August 7, 2008 Issue                                       

©2007 The Chestnut Hill Local

CHCA preparing records for state probe
by JOEL HOFFMANN

Community Manager Philip LeCalsey announced last week that the Chestnut Hill Community Association had copied or converted into digital form 95 percent of the records requested for review by the state attorney general’s office, which is investigating the fiscal practices of the CHCA and the Chestnut Hill Community Fund.

 “The balance of what we have left, really, it might be the more difficult things to find — to find that extra 5 percent,” LeCalsey explained at the July 31 CHCA board meeting. “But I’ve already begun drafting the letter because there’s enough information to be able to draft a letter and to address every single bullet at some level.”

Both the CHCA and the CHCF are ahead of schedule in complying with the request. The organizations were ordered to submit by Aug. 13 all meeting minutes and financial records related to operating budgets, cash flow, fundraising and tax exemptions and liabilities from Jan. 1, 2001, to the present. Membership and personnel lists were also requested for that time period.

Most of the remaining records were expected to be ready for review by Aug. 7, LeCalsey said, but some meeting minutes from 2001 and 2002 were still missing as of Aug. 1.

 “The procedure we’ve established is to release all the records we have found,” CHCA president Tolis Vardakis said, “and also to list the records we should have found but cannot find, and also list records the attorney general wants but we never had. That way, when we send a cover letter along with the records, when we have to explain as to why we are not providing the records, that he knows it’s at least on the books.”

In the wake of the investigation, many board members are uniting behind Vardakis’ call for full disclosure of records and greater openness, but there are dissenting views, including those of Thomas Fleming, who described the investigation as “grossly unnecessary.”

 “I think this organization is going through something it never should have been through,” Fleming said, adding that the initial demands of Montgomery, McCracken, Walker and Rhoads — the law firm that referred the case to the attorney general — were “outrageous” and “extreme.”

Fleming said that those board members who supported the law firm’s investigation had sown “divisiveness” and “negativity” in the community.

“I think it’s a disgrace,” he said.

“The divisiveness in this association has nothing to do with Montgomery, McCracken,” board member George Spaeth said in response. “It existed long before that and you know that, and I’m ashamed of what you said.”

Spaeth said the investigation was unfortunate and likely to take up countless hours of the association’s time, but he hoped that it would settle concerns in the community about the association’s management.

Former board president Ron Recko also took issue with Fleming’s comments.

“This all could have been avoided had the audit taken place that Lloyd Wells was willing to pay for,” he said, adding that “if that money were spent on that audit, it would have put to rest any problems that would have occurred during that time period. When the board voted against that audit [14-12], Lloyd Wells, the founder of this, said, ‘This appears to be a cover-up.’ Why wouldn’t you want to do the audit if it’s not costing you anything?”

Recko said the rationale for not doing the audit in-house — that it would take up too much of the association’s time — has proven to be unfounded since the association was able to compile seven years worth of data in two weeks.

In December, Wells joined five former board members and five current board members, including Recko, in scrutinizing the finances of the CHCA and the CHCF. The challengers hired legal counsel from Montgomery, McCracken, Walker and Rhoads to look into the organization’s records for the fiscal year ending March 31, 2006.

Attorneys Donald W. Kramer and Karl E. Emerson took the case to the attorney general because neither organization had fully complied with a list of 18 reparations (nine for each organization), which, if satisfied, would have kept the challengers from seeking state action.

The attorney general’s office sent letters to the association and the fund on July 10 requesting information to aid in the investigation. The letters stated that the organizations might have violated financial provisions in the state Charities Act.

Following the attorney general’s request, Vardakis told the Local that he believed the association had complied with the challengers’ demands, and that he suspected a referral was made because the initial investigation did not uncover any serious issues.

Vardakis later said that both the association and the fund would cooperate with the state’s investigation and obey all relevant regulations. He said that he is personally committed “to an administration that is in full compliance with both the letter and spirit of [the] laws.”

In other news

The board unanimously approved a zoning variance for the tree canopy walk at Morris Arboretum and a resolution thanking recycling volunteers at Wyndmoor Station.