- Twenty years ago, the Orlando Sentinel discovered that
for two years, complaints of Shrine Circus ticket fraud fell on deaf ears
until a Florida State Attorney decided to check things out. He found incestuous
law enforcement, political, and economic relationships that lent themselves
to a possible cover-up. After the ticket scam was finally "investigated"
by secret Shrine committees, the offending Temple was "reprimanded"
by having a letter of censure read to the members.
- Though the drums of "fundraising reform" banged
loudly, two decades later crime and fraud still plague the Shrine's temples.
At the last meeting of the Shriners Treasurers Association, officers admitted
to knowing about crimes and fraud before the semi-annual gathering of those
in charge of keeping the books.
- The solution? Public relations was suggested as the weapon
of choice instead of thorough investigations, independent audits or informing
law enforcement officials.
- According to the minutes (1) of a July 2, 2006 business
meeting of the Shriners Treasurers' Association, then Vice President of
the Shrine fraternal corporation, Charles Cumpstone:
- "addressed the meeting and repeated his concern
abut Cash Control. That subject is becoming an increasingly common problem
among several Shrine Temples. Over 30 Temples have discovered fraud in
their Divan this year, some of them up to $300,000."
- Cumpstone's "repeated concern" about the crimes
failed to suggest that he or his successor, Michael Andrews, would launch
an internal investigation, would ask the Temple leaders investigate or
audit or that he would report the crimes to state and federal law enforcement
- Cumpstone's replacement, Michael Andrews, according to
the same minutes:
- "addressed the audience with emphasis on doing proper
Fund Raising and being prepared to respond to the Media and public questions.
Because of constant scrutiny by the Media and others, it is now more important
than ever to do our fund-raising strictly according to the policies and
procedures established by Shrine headquarters. Also, he strongly suggested
that each Shrine Temple and organization appoint one person to be the official
spokesperson when discussing Shrine business with the Media and public."
- In contrast to Andrews suggesting that the Shrine Temples
rely on PR to deal with the fraud questions, he, like Cumpstone, failed
to include the possibilities of internal investigations, audits or reporting
the crimes to law enforcement authorities. Additionally, he emphasized
that the fund raising be conducted according to the policies and procedures
established by Shrine HQ but failed to include compliance with state and
federal non profit rules and regulations.
- As of October 27, 2006 at 11:06 pm, the minutes were
- Twenty years ago, Andrews was in a similar position as
Shrine Public Relations Director.
- The Orlando Sentinel began investigating the Shriners
after learning about a Circus ticket scam that was reported to officials
who did nothing. From an August 2, 1985 Orlando Sentinel article "Circus
Ticket Hocus Pocus was Ignored, Sources Say":
- "Orange County's convention center director excused
the possible disappearance of thousands of dollars in ticket proceeds from
a 1983 Shrine circus without investigating the eventSeveral sources have
said a Shrine audit indicated that between $8,000 and $30,000 in ticket
proceeds could have been stolen during the run of the circus at the Orange
County Convention and Civic Center on April 22 and 23, 1983When members
of the Bahia Shrine Temple told convention center director Tom Sewell that
they suspected a ticket scam within their ranks and offered to repay the
county, he chose to do nothing, sources saidSewell was appointed early
this week to be acting administrator of Orange CountyHad Sewell investigated,
the Orlando law firm of Gray, Harris and Robinson could have been in a
peculiar and possibly embarrassing situation. At the time, the firm represented
the civic center and their Orange County Commission, and a senior partner,
Gordon "Stumpy" Harris was the potentate, or head, of the Bahia
Shrine TempleThe Shrine contract Harris helped draft was one of a kind
for the civic center. In a letter Sewell wrote in January, 1984 to the
Shriners, he explained:
- 'The standard policy of the Orange County Convention
and Civic Center is to require all shows to use and pay for ticket takers
employed by the center. 'A one-time only exception was made for the 1983
Bahai Temple Circus. The exception was made because Harris was the potentate
of the temple and also legal counsel for the center.'
- Shriners who worked as ticket takers at the civic center
said they were instructed not to rip tickets in half and the used tickets
were brought up to the civic center's ticket booth, which was also staffed
by Shriners, and there the ticket sellers were instructed to resell the
used tickets first, the sources said. Instead of a computer printout on
the ticket sales, or an affidavit, the civic center received from the Shriners
pieces of paper with the number of tickets taken scrawled in pencil and
- This prompted State Attorney Robert Eagan to investigate.
He said that two law enforcement officers, Seminole County Sheriff John
Polk, 53, and Polk County State Attorney Jerry Hill, 38, 'should have reported
it at the time and that they are under the same obligations as any other
citizen to report a crime. Polk and Hill were both ShrinersAlthough a violation
of state law might have been involved, the Shriners bylaws dictated that
the possible fraud be handled internally and secretly."
- Following this, authorities in Minnesota, Ohio, Oklahoma,
New York and Massachusetts took a look at the group's fundraising practices
and the General Accounting Office was asked to "probe tax-exempt"
- In response, the Shriners announced fund raising guidelines
for temples and according to an October 28, 1986 AP story:
- "Tampa Fla. The Shriners have agreed to a
new set of fund raising guidelines after a newspaper reported that less
than one-third of the money raised by the fraternal organization each year
goes to its charities. A list of 10 recommendations was unanimously adopted
Monday by the Shriners board at a quarterly meeting, according to a news
release. The standards 'are intended to assure the public that information
on Shriners fund-raising activities is sufficient to easily identify those
activities which benefit the Temples and those which benefit Shriners Hospitals,'
said Mike Andrews, Shriners public relations director."
- It appears that after twenty years, some of the Temples
have yet to learn about the "new set" of fund-raising guidelines.
On 10/10/06, a team of auditors from Shrine headquarters spent the morning
at the Cahaba Shrine in Alabama to investigate allegations of Bingo theft
that were supposedly reported to the group's leadership three years ago.
To date, Willard Fawcett, Shrine comptroller, has yet to respond to questions
about the matter.
- On May 10, 2006, Robert Utley, Potentate of Alabama's
Cahaba Shrine, released a gag order that states:
- "It is directed that no member of the Cahaba Temple
will conduct an interview with a TV station, radio or newspaper or any
other organization, without written approval of the Potentate, and he must
know the subject matter that will be discussed. Thank you for your cooperation,
Robert Utley, Potentate."
- The Orlando Sentinel investigation found more than fundraising
irregularities. The paper was able to obtain only 343 of 685 forms that
should have been filed with the IRS during 1982, 1983 and 1984. The newspaper
had to rely on the IRS documents because the Shriners "declined to
make the information available."
- The investigation found:
- 1) In 1984, Shrine hospitals got only 1% of the Shrine
circuses charitable funds
- 2) Shrine Board directors got free trips, jewels and
- 3) Imperial Potentate's relatives went on trips
- 4) The Imperial Potentate spent $146,000 on travel with
$93,263 coming from the board and $53,000 from the hospital charity
- 5) A board member received $20,000 in expenses for working
4 hours a week or nearly $100 hr.
- 6) Imperial Potentate received $63,600 for working 20
hours a week or $60 hr.
- 7) $1 million in charity went to staff home loans
- From the Orlando Sentinel article "$1 Million in
Charity went to Shrine Staff for Home Loans" published August 3, 1986:
- "The Shrine of North America gave 13 employees about
$1 million in low-interest loans from funds donated by the public to the
Shrine's hospitals for crippled and burned childrenShriners said they consider
the loans to be perks that are no different from the financial assistance
provided by many (for) profit corporations encouraging key personnel to
relocate. Because the loans were provided substantially below prevailing
interest rates they represent a potential savings of tens of thousands
of dollars to the Shrine employees who got themA national expert on charities,
Elizabeth Doherty, director of the Philanthropic Advisory Service Council
of the Better Business Bureaus, said short term location loans by charities
occur but the employees usually must pay the loan back within two or three
- Doherty said she has never heard of a charity giving
a 30-year-term low interest to an employee. "In fact, I have never
seen a mortgage given to an employee by a charity at all," she said.
- Frank Driscoll, a spokesman for the National Charities
Information Bureau in New York, also called long term loans unusual. "I
have never seen that amount of money loaned by any one organization"
- Doherty said if her organization reviewed such a loan,
it would ask "Is this the way a donor wants their money used? We'd
ask how involved the board was in making the loans.
- Detailed information about the $1.25 million loaned to
Shrine employees is not included in the Shrine's annual reportsShrine employees
receiving loans included the administrator of the Shriners fraternity,
the administrator of the hospital charity, two attorneys, two medical record
keepers, four data processors, an insurance specialist, a comptroller and
a former hospital administratorThe only public record of the loans are
mortgage deeds in the Hillsborough and Pinellas county courthouses."
- An online search of Hillsborough County documents show
that Charles Cumpstone had three mortgages from the Shriners Hospitals
for Children, dated 7/25/79, 10/5/79 and 2/16/84. Two of the mortgages
were satisfied just six years later, one of which named Lewis K. Molnar,
COO of Shriners Hospitals, as co-grantor with the Shriners Hospitals.
- Other Hillsborough county documents show that in 1998,
1999, 2001, 2002 and 2003, employee mortgages with Shriners Hospitals for
Children were satisfied but were not disclosed on the group's tax returns
for those years.
- Since it appears that, after twenty years, both the Shriners
fraternal corporation and the Shriners Hospitals for Children lack of effective
internal controls and oversight has resulted in self-admitted fraud and
crime, this and the possiblity of years of incomplete tax returns, has
been shared with the proper authorities.
- (1) From the website http://www.shrinetreasurers.org/
- "The Shrine Treasurers Association of North America
is an Association of the Treasurers of the 191 Shrine Temples throughout
North America. Sixty Six Shrine Treasurers signed up for the business meeting
which featured reports by the Shrine's new Executive Vice President, Mike
Andrews, and his outgoing counterpart, Charlie Cumpstone."
- All copies of material reprinted or duplicated from "by
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Copyright © 2006 by Sandy Frost. Used by permission.
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