Chess Informant, printed and published in Belgrade, is the world's leading high level chess publication. It comes out twice a year and contains at least the 500 most important grandmaster chess games played during the preceding six months. The games are deeply annotated by some of the world's leading grandmasters. Every chess master in the world considers Chess Informant to be required reading, to keep up with the latest developments in chess theory.
Chess Informant is also the biggest selling item by the United States Chess Federation. As a result, when the War in Bosnia was declared and the United Nations imposed sanctions which prohibited commercial contacts with Yugoslavia, this was a major financial blow to the United States Chess Federation, because of the profits lost due to not being able legally to purchase Chess Informants from Yugoslavia.
Al Lawrence, who was at that time Executive Director of the United States Chess Federation, got around this by making a deal with the Yugoslavs. The USCF would order the Chess Informants from Yugoslavia now and the books would be shipped, but the USCF would not pay now yet and would wait until the War in Bosnia was over and the sanctions were lifted.
This agreement stayed in effect for several years. By 1996, when the War in Bosnia was over and sanctions were lifted, the USCF owed $235,000 (two hundred thirty five thousand dollars) to the Yugoslavs.
However, Al Lawrence still did not pay the money. Instead, he delayed. Finally, after this issue was raised by Tom Dorsch, who at that time was a Lawrence opponent, Lawrence on behalf of the USCF retained as legal counsel in Washington, DC, a high priced lobbying firm specializing is legal issues pertaining to the UN sanctions on Yugoslavia.
After a personal meeting with a high official of the Treasury Department, this Washington DC law firm sent a letter to the USCF stating that it was legal to pay the Yugoslavs. The law firm charged the USCF $60,000 in legal fees for this advice.
However, Lawrence still did not pay the Yugoslavs. This time, he had a better reason: The USCF did not have the money. The $235,000 which the USCF owed for the Chess Informants had long since been spent by Al Lawrence for other purposes.
Al Lawrence resigned in August 1996, just hours before he was about to be fired by Tom Dorsch, who had just been elected USCF Treasurer and who was a bitter opponent of Lawrence. However, in the hours before resigning, Lawrence signed a contract with his self-appointed successor, George Filippone, which made Filippone the Acting Executive Director of the USCF. This contract provided Filippone with a Golden Parachute in case the newly elected USCF policy board tried to remove Filippone.
Filippone also refused to pay the Yugoslavs, presumably for the same reason: No money. Filippone was strongly opposed by Tom Dorsch, who revealed on the Internet the non-payment to the Yugoslavs. Previously, the fact that the Yugoslavs had not been paid for their Chess Informants had not been revealed to the chess playing public.
Filippone was forced out after only six months in office, but the USCF was required to pay him $60,000 in severance, which was the amount which the contract which Lawrence had given to Filippone required that Filippone be paid under the Golden Parachute. Lawrence also received a substantial buyout. The total amount paid to Lawrence and Filippone combined to get rid of them was about $200,000.
Mike Cavallo came into office. Realizing that the USCF had a moral and legal obligation to pay the Yugoslavs for the Chess Informants, he scraped together the money and paid them. However, instead of paying the full $235,000 which was owed, Cavallo paid only $175,000, because of deducting the $60,000 which had been paid to the Washington DC lobbying firm.
The Yugoslavs objected to this but in the end they decided that receiving $175,000 was better than receiving nothing at all.
Later, the political forces in US Chess became realigned and Tom Dorsch, the strongest opponent of Al Lawrence, switched sides and became a Lawrence ally. Suddenly, Dorsch was attending Policy board meetings and saying that Cavallo had overpaid the Yugoslavs and could have gotten away with paying far less.
This, of course, was true. In fact, the USCF could probably have gotten away with paying nothing at all, because during the period when Dorsch was accusing Cavallo of overpaying the Yugoslavs, US bombs were falling on Belgrade.
However, all chess players throughout the world owe a great debt to the Yugoslavs. Yugoslavia was the number one country in the world in terms of supporting the development of chess. More international chess tournaments involving more grandmasters took place in Yugoslavia than anywhere else.
The biggest irony is that meanwhile, the greatest American chess player, Bobby Fischer, has been twisting slowly, slowly in the wind. Bobby was indicted for playing a chess match against Boris Spassky in Yugoslavia for money which, it was claimed, was a violation of UN sanctions and an Executive Order by President George Bush. However, it was not a violation. The UN Sanctions specifically exempted sporting matches. Many professional football teams went to Yugoslavia and played games there and Yugoslavia sent teams to other countries and received professional fees, all without incident.
However, what the USCF did was clearly illegal. Buying chess books from Yugoslavia in large quantities resulting in a debt of $235,000 was clearly a violation of UN Sanctions.
Also, as long a the USCF was paying a high priced law firm a fee of $60,000 and all it got in return was a letter from that law firm stating that it could legally pay the money it owed, why not ask the same law firm to get the criminal indictment against Bobby Fischer lifted?
In his Internet postings of the last few days, Al Lawrence has repeatedly said that the fee of $60,000 was necessary to "free up" the money. This implies that the money was in some sort of esgrow account. This was not true. The funds were for a time in a separate bank account, but were later co-mingled with other operating funds of the USCF. Also, Al Lawrence brags about how his years with the USCF were profitable, but that the USCF lost money under Cavallo. However, Al Lawrence had a cushion, because he did not pay his debts. He had an extra $235,000 in the USCF bank account, because the USCF was refusing to pay for the books it had ordered and profitably sold. Had Al Lawrence not had that extra $235,000, the USCF would have been in severe financial difficulty and might even have been out of business.
Al Lawrence also fails to deal with the fact that the contract he signed with Filippone, which made Filippone his successor and awarded Filippone a Golden Parachute, was very likely illegal because the USCF Policy Board was never informed of this contract. It was only months later when the Policy Board was trying to fire Filippone that Filippone produced this contract which had been signed by Lawrence and which provided that Filippone was to receive a payment of $60,000 in case he was fired.
Al Lawrence also fails to mention that under Cavallo, the USCF paid both the $200,000 in severance to Al Lawrence and George Filippone and the $175,000 to the Yugoslavs, both of these being debts caused by Al Lawrence. Had Cavallo not been required to pay this $375,000, the USCF would have been in much better financial shape.
Below are some recent quotes by Al Lawrence.
I will take this opportunity to mention that developments which have occurred during the past three weeks lead me to believe that the criminal indictment by the Government of the United States against Bobby Fischer has been dropped. However, I am not at liberty to reveal what these developments were.
Sam Sloan
On 19 Mar 2000 18:57:07 GMT, alforchess@aol.com (Al Lawrence) wrote:
>
>Payments were made legally, after USCF's specialist attorney actually met with
>Treasury reps to make sure. We followed his advice to the "T."
>
>Regarding an "honorable" payment, I think many are victims of rumor about this
>transaction. USCF paid the full fee less the actual attorney's fees required to
>"free" the money.
>
>This was done by MC. I find it impossible to argue with the logic and fairness.
>He could have paid less (legally), but I don't think it would have been the
>right idea.
>
>Regards, al lawrence
>
>
On 19 Mar 2000 19:58:24 GMT, alforchess@aol.com (Al Lawrence) wrote:
><< I think the argument against the fairness is that Informator are not
>the ones who declared the embargo. So why should Informator have to
>pay the USCF's legal fees? If I contract to buy something from you
>for X dollars and I have an attorney review the contract, is it fair
>for me to deduct the attorney fees from what I'm supposed to pay you?
> >>
>
>I follow your point. I guess I'd say that Informator ultimately agreed to the
>legal fees. (I understand that they would rather have more.) The attorney work
>was done to get their money released, and there was no net gain to USCF. It
>paid the bills and forwarded the rest. Not even admin "overhead" was charged.
>
>USCF didn't start the embargo either. And it was a big blow.
>
>Without this legal work, Informant would still not have its money.
>
>So, I don't see how, given the bad situation, the solution could be better.
>
>Regards, al