Just a top note: I have received several other inquiries on
'insider-trading' - one from another GM, and 2 more from national names in
chess, and I have also invited 2 board members to look at this situation
after they get their feet under the table - or the full board, as necessary.

If what follows at bottom is part A of the affair, part B relates to
trading-partner practices, and here is a little collation of the views of
one CPA:

The NFP would be required to issue a 1099-C for the cancellation of the
debt.

That means, if done properly, the IRS will know that the for-profit entity
received a sum of money (or goods or services) that they didn't have to
pay back, and that's income to the for-profit entity in most cases.

The FP entity would have taxable income in most cases.

Then the board would have a fiduciary responsibility to not do business
with that entity in the future.

AH! In this instance it insisted on continuing business with that entity,



Really now, would a reasonable person do such a thing? And that IS the
standard the Board members could be held accountable to. "Would a
reasonable person do what they did?" That's what the jury would be
deciding.

Phil Innes

----

In a message dated 9/6/2007 2:56:34 AM Pacific Daylight Time,
writes:

In the all-new $50,000 make-over for CL and the web-site. If the make-over
achieved less information appearing in CL, should the information not now
appear in CL-online?

I can't believe that even USCF could spend $50,000 on a cosmetic
touch-up -
who did Dan Lucas consult on content issues for Cl &Cl on-line?

Excerpt from THIS CRAZY WORLD OF CHESS by GM Larry Evans

46. Hapy Talk Is Here Again
June 12, 2006

This June, new editor Daniel Lucas undertook a makeover of Chess
Life, a house organ of the U.S. Chess Federation. Although the USCF is
expected to end this fiscal year in the red, the redesign was implemented
by
a consultant who was awarded the $50,000 job without any open bidding.

The first order of business for consultant Paul Hoffman, former editor-in-
chief of Discover magazine, was to fire three popular grandmasters with
long-running monthly columns in Chess Life, including this writer. Some
readers called the new issue fabulous. Others said it sucked and that
their
favorite columns were absent.

The new editor, interviewed in The Chess Journalist, said that cutting
several regular monthly columnists will free up space for more features.
Like what? He cited an article on "women in correspondence chess" as his
vision of what might interest readers.

Hoffman, who calls himself a "mainstream journalist," was paid
$10,000 in advance without submitting a written report. It must be nice
to have friends on the board. Dodging all questions about how he reached
his conclusions or if he consulted past reader surveys, he issued this
statement:

"I'm just a consultant. I give the USCF advice and implement
ideas they want me to implement. I have prepared no written
reports. I am not going to discuss personnel matters like who
writes for the magazine and who doesn't because that it not an
appropriate subject for a public forum. I'm trying to use my 25-
year experience in magazines to help the USCF publish a more
engaging magazine that will attract new members and better
retain existing ones. And I'm trying to avoid being embroiled
in the ugly petty politics of chess that have doomed many wellintentioned
efforts in the past."

As a matter of fact the USCF has earned a reputation for secrecy,
sweetheart deals, and censorship.