October 13, 2013
Out of a sense of duty, for the last few years, I have been attentively following and researching the organizational behavior and the financial activities of the Ethiopian Sport Federation in North America, ESFNA.
I am aware that you – the board of the Federation along with your Executive Committee – are holding your annual meeting in Addison, TX from October 12, 2013 to October 14, 2013. For that reason, I am writing this open letter to prompt you to provide me and, by extension, the Ethiopian communities, a response regarding issues I have been raising about your organization in the articles I have been publishing since December 15, 2010 – which I have emailed to the board and the Executive members of your organization.
Nothing would please me more than having you, the board, negating the assertions I have been making in my articles. So I would appreciate a reply – which is long overdue – from you proving me wrong rather than right.
Note: The purpose of this open letter is not to assign blame about potential mismanagement of your exempt organization’s public resources. But to encourage your organization to realize its full potential and to increase the Ethiopian communities awareness about one of your unfortunate organizational behavior – the ferocious cycle of the infighting between the board and the EC – has been mainly caused by nothing but who gets a turn to mismanage your organization’s public resources, money – which you generate at the expense of your players and vendors.
On December 15, 2010, in my article titled Non-transparent ESFNA, I have encouraged you, the board, to consider running your organization transparently, without success. On the same article, I promised my readers to provide data that most of the ESFNA venders lose money by vending at your tournaments. I am withholding the data, hoping you might start running your organization effectively and improve handling of your vendors. Concerning your handling of your players, I provided the general public data on August 29, 2013 in my article titled Should the ESFNA Solicit Leadership from the Community which shows you have not been thoughtful enough about them.
Based on my observations, your organization has become more secretive than ever about its financial information since I shared my articles with you. For instance, your Executive Committee has been refusing to easily and willfully distribute your organization’s financial reports to the board and to the general public. To illustrate, I sent an email on October 7, 2013 to your EC members including your President Getachew Tesfaye to request a copy of your 2012 tax return to be emailed to me. Thirty five days after I made the request, your EC has not provided me a copy of the tax return although it has a legal obligation to do so.
If you are not aware, “responsible persons of a tax-exempt organization who fail to provide the documents as required may be subject to a penalty of $20 per day for as long as the failure continues.” There is a maximum penalty of $10,000 for each failure to provide a copy of an annual information return, according to the Internal Revenue Service, IRS, Requirements for Exempt Organizations to Disclose IRS Filings to the General Public.
I inferred that you, the ESFNA board, do not review the Federation’s tax returns prior to filing it. You also do not receive a copy of the tax return in a timely manner after it is filed. I gathered that as of this article date you have not been able to obtain a copy of the Federation’s 2012 tax return from your EC due to your EC refusal to distribute the tax returns to its board. When I learnt, your EC has only allowed you, the board, to see the IRS electronic tax filing confirmation that the Federation’s 2012 tax return is accepted instead of the tax returns I was stunned.
A question that begs for an answer is that who is governing the ESFNA? Is it the board or the Executive Committee?
By the way, a board’s inability to govern, monitor, and manage an organization via an Executive Committee is a breach of fiduciary duty. In a court of law, proving a board’s breach of its duty is easier than proving fraud, embezzlement, and/or mismanagement of the organization’s resources by its Executive Committee.
Your Organization’s Disproportionately Higher Expenses than Incomes
On August 29, 2013, in my article titled Should the ESFNA Solicit Leadership from the Community, I have discussed: the progress of your organization, your organizational behavior, your organization’s disproportionately higher expenses than income, etc. For example, I documented that your former EC members – some of whom are active current board members – from 2006 to 2011 might have mismanaged $1.6 million public money of your Federation. To date the ESFNA board has not taken responsibility, or it has not countered the assertions I made in the article. Since the board has not addressed the allegations I made, its silence implies its consent.
Your Executive Committee Contradictory Declarations
The first declaration, the Federation’s 2013 tournament held at Byrd Stadium in College Park, Maryland was the most successful tournament the organization ever hosted; there were about 33K attendees which helped the Federation generate roughly $651K gross ticket sales revenue.
The second declaration, according to the Federation’s 2008 tax returns, the gross ticket sales revenue from its 2008 tournament at the RFK Stadium in Washington, D.C was $848K; a public turnout of about 55,858 attendees.
The third declaration – which is contradictory of the information on Federation’s 2008 tax returns – the gross ticket sales revenue from the Federation’s 2008 tournament at the RFK Stadium in Washington, D.C was $712K; a public turnout of about 47K attendees.
Using the Federation’s historical and current financial data, media reports, and attendees’ testimonies, I have estimated 47K to 65K guests attended the 30th anniversary, 2013 tournament, at Byrd Stadium in College Park, Maryland. However, your EC is claiming that the number of attendees of your 2013 tournament were only 33K.
Put another way, I have estimated $940K to $1.3M as your gross ticket sales revenue of 2013 tournament. However, your EC is reporting to you that your 2013 tournament gross ticket sales revenue is only $651K. The difference between your EC reporting and my estimate is quite large – which is $289K to $649K.
In summary, I have not been putting pen to paper just for the sake of writing, but to contribute my fair share to take your organization to the next level and to unveil your organization’s tragic internal infighting – which has been causing me and, therefore, the Ethiopian Diaspora enormous anguish. So I would appreciate a letter from you, the board, proving the assertions I have been making in my articles about your organization are wrong rather than right.
I look forward to hearing from you very soon.
The writer can be reached at LJDemissie@yahoo.com