Aaron Starr: Recap of the LNC’s Decisions Regarding the Audit Committee Findings

Aaron Starr

The Libertarian National Committee met last weekend in Dallas for their quarterly meeting. They were in Executive Session on Saturday for 6 hours and five minutes (11:05AM to 6:10PM)*, apparently most or all of it having to do with the Audit Committee’s report from 2012. There were several findings regarding possible misuse of Libertarian Party funds that were raised in the report. Following is the Audit Committee’s Chairman Aaron Starr’s recap of the LNC’s decisions regarding the findings.

Prior discussions on this forum of this can be found here and here , and also by entering “Audit” into the search box.

* see: https://secureservercdn.net/166.62.113.120/qkc.c33.myftpupload.com/wp-content/uploads/2013/12/lnc-minutes-2013-12-14-1.pdf

On Thu, Dec 19, 2013 at 3:21 AM, Aaron Starr wrote:

Dear Members of the LNC,

Let me begin by thanking all of you for giving the issues brought forward by the Audit Committee the attention they deserved. There was a general understanding that decisions needed to be made by the LNC and I believe the process was sufficiently deliberative and that the issues are now largely settled.

I am writing this email to recap the LNC’s decisions last weekend as they pertain to the findings of the Audit Committee so that we may expeditiously complete our work for 2012 and inform the outside auditors and FEC Consultant Paula Edwards as to what decisions were made. If you should find any errors in this recap, please let me know promptly.

Motion to Pay Mr. Cloud a Fair Amount for his Fundraising Services

Whereas, Mr. Cloud first disclosed to the National Committee on July 15, 2012 his intention to become a vendor to the Party;

Whereas, in violation of LNC Policy no written agreement with Mr. Cloud was crafted, reviewed by General Counsel or signed by the Chairman detailing the terms and conditions of the vendor relationship between Mr. Cloud and the Party;

Whereas, LNC Policy is that no LNC Member, Party officer or employee “shall transact business with the Party unless the transaction is fair and equitable to the Party;”

Whereas, the Party desires to pay Mr. Cloud an amount that is fair and equitable to the Party;

Whereas, the Party, in keeping with Mr. Cloud’s commitment on July 15, 2012 to provide services at “Walmart rates, rather than Neiman Marcus” rates, finds it reasonable to set a rate of pay at the lower end of the range for a freelance writer;

Whereas, Mr. Cloud’s billings to the Party in the amount of $38,800 for his services is not fair and equitable to the Party; now, therefore be it

Resolved, That the Libertarian National Committee finds that Mr. Cloud performed no more than 100 hours of work as a vendor at a fair rate of $50 per hour (or $5,000 total);

Resolved, That Mr. Cloud owes the Libertarian National Committee $33,800, and

Resolved, That the Audit Committee is instructed to work with the Party’s outside CPA firm to make appropriate adjustments to the 2012 financial statements to reflect this.

 

Voting Aye: Goldstein, Lieberman, Starchild, Visek

Voting Nay: Cloud, Hagan, Hinkle, Kirkland, Johnson, Lark, Olsen, Redpath, Tomasso, Vohra, Wiener

Abstaining: Neale

As the above motion failed and no other motion was adopted, I am treating that decision as a de facto approval of the $38,800. In addition, since no motion was adopted dealing with the issue as to when Mr. Cloud’s work as a vendor began, I am taking the position that the LNC accepts that paid work was conducted from May 15, 2012 through December 31, 2012 in accordance with the dates on Mr. Cloud’s original invoices.

First Motion Addressing Ms. Howell’s Moving & Commuting Expenses

Rental Deposits and Friend’s Airfare

Whereas, payments for rent security deposits for Ms. Howell in the amount of $3,550 and airfare for her friend Leslie Fish in the amount of $173.40 were made, but not authorized by Ms. Howell’s employment agreement (as detailed in an exhibit in the Audit Committee’s Second Interim Report);

Whereas, LNC Policy requires that the Chair or Treasurer approve (and evidence by signing or initialing) all expenses and expense account reimbursements more than $200 made to the Executive Director or other officers prior to payment, and such approval was not obtained; and

Whereas, Ms. Howell has only repaid $1,800 of this amount to the Libertarian National Committee; now, therefore be it

Ordered, That Ms. Howell is obligated to promptly repay the balance of $1,923.40 to the Libertarian National Committee; and

Ordered, that Robert Kraus and the Audit Committee be notified of this decision so that appropriate adjustments be made to the 2012 financial statements.

 

Voting Aye: Cloud, Goldstein, Hagan, Johnson, Kirkland, Lark, Lieberman, Olsen, Redpath, Starchild, Tomasso, Visek, Wiener

Voting Nay: Hinkle, Vohra

Abstaining: Neale

As this motion was adopted, the Audit Committee will be working with Robert Kraus to make appropriate adjustments to the 2012 financial statements.

Second Motion Addressing Ms. Howell’s Moving & Commuting Expenses

Expenses without Receipts

Whereas, the Party reimbursed Ms. Howell $1,118.00 for expenses and Ms. Howell directed the Party to pay $1,422.84 directly to vendors for expenses, all of a nature allowed by her employment agreement, but without receipts (as detailed in an exhibit in the Audit Committee’s Second Interim Report);

Whereas, the Party also paid $565.40 for airfare that Ms. Howell states is not related to the commuting and moving expenses of her employment agreement, but that she may be able to substantiate as being employment related by presenting receipts, along with other supporting documentation; and

Whereas, LNC Policy requires that the Chair or Treasurer approve (and evidence by signing or initialing) all expenses and expense account reimbursements more than $200 made to the Executive Director or other officers prior to payment, and such approval was not obtained; now, therefore be it

Ordered, that Ms. Howell promptly repay $3,106.24 to the Libertarian National Committee, but allow her to reduce that amount by providing receipts and other documentation to the Audit Committee by December 31, 2013 to substantiate those expenses as employment related, provided the Chair or Treasurer also approve (and evidence by signing or initialing) such expenses; and

Ordered, that Robert Kraus and the Audit Committee be notified of this decision so that appropriate adjustments be made to the 2012 financial statements.

 

Voting Aye: Cloud, Goldstein, Hagan, Hinkle, Johnson, Kirkland, Lark, Lieberman, Olsen, Redpath, Starchild, Tomasso, Visek, Wiener

Voting Nay: Vohra

Abstaining: Neale

As this motion was adopted, the Audit Committee will be working with Robert Kraus to review the receipts and other documentation supporting these transactions and make appropriate adjustments to the 2012 financial statements once those are settled. As written, the motion allows for staff to present documentation supporting the existing expenses, not for additional expenses for which reimbursement was not previously obtained.

Motion Regarding Shipping Expenses

Whereas, the Audit Committee found general ledger records stating that UPS and FedEx Kinko’s transactions in the amount of $956.30 were incurred for Ms. Howell’s move in March and April of 2013 (more than one year after she moved); and

Whereas, Mr. Kraus did not provide the Audit Committee copies of those records supporting those transactions; now, therefore be it

Ordered, Mr. Kraus shall provide to the Audit Committee receipts or statements from UPS and FedEx Kinko’s supporting the $956.30 in incurred expenses; and

Ordered, if complete records do not exist at headquarters, Mr. Kraus shall within the next seven days contact the vendors to obtain copies of those records.

 

Voting Aye: Goldstein, Hagan, Johnson, Kirkland, Lark, Pojunis, Redpath, Starchild, Tomasso, Visek, Wiener

Voting Nay: Cloud, Hinkle, Olsen, Vohra

Abstaining: Neale

As this motion was adopted, the Audit Committee will be expecting to hear back from Robert Kraus this week as to when the vendors will provide copies of those records. This matter does not impact the 2012 financial statements.

Motion Regarding FEC Matters

Whereas, the Audit Committee identified a number of FEC-related issues, as addressed in the confidential section of the Audit Committee’s Second Interim Report and reviewed by FEC Consultant Paula Edwards; now, therefore be it

Ordered, Treasurer Tim Hagan shall review the relevant transactions reported on previous reports, as recommended by FEC Consultant Paula Edwards, to determine the scope of the problems and follow her recommendations, including the filing of amended reports, if required, by no later than February 28, 2014.

 

Voting Aye: Cloud, Goldstein, Hagan, Johnson, Kirkland, Lark, Pojunis, Redpath, Starchild, Tomasso, Visek, Wiener

Voting Nay: Hinkle

Abstaining: Neale, Olsen, Vohra

The Audit Committee stands ready to provide the Treasurer with support in his review of the relevant transactions.

Motion Regarding Eric Dixon’s Moving Expenses

Whereas, employee Eric Dixon was given $2,000 to cover expenses for relocating to the D.C. area; now, therefore be it

Ordered, That Mr. Kraus is to obtain documentation from Mr. Dixon supporting that he incurred at least $2,000 in moving expense; and

Ordered, That to the extent receipts cannot be produced, the balance is to be treated as taxable compensation on Mr. Dixon’s W2 for 2013.

 

Voting Aye: Goldstein, Hagan, Johnson, Kirkland, Lark, Olsen, Pojunis, Redpath, Wiener, Visek

Voting Nay: Cloud, Hinkle

Abstaining: Neale, Starchild, Tomasso, Vohra

The law gives us no choice but to treat this $2,000 payment as taxable wages subject to payroll taxes, unless Mr. Dixon provides the required documentation showing that he incurred moving expenses. By giving Mr. Dixon the opportunity to present this documentation, we can reduce or potentially eliminate from this amount any personal income taxes and the LNC’s employer payroll taxes. As part of his costs of moving his household goods and personal effects, Mr. Dixon might want to consider taking advantage of the IRS’s optional standard mileage rates used to calculate the deductible costs of operating an automobile for moving purposes. During 2013 the allowed rate is 24 cents per mile. Since it is about 2,400 miles from Idaho to Washington, D.C., the mileage alone could make a considerable dent into the $2,000. The Audit Committee would like to see the paperwork for this to make sure it is handled correctly.

Respectfully submitted,

Aaron Starr

36 thoughts on “Aaron Starr: Recap of the LNC’s Decisions Regarding the Audit Committee Findings

  1. David Colborne

    Interesting how the Cloud motion went. Given the financial cost to Cloud, I’d have to assume that there were concerns about the cost of the inevitable lawsuit required to seek collection on that sort of an amount.

  2. George Phillies

    These ‘find the records’ should have been trivial to solve for the audit committee. Readers will note that while I do have a computer under my desk at home that can pull 1.15 teraflops, I do not believe in electronic offices. Your mileage may vary. In my opinion, the LNC offices should have a filing cabinet (or several of them). Inside should be a series of file folders labelled in order by payment ID number. In each folder is a copy of the financial transfer record, and the receipt, invoice, or whatever. For the Neale-approved payments to Cloud, for each payment there should have been a copy of the memo of conversation, printed, initialed by Neale, and in the end papermailed to the Watergate offices. Ditto for each contractor there should be a file, all in alphabetical order with name matching the FEC filings.

    Readers may recall, some years ago, a new Executive Director arriving, opening a desk to clean it out, and finding one or more donor checks. At least one was reasonably large.

  3. paulie

    Yes she did. But the majoriy of LNC still wanted to go on record demanding that she do so. Others, such as Hinkle, Cloud and Vohra, said this was silly and a witch hunt.

  4. Joseph Buchman

    Matt Cholko @ December 21, 2013 at 7:40 pm wrote:

    “Didn’t Carla already agree to pay back all/most of that stuff?

    paulie @ December 21, 2013 at 7:58 pm wrote:

    “Yes she did.”

    For what it’s worth, I did not see such an agreement, nor the repayment. That could have occurred after I resigned from the Audit Committee in late October.

    That said, I was left with the impression (could be false) that as of the December LNC meeting only one of the two rental security deposits had been repaid, and that several of the other issues remained uncertain (in the search, for example, for receipts to document moving expenses).

    So Paulie, it’d be useful to know which question you just answered. Did she agree to pay back all? or agree to pay back most?

    Again this appears to be, IMO, the natural symptom of a “culture of dishonesty” — and by that I mean to say one where such unconscious, sloppy bookkeeping is taken as normal — one where the motive or intent is difficult to discern because “not-being-one-with-what-is” is “normal.”

    Note that I’ve not called it a “culture of fraud” or “culture of ill-intent.” But, I can say it’s impossible to do an accurate audit in a timely fashion inside a culture of dishonesty/lost records/hand-shake deals/missing or never-sent invoices/low review and oversight by management, etc.

    What is utterly inappropriate though, IMO, is to mischaracterize attempts to point that out, or correct it, or offer recommendations for correction as politically motivated or a “witch hunt.”

    Only when there is a clean, honest system in place can one clearly discern if a “witch hunt” took place, or unfair/politically motivated actions by the auditors took place. When it’s a mess, those accusations, IMO, just don’t carry merit.

  5. paulie

    For what it’s worth, I did not see such an agreement, nor the repayment. That could have occurred after I resigned from the Audit Committee in late October.

    The repayment did not take place yet, but she has agreed to it, prior to the LNC motions, which was what Matt asked. I probably can’t tell you why she hasn’t paid it yet, since it is likely that the explanation I heard was in secret session, but there was one, and it did not strike me as unreasonable.

    Did she agree to pay back all? or agree to pay back most?

    If I am not mistaken, all of the LNC motions which actually passed that pertained to Carla Howell for her to pay back and/or submit receipts for expenses that she had already agreed to pay back or provide receipts for prior to the LNC motions passing (but had not yet done so).

    In the case of Carla’s receipts, unlike the five figure no-bid no-contract monopoly handshake deal with an LNC member who happens to be her ex and long time business partner, it is plausible to believe she made innocent mistakes in not keeping minor receipts or submitting the wrong ones months after the fact in response to the audit.

    Again this appears to be, IMO, the natural symptom of a “culture of dishonesty” — and by that I mean to say one where such unconscious, sloppy bookkeeping is taken as normal — one where the motive or intent is difficult to discern because “not-being-one-with-what-is” is “normal.”

    Some of it may be dishonest. Some or possibly even all of it could just be careless or thoughtless.

    Note that I’ve not called it a “culture of fraud” or “culture of ill-intent.” But, I can say it’s impossible to do an accurate audit in a timely fashion inside a culture of dishonesty/lost records/hand-shake deals/missing or never-sent invoices/low review and oversight by management, etc.

    I’m sure it was extremely frustrating. On the other hand I don’t think the Audit Committee was actually supposed to be doing the audit, just selecting and overseeing the outside audit firm.

    What is utterly inappropriate though, IMO, is to mischaracterize attempts to point that out, or correct it, or offer recommendations for correction as politically motivated or a “witch hunt.”

    As far as I know, Arvin only called passing LNC motions directing Carla to do what she already agreed to do a witch hunt, but Mark Hinkle called the whole thing – even asking the questions – a witch hunt. I believe that is how Cloud is characterizing it also.

  6. Joseph Buchman

    Paulie,

    “Some of it may be dishonest. Some or possibly even all of it could just be careless or thoughtless.”

    That’s my point. A culture of not needing to be honest/transparent/accurate IS what results in carelessness and thoughtlessness. The latter being a symptom of the former; and a symptom, not the disease.

    “I don’t think the Audit Committee was actually supposed to be doing the audit, just selecting and overseeing the outside audit firm.”

    Agreed. Arron tells me I misunderstood this; that the Audit Committee is NOT the “Audit Oversight Committee” but a real “Audit Committee.” I’ve described this as “bait-and-switch” — meaning when I agreed to serve it was to 1) research auditing firms, 2) evaluate them, 3) negotiate a contract with the one offering the best proposal, 4) be available to answer their questions (I was present in the LP HQ for the first and last days of the fieldwork of this audit), 5) be available to assist the LNC members with any questions they had about the audit.

    I tried to stop the process of what I called “in effect a second audit by the three of us” without success and in the face of the LNC Chair directing staff to produce documents/emails/timelines etc as if their jobs depended on it.

    IMO those should have gone to the Treasurer/Chair/Executive committee for evaluation, not the Audit Committee (again, Aaron tells me I’m misinformed on this; that he wrote the bylaw that created the Audit Committee).

    I was reluctantly okay with that, as I wrote at the time, “to the degree it was seen as helpful and did not cost more in staff time/resources than the value generated” (or something close to that).

    In the moment, however, I felt threatened with accusations of misdeeds by the three of us, which I needed to immediately reveal all I knew to prove my lack of complicity, I felt it was (past) time to resign.

    “even asking the questions – a witch hunt. I believe that is how Cloud is characterizing it also.”

    Sadly that’s what has been lost here. The issues with Mr. Emerling-Cloud were flagged by the outside auditors; they are issues which ANY manager should have been concerned with; they clearly violated both the policy manual and even minimal good business practice — the excuse of equivalent past-practice not being a sufficient justification, IMO (in fact, the explanations for this lack of professionalism are what most reveals the culture of dishonesty).

    Hopefully that has now been fixed. But I will point out, if it was addressed at the time it was first disclosed to the Chair and others; the first six months of the 2013 books could still be a mess; and if I were on the Audit Committee, or if I were the outside auditing firm, I’d have my concerns about the second half of 2013 as well.

    That said, the audit for the 2013 books must be, under the bylaws, completed before the convention in June.

    At least that’s somethin’.

  7. George Phillies

    An interesting point is raised above, namely that the formula that this is an explanation of the outside auditor’s report as seen elsewhere means (noted above) that there is an outside auditor’s report, a detail that I am doubtless the only person here to have overlooked. What did the outside report say?

  8. Joseph Buchman

    The outside auditor’s report is, I believe, on hold until the last of the management notes (footnotes essentially) for 2012 are completed. Those depend on the finalization of the motions passed in Dallas. For example, if Mr. Emerling-Cloud had been ordered to repay some amount of money, that would shift on the auditor’s report from an expense to an account receivable. Other minor adjustments will be made, I believe, based on what receipts are found, or not found, for other things.

    These outside reports should have been made available every year going back for decades, I’d imagine; and George, I would have thought you would have had/or have seen copies of all of them . . .

    The fact that (apparently) has not occurred is quite interesting as well.

  9. Joseph Buchman

    paulie @ December 21, 2013 at 10:30 pm wrote:

    “Did the outside audit firm flag any other issues with other contractors/vendors not having written or approved contracts?”

    I’m not at liberty to say. I only appeared here to answer questions about our Second Interim Report, one with my name on it, after it appeared elsewhere on the Internet.

  10. Stewart Flood

    I can see the signs at the convention: $33,800 Give back the money!

    I think about 250 of them should be enough…

  11. Joseph Buchman

    Stewart Flood @ December 21, 2013 at 11:49 pm wrote:

    “$33,800 GIVE BACK THE MONEY!!”

    What bothers me more is that Mr. Emerling did far more damage than that to our 1992 Presidential nominee, Andre Marrou. Maybe in the hundreds of thousands of dollars of damage.

    Andre fired Michael Emerling as his campaign manager. Michael petitioned the LNC to suspend the campaign. There was a long secret session (don’t we wish we had a recording/records of that now?) in Ann Arbor. I don’t know what happened in there, although I’ve heard about it from at least one LNC member who was there, and from Andre himself. The result was the campaign was not suspended, and an ex-wife of Andre’s was revealed (one whom he had married just out of high school; and which marriage was, as I remember, annulled, but had not been previously disclosed).

    Mr. Emerling had at least a portion of Andre’s travel schedule, and (was at least accused of) sending highly negative information about our Presidential Candidate, to various media outlets in advance of his appearance.

    I worked for that campaign. I remain loyal to it. Perhaps that biased some of my views of the issues raised regarding Mr. Emerling-Cloud by Mr. Starr. I was vigilant for that, tried to compensate for it, and ultimately realized with that sort of history, in addition to the other issues I’ve mentioned elsewhere, that it would be inappropriate for me to remain on the Audit Committee.

  12. From Der Sidelines

    So what we have here is a con artist being exposed by a scumbag. Typical LPUS mismanagement…

  13. Jill Pyeatt Post author

    I was a bit amused at the surprising images that came up when I put the name “Aaron Starr” in
    Google images. I was treated to several pics of completely nude men. IIRC, there’s a porn star somewhere by that name.

  14. paulie

    We better add a layer of bureaucracy to make sure lots of paperwork is shuffled.

    Or we could start by either starting to follow the policy manual or getting rid of it.

    Why have a bunch of policies and then just ignore them? Don’t we criticize the regime for that?

    These outside reports should have been made available every year going back for decades, I’d imagine; and George, I would have thought you would have had/or have seen copies of all of them . . .

    The fact that (apparently) has not occurred is quite interesting as well.

    I understand there is a vacancy on the audit committee. Perhaps Dr. Phillies would like to apply? 🙂

    I’m not at liberty to say. I only appeared here to answer questions about our Second Interim Report, one with my name on it, after it appeared elsewhere on the Internet.

    Understandable. And I’m not at liberty to say either, although as far as I know I am allowed to ask the question.

    I think it would be relevant and interesting for people to know and factor in their judgement of the situation whether the Cloud (lack of) contract was an aberation or a common occurence in LNC vendor relationships. If the latter, did Cloud get singled out for factional reasons, or was his unwritten contract out of line in some other ways?

    I can see the signs at the convention: $33,800 Give back the money!

    So I guess you agree that the other 5k was legit?

  15. Joseph Buchman

    “So I guess you agree that the other 5k was legit?”

    LOL. yet another reason I should NOT be on the Audit Committee; I read that as 38,800.

    I have a hard time distinguishing 3s, from 8s, from 0s on my cell phone too.

    Sigh . . .

  16. George Phillies

    There are audit reports at national conventions. I have some of them, I expect, and know where to look. I do not recall having seen the most recent one yet, though perhaps this too will come to pass. I believe there would be a conflict between my being on the audit committee and my editing my newspaper.

  17. Joseph Buchman

    “So what we have here is a con artist being exposed by a scumbag.”

    You and others are giving Mr. Starr too much credit for the Carla-Cloud-Contract-Collusion/Confusion.

    This was obvious to all of us on the Audit Committee, it was, if my memory serves, flagged by the outside auditing firm.

    It was “exposed” because it wasn’t cloudy. It didn’t take a star to find it. It was clear, obvious and if it had been an animal it would have been howling rather than hidden.

    Or so it seems to me . . .

    Now on the other issues Mr. Starr uncovered, especially the significant FEC and other ones, he clearly demonstrated, at least to me, a mastery of auditing process and details that is truly impressive.

    If I were to ever consider buying a company, I’d pay Aaron a premium rate to review the books.

    I’m not aware of anyone else on the LNC or associated with it who I would trust to do that.

    And I remain grateful to Mr. Starr for what I learned while observing his efforts.

    Perhaps I’ve been hoodwinked and hypnotized by the Chamber Mr. Flood has reported existing here, but if I was, it was a, by contrast to dealing with other members of the LNC/staff, an overall pleasant and rewarding experience.

  18. Joseph Buchman

    George,

    ” I do not recall having seen the most recent one yet”

    The 2012 report won’t be out until all parties are satisfied that the numbers won’t change due to various actions by the LNC that are currently in-process; and until the last of the management notes have been finalized/formalized.

    The 2013 audit has, by contrast, I believe, a hard deadline of the June convention.

    That said, I’d not be surprised if they were released simultaneously.

    🙂

  19. Stewart Flood

    You have to remember the following: in my discussions of Mr Starr and the group he leads, I have not been questioning his dedication to general libertarian principles. What I have been trying to get people to understand is that he rejects something significant: the non-aggression principle.

    Starr and his supporters believe that fraud (a form of aggression) has a legitimate use in eliminating any opposition within the party. There are many examples of Mr Starr doing wonderful things to help the party. There are also many examples of fraud on his part to achieve his political goals.

    I respect some of Mr Starr’s achievements that have helped the party, including fundraising and an exemplary job as Treasurer in a time when we desperately needed an exemplary job, but I detest some of his actions taken in getting there. The negative effect of his schemes have overshadowed many of the good things he has done.

    The Cloud incident is a “jumping the shark” moment for this board. At this point, I believe that both sides are, to an extent, abdicating their duty to the membership that elected them and expects their representatives to act in an ethical and non-fraudulent manner.

  20. paulie

    The 2013 audit has, by contrast, I believe, a hard deadline of the June convention.

    That said, I’d not be surprised if they were released simultaneously.

    Does the 2012 audit also have to be done by the June convention, or did no one foresee that this could ever become a problem?

    I was a bit amused at the surprising images that came up when I put the name “Aaron Starr” in
    Google images. I was treated to several pics of completely nude men. IIRC, there’s a porn star somewhere by that name.

    There’s a male stripper named Aaron Starr. Not sure if he does porn, but that would seem like a likely career move for a stripper.

  21. Jill Pyeatt Post author

    Thanks for the explanation of the other Aaron Starr, Paulie. I found the discovery of those photos highly entertaining.

  22. Jill Pyeatt Post author

    Any particular reason someone changed the photo I had used for Aaron? There was a reason I didn’t use the photo that’s there now.

  23. Jill Pyeatt Post author

    Someone has pointed out to me that what is discussed in Executive Session should remain private. Was this supposed to be made public? I found this on several email threads and felt it was info IPR readers would like to have. However, was someone unethical to leak it in the first place?

  24. Stewart Flood

    This report looks like it was written after the public vote on a motion. It appears (as far as I can tell) to mention motions made in public session. I don’t see anything in Mr Starr’s report that references executive session.

    Putting your comments about the executive session “appearing” to be mostly related to the audit is not privileged information.

    The report does not appear to be marked confidential, but it is certainly possible that it was intended to be held back from release to the general membership until the issues mentioned were addressed.

    I don’t think you did anything wrong in publishing it, especially since you found it on other lists.

  25. Joseph Buchman

    Stewart Flood @ December 22, 2013 at 9:20 am wrote:

    “There are also many examples of fraud on his part to achieve his political goals. . . . I detest some of his actions taken in getting there. The negative effect of his schemes have overshadowed many of the good things he has done.”

    I confess ignorance to that history. I first met Aaron outside the executive session of the December 2011 LNC meeting in Las Vegas. We didn’t speak again, that I recall, until after we were both appointed to the Audit Committee. I was charged by the Johnson Campaign with “being sure Gary Johnson’s name appears on the Oregon ballot.” As a result of that I had many long conversations with Wes Wagner; and a few with our Oregon State Campaign director Richard Burke, hearing (some of) both sides of that dispute, and in the process hearing claims of at least some of Aaron’s involvement in it.

    I’m also aware that one of my cohorts on last year’s audit committee hosted a meeting of (what you’ve described as) “the Starr Chamber” in his Vegas Condo. I was invited over the next night and joked about “searching through the trash cans for Aaron’s notes.”

    The context of my comments here on IPR since Dr. Phillies published our Second Interim Report is within my history with Mr. Starr over only the past year (at most).

    If the three of us, Arron, Brett and me, were on a witch hunt, I didn’t notice. I know I have 20 year plus issues with Michael Cloud, some of which I confronted him about in the Red Rock hotel in Las Vegas. My impression then was that we seemed accountable and contrite. Some of those were brought back to the surface when I arranged a breakfast in Dallas with Andre Marrou and Gary Johnson, and later Geoff Neale who masterfully convinced Andre to stay for lunch, and then acknowledged Andre, to a standing ovation.

    That was covered here:

    https://independentpoliticalreport.com/2012/06/1992-libertarian-presidential-candidate-andre-marrou-gives-speech-to-texas-lp-convention-full-transcript-follows/

    Unfortunately Mr. Emerling-Cloud’s presence on the LNC was cited as one of several reasons Andre was no longer interested in wholeheartedly supporting the LP.

    So, Stewart, I share all this by way of saying I feel I overcompensated in my role on the Audit Committee to NOT go on a “witch hunt.” I can’t however speak to the nature of the committee’s work after our my last active involvement which resulted in our October 15h Interim Report.

    “The Cloud incident is a ?jumping the shark? moment for this board.”

    I believe it’s more accurately described as the “Carla-Cloud Incident” (if nothing else, then for the alliteration). Our ED executed a non-written, non-reviewed by counsel, apparently oral contract, apparently approved by the chair verbally, apparently without anyone realizing the large dollar amounts involved (and need to involve counsel); or executed a series of smaller payments designed to avoid that review, or something similar. IMO, at this point, without a written record, it’s impossible to know exactly how that arrangement was made. It is possible to know, as IMO it is self-evident, that it was a violation of both the policy manual and basic good business practice. The current ED’s apparent defense of this arrangement (or claims he will defend it later when all the facts come out to prove some bias on the Audit Committee’s part (and my bias for seeing things that are not there (an effect, apparently, of being (falsely, IMO) a “UFO enthusiast”) is an even bigger RED FLAG.

    “At this point, I believe that both sides are, to an extent, abdicating their duty to the membership that elected them and expects their representatives to act in an ethical and non-fraudulent manner.”

    Stewart — I hear you. The nice thing about being resigned (cynical and curmudgeonly) is having the freedom to offend all sides. If I have a remaining bias, that’s it.

    That said, IMO, Aaron just did his job here, and did it well. If he ignored evidence that other misdeeds were done because it would hurt “his side” 1) I was vigilant for that at the time, 2) didn’t see it, and 3) am sure his opponents would have fired back with hard evidence of that by now.

    Maybe that’s what our current ED is collecting to fire back with at the perfect political moment; but I doubt it.

    I am however, I suspect, like most libertarians wanting to stop this crap and focus on regaining at least some measure of the liberty we’ve lost in my lifetime, if not fully living free now.

  26. Joseph Buchman

    Jill Pyeatt Post @ December 22, 2013 at 2:16 pm wrote:

    “Any particular reason someone changed the photo I had used for Aaron? There was a reason I didn’t use the photo that’s there now.”

    Aaron updated the formatting (after I’s posted a revised version with all the > characters removed), including replacing his photo.

  27. Mark Axinn

    I don’t know how much work Mr. Cloud performed, but the motion which failed stated that it was 100 hours.

    If that’s true and Mr. Cloud was paid over $38,000 therefor, then his billing rate was almost $400 per hour. I charge sophisticated real estate clients that rate for legal services in Manhattan, but would never charge the LP $400 per hour for writing press releases, etc. (Actually, I do that for free as a state chair.)

    It is quite possible that Mr. Cloud performed far more than 100 hours of service, in which case the hourly rate might be significantly less. The Record is very unclear on this issue.

  28. Stewart Flood

    I will concede the name but wouldn’t Carla/Cloud Gate also work as well?

    Regarding Oregon, a majority of the members of both camps as well as many of the unaligned board members agreed that Reeves’ side should prevail. I am not sure how much Mr Starr may have been involved, since he was not very visible in the incident from my perspective.

    Yes, Mr Starr’s work on CCG (Carla/Cloud Gate) was important. The incidents I refer to were between 2006-2010 when he was on the board. His actions after that were more behind the scenes.

  29. Joseph Buchman

    Mark Axinn @December 22, 2013 at 8:13 pm wrote:

    “I don’t know how much work Mr. Cloud performed . . . The Record is very unclear on this issue.”

    IMO one of the core purposes of an Audit is to evaluate if you got what you paid for.

    In this case we asked for the MS Word docs and the complete email record, based on what we had been told about how this work was done.

    The metadata in the MS Word file reveals the author and the number of minutes the file was open (available to be worked on directly). Other work, at least based on my on experience, might be done while thinking about the document, multitasking (thinking in the shower, thinking while driving), but there were apparently no handwritten drafts, etc.

    AFTER we asked for this, and after we noticed that the author’s name for the work product billed by Mr. Emerling-Cloud was, in at least one case Carla Howell, we were told that the work was sometimes done in consultation on the phone, with Carla writing a draft, calling Cloud and editing it over the phone.

    Mr. Starr attempted an evaluation of the number of hours involved, using the MS Word metadata as a base, adjusting for what we were told, using research (in part provided by me) on the going rate for freelance writing (a rate, I am led to believe based on a writer’s conference I attended this past September has “fallen like a rock” over the past few years), consultations with other fundraisers, etc to try to estimate 1) the number of hours associated with the work product we were provided 2) a reasonable going rate (as well as the (as described by Mr. Cloud at the July 2012 LNC meeting) “Neiman Marcus” and “Walmart” rates (the latter being the one Mr. Cloud promised to bill so that there would be “no questions” about his work), and ultimately fair compensation.

    I didn’t follow every jit of that calculation, but I’ll bet Aaron was prepared with documentation to validate each step.

    I also received a phone call from Mr. Emerling-Cloud 30 minutes or so before the executive committee conference call where he adamantly defended his work, saying (as I recall) that he had given a massive discount.

    On the conference call, I believe I said something to the effect of, “Offering a discounted rate is not a justification for failing to provide detailed invoices.”

    And therein is the problem.

    For $38,800 the LP should have received DETAILED invoices with the name of each project, the number of hours worked on it, the hourly rate, the discount (if any) and the grand total BEFORE ANY money was paid.

    In the absence of that, IMO, not a dime should have been paid.

    And for ANY OTHER VENDOR, I believe the LNC would agree.

    But this one is different.

  30. Joseph Buchman

    Stewart Flood @ December 22, 2013 at 8:24 pm wrote:

    “I will concede the name but wouldn’t Carla/Cloud Gate also work as well?”

    How about ClouCardLaGate?

    🙂

    “The incidents I refer to were between 2006-2010 when he was on the board. His actions after that were more behind the scenes.”

    Thanks Stewart. It’s just when I see claims that the Audit Committee (at least at the time I was on it) was on a “witch hunt” that I get defensive, both of myself and Aaron, and Brett.

    The thing is, 1) The LNC elected Aaron Starr, a majority of the non-officer members (officers do not vote for Audit Committee) clearly WANTED his/our review; 2) even if Mr. Starr had designs on going on a witch hunt, they remained (as far as I can tell) unused, on-the-table, not-needed. What more could ClouCardLa have given him to run with? How much more egregious need it have been to squelch claims of a witch hunt?

    Until the Johnson Campaign (based here in SLC (I live in Park City, 30 minutes away)), I’d had no involvement with the national LP for almost 20 years (since I’d volunteered on the Marrou campaign), so I’m just not well versed on the history of either Oregon or Aaron. What I can say is I was impressed with Aaron’s diligence and energy and competence while I was on the audit committee; and with Wes Wagner’s understanding of (sometimes obscure) Oregon election law, the printed voters guide up there, and the utter lack of anything other than honesty with the campaign, even in the face of our Oregon State Director being Mr. Burke.

    I can also say that Wes’s offer to be a keynote speaker the night before the platform committee meeting (if I choose to have it in Las Vegas on a weekend that he’s available) and the associated poster was, by far, the best laugh I’ve had this year. Better fun than anything on the 20 or so visits to Disneyland my daughter and I made this past year. And, based on the outline I’ve seen of his presentation, one which takes the platform debate back to core principles, I’d pay the $25 donation to listen to it.

    (That said, I’m going to be polling each member of the platform committee over the next 10 days or so, and my current impression is we may choose to meet in the Midwest in mid May. If that’s the clear will of a majority of the committee, I’m going with it. Same for Vegas or any other location. If there’s no clear will for a majority, I’ll declare the time and place based on what I think is best (and after reviewing all proposals from all state chairs and others who might like us to meet in their backyard)).

  31. George Phillies

    The FEC report shows the $38,800 total. However, if there were in fact approvals of various small amounts by the chair, wasn’t there any record date by date of what the chair approved and when? Asked differently, though perhaps it is in those tables (I see it is not in the confidential report), where is the list of checks showing the payments?

  32. Jill Pyeatt Post author

    I do see that Aaron has formatted the article. It’s a much easier read now. Thanks!

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