Frank A. Camaratta, jr.
362 McCutcheon Lane
Toney, AL 35773
256.858.8070 (Phone)
256.851.0560 (fax)
fcamaratta@mindspring.com
June 20, 2001
Dear Colleague:
I hope you have had an opportunity to look over my previous mailing and agree that my past
experiences, both professionally and within the chess community, qualify me to serve on the
Executive Board of the U.S. Chess Federation. I would like to take this opportunity to share my
views with you on various issues which I feel are important to our future success as a business. I
appreciate the favorable response to my first mailing that I received from many of you. Here are
some issues I believe are important.
I. ISSUES
A. Keep Decision Making an Open Process
The Executive Board needs to consult with the Delegates on key issues and adequately prepare
position papers to present to the Delegates for discussion and resolution. I believe in upholding
the fundamental principle in our Bylaws that the Policy Board cannot make decisions contrary to
dictates of the Board of Delegates. Here are a few related topical issues and my views.
1. Books and Equipment Sales
The sales of books and equipment has long been our major source of revenues. During my years
on the Board, it accounted for around half of our annual revenues. Whether or not the USCF can
adequately handle Books and Equipment sales as it is currently staffed is an open question.
Certainly, there are other option available to us, such as outsourcing and selective drop-ship
arrangements. Each has its pluses and minuses. The executive Board has the obligation to review
these options, but not to act without presenting their finding to the Delegates and obtaining their
approval. It is simply too far-reaching of an issue for the Board to decide on its own. Also, it is
not the type of issue that demands an immediate resolution. Issues of this magnitude must be
carefully studied and all the alternatives clearly presented to the Delegates in writing - well in
advance of the Annual Meeting.
2. US Chess Live
Unlike outsourcing of Books and Equipment, the authority of the Board to take unilateral action
on the US Chess Live (USCL) option is less clear. The ability of the Board to enter into contracts
of one year or less is a practical necessity and would seem to be well within the purview of the
Executive Board.
A contract of two years or longer is less clear and unilateral action by the Board would depend
on the specific situation. If such a contract obligated the USCF financially, then any prudent
Board should carefully prepare the options, draw its conclusions and present them to the
Delegates, well in advance of the Annual Meeting.
On the surface, ICCF seems to be the better choice as a long-term partner. They have an
established Internet presence and are the organization of choice for Internet Chess play. It seems
like a no-brainer. However, having neither actually studied both contracts in detail, nor having
been present during negotiations, it would be irresponsible to make any final judgement on the
decision to team with Games Parlor.
However, that having been said, this is a long-term commitment, potentially having serious
financial implications to the USCF. Since there was no apparent urgency to make this decision,
it should have been brought before the Delegates. If the issue proved to be too complex for such
a large and diverse body to resolve, the matter could have been referred to a subcommittee of the
Delegates composed of the appropriate technical, financial and legal expertise, for resolution.
Their findings and recommendations would then have been given to the Executive Board for
action.
We need to have a strong internet presence featuring on-line play. It is my opinion, however, that
a decision of this magnitude should have had prior Delegate approval.
B. Improve Our Financial Policy Making and Reporting
Our current budgeting process needs improvement. Here are two ideas I feel would help all of us
better prepare for one of our most important tasks as delegates, reviewing and approving the
annual budget.
First, the Executive Board and the Office must present, in writing, a more complete and
understandable explanation by explicitly stating any assumptions used in preparing the budget
(rate of membership growth, rate of sales growth, etc.), as well as providing ample graphics to
illustrate key points. Second, a five year analysis of expenses and income needs to accompany
the proposed budget. This information must be professionally and succinctly prepared and
presented, generously supported by graphs and trend charts, where applicable. This is standard
procedure in any serious Business. As a Delegate, you should accept nothing less.
I remain a staunch supporter of long and short-term planning. I'm not sure that the USCF even
HAS a business plan.
C. TLA policy and the role of OTB chess
As I stated in my first campaign letter, Promoting chess is our charter. Tournament chess,
particularly OTB chess, and our professional chessplayers play a major role in our ability to
promote chess.
We need to encourage tournaments and the appearance of TLAs in our magazine, not discourage
them. More tournaments mean more exposure. More exposure means more opportunities to
attract new members. Based on all the responses I have seen, I fully expect this problem to be
corrected by the Delegates.
D. Ratings, Titles, etc.
As I stated in my first letter, Our rating system is one of the key services we offer our members.
It must represent an accurate tool to measure and predict performance. It is not a rewards system
per se and casual tampering such as Activity Points only tarnish its value. The system's
promotional value is its objective accuracy. Fortunately the recently enacted Activity Points
System was rescinded.
I'm sure you know my position on titles. The entire system of tying titles to ratings needs
rethinking, in my opinion. Ratings are an objective measure of current performance and are
temporary. Titles represent achievement and are permanent. The fact that titles are tied to ratings
have caused a number of players to abandon OTB chess in order to preserve their "Titles". Titles
encourage play if they can be earned and not lost. Titles are a good promotional tool and are
respected. The FIDE titles of IM and GM are perfect examples. They are not tied to ratings, but
to achievement (norms, etc.). We had such a system in place around 7 years ago, but the
implementation was flawed and the system unfortunately abandoned.
My ultimate goal still is to have a norm-based Title system implemented and to break the hard
connection between titles and rating. They are only loosely connected - norms depend on
achieving a particular score depending on the average ratings of the opponents.
The current "Peak Rating" system is based on the number of games played within a certain rating
interval. This system has two problems that I can see. One, it retains a strong link between titles
and ratings. The other is that the number of games required to earn the title is too high. Most
tournament players play less than 6 rated games a year. Under the present system, it would take
me 30 years to earn any title!
Title Systems should be designed to retain Rating System accuracy and, at the same time,
encourage play. Titles are a good member retention tool. I see nothing wrong with keeping the
current games-played based title system. All that is needed is to change the peak ratings back to
titles, and call it a Life-Title System. The Life Master title is already in place. We would then
have two parallel title systems similar to Bridge.
We should also seriously consider (yes, once again) changing the titles for the below-expert
classes back to Category I, Category II, etc. We did that once before, and then changed back.
However, many lower rated player still find the current Class D, C, etc., designations somewhat
denigrating. A title should be something a person is proud to have earned, and it should be
permanent. I believe that permanent titles and well thought out title designations will go a long
way to producing permanent members.
II. WHAT IS WRONG WITH THE USCF TODAY?
What follows is a list of many of the issues, in no particular order, that face the USCF today.
These are standing in the way of our becoming the World-Class Chess service provider that I
know we CAN be.
Financial Instability
Membership Loss
Senior Staff Unfamiliarity with the Niche Market They Serve
Staff Indifference to Job and Customer
Office Obsolescence
Late Vendor Payments
Too Much Negative Rhetoric, Particularly on the Open Internet Forum.
Lack of Business Skills on the Executive Board
Distrust, Poor Teamwork and Chemistry on the Executive Board
No Grass-roots Club Development Programs
Lack of a Good Performance-based Title System
No Tournament Incentive Program
Good People Driven from Chess - Why Should I Take That Abuse Syndrome
Lack of a Clear Direction - No Business Plan
Lack of an Effective On-line Presence
I'm sure I've missed some, but a good first step toward correcting our problems is to first identify
the issues, then rank them in order of importance, and finally develop a plan to solve the
problems. To do that, it takes a team with the proper skills who are willing to work hard and
cooperate with each other for the betterment of the organization.
III. HOW I CAN HELP
I have delineated my business and chess-related experience in my last letter to you. I bring a
wealth of large and small business experience to the Executive Board. I am a retired business
executive who has managed small and large technical staffs. I have served as a business manager
in a niche market segment, having complete P&L responsibility. I currently own and operate a
very successful small business.
I have been intimately involved in the chess community for almost 40 years and understand the
markets we serve and the problems we face. I know the people who make it run.
I have a strong computer-related background and have written small programs and large,
complex, aerospace simulations. In the early 1980s, I was one of the first in the industry to design
and implement an integrated, networked computer solution to the Engineering workplace. I am a
heavy e-commerce user. I have written a good bit of HTML coding and have designed my own
website, which is one of the best chess sites of its kind on Internet.
I have interviewed and hired hundreds of employees, written performance evaluation guidelines
and performed hundreds of performance reviews.
These are some of the skills I can add to the Executive Board. There is not an area of our
business that I don't have solid, relevant experience.
IV. WHAT ABOUT ALL THOSE VICIOUS POSTINGS?
Every campaign has its hyperbole, balderdash, and the intentional misstatements, and things do
get more tense as we come to the wire. But some of the late submissions this year so exceed the
commonly accepted bounds of political overstatement that they demand repudiation. I would
hope by now that all reasonable voters will see these postings for what they are, pure, malicious
nonsense.
The tactic here is clear - keep pummeling the opponent with emails and postings accusing them
of all manner of improprieties, while simultaneously attacking their character and competence. In
this manner, they hope they will prevent the candidate from concentrating on their campaign and
expend their time, energies and money answering their potentially libelous blatherings.
A. House of Staunton
Posting: Camaratta received a $20K business loan from the USCF to start his House of Staunton.
Reply: Simply a pure fabrication. There has never been a business loan of any kind to the House
of Staunton, Inc. from the USCF.
Quite to the contrary. For the past three years, we would send the USCF merchandise and wait
for 90 days or more before we received payment. As of the end of last year, the USCF owed the
House of Staunton over $25,000 for merchandise already shipped, some of the open invoices
dated back 9 months.
We tried to help the Federation during their cash-flow crisis and administration problems. Just
goes to show you that no good deed ever goes unpunished!
Also, the assertion that we delivered late is absurd. The Federation orders were almost always
shipped out within one week of when the P.O. was received. If you want to check our delivery
performance, just check eBay under our seller ID hstaunton and read our ratings. You will see
that almost every post (there are almost 400 positive and zero negative postings) attests to our
prompt shipping record.
Unfortunately, the House of Staunton no longer sells their patented chessmen to the USCF. This
is a result of continuing late payments and some irregular pricing by the Federation.
B. Handling of the LMA Investments
Before proceeding to some of the bizarre charges, let be provide you with some pertinent
background information.
During the Dlugy Administration, then Treasurer Gary Sperling sought and obtained Delegate
permission to move the LMA funds from low-yield pass book accounts to higher yielding Stocks
and Stock Funds. This, in my opinion, was a major improvement in our investment philosophy
for the Fund.
When I took over as Treasurer in 1993, Key Bank was managing the stock portion of our
portfolio and seemed to be performing reasonably well.
In late 1994, I reported to the Board that I was not happy with the performance of Key Bank
There were too many trades and they were not performing as well as I thought they should.
Although I couldn't say that they were "churning" the account, I felt that the time had come to
change our strategy.
With Board approval, I went to the Delegates with a plan to reinvest our holdings. I proposed
that we keep a large portion of our investment portfolio in one, two and three-year Treasuries,
some in cash and the remainder for investment across a broad segment of the market. The
Delegates, essentially approved the plan as presented.
Over the next four months, I directed Key Bank to liquidate their LMA holdings and moved them
into a cash fund. At the beginning of 1995, I started moving the money into Tucker-Anthony, a
Boston-based brokerage firm.
The first task was to invest a major portion of the fund into the one, two and three-year
Treasuries, which were yielding around 7% at the time. I then moved $60K into two preferred
stocks, Morgan Stanley and Fleet Financial, both paying around 9%. The remainder went into
cash.
Following the Delegate guidelines, I moved approximately $400K into a broad spectrum of
stocks, covering most major market segments. These included such names as IBM, AT&T, Intel,
Microsoft, Merck, Weyerhaeuser, Pepsico, Pitney Bowes, IHOP, AMD, Thiokol, GM, Apple,
Exxon, Motorola, and others. Not what you might call highly speculative investments.
No stock transaction could take place unless approved by both Steve Doyle and me. We did have
an understanding that, in case of an emergency and one of us could not be contacted, the other
could initiate a sell transaction.
The market was somewhat volatile and our upper sell points were triggered more frequently than
we had anticipated. This resulted in our turning over several of our investments much sooner
planned, but we did make a lot of money as a result.
I also kept the Board informed of my activities and our investment performance. No one seemed
to object to my making money at the time. Funny how things seem to change during an election.
Posting: Frank "churned" the account.
Reply: The term churning is specifically used to describe an illegal activity involving the
excessive trading an account for the purposes of generating commissions. I did not "churn" the
account and I certainly was not earning any commissions.
Posting: One of the stocks Frank picked, AOL, went down.
Reply: Yup!
It seems that this particular detractor flunked Fundamentals of Investing 101. The object is to
come away from the table with more than you came with. The fact that any particular investment
performed well or poorly is largely irrelevant.
What the Delegates essentially said to me was Frank, go invest the lion's share of the LMA in
cash and Treasuries and use your discretion with the remainder and make some money for us. So,
over the next 9 months, I took approximately $375K "at risk" money and made us over $120K.
In a nutshell, I was given a difficult job to do by the Delegates. I did the best I knew how.
To paraphrase: Those who can do, those who can't criticize.
V. WHAT MAKES FRANK RUN?
Many of you (and my wife) have asked my why would anyone run for a post on the USCF and
subject themselves to all the concomitant abuse. To be sure, attacks on my business and my own
personal integrity and competence have been very hurtful, both personally and financially.
However, this is a service I feel I must render.
I grew up in the inner-city (Philadelphia). Both my parents are immigrants, which makes me a
first-generation American. My father could neither read nor write. My mother had the
equivalent of a fourth-grade education. I grew up not caring much about school. With little or no
motivation, I frequently found myself in and out of school and trouble.
My father worked as a laborer, installing and finishing hardwood floors in new and existing
construction. He was often out of work and our yearly family income barely made the poverty
level. I can remember doing our income tax return in 1960 - our family income for that year was
$1800. We survived by moving into row homes in the city that needed attention, refurbishing
them while we lived there, and then reselling them. Then, the cycle would start all over again.
In the Spring of 1959 came a chance occurrence which would radically change my life. While on
a job site, my father had come across a new house shell in a modest but comfortable suburb of
the city. It was a single home with the major structure completed, power and water functioning,
but totally unfinished. The entire family, my grandfather, uncles and I, spent the entire spring and
summer of that year completing the home, grading the exterior, building walks and patios,
installing the floors, adding trimwork and painting. That was our home while the work was in
progress.
My main goal in life up to that point had been to drop out of school when I reached 16 and work
with my father. (Both my sisters dropped out of school when they were 15.). However, in this
new setting, I met an entirely different class of friend. The four of them often sat around talking
and philosophizing - and playing chess. Although obviously cut from a different cloth, they
accepted me. I became a part of the group.
One day, while watching two of my new friends playing a game of chess, I was asked if I wanted
to learn. My response was a rather predictable: I'm too stupid to pay that game! Well, to my good
fortune, they didn't buy into that and took the pains to teach me chess. That was late Spring of
1959. By that fall, I found that I could easily defeat any of the group. When I returned to school, I
found the chess club. The moderator was one of my teachers. Much to my surprise, I was easily
able to defeat him - and the other members of the faculty who payed. I soon found students and
teachers alike asking me for advice and instructions on chess! Six months after learning the
came, I earned a Class A rating as a result of my first tournament performance - a rather high
rating back then.
Now imagine what that did for the confidence and self-esteem of a child who had been
convinced that he was not capable. My academic performance soared. I was accepted into an
Engineering college and graduated at the top of my class. I was awarded an NDEA fellowship to
pursue my Doctoral studies.
This was the foundation for my career in the Engineering and Sciences. After 10 years working
in the fields of aerospace design and analysis, I was offered increasingly more responsibilities,
which culminated with my position as a Senior Executive in a multi-billion dollar corporation.
All this from a chance encounter with chess.
Were it not for chess, I certainly would not have had the opportunities life has afforded me. I
realized this simple fact very early in my career. I am devoted to the goal of promoting the chess
to the fullest extent that I am able. If I can make a difference, then I feel an obligation to give
back to the community some of what it has given me.
VI. IT'S YOUR MOVE
I am willing to help, but it is now up to you. I know I can make a difference. Please consider each
candidate, and the business skills they bring to the table, very carefully before marking your
ballot.
Should you wish to contact me personally, feel free to write or phone at the number listed above
anytime.
With warmest regards,
Frank A. Camaratta, Jr.
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