Faneuil Adams 25 July 1997
There have been widespread accusations, mainly originating with Dorsch and Eade, that the current PB is fractured and ineffective, leading to severe financial and operating errors. The purpose of this memo is to put forward my opinion that those accusations are incorrect, and that the PB has operated reasonably well except for the pattern of malicious attacks by Dorsch and Eade upon their colleagues and others.
I should first state briefly my qualifications for reporting to you what has happened. I spent 5 years in the Army (WWII & Korean war), 5 years as a Wall Street lawyer, 28 years in international petroleum refining and marketing, and 7 years as Executive-in-Residence and Visiting Professor at the Columbia University Graduate School of Business. In my last position in petroleum, I was General Manager of Mobil South Region with 8000 employees and annual sales of $3.5 billion in 40 countries of Africa, Asia and Latin America. I would say that the most important part of that job and previous ones was to choose and evaluate managers, and to follow closely the operations which they ran. I have sat on many for-profit and not-for-profit boards and am currently a director of First Bank of the Americas, a multi-branch New York City bank. I thus feel qualified to comment on the performance of the office and the PB, although no doubt my brain cells are slowly melting away ("over the hill" in the view of the ever charming Eade). Nevertheless, enough gray matter remains to make this report to you.
In chess, my main effort is as President of Chess-in-the-Schools (formerly American Chess Foundation), where we bring chess to 12,000 inner-city children in New York City and more thousands in other cities, a program which Bruce Pandolfini and I started in 1986. Our headquarters is in a 4-story building in the theater district, another project which I initiated. We also award the Samford fellowship each year to an up-and-coming young chess player, an amount of $32,000/year, normally extended to a second year. Our annual budget is $1.5 million. The Manhattan Chess Club, of which I am Treasurer and volunteer office manager, shares space in the building. I have done a lot of chores for the USCF such as FIDE delegate. I am an enthusiastic but lousy chess player.
The current PB took over last August following the resignation of Al Lawrence. It soon became apparent that the USCF had major problems in a number of areas. I believe that all PB members came fairly quickly to the view that the most urgent areas were to find a new Executive Director, and to find a full-time Scholastic Director, to confront the worsening financial crisis, to improve dramatically our poor Internet presence, and to modernize our computer and telephone systems. I shall say something about each of these areas, but first must comment on the difficulties of dealing with these and a myriad of other problems given the state of the office at that time.
State of the Office Months before Lawrence left in August, rumors of his possible departure and the circumstances causing those rumors led to a degeneration of office morale. Following Lawrence's resignation, Filippone, who had received excellent ratings from Lawrence and had a good reputation with the prior PB, took over as Acting ED. His task became very difficult due to staff shortages (Lawrence, the scholastic coordinator, and others), a growing list of time-consuming crises, and a series of abusive communications from Dorsch attacking his competence.
During the balance of 1996, the office was simply not up to handling the magnitude of the problems faced by the USCF. It is impossible to measure Dorsch's contribution to that state of affairs, but based on a number of visits to New Windsor, it became apparent to me that the Acting ED was so worried about the Dorsch attacks, and spent so much time trying to deal with them, that his work efficiency was seriously reduced. I also had the strong impression that the attacks reduced the morale and efficiency of many others in the office.
Hiring of New ED The PB at its meeting of August 12-13 in Alexandria decided to wait before starting the ED search to see how Filippone would fare running the office. I believe that Eade preferred to start right away, but there was no strong objection to waiting a bit. On October 9-10, when Dorsch and I were in New Windsor, Dorsch suggested that we start the process. We ascertained that we could place an ad in the December issue of Chess Life arriving in early November. We decided to place ads in the NY Times at the same time, as it seemed inappropriate to advertise elsewhere before Chess Life. Schultz agreed by phone. We received almost 100 applications from various sources. The process of screening them, arranging meetings to conduct preliminary interviews, and then final interviews in New Windsor took us until January 12, when we hired Cavallo. He went to work immediately. I must add that after finally persuading Eade and Dorsch to join the 7-0 vote for Cavallo, Eade wanted to renege and postpone the decision to a later meeting. We talked him out of it with some difficulty. We hired a professional and aggressive ED who will build the USCF into an effective organization.
If we had decided to go ahead on August 13 in Alexandria, and again logically started the search with an ad in Chess Life, the earliest insertion possible would have been the November issue arriving in early October. We lost a month. In retrospect, it would have been better to have started earlier but at the time we had no clear idea of the crises about to hit us.
Hiring of Scholastic Director This was handled reasonably well with full involvement of the Scholastic Committee. As in the case of the ED, it appears that Beatrice Marinello was an excellent choice for the job.
Financial Crisis As the monthly reports started rolling out after the August delegates' meeting, it became apparent that our losses were serious and our cash draining away. Our early examination made it apparent that one of the problems was a faulty FY1997 plan: mistakes in unit revenues from regular members and gross margin on book and equipment sales; failure to charge various items to income; and other smaller errors would have lead to a loss of about $200,000 even if all the other assumptions in the plan were correct. (The three PB members, including myself, who were members of the prior PB must share in the blame for this).
Other assumptions did not turn out to be correct, as we saw membership numbers and book and equipment sales fall below planned levels. On October 11 Dorsch, our Treasurer, wrote that we were on target to lose $1 million this year. In late 1996 the office prepared an FY1997 forecast showing a loss range of $115-272,000, numbers treated with derision as hopelessly optimistic by Dorsch and Eade. In January 1997 the Finance Committee estimated a loss of $349,000. Finally, the year closed with a loss of about $150,000 (subject to auditors' and Treasurer's review).
Dorsch and Eade accuse the PB of inaction and foot-dragging in the face of the financial crisis. In fact, as soon as the crisis emerged a brake was put on expenditures. However it became apparent to those of us who spent many days in New Windsor trying to understand and find ways to deal with the crisis that the office was not equipped in late 1996 to make major progress in finding more efficient ways of doing business.
Internet Presence A breakdown in relations between the office and our former webmaster led to a shift to an Interplay webmaster. The transition period saw a sharp deterioration of our web site. Eventually the office appointed an internal web editor to work with Interplay and the site began to improve, but not at a satisfactory rate as we were not staffed adequately to work out the details of our relationship with Interplay. In May the office hired Jade River as web editor. The site is dramatically improving, and an efficient system of posting is being worked out. Issues remain.
Editorial Control I believe that all PB members agree that we must retain editorial control. Dorsch and Eade appear to believe that we cannot do this through Interplay, and must go to the expense of operating a separate server. A decision on this awaits investigation of alternatives by the office.
Interplay Partnership Dorsch has repeatedly attacked our relationship with Interplay publicly (a great help to our negotiators??), taking the view that we should "do it ourselves." I do not agree. Interplay is a large game-oriented company with Internet experience. They are strongly placed to put our online chess playing and viewing on our site as well as their own game sites with major service providers. They currently give us $50,000 annually in sponsorships and pay us $16,000 in royalties. Unfortunately, the current contracts are too short in duration and too vague in content. Also, Interplay has missed a series of important deadlines for online play, online purchasing, etc. Again, in 1996 the office was not equipped to deal efficiently with these issues. They are a high priority for the new ED. We should try to sort out our relations with Interplay before looking elsewhere.
Modernize Telephone and Computer Systems Clearly we cannot adequately service our members or sales program with antiquated electronic systems. Before the arrival of the new ED progress in preparing to modernize our telephone and computer systems was slow. This is another priority of the ED, who expects to have both systems installed during 1997.
Performance of the PB I believe that all PB members recognized the urgency of the problems discussed above. However, the PB is not in a position to do much on its own, and can only act through the office. During much of this year the office was understaffed, overtaxed with crises, and simply unable to deal with the problems as we wished. I believe that five members of the PB did as well as they could to keep things going until a new ED and additional staff could be brought on the scene, while Dorsch and Eade poisoned the atmosphere of the PB and the office by endlessly and viciously attacking their colleagues.
While they pretend to disagree with everything, in fact an examination of PB votes will show that they almost invariably voted with the rest of us. Their argument that this is only because they were prevented from bringing their issues to a vote is patently absurd: any PB member can bring a proposal to the Board in the form of a motion and have it voted on. This was not a fractured board, but one where two members concentrated on mischief rather than the task at hand. Please examine the attachments containing a modest selection of quotes from the endless stream of offensive vitriol which flowed from their keyboards. I shall give a brief opinion of each of them.
Dorsch is highly intelligent with good business instincts and quick, intuitive reactions. He could be the most productive PB member. However, he seemingly cannot resist constantly and viciously attacking his working colleagues, for example, calling our President a lying scumbag on the Internet. His conduct at meetings has been varied but often wholly unacceptable. He will frequently post information that he must know is false. Anything for a mean story. Except as an attack dog, he is generally lazy and given to vague proposals. A serious person who felt that the PB was going astray would spell out what he thought must be done and force a vote at the PB meetings. Dorsch, on the other hand, has more fun mocking the PB, and then voting with the majority.
Eade has good credentials, but no business common sense whatsoever. He is pompous, long-winded, erratic and deeply in love with the look and sound of his own words. He attacks one day and apologizes the next. He is full of implausible "I told you so"s and repeatedly take credit for matters where he was more of a hindrance that a help. In the March Chess Journalist he wrote that chess credentials should be seen as a drawback to PB credentials, since chess credentials are usually a sign of petty political acumen rather than sound business sense! By long odds he is the weakest member of the PB. He has declared that he will not continue on the PB beyond the August 1997 meeting, but can we believe him?
Vote of Confidence It is important to me that you believe the essence of what I have written here. I therefore ask that the delegates give me a vote of confidence at the August meeting. If I receive less than a majority of delegates voting, I shall immediately resign from the PB and never run again. Dorsch and Eade should submit to the same test, but I do not believe that they have the guts.
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