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Nov 20, 2006
Dear Ms. Carmody,    
I can only imagine what a daunting challenge it must be to lead an agency that the public looks to for guidance. Countless citizens look to the reporting of the BBB for direction when anticipating spending their hard-earned money for services.  In doing so, citizens accept that the BBB's reporting is accurate, unbiased, and the result of thorough investigation.
That is why I was so disappointed to discover a BBB "Charity of Ethics Award" posting on the Humane Society of Indianapolis's (HSI) website  . Sadly, however, I was not surprised. HSI has managed to escape responsibility for its financial stewardship for years.

According to the Better Business Bureau, an independent panel of business and community leaders said the Humane Society of Indianapolis has demonstrated "sound business practices, integrity and flexibility for the clients and community it serves."  "The Humane Society of Indianapolis has demonstrated exceptionally high ethical business practices," said Better Business Bureau of Central Indiana President and CEO Linda Carmody. "Integrity, honesty and ethics are important to the Humane Society of Indianapolis."

I¹m afraid endorsement of this organization with an "ethics award" from an entity as respected as yours can only be called irresponsible and may damage the reputation of the BBB as well. Let me share with you some information that you probably did not have.

Move to ACT (mtA) a local animal service and watchdog organization  www.movetoactorg  has done its homework on HSI. Our findings are considerably different from those of your panel. In case you have questions about the validity of this information, this letter is also being sent to Roni Jarnagin, an attorney who, like all of us, cares deeply for the integrity and viability of HSI and who has represented local animal service providers in their efforts to protect a public charitable trust for animals and Mary Lee Pappas, the award winning journalist who investigated the panleukopenia outbreak at HSI that is referenced in the ethics award.

HSI's financial misadventures are well documented and create a long, complex tale that has long been witnessed by both the local and national animal welfare community. I urge you to set aside some time to read closely the last three-year review of the agency
Litigation efforts by civic minded grass roots animal service providers that cared enough to try to stop the financial bleeding and halt the agency's misuse of donor dollars and collateralize a benevolent public charitable trust for deficit spending is eloquently summarized by Ms. Jarnagin . Please pay special attention to the footnotes. It should also be noted that this effort was undertaken only after several failed attempts at meaningful communication with the agency's leadership.
Following is a brief history of HSI’s financial mismanagement. Perhaps I can show you how these events conflict with the BBB¹s high standards for ethical accountability.
In three short years, the Humane Society of Indianapolis went from one of the wealthiest animal service non profits in the country to one claiming near-bankruptcy. During its long run of wealth both the local and national animal welfare community has been aware that the agency¹s financial treasury was excessive while the number of animals destroyed in our city (22,000 a year) remained unchanged. 
A credit card scandal in 2002 gained national attention when it came to light that the previous Executive Director had used the agency's credit card for personal spending. The response from HSI officials was that "all actions were acceptable" .
What about "commingling of assets"?
HSI was never able to show repayment documentation. In "Financial Disclosure": a supposed report ( by Ness & Company — an accounting firm that also prepares HSI’s audited financial statements) "...stated that much of the supporting documents for the credit card transactions, such as invoices, receipts or notes, had been stored off-site and were not very well organized, which made them difficult to find. HSI staff indicated that some of the credit card bills had been removed from the appropriate files at the time of a break-in at the accounting office." .  
The credit card fiasco resulted in the E.D stepping down (with a $70G+ severance package) and a $30,000 search expense for a new director who currently heads the agency. Hope for a turnaround in the agency's character and responsibility was met with disappointment as fiduciary and animal care problems persisted.
MtA began scrutinizing the agency's annual statement of accounts. Unable to unravel the confusion of the agency's actual net worth (it was later determined that the agency had been filing the assets of the Mary Powell Crume Public Charitable Trust on its side of the financial ledger), mtA in March, 2004 filed an objection to HSI's annual statement of accounts with the probate court.
The probate court and the Attorney General have more than 800 charitable trusts to monitor, and obviously lack the resources to assess each of these filings. Consequently, these documents are rubber-stamped as "approved" and passed along, leaving the door wide open for possible mismanagement and/or malfeasance.
During the litigation period to bring financial transparency, HSI had the luxury of a board member's affiliation with Indianapolis Business Journal. IBJ published a series of articles entitled "Rescue Mission,"  
part of a competent PR campaign to influence public opinion about its operations and proclaim victimization.
In the 2004 "Reversal Shakes Humane Society" ,  HSI¹s attorney defended the organization's desire to use the public charitable trust as collateral for a loan from National City Bank with the statement "We need the money... we're coming up on a big cash crunch."  Two years later, Charity Navigator reports that the salary of HSI's Executive Director has been raised $15,000 to more than $110,000 
An HSI Board member is also a National City Bank agent, and coincidentally, a trustee of the trust as well as a depository trustee.  Should the agency default on the loan, where would the money go?
BBB Standards for Charity Accountability #5.
No transaction(s) in which any board or staff members have material conflicting interests with the charity from any relationship or business affiliation.
When mtA encouraged the Attorney General to press HSI to consider options for loan collateral other than putting at risk the $3.4 million Crume Trust for animals, HSI offered real estate instead. When mtA alerted the Attorney General to the fact that the real estate offered was (Crume) trust property, HSI's claim to innocence was that 'it's not clear what happened then, since institutional knowledge of the organization does not go back that far'  (referring to the fact that the real estate listing was dropped from the statement of accounts since 1980) (Reversal Shakes Humane Society,   

In the "Position Guide" that was part of the recruitment documentation for the current HSI Executive Director, text specifically included the background history of HSI with the Crume Trust and property: ""In 1967, the present site was purchased by the Crume Trust from Otto Ray, and leased to the Humane Society for 99 years."
Doesn¹t it seem odd to you that, with the Board of Directors including accountants and attorneys, such confusion would exist? 
Isn't there a legal term, "conversion of property"
BBB Standards for Charity Accountability #1.
A board of directors that provides adequate oversight of the charity's operation and its staff
The litigation story is a long one, (and this is where the archives would offer insightful history) but the essentials are these: the Indiana Supreme Court ruled that only the Attorney General can represent the public in the matters of oversight of public charitable trusts and consequently the public is denied access or "standing" in the court in regards to the administration of a public charitable trust.  A ruling otherwise would implicate the Attorney General as having missed this accounting error for two and a half decades.
Then HSI petitioned the probate court for money from the Crume Trust principal to pay for legal expenses in regards to defending its efforts to tap the trust principal (contrary to the benefactor's explicit wishes).  HSI's legal counsel in the litigation is an HSI board member. 
BBB Standards for Charity Accountability #5.
No transaction(s) in which any board or staff members have material conflicting interests with the charity from any relationship or business affiliation.
The panel made particular mention of HSI's handling of an outbreak of feline panleukopenia and the shelter's emphasis on open communication and protection of pets.
With regard to the above statement, I would encourage you to visit the coverage of "Panleukopenia fears" by MaryLee Pappas: "Humane Society depopulates all adoptable cats"

Please review what leaders in the veterinary community say about managing panleukopenia in a shelter environment: "Feline Distemper or Panleukopenia Prevention and Disease Outbreak Management"   There is no reference to destroying a pavilion of asymptomatic cats housed with a cat/cats with panleukopenia. The HSI position to destroy over a hundred asymptomatic cats in the recent panleukopenia management is supported nowhere except in their own position (acknowledged with the BBB award) which was  "Because there is no way to identify a cat has this disease until it is contagious and the cat has potentially infected dozens of other cats, euthanization was the only way to stop the spread of the disease."
In regard to the "protection of pets," consider reviewing the following series. It is just one case that reached the press of many other similar "mistakes" that didn't but have been reported to mtA and verified in recent years. 
Lost dog turns up dead at Humane Society
Lost dog killed by mistake
An account by lost dog's owner
Ms. Carmody, whether the BBB retracts this award and sets the record straight will depend on the conscience that prevails within the organization.  I'm sure the findings of your "independent panel of business and community leaders" are the result of oversight and incomplete information. But whatever the reason, an ethics award for an agency with this profile tarnishes the hard work and reputation of the BBB. Sadly, it also misleads the donating public and totally discredits efforts to hold a nonprofit agency accountable for carrying out its mission with integrity. It cheats the public who donates millions of dollars into animal welfare, betrays helpless animals who have no voice, the other animal service organizations who toil daily with strained budgets and all-volunteer staff and misleads those who rely on the BBB for sound direction. I’m sure you agree that's just plain wrong.
I would appreciate the opportunity to discuss this with you in more detail. Please feel free to contact me at any time. I'm sure you want to do the right thing.
Warren G. Patitz
Co-founder, Move to ACT