Conflict of Interest - Page 1

Conflict of interest is not being used correctly. It is not about what you beleive in as opposed to another person or club beleifs etc.. It is a legal term the IRS uses regarding officers, directors or trustees in a 501 C corporation. It speaks to officers, directors or trustees (NOT MEMBERS) or people of substancial authority.  And its about those same benefitting financial from their own votes, decsisions within those non-profits. The conflict of interest policy looks inward at the people in charge, not outward to members.

From the IRS page http://www.irs.gov/charities/article/0,,id=139515,00.html  :

Form 1023: Purpose of Conflict of Interest Policy

What is the purpose of the conflict of interest policy?

Charitable organizations are frequently subject to intense public scrutiny, especially where they appear to have inappropriately benefited their officers, directors, or trustees. The IRS also has an oversight role with respect to charitable organizations. An important part of this oversight is providing organizations with strategies that will help avoid the appearance or actuality of private benefit to individuals who are in a position of substantial authority. The recommended conflict of interest policy is a strategy we encourage organizations to adopt as a means to establish procedures that will offer protection against charges of impropriety involving officers, directors, or trustees.

A conflict of interest occurs where individuals’ obligation to further the organization’s charitable purposes is at odds with their own financial interests. For example, a conflict of interest would occur where an officer, director, or trustee votes on a contract between the organization and a business that is owned by the officer, director or trustee. Conflicts of interest frequently arise when setting compensation or benefits for officers, directors, or trustees. A conflict of interest policy is intended to help ensure that when actual or potential conflicts of interest arise, the organization has a process in place under which the affected individual will advise the governing body about all the relevant facts concerning the situation. A conflict of interest policy is also intended to establish procedures under which individuals who have a conflict of interest will be excused from voting on such matters.

Apart from any appearance of impropriety, organizations will lose their tax-exempt status unless they operate in a manner consistent with their charitable purposes. Serving private interests more than insubstantially is inconsistent with accomplishing charitable purposes. For example, paying an individual who is in a position of substantial authority excessive compensation serves a private interest. Providing facilities, goods, or services to an individual who is in a position of substantial authority also serves a private interest unless the benefits are part of a reasonable compensation arrangement or they are available to the public on equal terms and conditions.

Trouble is Lyle's lack of transparency to the USA membership. There was never an intended merger with USA by the WDA. The WDA only reached an agreement with the GSDCA in order to give the WDA greater independence of the GSDCA--so that the WDA could communicate directly with the SV (regarding paperwork, etc.) and bypass the bottleneck of the GSDCA's SV liaison.

Kim, the possibility of a conflict of interest within a section 501(c)(3) such as U.S.c.A. would have to be proven beyond doubt; and I seriously doubt that can be done. Know that I am not saying this to speak in a detrimental manner against your post.

I agree with Louise's statement concerning Lyle's (and the executive board's) lack of transparency to the membership. Kind of an "us and them" relationship. Well, this member of the "them" will no longer be a member come January 2010. And it will really be a moot point with me at that time.

The executive board has spoken. Many of us have listened in disbelief. The fallout has begun. Not everyone reads this messageboard or any of the other messagebords, and not everyone reads the results of the board meetings as published in the magazine. So, the fallout could become worse as time passes.

So, how severe will be the damage from the fallout? I would guess that most who disagree will not remove their membership immediately, but (just like me) will wait until their membership expires and fail to renew. I hope these people (just like me) reply with a short note that explains "why" they choose to not renew.

I will send that short letter, and if I recieve a reply I will post it here. Hah - I would not hold my breath.

Best Regards,
Bob-O

Bob-O -

I agree with you on what you said, meant to say that, and also I absolutely beleive this amendment is the tip of the iceberg and more things will be coming down the pike, not immediately, but it's coming.  Its kind of ike the federal government, give up your rights a little at a time due to fear and pretty soon you have none over time. :) 

Nobody cares why people are leaving. I am sure they took a look at the roster and figured who would go and who would stay.  It was planned attrition. 

Louise - according to everything I have heard, you are correct - it would have taken board approval to even begin talks with USA and a membership vote of WDA to decide to merge.  It also would have taken USA to convert to a individual member vote to merge the two, then they would have had to vote as individuals.  Has to be apples to apples membership type.  The way things are going I really do not see that USA would have given their members the individual right to vote, quite the contrary, it is more advantageous from a control standpoint to keep it club only in votes insofaras the regular members are concerned.  You know you are going to knock out some votes just by the travel expense aspect.  Its pretty easy to size up the vote especially in person.  The mailed in ballot has a lot of power in it not being controllable.

Kim, I do understand. I am an officer in a 501(c)(3) "not for profit" organization and the serious part of the legal code applied to us concerns how we report the money that goes through the organization. That is really the only interest of the I.R.S. - they want an accurate and timely report for the origin and disposition of all of the money that we handle.

I too do not accept any idea of a pending "conflict of interest" and that is why U.S.c.A. would have a difficult time explaining to me (or any other members) how membership (or other support) in the G.S.D.C.A.-W.D.A. or any other group could pose a conflict that is detrimental to U.S.c.A... As long as money is not passed between the groups without some type of paper trail, there can legally be no conflict of interest - at least not the type defined by law.

I really think some high-ranking members of U.S.c.A. had their feelings hurt and decided to strike back. But, they struck back at the very ones who provide some support for the organization - that is what is really dumb. If they wanted to compete (and win) against other groups they should have done it by allowing general members to vote on important issues and show that they valued these members just as much as they did the heavy-hitters. And prove beyond doubt that they were the undisputable best group. I agree that they probably calculated the percentage of membership loss, and decided it was "worth it". Gee, one would think they did.

This reminds me of recent proposed changes in the By-Laws of an organization of that I am an officer. In my role as Sergeant-at-Arms I recently had to remind some of the voting officers more than once; that any proposed changes to By-Laws are very serious matters and had to be decided by all members of the organization. Some just do not "get it" I guess, and it is not something that we do a lot. So, this method ensures that the final decision is made by individual chapter members as well as members of the at-Large membership. That is how a TRANSPARENT organization operates.

Best Regards,
Bob-O

kim wrote  
"I absolutely beleive this amendment is the tip of the iceberg and more things will be coming down the pike, not immediately, but it's coming. Its kind of ike the federal government, give up your rights a little at a time due to fear and pretty soon you have none over time. :) "

and this is the truly scary part.   if this is the start, where will it go from here?  speaking with several others over the past couple of weeks i have got a good idea,,,,, but i dont want to say anthing right now, or tell you why, and i dont want to explain it after the fact either.  ;)

john

Conflict of interest in not an IRS specific or IRS coined term.

"A conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other."

Reference http://en.wikipedia.org/wiki/Conflict_of_interest

So, the board members probably did use correctly after all.

Please check for yourself.

One organizations personal definition of a term for their own internal legal documentation does not apply to the rest of the world.

The wikipedia says the same thing - its talking about the way the organziation can be influeneced or run.  Members do not run USA,  the officers, directors and other people of substancial influence which certainly is not the members.

USA I would assume has consulted an attorney that specializes in 501 c3  and Missiouri corporation law that they can indeed restrict membership, however, the excuse that it is a conflict of interest for members to belong to other GSD organizations, especially those not holding offices etc., is ludicrous and far outside the scope of the definition of conflict of interest.  Under USA's use of conflict of interest, it should include going to another GSD's events, trials or giving them any income. 

You have to have some power and influence in running corporation to have a conflict of interest.  The members in any of this organziations do not have that.  Again its officers, directors, and persons of substancial influence. 

My best guess if a USA member that was not an officer holder was kicked out due to conflict of interest, it could be challenged in court and that member would win.  However, IF the restriction on membership comports to Missouri corporate statutes and IRS statutes regarding 501 c3 organziations, then the person could be kicked out -  That is why they did not make an amendment that anyone with a conflict of interest could not belong to the club - they knew it would have no bearing on anything and would not be enforceable unless that person was an officer etc.  - - that is why you have a membership restriction amendment rather than an amendment to the conflict of interest policy.  Obvioulsy a conflict of interst policy does not include members or they would have used the USA standing conflict of interst policy that by statute has to be in place, so just by that, you know conflict of interest reasoning is bogus. If it was legit, it would have been in that policy.