OUTRAGEOUS MISUSE OF CHESS LIFE!
BOOZ/DUBECK "REPORT" IS POLITICAL PROPAGANDA

The May issue of Chess Life includes a "report'" which is little more than political propaganda, and probably one of the greatest misuses of power in USCF history. 

This "report" by "Stanley N. Booz, CPA, Co-Chair Finance Committee and Dr. Leroy Dubeck, Chair LMA Committee" appears prominently on page 7, not far from the Executive Board candidates' statements which begin on page 12, only one month before the election. 

Even if this "article" was entirely factual, it would be improper, as it praises "the majority on the Executive Board" (three of whom are candidates) and attacks a candidate, myself.  However, the "article" is far from being factually correct.

Booz and Dubeck say in this article, "However, the statement in the February Chess Life by former Acting Executive Director Bill Goichberg that as of December 31 we had a $250,000 profit (exclusive of the sale of the building) is now known to be overstated by at least $150,000."

This is an outrageous lie!  My statement in the February Chess Life said no such thing!  What it did say was that "At the end of December 2004, our operating account now has enough to pay our bills with about $250,000 left over."  Most of this surplus was already there at the end of the 2003-4 fiscal year in May, though, and did not represent a 2004-5 fiscal year profit.  The only profit or surplus I referred to in my statement was the 2003-4 fiscal year audited surplus of $285,000. 

Also, my title was "Executive Director," not "Acting Executive Director."

Incidentally, my $250,000 estimate was based on what I heard from our outgoing CFO, but shortly after, the new CFO updated our bank balances and I was advised that the number might be slightly too large, so I revised my article to change "with about $250,000 left over" to "with a significant surplus left over."  I have a copy of an email from Jean Bernice dated Jan 7 confirming that the article would read "significant surplus" and not "about $250,000."  However, someone must have made a mistake, because when the issue appeared, the old "about $250,000" wording was there instead of "significant surplus."

The Booz/Dubeck "article" also says, "Acting Executive Director Bill Goichberg felt that $2 million would be a conservative projection since 2004 membership revenues were expected to exceed $2 million.  Past President Leroy Dubeck made a more conservative estimate to the Executive Board of $1.8 million, based on the assumption that membership declines would likely continue for much of the year.  President Marinello and the Board majority chose the $1.8 million estimate.  As of this writing, an extrapolation of present dues received suggests that we will realize a total of slightly more than $1,800,000 in the current fiscal year and thus nearly $200,000 less than the $2 million dollar estimate.  Had the larger estimate been adopted in the budget, we could be facing another operational deficit this year."

Once again, this is an attack that would be outrageous even if factually correct.  However, it is incorrect that the Board chose between my suggested number of $2 million and Leroy's number of $1.8 million, let alone the "Board majority."  The truth is that $2 million was my initial suggestion based on current year numbers I was looking at through 2/04, but shortly after, the 3/04-4/04 membership numbers became available, they showed less income than I expected, and I agreed to the $1.8 million number.  Thus, it is false to claim that the Board chose between my $2 million number and Leroy's $1.8 million. 

It is even worse to say that the "Board majority" chose $1.8 million over $2 million, as the  implication is that there was a minority backing $2 million, certainly not the case. 

On May 20, two days before the Board's budget meeting, I wrote the following to Leroy with copies to the Board:

>>I now have figures for March and April membership income.  In March we took in $182,340.65 for one year memberships, $10,477 two year ($5238.50 with an equal amount deferred) and $19,443 three year ($6481 with the balance deferred).  This totals $194,060.15 not counting the deferred amounts.  In April we collected $128,720.90 one year, $14,365 two year ($7182.50 with an equal amount deferred) and $20,913 three year ($6971 with the balance deferred).  This comes to $142,874.40 not counting the deferred amounts. 

>>The membership total revenue for 11 months is now $1,803,299 which is a bit less than I expected.  The total for the year seems likely to be only $1,940,000 to $1,950,000, which makes your $1,800,000 estimate for next year look better.

Also, the current USCF CFO Grant Perks has written to say, "With regard to membership revenue, through March we are at $1.6 million. Annualized, about $1.96 million. Closer to $2 million than $1.8."

So I supported a budget line that was actually very conservative compared to the dues revenue that has been received, and now one month before the election, the voters are told in an official sounding "report" from two Committee chairs that I asked the Board to budget an excessive amount and if they had agreed this might have caused a deficit for the year!

The "article" also says, "President Marinello and the majority on the Executive Board that supported her braved much criticism by making those painful decisions.  The authors believe that the membership owes them a sincere debt of gratitude for taking the responsibility to make these decisions."  Whether this is true or not, it is a political statement inappropriate in the magazine a month before the election (and the truth is that the painful decision was to slash staff in August 2003, and NONE of the incumbents now running for re-election voted for those staff cuts- Shutt voted no, and the other two were not even on the Board yet.)

The "article" also has a chart at the bottom supposedly showing USCF's increase/decrease in net assets each fiscal year since 1997, together with the name of the USCF President at year end (but not the name of the ED, which has usually been included in such presentations in the past.)  This chart says, "Table based on audited financials from 1996 to 2004," but it presents long discredited figures from the 2001 audited report when Tim Redman (now, I believe, a Marinello supporter) was President (that was the year that a fortune in unpaid invoices not reported to the auditors was later discovered in the desk of CFO Jeff Loomis.)  The 2002 audited report restated USCF's net assets at the end of the 2001 fiscal year downward by $268,353, yet Booz and Dubeck choose to ignore this.

It is especially surprising that Booz should include the seriously distorted 2001 audited numbers in his report, since he has publicly ridiculed these numbers.  For example, on March 22, 2002, Booz posted the following on the newsgroup:

<j...@watson.ibm.com> wrote in message
>          You saying Loomis deliberately concealed invoices to make the
> numbers look better?


I'm saying that last year's "profit" was overstated because not all the
accounts payable were recorded. It appears that there was some negligence at the very least.

             StanB


And on Nov 12, 2002, Booz posted the following: 

Sorry but I have no confidence in anything Loomis and DeFeis issued. Reason: The hiding of accounts payable, the sloppy condition of the books, and the 350,000 of prior period adjustments discovered since the dismissal of them there two quacks.

StanB

But now that it is election time, Booz apparently thinks it is OK to present those 2001 numbers to the membership in a "report," numbers that he once rightly ridiculed!

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