Updates on Libertarian National Committee, Bylaws and Platform Committees, Budget and Audit

*The Libertarian National Committee will be meeting next weekend near Dallas-Ft. Worth airport. See details here. IPR is looking for volunteer correspondents to help us cover the meeting. If you can be there in person to help livestream, liveblog, tape, provide equipment for any of these, provide a phone internet connection if the hotel blocks wi-fi in the meeting room, or record your own version of the events to post after the fact or with periodic updates, please let us know in the comments or by calling or texting me at 415-690-6352. If we are able to get a livestream, we’ll also be looking for people to provide text comments on what is happening as it occurs for the benefit of those unable or unwilling to watch the livestream themselves.

*The main items for consideration at the meeting will be next year’s budget and the discussion of the findings of the Audit Oversight committee. The preliminary agenda for the meeting is here. For anyone unable to open the document I have a text version here. It will be subject to amendment by the LNC at the start of the meeting as well as by votes held throughout the meeting.

*Regarding the budget, LNC treasurer Tim Hagan wrote on LNC-discuss

The Executive Committee, Executive Director, and Operations Director crafted the attached budget for the LNC to consider at the December meeting.

The first page is the Statement of Operations for the budget, with comparisons to 2010, 2012, and 2013 extrapolated out to a year. The numbers for the budget come from the details on pages 2-4. On those pages, the numbers highlighted in green are fairly firm numbers, for example insurance and contracts the LNC has for professional services. The numbers highlighted in yellow have flexibility. We used the average of 2010 and 2012 as a basis for most of the budget. The other numbers are explained with the footnotes on page 4.

Tim Hagan

LNC-Discuss_Budget_2014_Draft5

Everyone on the LNC is aware that posts to the list are routinely mirrored on LNCDiscussPublic on yahoo groups, so hopefully it’s OK for me to post this here. Input from our readers regarding the proposed budget is welcome.

*Regarding the audit oversight committee report IPR has previously published the following (and see the comments):

Response From Audit Committee to Several Questions posted by Jill Pyeatt

Joe Buchman responds to LNC audit controversy posted by Paulie

Wes Benedict responds to LNC audit controversy posted by Paulie

LNC passes policy manual changes regarding audit related issues posted by Paulie

2012 Libertarian Audit Committee: Out of Control? posted by Joe Buchman

Some LNC members may be interested in what questions you would like to have us ask and what further actions if any you would like us to take in response to these findings. Please use the comments to this post to relate your questions and proposals. Technically, the information that has been made public so far is an unauthorized leak, but since it is already out there, it is possible that some of your input may prove to be valuable. Please don’t hesitate to restate points you have made on those prior posts for those who do not follow the links. Please be aware, however, that there is no guarantee that LNC members will read, much less act on, your suggestions. If you would like to bring your opinions to the LNC, you may want to attend the upcoming meeting if you can or contact the Libertarian National Committee members directly – each name links to an email link.

*LNC Secretary David Blau will not be at the meeting:

David Blau will not be in attendance at the Dallas LNC meeting.

Gary Johnson has volunteered to be the recording secretary at the meeting.

James Lark, our formal Secretary Pro Tem, is fine with Gary serving as recording secretary.

Geoffrey Neale

I replied:

Please forgive my ignorance of the rules. Does this mean I will be representing our region at the table, or will Gary be doing both simultaneously?

Responses so far:

Vicki Kirkland:

My educated guess would be that you would be representing Region 7.
I have no inside information on this. 🙂

Daniel Wiener:

If Gary wants to vote, he’ll have to do it in his capacity as a Regional representative. Just because he is also temporarily performing secretarial functions in David’s absence does not make him an Officer. Only the four Officers elected at a convention are counted as members of the LNC. See Article 7 (#1 & #3) and Article 8 (#2) of the Bylaws.

Vicki Kirkland:

I was going to make that same point, but my point to Paulie which I did not spell
out was that it would make sense for him to represent Region 7 since Gary would
be concentrating on the Secretarial duties filling in for Dave. Of course Region 7
would only have one vote.

Geoff Neale:

I’m going to defer to an expert in RONR.

Scott Lieberman:

Just because he won’t be in attendance, David Blau is still the Secretary of the LNC. The only way for Gary Johnson to become “The Secretary” would be for the LNC to remove David Blau as Secretary, and for the LNC to elect Mr. Johnson as Secretary.

In the past the actual, factual Secretary has always voted during in-person LNC Sessions. So, it would be perfectly OK for Regional Representative

Gary Johnson to serve as Secretary Pro Tem during this LNC Session, while simultaneously voting as his Regional Rep.

If Gary Johnson wants to permit Paul Frankel to “sit at the table” during the LNC Session, then of course Gary Johnson can be the Secretary Pro Tem and not vote. Or, if they want to swap off, Gary can still vote whenever he wants to, and permit Mr. Frankel to vote when he doesn’t vote.

Please note that the body elects the Secretary Pro Tem.

I am 99% sure that Alicia Mattson will be in attendance at this LNC Session. If Mr. Johnson wants to be able to serve as his Region’s Representative without having to keep track of the motions and the votes, and having to get the Draft Minutes out to lnc-discuss within 15 days after the LNC Session as per the Policy Manual, then it might be worth exploring the possibility of asking Ms. Mattson to serve as Secretary Pro Tem.

Obviously Ms. Mattson would have the luxury of not having to worry about how she was going to vote, since she would not be an LNC officer or representative.

Note – I have not talked to Ms. Mattson about this matter, so I am not sure if she is willing to do this.

Me:

I’m fine with it either way, but I would just like to know as far in advance as possible so I can be better prepared if needed.

Opinions from RONR experts may be posted in the comments, although your opinion will not necessarily prevail. If I am going to be voting or sitting at the table at this meeting I would be especially interested in readers’ input on the audit and budget issues, and on anything else that is on the agenda. If we are able to provide live coverage of the meeting, you may send me your input via IPR comments and/or text message, although I can’t tell in advance whether both, one or the other or neither will work in the meeting room. My ability to take voice calls or respond to IPR comments or texts during the meeting will be very limited to non-existent if I am at the table voting. However, if I am able to access text messages and/or IPR comments I will read them whenever I am able even if I don’t have time to reply. We do not yet know whether all, part or none of the audit discussion will be in executive session.

If I am not at the table I may be more able to help with providing coverage, but I don’t have a phone internet connection, so my ability to do so will depend heavily on the availability of wi-fi in the meeting room.

* The membership of the Bylaws and Platform committees according to LP.org:
Bylaws and Rules Committee

LNC members:
Mark Hinkle
Geoff Neale
Rich Tomasso
Dan Wiener
Non-LNC:
Rob Latham (UT)
Alicia Mattson (NV)
Chuck Moulton (VA) – interim chair
Jeff Orrok (CO)
Nicholas Sarwark (CO)
Matt Wittlief (IN)
LNC appointed alternates:
Aaron Starr (CA)
Adrien Monteleone (LA)
James “Libertarian” Burns (NV)

Platform Committee

LNC appointed:
Joe Buchman (UT) – interim chair
Sam Goldstein (IN)
Mark Grannis (MD)
Joe Hauptmann (IN)
Brian Holtz (CA)
Lynn House (FL)
Travis Nicks (CO)
Debbie Schum (CO)
Rebecca Sink-Burris (IN)
Dianna Visek (IL)
LNC appointed alternates:
John Wayne Smith (FL)
Starchild (CA)
California: TBD
Texas: TBD
Florida: TBD
Ohio: John Fockler
Ohio alternate: Ann Leech
New York: Christian Padgett
Pennsylvania: TBD
Virginia: Laura Delhomme
Illinois: TBD
Michigan: Andy LeCureaux
Georgia: TBD

In the comments on a previous post, Mark Vetanen raises the question of how rank and file party members and interested observers may contact these committees to provide input. Since I don’t know the answer off hand, I hope that those questions will be answered in the comments here. Both of the interim chairs are signed up to post articles at IPR, and both have made recent returns to IPR comments (and in Dr. Buchman’s case to posting articles). I hope they read this post, and will email them about it if they do not respond in the comments. Aside from the LNC members on these committees, whose contact information is on the LNC members page linked above, I hope we can get contact information for the other members of these committees or for the committees as a whole.

34 thoughts on “Updates on Libertarian National Committee, Bylaws and Platform Committees, Budget and Audit

  1. paulie Post author

    The comment bumps on the old posts were because I was hoping to restart those conversations, but so far that does not seem to be working, and neither is my attempt to jumpstart this one.

  2. paulie Post author

    My post on about contacting the LNC committees is here http://www.independentpoliticalreport.com/2013/11/response-from-audit-committe-to-several-questions/#comment-864513

    Contact me via facebook https://www.facebook.com/EventOneVideo?ref=tn_tnmn if you have specific questions about what I am saying or talking about.

    Thanks. Your comment led me to pose these questions, but I am hoping the answers, if we get them, will also be of interest to others here.

  3. Chuck Moulton

    I am interim chair of the 2014 LP bylaws committee. Feel free to contact me at chuck@moulton.org if you have any bylaws proposals (or broad ideas for proposals) you want the committee to consider.

    Sorry for my lateness chiming in. I didn’t follow IPR Thanksgiving weekend.

  4. paulie Post author

    Not late at all. Still trying to get this one jumpstarted, without much success as of yet. If I succeed, you’ll be one of the early comments 🙂

  5. paulie Post author

    Geoffrey Neale

    7:17 PM (1 minute ago)

    to lnc-business
    Hopefully yes

    ——– Original message ——–
    From: Rich Tomasso
    Date: 12/01/2013 6:03 PM (GMT-06:00)
    To: lnc-business@hq.lp.org
    Subject: Re: [Lnc-business] Dallas LNC meeting proposed agenda

    Is the intent to have the motion about the convention “floor fee” during
    one of the two convention committee reports?

    ~Rich
    Region 5N Rep

  6. Pingback: Floor fee issue likely to come up for a vote at this weekend’s LNC meeting | Independent Political Report

  7. paulie Post author

    From the pingback, for those who read comments but not articles:

    Additionally, there will be a goals discussion – but only for 15 minutes, unless the agenda is changed.

    Regarding the other items I discussed in the prior post:

    *I’ve received no response as to whether the preliminary budget has already been publicly posted anywhere. I would like to get some feedback about budget priorities from our readers. but I would rather not post it unless it has already been publicly posted somewhere since it is marked confidential.

    *So far, no one commented on that post as to what questions LNC members should ask, or what further actions should be taken, in response to issues brought up by the audit oversight committee.

    *It appears I most likely will not be voting, but I’ll try to be prepared in case I will be, since no definitive answer has been posted. However, even if I am not voting, I still don’t have a phone internet convention, so unless we find someone who can provide that or unless the hotel makes their wifi available to us at no charge, there may not be any live coverage of the meeting.

    *In the comments on the previous post, interim chair Chuck Moulton said that rank and file members who have proposals they would like to have considered by the bylaws committee can write to him at chuck@moulton.org and that these can be either specific language or broad ideas for proposals. To date, we have received no similar reply from the platform committee to the same question.

  8. paulie Post author

    Thanks to a comment from Starchild that reminded me of a comment from Geoff Neale that the draft budget is not confidential I have restored it in this post.

  9. Nicholas Sarwark

    Clicking on the attachment opens a document that has “DRAFT #4 – CONFIDENTIAL – NOT FOR PUBLIC DISSEMINATION” in red letters across the top of each page.

  10. paulie Post author

    Yes, that was why I redacted it after I posted this article.

    This was addressed by Starchild in a comment on another article, which is why I restored this version:

    In a response to Scott Lieberman (who, in a welcome change, makes a point here in favor of more transparency), LP chair Geoff Neale stated that the budget we were sent on the LNC is NOT confidential, and I haven’t seen anyone say otherwise:

    On Nov 19, 2013, at 12:13 AM, Geoffrey Neale wrote:

    Mr. Lieberman,

    This version is version 5, which is not confidential. The note you reference is a vestige from the prior version, which was a work in progress.

    Geoff

    ——– Original message ——–
    From: “Scott L.”
    Date: 11/18/2013 11:34 PM (GMT-06:00)
    To: lnc-discuss@hq.lp.org
    Subject: Re: [Lnc-discuss] Draft 2014 Budget

    “The Executive Committee, Executive Director, and Operations Director
    crafted the attached budget for the LNC to consider at the December meeting.

    Tim Hagan”

    Mr. Treasurer:

    The attached file has this notation on the first page:

    DRAFT # 4 – CONFIDENTIAL – NOT FOR PUBLIC DISSEMINATION”

    Why is a draft budget confidential?

    Scott Lieberman

    The proposed budget was sent to us as a PDF document; I’m not sure how that will post on IPR. I also got Tim Hagan to send it to me as text in the body of an email, but I’m not sure how that will post here either.

    Anyone who would like to see a copy is welcome to email me and I’ll send it to you in whichever of those two formats you prefer — realreform[at]earthlink[dot]net.

    Love & Liberty,
    ((( starchild )))
    At-Large Representative, Libertarian National Committee

  11. Nicholas Sarwark

    Looking at the charts, I would note that the party gets approx $4 in dues for every $1 of membership fundraising costs, but only $2 in donations for every $1 in fundraising costs. That said, I can’t tell if those numbers are apples to apples or what costs are applicable to recurring gifts.

    I would also note that the proposed 2014 budget has some mighty big increases in some areas that are not (at least in this document) supported by evidence of how they are to happen. E.g. major donor solicitation is projected to bring in $60K of revenue even though it’s only brought in $1K in 2012 and $120 in 2013. 2010 numbers were $94K, but unless we have a plan for how to get back to that performance from a standing start, budgeting for that revenue seems like magical thinking.

    I also note with concern that in 2013 the party spent $236K on fundraising expenses, compared to $62K across all program expenses (outreach, ballot access, LP News, events, etc.), a 4:1 ratio. 2014 proposed is $277K on fundraising, with $188K on program expense, closer to 3:2, but $123K is just for ballot access, which leaves just $65K for all other program expenses. There’s also a whopping $0 budgeted for candidate support in an election year.

  12. Starchild

    As one of those who will be voting on the Libertarian Party’s national budget, I am particularly interested in proposals to cut spending and save money. (It is rarely difficult for legislators to find ways to SPEND more money! lol…) The LNC is contacted on a fairly regular basis with requests for funding ballot access efforts, candidates, lawsuits, etc. Most of these requests have merit — much less clear is how much merit they have relative to each other and relative to existing budget expenses.

    In general, some of my budgetary priorities are:

    • Cut unnecessary spending on LNC meetings
    • Oppose any attempt to charge convention delegates floor fees
    • Keep convention costs low so conventions are as affordable as possible
    • Reduce staff pay/benefits – move toward competitive bidding for services and work performed
    • Publish LP News on a monthly basis again
    • Reduce direct mail fundraising letters – migrate to raising money via crowdfunding approach
    • Be very skeptical toward any expensive new software packages or website proposals
    • Make budgets more widely public (current and past budgets should be published on a page on LP.org) and more detailed and easily understandable by non-financial types

    Input from LP members and other libertarians is most welcome. One thing I’d like to hear opinions on is the exchange below between LNC regional rep. Norm Olsen and LP chair Geoff Neale. Frankly I cannot get a clear handle on the point they’re discussing, and consider it an example of how budgets need to be published in a form more easily understandable by non-financial types.

    —–Original Message—–
    From: Lnc-discuss [mailto:lnc-discuss-bounces@hq.lp.org] On Behalf Of Norm
    Olsen
    Sent: Sunday, November 24, 2013 11:48 PM
    To: lnc-discuss@hq.lp.org
    Subject: Re: [Lnc-discuss] Draft 2014 Budget

    Help me, please . . .

    On the proposed budget, Page 1, Statement of Operations, I see an item
    labeled 25 – Project Program Revenue $135,300.00; This same figure shows up
    on page 2, Account #4108. Looks like we’re talking funds collected to pay
    for the “building”.

    Building funds are restricted. Yet I see no allocation in the expense side
    to account for the fact that most/all/much of the $135,300 can only be used
    as a down payment on a “building”.

    I don’t understand how this $135,300 can be included in “Net Support
    Available For Programs”. Can someone help me out?

    Norm

    Norman T Olsen
    Regional Representative, Region I
    Libertarian National Committee

    ————————————————————

    On Nov 25, 2013, at 4:45 PM, Geoffrey Neale wrote:

    Norm – I’ll take a stab (guess) with my understanding of accounting.

    The budget is trying to measure money coming in and money going out, to
    “balance” the numbers. However, from an accounting standpoint, when we buy
    a building, we will not be considering down payments as “expenses”. All
    that will actually happen is that a chunk of money will disappear from our
    “cash” on the balance sheet and reappear in “fixed assets”.

    Of course money raised for the building is permanently restricted, and can
    only be used for capital expenditures.

    Geoff
    ————————————————————

    Love & Liberty,
    ((( starchild )))
    At-Large Representative, Libertarian National Committee

    “Maintaining the Libertarian Party as a libertarian organization requires leadership accountability, and accountability requires operational transparency. You can’t hold us accountable if you don’t know what we’re saying and doing.”

  13. Starchild

    Nicholas Sarwark (December 2, 2013 at 7:55 pm) – These sound like valid concerns Nick.

    Regarding major donor fundraising, I expect Mark Hinkle will say something along the lines of, “I didn’t spend much time on that recently outside of the building fund, but plan to do much more in the coming year.” How would you respond to this?

    How much money do you think we *ought* to be giving to candidates? A tougher question: How should we evaluate which campaigns to support and how much money to give them? Or do you think we ought to spend money on candidate support in ways other than giving them money?

    I think we can save a lot of money on fundraising by switching to a crowdfunding approach. List various projects on a web page on LP.org or another site (LP chair Geoff Neale bought LibertarianAngels.com and proposed to use this site for such a purpose after I bought a couple other domain names and offered to donate them to the party, but I haven’t heard anything further).

    Promote such a crowdfunding website via email and LP News and a small number of concise direct mail pieces instead of sending lots of lengthy and expensive direct mail appeals that people are paid to write (if I recall correctly, this is what most of the ~$39,000 payment to LNC member Michael Cloud that came up in the Audit Committee scandal was allegedly for).

    I would personally welcome a short email every couple weeks from the LP telling me which projects are currently listed on an LP crowdfunding website, and how they are doing. I believe that putting donors in the driver’s seat by giving them a good variety of pre-approved projects from which to choose, rather than just sending them letters saying “Please give us money” or “Please give us money to fund Nebulous Priority X” or even “Please give us money to fund Specific Priority Y”, will tend to bring in more money, especially over time as public awareness of the crowdfunding site grows.

  14. Randy

    Interesting that the meeting will be held on the 72nd anniversary of the Pearl Harbor sneak attack. This could not have been a coincidence. Maybe they are expecting 72 virgins in paradise like the Muslim terrorists?

  15. Mark Vetanen

    Re: 2014 Draft Budget

    Having been a Treasure for a State Party for over 5 years, i can attest that when the income streams dwindle, as in the case of the LNC, it is completely irresponsible then to then budget in the opposite direction. The result when this happens is always unwanted debts are occurred and court litigation as creditors and contractors demand payments.

    Reducing overhead is a good idea, however the money released must be used for recruitment and growth. That is in the long run the only true revenue stream any organization has.

    I also noticed that the compensation line item was greatly increased – that is most troubling and telling.

  16. Joe

    The last of the 20 members and 6 alternates to the Platform committee was confirmed last Friday. I sent an updated list to Robert Kraus and David Blau late last Sunday. I expect the associated LP.org webpage will be updated soon. I’ve also asked each member to let Robert and/or David know what contact information they would like to have posted there and at least one member has already responded to that request, offering an email address.

    The process of confirming the members of the 2014 platform committee has been, I believe, 100 percent transparent, and can be found on Facebook at:

    https://www.facebook.com/pages/Libertarian-Platform-Committee/496553003725528

    I anticipate posting an article here seeking input both on the Platform itself, and in put on the location/time of our first in-person meeting, within the next week or so at most.

  17. George Phillies

    Relative to 2010, a 2% increase in income — which appears imaginary — leading to a 38% increase in the compensation budget. The increase in income projected over this year is very large, much larger than the 10% projection limit in the Policy Manual, as I believe Aaron Starr was the first to note.

  18. Wes Wagner

    At the pinnacle of perversity, we, who often complain that government will grow to consume revenues and borrowing capacity eventually leaving the people poor.

    At the LP we punch that up a notch, to make up imaginary revenues and borrowing capacity to meet our desired spending.

  19. George Phillies

    Let’s see. Compensation is going up a lot, but radio ads are being eliminated. Branding is being mostly eliminated. There are marked surpluses for this year and next year. They appear to be much smaller than the money raised for the building fund. (Incidentally, why do you expect that you can continue to raise a lot of money for the building when there is no building?) There are some new income streams not recently used that are being asked for a lot. The IT budget is quite impressive, and merits more detail.

    Best,

  20. Starchild

    As I would expect is normal for an organization with a number of full time employees, a large portion of the matters we deal with on an ongoing basis in our operations concern staff in one manner or another.

    There are concerns that we shouldn’t discuss certain personnel matters publicly lest we expose ourselves to legal liability, and while given the out-of-control legal system in this society I believe these concerns sadly have merit in certain specific situations, it is clearly unrealistic and detrimental to the interests of our party for everything that relates to staff to be kept secret.

    I have attempted to get advice from our general counsel and input from other LNC members about which specific types of information regarding staff need to be kept secret, but no one who knows or claims to know has volunteered this information to me.

    In fact, LP chair Geoff Neale specifically instructed our in-house lawyer Gary Sinawski to ignore my questions. I believe this was exceeding his authority as chair, but even if I wanted to compel Gary to give me advice when he chooses not to do so, I don’t know of any way to do this short of a vote by the entire Libertarian National Committee.

    In the meantime, Audit Committee chair Aaron Starr sent the following additional material to members of the LNC a couple days ago. Neither he nor anyone else including counsel has told us this needs to be kept secret that I am aware of, and the bulk of the Audit Committee report has been leaked already anyway along with numerous comments posted here by others, so I am going to go ahead and post this in the interests of disclosure and accountability ahead of our December 7-8 meeting in Dallas this weekend.

    My fear is that some LNC members will seek to have the entire conversation about the Audit Committee report in secret without disclosing anything. If someone convinced me we face a great legal risk by having a public conversation on the matter I would be more willing to entertain that course of action, but my sense is that the secrecy is as much about avoiding embarrassment and maintaining insider exclusivity as anything else — and these do not strike me as good reasons not to let our members know what’s going on or have an opportunity to weigh in on the matter.

    ————————————————————————————————–
    On Nov 30, 2013, at 3:31 PM, Aaron Starr wrote:

    Members of the LNC and LNC General Counsel Gary Sinawski,

    In his role as counsel for the LNC, I am including on this email LNC General Counsel Gary Sinawski so that he is aware of these issues and can offer his legal advice.

    Since the time the Audit Committee submitted its Second Interim Report to the LNC, another detail has come to our attention that we did not notice in time to include in our second report.

    Before the 2012 audit even began, Mr. Cloud disclosed to the LNC some information which seems to contradict his invoices, as well as the statements later made by Ms. Howell during the audit.

    For background, the LNC’s Policy Manual discusses Conflict of Interest in Section 2.01.2. It reads as follows:

    Each LNC Member and each Party officer or employee shall disclose to the LNC situations in which such person’s own economic or other interests, or duties to others, might conflict with the interests of the Party in the discharge of his/her duties. Any such disclosure shall be made at the earliest opportune moment, prior to the discharge of such duties and clearly set forth the details of the conflict of interest, in a written disclosure statement provided to the Secretary. No LNC Member, Party officer or employee shall: (a) transact business with the Party unless the transaction is fair and equitable to the Party; or (b) use information gained in the discharge of Party duties to the disadvantage of the Party.

    The Secretary shall maintain a register of all declared potential conflicts of interest by LNC members. This register will be presented and distributed to all LNC members at each regular LNC meeting.

    As a result of this policy, during the July 15, 2012 LNC meeting, time was allowed for each person to provide the Secretary with the appropriate disclosures. Below is a transcript of a portion of that meeting, and the matching audio is attached for your own verification of its accuracy.

    LNC Secretary Ruth Bennett: Mr. Cloud?

    Michael Cloud: I am the President of the Center for Small Government. We don’t have any financial relationship yet to the Libertarian Party, but I anticipate either lending or renting mailing lists so that we can cross mail – so that we can harvest some of our names into the Libertarian Party. That’s number one.

    Number two is, although I am not on the board of the Advocates for Self Government, I’ve had a very, very close relationship, long time, with the people running the organization. And I believe that Advocates has a relationship with the LP with the World’s Smallest Political Quiz. I don’t know if there’s any monies involved. I needed to put that on the table.

    And third is, I expect to be vendor to the Libertarian Party for fundraising. And in order to alleve (sic) any potential conflicts of interest, I’m charging under market rates for the fundraising I will do – under what the normal pay is for those, so that the question simply doesn’t arise whether or not you’re getting value for your dollar.

    Geoff Neale: Mr. Lark, you have a question?

    Dr. James Lark: Yes, please excuse my incredible ignorance. In terms of providing below market rates, is there any possible FEC question? You are a member of this board. I would assume that there probably isn’t a problem, but if you are in some sort of vendor capacity, is there a problem if you are providing services to the LNC at below market rates? You may want to just look into that and see if there is some sort of implication by virtue of federal law.

    Michael Cloud: Well then, let me rephrase is that I am providing services at WalMart rates, rather than Neiman Marcus, for our fundraising.

    What we want to bring to your attention is that Mr. Cloud’s disclosure in July of 2012 indicates that at that point in time he “expect[ed] to be” a vendor. Expecting to be something is a hope for a future situation that is not yet true. Mr. Cloud did not say he was at that time a vendor who had already reached an agreement with the party on payment terms and was already performing services under that agreement. One could reasonably infer from his statement that he had not yet performed paid work.

    However, Mr. Cloud’s invoices make clear that he charged for work done prior to July 15th, 2012 at which time even he apparently did not yet consider himself to be a vendor.

    His first two (summary, not detailed) invoices amounting to $33,500 were not presented and paid until October 2012, and those invoices state that they are for work performed from May 15, 2012 through October 31, 2012. No details of the work performed were provided on those first two invoices. The latest long-after-the-fact reconstructed invoice created to support his work shows that he billed $7,429.70 in gross fees and commissions (before discounting the amount to the $7,311.85 billed) for work performed from May 18 – July 15, 2012.

    Contrast Mr. Cloud’s July 15, 2012 statement with Ms. Howell’s written statement to Chairman Neale on August 13, 2013 during the audit:

    In December of 2011, then-Chair Mark Hinkle and LP Convention Chair Ruth Bennett asked Michael Cloud to do the marketing for the 2012 national convention, despite the fact there was no budget allocated for marketing it. Michael obliged and also refused to be paid for this work. He worked voluntarily for LP HQ from December through early May of 2012. Most of his help involved writing fundraising letters/registration appeals for the convention with the aim to make it profitable. He also reviewed the fund-raising letter I wrote in Jan-Feb and came up with the teaser for the envelope, “The Ron Paul Effect.” He also reviewed and offered edits for a few other pieces we wrote such as blogs and LP News. I didn’t keep track of the specific pieces he helped with on a volunteer basis during this time.

    Shortly after the convention, we agreed to his doing paid work for headquarters and to terms of payment. He did this work for the period between mid-May and end of 2012. The terms were:

    Fundraising letters: 15% of gross after subtracting $1000, plus $1000 flat fee.
    Press releases: $500
    LP News issues – review and edits: $500 per issue
    Email fundraisers: 10% of gross online donations (not including membership/renewals).

    Ms. Howell’s statement above asserts that he only worked as a volunteer through early May of 2012, but shortly after the convention in May, “we agreed to his doing paid work for headquarters and to terms of payment. He did this work for the period between mid-May and end of 2012.”

    Ms. Howell indicated that Mr. Cloud already was a vendor, with agreed upon terms, already performing the contracted work well before July 15, 2012.

    These conflicting statements cannot both be true. It isn’t likely that in July 2012 Mr. Cloud didn’t know he was already a vendor, had already agreed to terms, and had already performed work for which he was owed. Did Mr. Cloud misinform the LNC about his status at that time, or else was he not yet a vendor, the undocumented vendor agreement came after July 15, 2012, and he then back-billed for work performed before he became a vendor?

    Because there was no written contract for this work, the Audit Committee is unable to determine which of these conflicting timelines is accurate. We are unable to determine when Mr. Cloud ceased doing volunteer work and when he became a vendor to whom payment was due. If his vendor agreement came about after July 15, 2012, then some of the items on the reconstructed detailed invoices would not have been owed to him, as they predated the vendor relationship.

    At this time we would like to remind you of something we did note in our Second Interim report. On page 7 of that document we noted that the most-recently-reconstructed invoice that was produced on September 2, 2013: “included items Mr. Cloud had previously agreed to do for free before he became a paid vendor. These were related to promotion for the 2012 national convention, and the new invoice suggests he was owed for these under the terms and payment rates of his post-convention vendor agreement, but suggests that Mr. Cloud simply chose not to bill for them.”

    On that invoice, Mr. Cloud backdated his payment terms to include $8,250 worth of work (eleven pieces at $750 each) he had previously agreed to do for free between February 14, 2012 and April 30, 2012, even though Ms. Howell’s statement was that “he worked voluntarily for LP HQ from December through early May of 2012,” so it is not unrealistic to question whether he again chose to bill for work between May 15 and July 15, even if it pre-dated his agreement to become a vendor.

    Based on Mr. Cloud’s statement indicating that he was not yet a vendor as of July 15, 2012, we are amending section 1.10 of our Second Interim report to include the bracketed, underlined language below.

    1.10 CALCULATION OF COST PAID PER WORD (BOTH AUTHORED AND/OR CO-AUTHORED)

    Leaving aside for the moment that the Audit Committee cannot substantiate the dollars raised by Mr. Cloud through email fundraising, it is claimed that $216,106 was raised from all of his writing efforts based on our count of 22,488 words being written, which supports the payment to Michael of $39,466.50 in gross fees and commissions (before discounting the amount to the $38,800 billed). [If one were to characterize the time prior to July 15, 2012 as volunteer work, then $172,005 was raised (before printing, mailing and other fundraising costs) based on 18,884 words written for $32,036.80 in gross fees and commissions billed by Mr. Cloud. The actual bills and payments amounted to $38,800.]

    However, of the total revenues generated, $76,867 (over 1/3) was from work that cannot be substantiated in the emails staff provided to us. If you review the chart provided in the Exhibits you’ll find that there are 11 items for which no documentation was provided to support work the LNC paid for. There is no substantiation for those 4,589 words written, no substantiation that three issues of LP News were edited and therefore no substantiation that $13,252.85 in gross fees and commissions (before discounts) were earned by Mr. Cloud. [If one were to characterize the time prior to July 15, 2012 as volunteer work, then $45,096 (over ¼) of the revenues cannot be substantiated. There are 6 items for which no documentation was provided. There is no substantiation for 2,434 words written, no substantiation for two issues of LP News edited and therefore no substantiation for $8,522.65 in gross fees and commissions earned out of the $32,036.80 in fees claimed as earned by Mr. Cloud subsequent to July 15. The actual bills and payments amounted to $38,800.]

    Though the Audit Committee’s task does not include making judgments about how much a vendor’s work is worth, we will pass along to the LNC some additional data for your independent evaluations. Of the roughly $26,000 in fees the Audit Committee can substantiate, the Word document properties show around 3,900 minutes of time that these documents were open. We can’t be sure how much time Mr. Cloud spent working on these. (One can easily imagine that a person will often walk away from a document with it open on his computer while working on something else. One can also imagine that someone might spend some time not working directly on a document because there is thinking that goes on before writing commences. And there is work that is done after completing the document.) Using this amount of time as the best available reasonable gauge of the amount of work done, results in a rate of pay of approximately $400 per hour. [If one were to characterize the time prior to July 15, 2012 as volunteer work, then of the roughly $23,500 in fees that we can substantiate, the Word document properties show around 2,800 minutes of time. As such, the recalculated rate of pay exceeds $500 per hour.]

    The Audit Committee requests that the National Committee answer the following questions at its upcoming December 7-8 meeting in Dallas:

    · Given that Mr. Cloud indicated that he was not yet a vendor as of July 15, 2012, as of what date does the Libertarian National Committee believe that Mr. Cloud ceased being a volunteer and became a vendor?

    · According to the Bureau of Labor Statistics (http://www.bls.gov/ooh/media-and-communication/writers-and-authors.htm), the median annual wage of writers and authors was $55,420 in May 2010 (or $26.64 per hour). Freelance copywriters tend to earn more to cover office costs, self-employment taxes and other costs. According to the 2012 Writer’s Market, a freelance advertising copywriter charges between $35 and $150 per hour. Depending on when work as a vendor began, the Audit Committee can document Mr. Cloud working anywhere from 46 to 65 hours. Given the policy that no National Committee member shall “transact business with the Party unless the transaction is fair and equitable to the Party” and Mr. Cloud’s commitment to “providing services at WalMart rates, rather than Neiman Marcus” rates for his copywriting skills, what portion of the $38,800 paid to Mr. Cloud does the Libertarian National Committee consider to be a fair and equitable amount of compensation?

    Respectfully submitted,

    Aaron Starr, Chairman
    Libertarian Party Audit Committee
    ————————————————————————————————–

    It appears we can no longer post photos and audio and video links in the IPR comments under this new format (I presume this has been discussed and explained elsewhere, but since I haven’t mentioned it previously, let me just say for the record that I vastly preferred the former look and feel of IPR before the change a couple months ago!). So you’ll have to take my word for it, for the time being, that the audio file of the July 15, 2012 LNC meeting that Aaron Starr attached to the message above contained a recording of a conversation which I believe to be accurately reflected by the transcript above, and which accords with my memory of what was said at that meeting.

    Since we will be discussing the Audit Committee report this weekend, I’m interested in hearing from party members how you feel this situation should be handled. Especially if you are someone who does not post often, or has not posted previously on this topic.

    Love & Liberty,
    ((( starchild )))
    At-Large Representative, Libertarian National Committee

  21. Joe

    Starchild @ December 6, 2013 at 12:11 am,

    I bought a ticket to Dallas back in September, nonrefundable, so I am planning on going to Dallas (while hoping to get bumped/refunded due to a cancellation). If neither of those happen, I’ll be in the hallway during the secret session of the audit discussions, available to answer questions, etc; or in the room if it’s an open session.

    Also, FYI, the latest update on the Platform Committee is here:

    https://www.facebook.com/pages/Libertarian-Platform-Committee/496553003725528

    (If I am bumped, I’ll be available by phone Friday morning/early afternoon.)

    See you there,

    Joe

  22. paulie Post author

    Change of plans. I will not be able to make it to the LNC meeting. Greyhound is cancelled from Jackson MS to Dallas indefinitely. Not much point in spending the weekend in Jackson, so I never boarded. We’ll see if I can get the Greyhound ticket and/or motel reservation refunded. Something tells me no.

    Hopefully Joe and/or someone else can report from the meeting.

  23. paulie Post author

    It appears we can no longer post photos and audio and video links in the IPR comments under this new format

    We can and I often do. Since you are signed up for IPR you should be able to as well.

    (I presume this has been discussed and explained elsewhere, but since I haven’t mentioned it previously, let me just say for the record that I vastly preferred the former look and feel of IPR before the change a couple months ago!).

    Me too, but it was apparently an outdated theme that was a security risk and caused us to be listed as a virus site somewhere.

  24. Starchild

    Paulie, that’s a bummer, hope something turns up! Maybe you can find a hitch?

    Glad you’re coming Joe, look forward to seeing you!

  25. paulie Post author

    Maybe you can find a hitch?

    No, that wouldn’t work, for many reasons. The roads are messed up being just one of many.

Leave a Reply

Your email address will not be published. Required fields are marked *