USCF LIFE MEMBER ASSETS DECLINE IN VALUE
During the first seven months of the fiscal year, 5/31/00 to 12/31/00, USCF's Life Member Asset account, commonly known as the "LMA," lost $80,343 on its investments. This was a period of poor performance for the stock market.
LMA investments rose in value from $1,643,193 on 5/31 to $1,679,042 on 9/30, but then declined to $1,632,820 on 10/31 and $1,562,850 on 12/31.
The calculated LMA liability, based on the estimated cost of servicing USCF's life members, increased from $1,973,977 to $2,005,191 during this period, a liability increase of $31,214.
The above information is based on a report from a member of the LMA Committee. The federation appears to no longer issue monthly financial reports, and recent reports have shown only "operations," a departure from past practice in which both "operations" and "consolidated" (operations plus LMA) were shown. The USCF website reports no LMA figures at all for this fiscal year, and President Tim Redman has stated, "I don't consider the consolidated statements a high priority. That is because the consolidated statements include the performance of the LMA fund, which is managed by a Delegate Committee and completely outside the control of the Board."
While it is true that the LMA Committee is not controlled by the Executive Board, each dollar gained or lost by the LMA has an impact similar to a dollar gained or lost by operations, so we would think the EB would closely follow how the LMA is doing, and try to insure that these results are reported to the delegates, who are supposed to be the ultimate governing authority of the federation. Politically, the LMA Committee has a heavy majority of members friendly to the Executive Board's Redman-Warren-Barry-Pechac alliance, so it is hard to believe that the Board cannot get that committee to keep up to date with public reports. If ChessNews.org can obtain the figures presented above, the EB must surely have them too, so why have they not been made public, the most appropriate place being the USCF website at uschess.org?
Recent history has shown that Redman and allies have tended to select either "operations" or "consolidated" figures to emphasize, depending on which better supports their political case. When the Redman alliance was attacking former ED Cavallo in late 1998, it played up the consolidated figures, because the stock market had suffered a sharp reversal in October of that year, and using consolidated made the Executive Director look worse than using operations. However, when the market rebounded strongly in 1999, the Redman group dropped all mention of consolidated and focused only on operations.
Likewise, Redman and friends are now trying to make the case that they are turning things around (a deceptive case because of the many writeoffs and extraordinary expenses of the few years before Redman), so consolidated figures are no longer considered relevant during a period of market decline. We are confident that should the markets recover in the coming months and LMA investments show a profit for the fiscal year, the President and EB majority will suddenly discover the virtue of consolidated figures, and issuing them will no longer have such a low priority!