Vantage Group, Shriners leaders, hospital scandal
“Corruption exposed at network of 22 US and Canadian children’s hospitals,” says Luvie in a news tip from Quebec.
She goes on »»»
A report reveals how Semb and Bracewell [Shriner leaders Ralph Semb and Gene Bracewell] pushed hard for continued contracts with one specific fund-raising company, Vantage Direct Marketing Services.
Vantage raised over $46 million between 1999 and 2003 on behalf of SHC with only $2.5 million going to the hospitals.
Interesting.
“The Vantage Group and its subsidiaries Vantage Financial Services Inc. and Vantage Direct Marketing Services Inc. have agreed to pay $4.5 million to settle civil postal fraud charges,” said directmag.com, also in 2003.
It continued, “The government’s complaint, which named Henry R. Lewis (then Vantage’s CEO) and Harry S. Melikian (then Vantage’s CFO), alleged that while conducting fundraising programs for nonprofits, the company improperly mailed 78 million pieces of mail at the reduced nonprofit rate, knowing they were not entitled to use the rate for their cooperative mailings.”
Vantage Financial Services is a Boston-based direct marketing company, “specializing in providing database and fundraising management services to non-profit organizations in the United States and Canada, said the story, adding »»»
The complaint, filed in 1998, noted that in 1990 the Postal Inspection Service investigated Vantage for sending illegal cooperative mailings.
At that time, a U.S. Postal Inspector informed Vantage, Lewis and Melikian that mailings sent pursuant to Vantage’s standard contract were ineligible for the reduced non-profit rate because Vantage had a financial stake in the mailings. As a result of the 1990 investigation, Vantage and one of its non-profit clients paid a postage deficiency to the government.
In response to that investigation, the complaint said Vantage revised its standard contract to make clear that, in the future, Vantage would not have a financial stake in the programs it conducted on behalf of non-profit clients. Based on the revised contracts, the Postal Service permitted Vantage to mail at the non-profit rate on behalf of its nonprofit clients.
The complaint alleges, however, that Vantage then entered into secret “side letters” with many of its non-profit clients, agreeing to take a financial state in the mailings.
‘… the biggest non profit scandal of our time …’
Now, “A confidential ‘Interim Report of the Special Investigative Committee of the Joint Boards of Shriners Hospitals for Children’ describes how immediate past potentate Bernard Lemieux appointed a committee to investigate the conduct of Shriner leaders, Ralph Semb, Chairman of the Shriners Hospitals for Children Board of Trustees and Gene Bracewell, Imperial Treasurer Shriners International Imperial Divan,” says WikiLeaks, quoting Sandy Frost.
“The report was leaked online at Wikileaks.com and can be found here,” it says, going on »»»
This document has not been released anywhere on or off line.
2. This file is important because it is a document generated by the Shriners that discusses an internal investigation into the possibility that two executives violated conflict of interest policies and may have committed tax fraud.
3. The likely audience are millions world wide concerned with corruption associated with what may be the biggest non profit scandal of our time. The audience also includes members of these fraternal organizations all over the world as well as tax payers and those concerned with Shriner corruption.
4. Journalists can call Shriner HQ and verify the document with those mentioned as well as with the Shriners PR staff. The document lists the committee members as well as the elected leader who called for the investigation.
5. It was leaked because the document reveals how executives took trips in exchange for helping a fundraiser vendor obtain and keep contracts with Shriners Hospitals for Children. It was leaked also to show how the head of the hospitals tried to get an executive fired after he learned of the “excess benefit transactions” and how this same executive signed the Shriners 2006 tax return, though he had been told that it was incorrect, misleading and/or incomplete.
6. Yes, the Shriners convention just finished and it is important that the Shriners know what is going on with thier organization as well as the public to know about the tax fraud admitted to in this interim report.
‘ … if someone donated $100 … $95 was kept by Vantage … ‘
Says Wikileaks, from Frost »»»
The April 10, 2008 document describes how Lemieux appointed committee members on September 20, 2007 to “inquire whether Semb and Bracewell engaged in unethical conduct by intervening in the executive evaluation process (the so called 360 degree review) of Edgar McGonigal, Director of Development of SHC during the year 2007.”
It is believed that this is the first time that an Imperial Potentate has appointed such a committee to investigate allegations that top Shriner leaders behaved unethically.
The report reveals how Semb and Bracewell pushed hard for continued contracts with one specific fund-raising company, Vantage Direct Marketing Services. Vantage raised over $46 million between 1999 and 2003 on behalf of SHC with only $2.5 million going to the hospitals.
In other words, if someone donated $100 during these campaigns, $95 was kept by Vantage with only $5 going to the hospitals.
Bracewell admitted to committee and board members that he got at least one free trip from Vantage in 2007.
The report suggests that Semb retaliated against McGonigal, who opposed Vantage contracts, by unilaterally firing him on October 31, 2006 without first consulting the joint boards or HR.
The report suggests that both Semb and Bracewell were attempting to accomplish their purpose by using subterfuge rather than by directly making their views known by “compromising the 360 degree review process in an unprecedented way.” The committee reported that Semb and Bracewell contacted confidential employment reviewers in an effort to further retaliate against McGonigal by having him removed for poor job performance. This was done after executive vice president James Full allegedly violated employment confidentiality to “in part, avoid a confrontation with Mr. Semb.”
The report also describes how the committee was suspended by an unrecorded action of the joint boards in executive session on November 2, 2007. After the investigation was reinstated on January 26, 2008, it was expanded to include events surrounding the resignation of controller, Willard Fawcett.
The report describes how Fawcett alleged “improper reimbursement of expenses that did not further the exempt purposes of SHC and contracts that were not in the best interests of SHC and may have involved self-interest on the part of members of the Joint Boards.”
“Of greater concern,” the report explains “is Mr. Fawcett’s allegation (which we emphasize is unsubstantiated at this time) that the 2006 Form 990 may include improper reporting of certain items, and that the form was executed by Mr. Semb notwithstanding the identification by Mr. Fawcett of irregularities in the return.”
The committee members also described how headquarters personnel worked under the threat of being fired in a culture of fear if they did not bend to the wills of leaders like Semb and Bracewell.
The committee recommended that:
- Semb and Bracewell be reprimanded for violating both SHC and AAONMS Code of Ethics.
Deloitte and Touche be hired for forensic accounting.
- Records be reviewed to correct or recover improper reimbursements.
- The Conflict of Interest Policy and Bylaws be amended to designate a full time member of the legal department for conflict of interest compliance.
- The SHC bylaws be amended to “debar from business with SHC any entity that provides or offers any gifts, gratuities or favors to any member of the joint boards, any officer or senior executive.”
- SHC provide a whistle blower hotline or other program so employees, senior executives, trustees or directors can report suspected incidents, corporate wrong doing, conflict of interest, violations of corporate policy or violations of law.
The report concluded the committee’s investigation into the Semb/Bracewell/Vantage conflict of interest matter but stated that Fawcett’s allegations required more investigation.
[From http://sandyfrost.newsvine.com/ Copyright © 2008 by Sandy Frost. Used by permission.]
(Thanks, Luvie)
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directmag.com – Vantage to Pay $4.5 Million Postal Fraud Settlement,October 28, 2005
WikiLeaks -Corruption exposed at network of 22 US and Canadian children’s hospitals,July 17, 2008
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July 25th, 2008 at 12:36 pm
Thats pretty sad when people donate 46-MILLION dollars for what they think will be going to care for the kids, and the childrens hospital ends up only getting 2.5 million between 22 hospitals.
Makes me grumpy and mad.