could also be thought to be too
close to the organisation. Perhaps it might be considered
appropriate to second into the independent body a complete
outsider, a senior executive from a foreign gliding
or similar USA based GA organisation, not to judge
the detail or make pronouncements on USA law, but to
provide a completely independent person with no conflict
of interest or indeed interest in the outcome.
You may feel that as an outsider it is none of my damm
business and of course you would be right, it isn't,
but anything is better that seeing glider pilots at
each others throats. Right now perception is more important
than truth to many.
Of course there will be those who will never be satisfied
and that has to be accepted, you can only do the best
you can.

At 20:18 26 September 2006, wrote:
(with apologies to non-U.S. readers)

Most of the postings on this subject follow a predictable
pattern:
'what a bunch of stupid/unethical/indifferent (pick
one) idiots we have
at SSA; why don't they just [fill in the blank with
your favorite
brilliant solution]' A few (including mine) urge patience,
support, and
a chance to let the process work.

Reluctantly I'm now changing my position from 'be patient'
to 'do
something.' For the specifics, skip to the ACTION ITEM
at the end. The
rest of this is just a long-winded description of a
discouraging
journey the past few weeks.

My new stance may seem like heresy given my past support
of SSA. But
after more than three weeks of working with and communicating
with SSA
directors, including the Executive Committee (ExComm),
I confess I no
longer have complete confidence that the current organization
can deal
properly with this crisis.

Like most, I learned about SSA's tax filing/remittance
problems from
Dianne Black-Nixon's letter 3 1/2 weeks ago. While
publicly urging
patience, I also offered help to directors I know,
including ExComm
members. I agreed with most of their decisions but
nevertheless had
concerns. Soon I found myself working behind the scenes
with several
directors who shared these concerns, which were centered
around
maintaining the confidence and trust of SSA members
during a time when
their faith in SSA would be tested.

Disclosures by ExComm implied that certain SSA funds
were
misappropriated by SSA's Chief Financial & Administrative
Officer
(CFAO), who has since been fired. But even if the CFAO
were guilty,
others may share responsibility for allowing this to
happen. And as
ExComm continued their investigation, the primary reason
for our
concern was conflict of interest.

In the corporate (and non-profit) world, a conflict
of interest exists
whenever there is an incentive for people in positions
of power and
trust to take actions contrary to the best interests
of those who have
placed their trust in these individuals. It does not
matter whether
said individuals are trustworthy or competent or even
whether they
yield to these temptations. If there's an incentive
for them to do the
wrong thing, they are said to be conflicted and those
conflicts must be
properly addressed.

The conflicts of interest with SSA's crisis relate
to the fact that
those working to resolve it--i.e., ExComm, the Budget
and Finance
Committee (FinComm), and SSA's accounting firm--potentially
share
responsibility for allowing it to occur. I would include
SSA Executive
Director Dennis Wright (ED) in this group but ExComm
has been careful
to give the impression that they are managing this
situation, not the
ED.

Much outcry on this forum has focused on the decision
to forgo annual
audits. In my opinion, this misses the mark. To the
best of my
recollection as a former director (for nine years in
the mid 1990s
through early 2002, including service on ExComm), previous
FinComms
elected to have annual reviews performed by Johnson,
Miller, SSA's
public accounting firm (CPA) because they were much
less expensive than
a full audit (if I recall correctly, on the order of
$20,000 less) yet
provided some assurance that material problems would
be uncovered.

For those of you without financial backgrounds, there
are three levels
of involvement by a CPA with a client. For a 'compilation,'
the CPA
simply cranks out standard-format statements using
the client's books
and records. If the numbers add up, the CPA doesn't
do much checking;
they just make it look pretty. For a 'review,' (which
is what I believe
SSA had in prior years), the CPA goes a step further
and attempts to
uncover material problems. They offer no guarantees
but at least the
accountants look under the hood, so to speak. An 'audit'
(called for by
the By-Laws) involves many more tests and checks based
on which the CPA
expresses an opinion as to whether the results conform
to generally
accepted accounting principles. An audit provides the
highest level of
assurance but, of course, costs the most, because of
the extra work
involved and also the liability assumed when expressing
an opinion.

In the past, the annual review plus the close relationship
between the
CPA and FinComm--who played a very active role in the
SSA's finances at
that time--plus performing an occasional full audit
made the question
one of economics as well as the By-Laws. In effect,
FinComm made the
decision to self insure, judging that an occasional
loss, though
unlikely, would still be less than the accumulated
added cost of doing
an audit every year. I suspect that may still turn
out to be true
despite the magnitude of the potential loss. I recall
that the Board
was made aware of this policy (but not asked to approve
it, per se) on
at least one occasion while I was a director but I
cannot be certain.

In my opinion, then, the critical question is whether
FinComm retained
Johnson, Miller to continue preparing SSA's annual
financial
statements, and more specifically to do annual reviews.
ExComm's
disclosures indicate they did not.

Here's where the potential conflicts arise. Good governance
calls for
FinComm to retain the CPA, who would report directly
to them (not to
the CFAO or the ED or ExComm or Board), to prepare
the annual financial
statements (with a review or, under the By-Laws, an
audit). ExComm
meeting minutes note that Johnson, Miller appears not
to have been
retained to do any such work after 2002. If FinComm
did retain them, in
writing or orally, then Johnson, Miller may (and I
emphasize the word
'may') have some culpability and there is an inherent
conflict with
their continuing to work on the SSA account. In that
case, it gets
messier: ExComm meeting minutes indicate that Johnson,
Miller selected
the lawyer in Hobbs that SSA engaged. This attorney
quickly recommended
that SSA give Johnson, Miller 'carte blanche to do
what they needed
with the SSA financial records.'

On the other hand, if FinComm did not retain Johnson,
Miller, then
FinComm itself may (again, 'may') have some culpability,
perhaps shared
by ExComm and the Board (although directors could argue
they acted in
reliance on FinComm) and there is an inherent conflict
with their
playing a key role in this investigation.

It's very important to reiterate that competence and
trustworthiness
are irrelevant to this discussion. It doesn't matter
whether the CPA or
FinComm or ExComm did anything wrong, intentionally
or otherwise. And
I'm not suggesting they did. On the contrary, I've
been generally
impressed with the work done by ExComm so far. What
matters is that
people who may have legal liability and therefore a
vested interest in
the outcome are deeply involved in this investigation.
That's a classic
conflict of interest. And it's a recipe for losing
the confidence of
SSA members at a time when we need it most.

One remedy for conflict of interest is disclosure.
Depending on your
point of view, disclosure to date has been adequate
but sometimes
reluctant.

Another remedy is bringing in new people to do the
investigative and
remediation work. This is risky. Those who know the
most about SSA and
are in the best position to help are probably already
involved. It's
difficult enough to get competent volunteers, much
less to work for
free in Hobbs going through accounting records and
meeting with
attorneys, bankers, the IRS, etc.

A third and, I believe, best remedy is an independent
group to monitor
the actions of ExComm, the accountants, the attorney(s),
staff, and
others involved. This is where the discussions with
the concerned
directors quickly arrived. Ultimately this resulted
in a formal
proposal for an Oversight Task Force (OTF). Four SSA
members were
prevailed upon by these directors to serve on the OTF:
myself and three
other individuals--a highly experienced accountant,
an attorney, and a
successful businessman. Because of my prior Board service,
I initially
declined to serve on the OTF but was persuaded by the
two concerned
directors because of my knowledge of SSA, my business
background, and
the fact that my tenure ended in early 2002, prior
to the Larry
Sanderson affair.

The OTF proposal was made to the full Board by one
of these concerned
directors approximately two weeks ago with, unfortunately,
a generally
negative reaction.

How could this happen? Well, some directors had genuine
questions about
certain provisions in the OTF proposal but I believe
the negative
reaction was due in great part to misunderstanding
the OTF's purpose.
Instead of oversight (i.e., monitoring, not decision
making), some saw
this as an attempt to usurp power from the Board or
ExComm. Some feared
it could interfere with and/or delay the investigation
or reveal
confidential information. Others viewed it as a no-confidence
vote. In
frustration, I 'recused' myself from participation
on the OTF and made
a direct appeal to the Board explaining OTF's purpose
in more detail
and arguing that it was the Board's fiduciary duty
to take action to
oversee the activities of ExComm, FinComm, and others
who were
conflicted.

With this clarification, responses to our proposal
were gratifyingly
more favorable. In fact, ExComm subsequently expressed
their support
for the OTF. To be fair, at least some ExComm members
(including Dianne
Black-Nixon) had voiced support all along.

That was nearly two weeks ago. Since then, nothing
much has happened.
ExComm continues to manage the investigation and to
make decisions. My
sense is that there may be debate even within ExComm
on how to proceed.
More than a week ago, one ExComm member emailed me
to say it would be
not be practical to hold a tele-conference special
Board meeting for
all 26 directors and suggested delaying action on the
OTF until the
scheduled Board meeting at the end of this month. My
response was that
with every passing day, decisions were being made that
could be
criticized by SSA members and should be overseen by
an independent
body. I often participate in conference calls with
at least that many
people dispersed over the U.S. and India and do not
think a properly
managed special meeting--with one agenda item--would
be terribly
difficult. Rightly or wrongly, I interpreted this as
foot dragging. If
ExComm had supported the OTF with the same admirable
alacrity with
which they jumped on the initial disclosure of the
tax problems, the
OTF would already be at work and I would not be writing
what some will
doubtless interpret as a disloyal or disruptive public
posting.

ExComm believes it would be inappropriate for them
to charter the OTF
without full Board approval. They have a point, but
this reasoning
leads inexorably to the conclusion that, absent oversight,
ExComm
should not be making major decisions about the investigation
or
corrective action, either.

Ironically, with one troubling exception (see below),
I'm less
concerned with what ExComm is actually doing in Hobbs
than with how SSA
members may come to perceive or question their actions.
To date, ExComm
has moved decisively to manage a tough problem and
it's difficult to
quarrel with their actions.

But many members still have a sense that a previous
ExComm attempted to
cover up the Larry Sanderson expense account scandal
three years ago.
We cannot afford the same cynicism, or worse, now.
While most members
understand that some things must remain confidential
for legal reasons,
they are uncomfortable or angry if they suspect they
are not getting
the real story. And on that score, ExComm's inaction
is troubling.

I mentioned an exception, and it's a big one: how responsibility
for
this problem is being assigned. ExComm's communications
have emphasized
the ED's failure to inform the Board of the non-filing
of tax
information returns. At the same time, however, ExComm
has minimized
the 'errors of omission' of the ExComm/FinComm/Board
in not retaining
the CPA to examine the SSA's annual financial statements.

In fact, both lapses are errors of omission. Yet my
impression is that
the ED is being positioned as the one most responsible
for allowing
this crisis while FinComm's failure to act is being
dismissed. For that
matter, ExComm admits that the CFAO reported directly
to the Board, not
the ED, until mid 2005 so there is ample reason to
share responsibility
for this. While I do not have the facts available to
ExComm, the
questions raised are precisely the reason that independent
oversight is
needed over those who find themselves in conflicted
positions, for
their sake as well as the members'. And it is needed
immediately, not
next week or the week after that or after the next
major staff or
organizational decision is made.

If this were a public corporation, plaintiffs' attorneys
would already
be circling like vultures with the prospect that directors
could be
sued and found guilty of breach of their fiduciary
duty, in particular
those on FinComm and, likely, ExComm. But there's not
enough money here
to interest them. Nor do I believe we should necessarily
seek to punish
whomever may have contributed to this debacle. This
was a failure,
albeit a predictable one, of a flawed system. Yet I
don't think we
ought to sweep anything under the rug, either. I believe
most SSA
members would readily forgive the unwitting errors
of volunteer
directors so long as they believe they are being dealt
with
forthrightly.

I apologize to those I know and respect on the Board
and ExComm who are
dedicated, well intentioned, and working hard in thankless
positions.
But I fear that some of them do not fully understand
the danger that
their inaction will increase the cynicism and apathy
already evident in
many SSA members. The lack of urgency and reluctance
to initiate
oversight by ExComm and the directors alike suggest
that some of them
still don't 'get it.'

Despite protestations to the contrary, there is a tendency
in times
like this for ExComm and the Board to 'circle the wagons.'
It's a
natural human response to threats, both from the original
problem and
from outraged SSA members who want someone, anyone,
to pay in blood. It
is a tendency against which we must fight hard if we
are to maintain
the trust of our members.

Sadly, at this point individuals who generously agreed
to serve on the
OTF weeks ago are growing cynical about the willingness
of SSA to
address its problems. Clearly I am, too.

On a positive note, I see this unfortunate crisis as
a wonderful
opportunity to make major changes to SSA to improve
its financial
position and increase its effectiveness. The current
Board structure is
indeed cumbersome and ineffective. It also makes sense
to examine which
functions the SSA should perform and whether some of
these should be
outsourced. And I agree with those who believe we should
explore
locations other than Hobbs. We have a chance to 'start
over' with a
clean sheet of paper...without losing those elements
of SSA that are
critical. Yet what I have seen in the past 3+ weeks
leaves me worried
that we will squander this opportunity.

ACTION ITEM: Please contact your directors and, while
offering your
continuing support and trust, urge them to demand the
Oversight Task
Force or something like it be put in place immediately.
All of
us--members, directors, ExComm, and staff alike--need
the clarity and
assurance that only an independent observer can provide.

In the meantime, please maintain the degree of civility
on this forum
that I hope you would if the discussion were taking
place in person.
Ironically, the offensive and irresponsible behavior
of some
participants on rec.aviation.soaring alienates most
SSA members and
encourages our leadership, with some justification,
to dismiss these
critics as just a bunch of loudmouth idiots. Those
who insist on
popping off indiscriminately with wild allegations,
accusations, and
statements of opinion-as-fact serve no one but their
own egos. Their
actions--presuming they actually care about the future
of SSA and the
great things it has and can still do for soaring pilots
in this
country--are counterproductive.

Chip Bearden
SSA Member since 1965

Bill Daniels wrote:

"It would be nice if there were a forum less public than this one where
internal matters of the SSA could be discussed by the membership. That
there isn't such a forum is perhaps a small part of the problem."

I remember there used to be such a forum on the SSA web site.
Apparently it was lost when the site was "upgraded" a year or two ago.

wrote in message
ups.com...

Bill Daniels wrote:

"It would be nice if there were a forum less public than this one where
internal matters of the SSA could be discussed by the membership. That
there isn't such a forum is perhaps a small part of the problem."

I remember there used to be such a forum on the SSA web site.
Apparently it was lost when the site was "upgraded" a year or two ago.


As far as I can tell, it is still there, (news.ssa.org) but it has fallen
into disuse. That may not be the best place for such a frank discussion; things
could get ugly and the existence of the discussion itself could unnecessarily
become a political issue. I have seen it happen!

While I understand the feelings of others, this is a vital subject! RAS is
the only place I know of where the proper "critical mass" of SSA members can be
found on a daily basis to have a meaningful discussion.

Vaughn

wrote:
Bill Daniels wrote:

"It would be nice if there were a forum less public than this one where
internal matters of the SSA could be discussed by the membership. That
there isn't such a forum is perhaps a small part of the problem."

I remember there used to be such a forum on the SSA web site.
Apparently it was lost

I don't think it was lost, but discarded because it was so little used.
This was particularly noticable during the Sanderson episode, when
everyone used ras instead of the SSA newsgroups.

when the site was "upgraded" a year or two ago.

"Upgraded" in quotes? You don't think the site is much better in the
last two years? I think it's got a lot more content that is easier to
find, and it looks great. Do you really wish we had the site from two
years ago?

--
Note: email address new as of 9/4/2006
Change "netto" to "net" to email me directly

Eric Greenwell - Washington State, USA

"Transponders in Sailplanes" on the Soaring Safety Foundation website
www.soaringsafety.org/prevention/articles.html

"A Guide to Self-launching Sailplane Operation" at www.motorglider.org

Chip;
Thank you for the time it took for you to carefully write your message. There was much to digest, and I have several thoughts/responses.
1. Overall, I got the impression that you were going "public" with some of your thoughts because you tried working from the inside and got nowhere against an entrenched power that was circling the wagons. This represents one of the great mistakes that continues to plague the ssa. A small minority of power players simply cannot run a non profit organization which depends upon the support of members, many of whom feel disenfranchised.

2. I have written to the excom on several occasions. Immediately upon reading the first note from the chair, I strongly urged the entire board to resign and to have a master appointed to oversee the reorganization, preferably under court supervision. At that point the ssa was insolvent and it was appropriate for a bankruptcy court to appoint a master. Since the financial issue of the unpaid taxes has evidently been resolved via a loan from the soaring foundation ( which is controlled by the excom), I am not sure if bankruptcy is still a viable option for getting a master involved. HOWEVER, for the board to have decided to borrow from the foundation is another decision which has conflict written all over it and in the long run may NOT have been in the best interests of the ssa or the foundation. Non payment of federal withholding is a PERSONAL LIABILITY to the ED, AND TO THE BOARD!!!. So lets be real clear about what they did.. They paid the taxes and got out from under personal liability. In my opinion, this was a major driver in their decision making over the last few weeks. They chose to MANAGE the situation themselves rather than to expose themselves to leins from the IRS. They have cloaked this decision in rhetoric that is thin at best.
I have not recieved any responses from the excom to several messages.

3. I somewhat DISAGREE with your analysis of the situation re the accountants.
a. the BOARD DECIDED to forgo the audit. it was an act of COMMISSION that they have publically acknowledged. Not an act of OMISSION.

b. The association, the board,the excom and the ED are all controlled by the bylaws. Being a volunteer does not excuse noncompliance, especially when done OVERTLY.

c. I believe that you are a bit off track when you imply that the LEVEL of service purchased from the accountants limits their ( the accounts) liability. Likewise, i believe that your implication that the accountants worked for someone other than the ASOCIATION is off track. While the finance committee or the ED or the chair could be responsible for the selection and determination of the scope of services purchased, THE ACCOUNTANTS WORK FOR THE ASSOCIATION. Regardless of the scope of the assignment, they evidently had knowledge for years that returns and reports were not being filed in a timely manner. The chair informed us that they complained several times to the ed that they were not recieving adequate information from the cfo.. He was evidently unable or unwilling to address these questions from the accountants.
It is my belief that ethical and responsible standards of conduct REQUIRE them to have brought these problems to the attention of the fin com and or to the chair of the board. I cannot understand how a firm could NOT have done this when faced with the certain knowledge that timely reports were not being prepared and filed. At the very least they should have formally RESIGNED the account when faced with continued inaction. Not doing so puts them right in the middle of the problem. Having them do the forensic accounting puts them further in the hole.

4. In my opinion, the real short term problems stems from the SSA insurance policy which insures against fraud and misdeeds by inside officers and probably the board as well. The society will be reimbursed for monies lost due to fraud and other willful acts. BUT THE INSURANCE COMPANY WILL GO AFTER THOSE RESPONSIBLE!! So to the extent that the CFO or the ED or the Board took actions which cause the insurance company to pay out a claim to the society, THEY WILL BE SUED by the insurance company. The concept of "deep pocket" applies here.
It is my opinion that the attorney who, by your account, was suggested by the accountants, has explained this in detail
I find it interesting that NO mention of insurance coverage has been made by the chair to date.. My conclusion is that perhaps all involved are seeking to resolve the financial problems WITHOUT accessing the policy because they have been informed of their legal liability. As an aside, most directors policies do NOT cover legal expenses resulting from acts that were unlawful. In plain english... if the board files a claim, they are probably going to get sued individually by the insurance company and neither the ssa nor the insurance co will be able to pay their legal costs of defense.

This is why they should have resigned, but, imho did not.

5. you wrote "plus performing an occasional full audit made the question
one of economics as well as the By-Laws. In effect, FinComm made the
decision to self insure, judging that an occasional loss, though
unlikely, would still be less than the accumulated added cost of doing
an audit every year. "
You have just hit upon a key issue. A small group of people made a decision to self insure and to make a decision out of economic necissity. This was ILLIGAL. economics do not trump the bylaws. restated, .. the fincom and the board choose to violate the bylaws. they choose not to AMEND them. What they did was wrong, irrisponsible, actionable and is biting them in the ass.

6. you wrote "Sadly, at this point individuals who generously agreed to serve on the
OTF weeks ago are growing cynical about the willingness of SSA to
address its problems. Clearly I am, too."
just how cynical do you feel the average member is today?? How is that member going to feel about having his dues raised or his pretty magizine eliminated so that the ssa can repay the debt to the foundation?? especially if the board decides not to access the insurance money???

Again a single MASTER with authority vested by a court could resolve these issues, call a general reorganization election and present several alternative business/governance models to the membership and do an impartial job of restructuring. It would be expensive, some people would get sued, but the society would have a chance. As thing are going now, members are feeling less and less a part of the process, mistakes are being compounded and the situation is getting worse. Who in their right mind is going to volunteer to be a director??
Rather than tap the soaring foundation trust fund to pay the taxes, it would be more appropriate for the society to collect from the insurance company and then tap into the foundation for expenses related to the restructuring and reorganization. I would support that, and am very opposed to using the resources of the foundation to get those in power off the hook with the irs.

The underlying problem remains that a very small group of insiders continues to run the organization and, as you stated, circles the wagons when confronted with major problems.


wrote in message ups.com...
(with apologies to non-U.S. readers)

Most of the postings on this subject follow a predictable pattern:
"what a bunch of stupid/unethical/indifferent (pick one) idiots we have
at SSA; why don't they just [fill in the blank with your favorite
brilliant solution]" A few (including mine) urge patience, support, and
a chance to let the process work.

Reluctantly I'm now changing my position from "be patient" to "do
something." For the specifics, skip to the ACTION ITEM at the end. The
rest of this is just a long-winded description of a discouraging
journey the past few weeks.

My new stance may seem like heresy given my past support of SSA. But
after more than three weeks of working with and communicating with SSA
directors, including the Executive Committee (ExComm), I confess I no
longer have complete confidence that the current organization can deal
properly with this crisis.

Like most, I learned about SSA's tax filing/remittance problems from
Dianne Black-Nixon's letter 3 1/2 weeks ago. While publicly urging
patience, I also offered help to directors I know, including ExComm
members. I agreed with most of their decisions but nevertheless had
concerns. Soon I found myself working behind the scenes with several
directors who shared these concerns, which were centered around
maintaining the confidence and trust of SSA members during a time when
their faith in SSA would be tested.

Disclosures by ExComm implied that certain SSA funds were
misappropriated by SSA's Chief Financial & Administrative Officer
(CFAO), who has since been fired. But even if the CFAO were guilty,
others may share responsibility for allowing this to happen. And as
ExComm continued their investigation, the primary reason for our
concern was conflict of interest.

In the corporate (and non-profit) world, a conflict of interest exists
whenever there is an incentive for people in positions of power and
trust to take actions contrary to the best interests of those who have
placed their trust in these individuals. It does not matter whether
said individuals are trustworthy or competent or even whether they
yield to these temptations. If there's an incentive for them to do the
wrong thing, they are said to be conflicted and those conflicts must be
properly addressed.

The conflicts of interest with SSA's crisis relate to the fact that
those working to resolve it--i.e., ExComm, the Budget and Finance
Committee (FinComm), and SSA's accounting firm--potentially share
responsibility for allowing it to occur. I would include SSA Executive
Director Dennis Wright (ED) in this group but ExComm has been careful
to give the impression that they are managing this situation, not the
ED.

Much outcry on this forum has focused on the decision to forgo annual
audits. In my opinion, this misses the mark. To the best of my
recollection as a former director (for nine years in the mid 1990s
through early 2002, including service on ExComm), previous FinComms
elected to have annual reviews performed by Johnson, Miller, SSA's
public accounting firm (CPA) because they were much less expensive than
a full audit (if I recall correctly, on the order of $20,000 less) yet
provided some assurance that material problems would be uncovered.

For those of you without financial backgrounds, there are three levels
of involvement by a CPA with a client. For a "compilation," the CPA
simply cranks out standard-format statements using the client's books
and records. If the numbers add up, the CPA doesn't do much checking;
they just make it look pretty. For a "review," (which is what I believe
SSA had in prior years), the CPA goes a step further and attempts to
uncover material problems. They offer no guarantees but at least the
accountants look under the hood, so to speak. An "audit" (called for by
the By-Laws) involves many more tests and checks based on which the CPA
expresses an opinion as to whether the results conform to generally
accepted accounting principles. An audit provides the highest level of
assurance but, of course, costs the most, because of the extra work
involved and also the liability assumed when expressing an opinion.

In the past, the annual review plus the close relationship between the
CPA and FinComm--who played a very active role in the SSA's finances at
that time--plus performing an occasional full audit made the question
one of economics as well as the By-Laws. In effect, FinComm made the
decision to self insure, judging that an occasional loss, though
unlikely, would still be less than the accumulated added cost of doing
an audit every year. I suspect that may still turn out to be true
despite the magnitude of the potential loss. I recall that the Board
was made aware of this policy (but not asked to approve it, per se) on
at least one occasion while I was a director but I cannot be certain.

In my opinion, then, the critical question is whether FinComm retained
Johnson, Miller to continue preparing SSA's annual financial
statements, and more specifically to do annual reviews. ExComm's
disclosures indicate they did not.

Here's where the potential conflicts arise. Good governance calls for
FinComm to retain the CPA, who would report directly to them (not to
the CFAO or the ED or ExComm or Board), to prepare the annual financial
statements (with a review or, under the By-Laws, an audit). ExComm
meeting minutes note that Johnson, Miller appears not to have been
retained to do any such work after 2002. If FinComm did retain them, in
writing or orally, then Johnson, Miller may (and I emphasize the word
"may") have some culpability and there is an inherent conflict with
their continuing to work on the SSA account. In that case, it gets
messier: ExComm meeting minutes indicate that Johnson, Miller selected
the lawyer in Hobbs that SSA engaged. This attorney quickly recommended
that SSA give Johnson, Miller "carte blanche to do what they needed
with the SSA financial records."

On the other hand, if FinComm did not retain Johnson, Miller, then
FinComm itself may (again, "may") have some culpability, perhaps shared
by ExComm and the Board (although directors could argue they acted in
reliance on FinComm) and there is an inherent conflict with their
playing a key role in this investigation.

It's very important to reiterate that competence and trustworthiness
are irrelevant to this discussion. It doesn't matter whether the CPA or
FinComm or ExComm did anything wrong, intentionally or otherwise. And
I'm not suggesting they did. On the contrary, I've been generally
impressed with the work done by ExComm so far. What matters is that
people who may have legal liability and therefore a vested interest in
the outcome are deeply involved in this investigation. That's a classic
conflict of interest. And it's a recipe for losing the confidence of
SSA members at a time when we need it most.

One remedy for conflict of interest is disclosure. Depending on your
point of view, disclosure to date has been adequate but sometimes
reluctant.

Another remedy is bringing in new people to do the investigative and
remediation work. This is risky. Those who know the most about SSA and
are in the best position to help are probably already involved. It's
difficult enough to get competent volunteers, much less to work for
free in Hobbs going through accounting records and meeting with
attorneys, bankers, the IRS, etc.

A third and, I believe, best remedy is an independent group to monitor
the actions of ExComm, the accountants, the attorney(s), staff, and
others involved. This is where the discussions with the concerned
directors quickly arrived. Ultimately this resulted in a formal
proposal for an Oversight Task Force (OTF). Four SSA members were
prevailed upon by these directors to serve on the OTF: myself and three
other individuals--a highly experienced accountant, an attorney, and a
successful businessman. Because of my prior Board service, I initially
declined to serve on the OTF but was persuaded by the two concerned
directors because of my knowledge of SSA, my business background, and
the fact that my tenure ended in early 2002, prior to the Larry
Sanderson affair.

The OTF proposal was made to the full Board by one of these concerned
directors approximately two weeks ago with, unfortunately, a generally
negative reaction.

How could this happen? Well, some directors had genuine questions about
certain provisions in the OTF proposal but I believe the negative
reaction was due in great part to misunderstanding the OTF's purpose.
Instead of oversight (i.e., monitoring, not decision making), some saw
this as an attempt to usurp power from the Board or ExComm. Some feared
it could interfere with and/or delay the investigation or reveal
confidential information. Others viewed it as a no-confidence vote. In
frustration, I "recused" myself from participation on the OTF and made
a direct appeal to the Board explaining OTF's purpose in more detail
and arguing that it was the Board's fiduciary duty to take action to
oversee the activities of ExComm, FinComm, and others who were
conflicted.

With this clarification, responses to our proposal were gratifyingly
more favorable. In fact, ExComm subsequently expressed their support
for the OTF. To be fair, at least some ExComm members (including Dianne
Black-Nixon) had voiced support all along.

That was nearly two weeks ago. Since then, nothing much has happened.
ExComm continues to manage the investigation and to make decisions. My
sense is that there may be debate even within ExComm on how to proceed.
More than a week ago, one ExComm member emailed me to say it would be
not be practical to hold a tele-conference special Board meeting for
all 26 directors and suggested delaying action on the OTF until the
scheduled Board meeting at the end of this month. My response was that
with every passing day, decisions were being made that could be
criticized by SSA members and should be overseen by an independent
body. I often participate in conference calls with at least that many
people dispersed over the U.S. and India and do not think a properly
managed special meeting--with one agenda item--would be terribly
difficult. Rightly or wrongly, I interpreted this as foot dragging. If
ExComm had supported the OTF with the same admirable alacrity with
which they jumped on the initial disclosure of the tax problems, the
OTF would already be at work and I would not be writing what some will
doubtless interpret as a disloyal or disruptive public posting.

ExComm believes it would be inappropriate for them to charter the OTF
without full Board approval. They have a point, but this reasoning
leads inexorably to the conclusion that, absent oversight, ExComm
should not be making major decisions about the investigation or
corrective action, either.

Ironically, with one troubling exception (see below), I'm less
concerned with what ExComm is actually doing in Hobbs than with how SSA
members may come to perceive or question their actions. To date, ExComm
has moved decisively to manage a tough problem and it's difficult to
quarrel with their actions.

But many members still have a sense that a previous ExComm attempted to
cover up the Larry Sanderson expense account scandal three years ago.
We cannot afford the same cynicism, or worse, now. While most members
understand that some things must remain confidential for legal reasons,
they are uncomfortable or angry if they suspect they are not getting
the real story. And on that score, ExComm's inaction is troubling.

I mentioned an exception, and it's a big one: how responsibility for
this problem is being assigned. ExComm's communications have emphasized
the ED's failure to inform the Board of the non-filing of tax
information returns. At the same time, however, ExComm has minimized
the "errors of omission" of the ExComm/FinComm/Board in not retaining
the CPA to examine the SSA's annual financial statements.

In fact, both lapses are errors of omission. Yet my impression is that
the ED is being positioned as the one most responsible for allowing
this crisis while FinComm's failure to act is being dismissed. For that
matter, ExComm admits that the CFAO reported directly to the Board, not
the ED, until mid 2005 so there is ample reason to share responsibility
for this. While I do not have the facts available to ExComm, the
questions raised are precisely the reason that independent oversight is
needed over those who find themselves in conflicted positions, for
their sake as well as the members'. And it is needed immediately, not
next week or the week after that or after the next major staff or
organizational decision is made.

If this were a public corporation, plaintiffs' attorneys would already
be circling like vultures with the prospect that directors could be
sued and found guilty of breach of their fiduciary duty, in particular
those on FinComm and, likely, ExComm. But there's not enough money here
to interest them. Nor do I believe we should necessarily seek to punish
whomever may have contributed to this debacle. This was a failure,
albeit a predictable one, of a flawed system. Yet I don't think we
ought to sweep anything under the rug, either. I believe most SSA
members would readily forgive the unwitting errors of volunteer
directors so long as they believe they are being dealt with
forthrightly.

I apologize to those I know and respect on the Board and ExComm who are
dedicated, well intentioned, and working hard in thankless positions.
But I fear that some of them do not fully understand the danger that
their inaction will increase the cynicism and apathy already evident in
many SSA members. The lack of urgency and reluctance to initiate
oversight by ExComm and the directors alike suggest that some of them
still don't "get it."

Despite protestations to the contrary, there is a tendency in times
like this for ExComm and the Board to "circle the wagons." It's a
natural human response to threats, both from the original problem and
from outraged SSA members who want someone, anyone, to pay in blood. It
is a tendency against which we must fight hard if we are to maintain
the trust of our members.

Sadly, at this point individuals who generously agreed to serve on the
OTF weeks ago are growing cynical about the willingness of SSA to
address its problems. Clearly I am, too.

On a positive note, I see this unfortunate crisis as a wonderful
opportunity to make major changes to SSA to improve its financial
position and increase its effectiveness. The current Board structure is
indeed cumbersome and ineffective. It also makes sense to examine which
functions the SSA should perform and whether some of these should be
outsourced. And I agree with those who believe we should explore
locations other than Hobbs. We have a chance to "start over" with a
clean sheet of paper...without losing those elements of SSA that are
critical. Yet what I have seen in the past 3+ weeks leaves me worried
that we will squander this opportunity.

ACTION ITEM: Please contact your directors and, while offering your
continuing support and trust, urge them to demand the Oversight Task
Force or something like it be put in place immediately. All of
us--members, directors, ExComm, and staff alike--need the clarity and
assurance that only an independent observer can provide.

In the meantime, please maintain the degree of civility on this forum
that I hope you would if the discussion were taking place in person.
Ironically, the offensive and irresponsible behavior of some
participants on rec.aviation.soaring alienates most SSA members and
encourages our leadership, with some justification, to dismiss these
critics as just a bunch of loudmouth idiots. Those who insist on
popping off indiscriminately with wild allegations, accusations, and
statements of opinion-as-fact serve no one but their own egos. Their
actions--presuming they actually care about the future of SSA and the
great things it has and can still do for soaring pilots in this
country--are counterproductive.

Chip Bearden
SSA Member since 1965

Chip,

You make many valid points but the idea of going to the courts or doing
a BK is not a good solution. I have 25 years of experience in the
finalcial world and have seen many BK events. The primary action of
any court appointed Boss or BK Trustee is to get the thing done not
take the care or time that an owner would hope for. A big issue is
that the time it takes for one of these to do anything would be
messured in months not days and weeks. If we go BK that would be the
end- at a minimum - of the group insurance, relationship with all the
various alphabet organizations not only in the USA but internationally
( a court appointed Master would have no influence with any of these
organizations ). Further, if the Foundation is not a separate 501-3c
organization those funds become controlled by the BK trustee. All
members would fall into the class of unsecured creditors and would have
no influence in the actions of the contolling entity and would get
nothing!! Trying to restart the SSA or some new organization would be
a mess. ( Even if we did a Re-organization BK we would be ineffective
for a long time going through the legal process and outsiders would be
making decisions for us in the interim.) Just look at the various
opinions of the individuals that have commented on this subject and
imagine how many splinter groups would like be the BOSS.
Yes, this is a mess but lets keep working on overcoming it nd creating
a better SSA from the organization we have. I stronly agree with the
formation of an independent oversight taskforce. To give this group
credibility it should be completely "independent" of any relationship
with present and past Boards. It should be comprised of individuals
with backgrounds in business, finacial, legal, acounting and management
practices.

Tom Dixon
Idaho

Tom,

There have been many misrepresentations in this discussion over the
past few weeks that I have let go by but because this one has my name
on it, I must respond! Owing to the length of my original posting
and its inclusion in subsequent responses, it can be difficult to
determine who said what. For the record, please note that I am NOT
advocating recourse to the courts, much less bankruptcy!! (that was
another poster's suggestion)

On the contrary, I believe there is ample opportunity not only to
resolve the current problems without these actions but to move forward
with an even more effective SSA, perhaps in a modified form. But a
critical pre-requisite is having the trust of our members. For that, as
you reiterate, independent oversight is required.

There are actually two steps: 1) resolve the current crisis, and 2)
explore future alternatives for SSA. These are two distinct, albeit
related activities most probably calling for separate efforts. The
Oversight Task Force (or something like it) is necessary, I believe,
for the first. A Restructuring Task Force (or something of this sort)
is necessary for the second. Both groups must be staffed by respected
people who are competent, independent-minded [though I wouldn't exclude
members from either group simply because of past or current association
with SSA], conceptual, organized, and able to think creatively. Don
Johnstone's suggestion to seek membership from outside the SSA, even
from outside the U.S., is a worthy idea that we should pursue.

Chip Bearden