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June 30, 2007 Subj: Association Governance Issues Refer to: Central Region Letter 05-07 ********* Dear Central Region Alumni:
As I pointed out in my other Newsletters, my duty to communicate with you is made clear by the Alumni Association Bylaws/Operating Manual: “…being a Trustee of the Association involves serious responsibility...Of utmost importance is the responsibility to communicate effectively in explaining to our individual constituencies about issues, initiatives and activities of the Association.”
Since late May there has been internet traffic regarding alumni allegations of governance irregularities by the Association Board of Trustees. The initial traffic was issued by the Association Chair. Later, the alumni who have made the charges, Messrs. Bill Tate ’64 and Mike Tackney ’64, responded. I have delayed reporting on this matter until the Board itself met to discuss this matter on June 28. I will try to update you on this matter in a factual way. To do so, this Newsletter will be a bit long, but I think it is better for you understand what’s transpired, and to have more facts than personal opinion from me. The charges, and the Board’s response, are an important matter, and I hope that you take the time to read the various documents that are relevant. They are on the T&T Naval Academy Alumni Action Group (NAAAG) web site, http://www.naaag.org, and on the Alumni Association web site, http://www.usna.com.
1. On May 18 Messrs. Tate and Tackney (T&T) sent a registered letter to each of the 29 Alumni Association Board members alleging that the Association’s bylaws were violated, and that the Board has not carried out its responsibilities to exercise proper oversight of the Association. In particular, they cite the bylaw term limit restriction of no more than six consecutive years (two terms), and charge that two trustees are sitting in violation of that term limit, i.e., the Vice-Chair (3rd consecutive 3-year term) and Immediate Past Chair (4th consecutive 3-year term).
T&T further alleged that bylaws were violated in the last election process and resulted in the election of a Chair who was ineligible to serve. With regard to the election process T&T alleged five bylaw violations, including: appointment of an ineligible person to chair the first Nominating Committee, dissolution of the first Nominating Committee by the Chairman who had no authority to do so, appointment of a trustee ineligible to serve (because of term limit violations) to chair the second Nominating Committee, and appointment by both Nominating Committees with subsequent Board ratification of the sitting Chair to be re-elected for a second term. T&T also expressed their greater concern to be the unwillingness of members of the Board of Trustees to exercise their oversight responsibilities as assigned to each of them by the Association’s By-laws and Operating Manual.
T&T concluded by saying: (a) they had retained Maryland counsel who assured them that there are substantial grounds for pursuing redress under the laws of the State of Maryland; (b) they were incorporating as a non-profit 501(C)(3) organization in the State of Maryland to communicate with concerned alumni and organize support for further actions; (c) they had developed a secure web site to harness the interest of alumni in pursuing this matter, but would not open it until after the Board had a chance to review the matter (they gave the Board access to this site while they were considering the T&T requests); (d) they requested the three trustees in question to resign or be removed, any trustee unable to uphold the bylaws to resign or be removed, and a new election be held under third party supervision to fill the vacancies; and, (e) for the Board to respond to T&T’s request by June 15, 2007 and, if it agreed to honor the requests, to issue a timetable for implementation by July 15, 2007.
2. On May 23 the Vice Chair issued an email to the BOT (in the Chair’s absence) saying that a copy of the T&T letter had been given to legal counsel to review and prepare a position paper for the Board’s information. He expected the review to be completed in a few weeks and that there would be communication with the board including the likely probability of a telephone conference meeting.
3. On May 31 the Chair issued an email to the BOT saying he, the Vice Chair, President, and Secretary were engaging an attorney to assess the T&T allegations. He indicated there would be a telephonic BOT meeting toward the end of June, and that that Association Secretary would correspond to T&T acknowledging receipt of their letter. He concluded by saying he would inform the BOT if there were further developments.
4. On June 1 the Chair issued an email setting up an Executive Committee meeting on June 7 to discuss the T&T matter, set a telephonic meeting for the entire BOT on June 28, and said he would issue an email to all Class Presidents and Chapter Presidents telling them about the T&T letter and “what we are doing about it”—the “we” obviously referred to himself, the Vice Chair, and President since the Board had not been involved in any way at that point.
5. On June 5 the Chair issued an email to Class & Chapter Presidents, as well as Class Corresponding Secretaries, telling them of the T&T allegations along with selected quotes from their letter.
6. On June 7 the Association Secretary sent the Board an email saying there were many requests for a complete copy of the T&T letter, and advised the Board of what to say if we were asked for a copy—or if we preferred, he would handle it for us.
Also on June 7 there was an Executive Committee meeting but no formal word of what was discussed or decided was relayed to the Board. I received an informal call from our Region Trustee Rep to the Executive Committee with some information on the meeting, for which I was thankful. Most others on the Board received no formal or informal information on that meeting.
7. On June 8 Tate & Tackney sent an electronic copy of the complete May 18 letter they had sent to the Board, to Class & Chapter Presidents and Class Corresponding Secretaries. T&T said they felt compelled to address these same groups that the Chair did, and felt strongly that everyone in these three groups should have an opportunity to read the letter in its entirety and make their own judgment as to the validity of its contents and the appropriateness of the proposed remedies. T&T asked that they read the letter with an open mind and share it with their constituency as they deem appropriate.
8. The June 15 deadline set by T&T passed without substantive response by the Board.
9. On June 19 T&T opened their web site to all alumni, advising Class & Chapter Presidents, Class Corresponding Secretaries, and the Board of this action by email.
10. On June 22 the Association Chair forwarded his attorney’s legal opinion to the Board, with a summary that said the T&T allegations have no merit and show a misunderstanding of Maryland law. The complete 17 page opinion was included as an attachment.
11. On June 28 the telephonic meeting of the BOT was held with 26 of the 29 Trustees in attendance, plus the Chairman’s attorney and a few officers of the Association. A court reporter transcribed the session. It was a short meeting, taking about an hour including matters not connected to the T&T matter. The T&T discussion began with a brief background of receiving the May 18 letter and a statement by the Chair that the legal opinion found no merit to the T&T charges. The Trustees were assured that the Directors & Officers (D&O) liability insurance would cover them. I asked for restrictions on the policy, and they include trustees acting in bad faith, deliberate dishonesty, and unlawful acts.
Another two-term trustee and I recounted our history on the Board that reaffirmed the 6 consecutive year bylaw rule. A central point of the attorney’s analysis centered on the intent of a 1998 Ad Hoc Governance Committee report. I then reported that I had contacted the Chairman of that Committee (Captain Neil Block ’61) a few days earlier, and put to him several questions about “intent” and other aspects of his report. I relayed to the Board that his recollection of the intent of the report was different than the attorney’s interpretation. I reported that Captain Block also told me that no one was given special dispensation to exceed the 6 consecutive year term limit, that great pains were made to develop a plan to ensure a fair transition, and all of his report’s recommendations were included in the bylaws when he left the Board in May 2002. The attorney argued against my input, indicating that my fact-finding was invalid; another trustee said my comments were irrelevant; and then the Chair ruled that my comments were moot—that ended any discussion on points I made. Obviously, I was disappointed. After some other brief discussion the Chair asked for a motion to accept the attorney’s report which he received and was seconded. When the vote was taken I and another trustee voted NAY, but the motion carried 24-2. (My vote was based on my belief that the attorney’s opinion is flawed by focusing on the intent of a historical report rather than on what the bylaws say, and has put together a document that I view as more a legal defense rather than an objective analysis. I put this here so that the Central Region alumni know why I voted as I did.)
After the vote the Chair said he would be getting back to Tate & Tackney with our decision. One trustee asked whether there would be room for Board discussion on how we deal with Tate & Tackney. The Chair responded that it was clear how to deal with them, i.e., the Chair would respond to T&T on each allegation they made using our legal opinion, and this would bring to a conclusion the Association’s efforts in this matter. Later, this same trustee raised the issue of Board input again so that we would not inflame alumni member concerns, but no response was made to this trustee.
The Chair then said he would communicate promptly to Tate & Tackney, as well as to the alumni, and would put his letters to them as well as the legal opinion of his attorney on the Association’s web site for all to see.
In the New Business discussion which followed, a trustee asked if the Chair still favored a single candidate slate for Chair and Vice Chair, picked by an appointed Selection Committee, and would urge adoption of this new procedure by the Association. The Chair indicated that he strongly supports that method and a change to our bylaws because everyone else, like John Hopkins, is taking that approach. He indicated that the Governance Committee will be taking up this issue. (For the record, I oppose such an approach because I believe member alumni have few rights as it is now, and to take away voting rights for 2 of the 3 positions they can vote for is undesirable. I further believe alumni can make a sound decision on a competitive slate, and I believe that competition is healthy.) *** I believe that this brings you up to date on the Tate & Tackney matter. It remains to be seen whether this matter will be put to rest by the plan the Association Chair has put into effect. I do urge you to read the applicable documents. Once again, you can find the Tate & Tackney Naval Academy Alumni Action Group web site at http://www.naaag.org (use lower case for signing in per the instructions). The Alumni Association documents are found on http://www.usna.com.
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**************************************** (Cell) 630-816-7612 |
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*** Central Region: |