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Activist Groups Urge Obama to Reject Boy Scout Honor

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Activist groups, including Scouting for All, urge President Obama not to accept the honorary Presidency of the Boy Scouts of America until they stop discriminating.

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Learning for Life Pays The Chief Scouting Executive, Roy Williams, More Than $500,000 a Year in Salary and Perks

January 1,2006

Researched by Scouting for All Researcher

I've been doing additional research into the finances of the BSA. All large nonprofit organizations must file an IRS financial reportForm 990 each year. Once filed, these documents are in the public domain. Guide Star is an online organization that supplies information about corporations. Some of the info is free; some is 'for sale.' The 990's are available free. The only problem is that it takes several years for Guide Star to scan the forms and make them available. The most recent 990's are for 2003. When I reviewed the L4L 990 for 2003, I quickly came to the same conclusions that you reached in looking at the articles of incorporation. You quickly see other things as well. Take a "for instance." L4L pays the Chief Scouting Executive, Roy Williams, more than $500,000 a year in salary and perks. It also pays around $300,000 in salary and perks to one of Williams' assistants.

It turns out the Boy Scouts of America can be thought of like a "three-legged stool" for financial purposes. To be sure, the three legs are of different lengths, but in order to understand the stool, you need to understand all three legs. The legs are the National Council, Learning for Life, Inc. and the National BSA Foundation. You may not have heard of the latter organization. The BSA Foundation is a charitable organization that accepts donations from individuals and other foundations to "further the Scouting movement at the international, national and local levels." All three "legs"are housed in the same building in Irving, TX, and all three are directed by varying subsets of the Board of Directors of the National Council. All three must file separate 990's with the IRS since they are separate corporations "on paper." However, to see how all this works, you need to get all those 990's and look at them side-by-side. When you do, you begin to get a sickening feeling for how all this works.

I'll spare you thedetails about the hours Ispent staring at these forms and "cut to the chase." The IRS obviously concluded that these organizations were more than "casually related." The IRS required thatan independent accounting firm audit the entire "stool" as well as theindividual "legs." The overall audit showed that thecomposite BSA had revenue of $189M in 2003 and expenses of $109M. In other words, the BSA was a profitable undertaking in 2003. The composite revenue claimed bythe BSA in 2003 was $115M with expenses claimed to be $165. In other words, the BSA claimed to have a net loss of $50M in 2003.Relative to the audit, the BSA had understated revenue by $74M and overstated expenses by $56M. When forced to reconcile these differences, theNational Council attributed thedifference to "$127Min unrealized income from investments." There was no explanation for this obviously preposterous claim, and I have no idea why the IRS bought theclaim.

When you look at the individual 990's, some obvious "fantasies" pop up immediately. The revenue quotedforLearning for Life is less than the membership fee charged tosign up for theprogram. In fact, the line where "dues and membership fees" should have appeared was blank. When you look at the corresponding line on the 990 for theNational Council, you quickly come to the conclusion that the number quoted is greater than could be generated by all the members andadult leaders in the Traditional Scouting Program. How can this be?Very simple, the BSA commingledthe membership fees for L4L with the Traditional Program. When I "roughed out" the projected revenue for L4L, it came out to be ~$80M. This would easilyaccount for the extra revenue found in the audit!

When you look at the 990 for the BSA Foundation, nothing particularly outstanding pops out...except that this organization would be an ideal medium for "redistributing" money throughout the BSA. A bit of that was obvious even in the 990 form. The foundation had given the National Council a grant of $100,000 for "office supplies," and several Councils had received grants ranging from $25,000 to $50,000.

When you smell rotten fish, chances are that there are some rotting fish close at hand.




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