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June/July, 2004
 
www.old.movetoact.org
317-641-9300
 
We recognize that the casual visitor to the website may have difficulty wading
through all the information so we want to offer this update summary:
 
The efforts of Move to Act (mtA) focus on advocating for animals in central
Indiana. Especially, we believe reckless use of limited and precious financial resources
compromises the ability to realize broad and meaningful programs for animals in our
community. Our most immediate concern is to protect a $3.4M trust intended for
relief of animals. The trust is the Mary Powell Crume Trust and the trustee AND
beneficiary of said trust is the Humane Society of Indianapolis, (HSI).
 
HSI is in financial distress.  Within the last 5 years it has gone from one of
the wealthiest charitable organizations of its size in the country (assets of
$15+M) to one that now claims it is on the brink of closing its doors.  HSI
leadership insist the reason for this is the economy and bad publicity, (http://
www.indystar.com/special/destinedtodie/).  MtA feels that financial scandal,
overspending and financial mismanagement are significant contributing factors.
 
These same officials who continue to direct the organization today:

  • Approved the use of the agency credit card by the previous E.D for personal
    purchases.
  • Provided the previous E.D. with a $103,000 compensation package upon her
    resignation.
  • Insisted to the public that HSI had all the documentation to validate that all
    expenditures had been repaid.
  • Shared with mtA on February 25th that they don’t exactly have such
    documentation.
  • Later indicated in the May 5th NUVO article  “…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.” http://www.old.movetoact.org/financial_disclosure.htm

Several animal welfare organizations have joined mtA in its concern for the
responsible stewardship of a $3.4M public charitable trust designated for the
animals in the Indianapolis area.  These concerned organizations are:
Spay-Neuter Services of Indiana; Alliance for Responsible Ownership, Inc.
(ARPO); Home for Friendless Animals, Inc. and Southside Animal Shelter.
 
HSI wants to use the Crume trust as collateral for a loan. Our position is that
the use of a charitable trust being used by the beneficiary for collateral is
contrary to Indiana law.  In addition, HSI has shown itself to be a reckless
steward of donor dollars as well as not credit worthy.
 
HSI has exhausted its own charitable trust of $4M in the last 3 years and has
already collateralized another trust, the Stokes Trust, "to its
limits" according to ex-president and treasurer of the board, Monty Korte. 
Officials also claim the society continues to operate $50-100,000 in the red per
month even despite the recent infusion of cash by the Stokes loan and by a
generous gift from the Nina Mason Pulliam Trust. If the Society were to
collateralize the Crume Trust and then default on loan payments, up to 90% of
the trust assets would be lost as collateral to the lending institution (which,
by the way, is also a co-trustee of the Crume Trust).
 
HSI will not disclose its financial statements or "strategic recovery plan" to the
court or to the public.
 
Some interesting facts:

  • National City bank has been the depository trustee (where the trust is deposited) for 29 years.
  • National City Bank receives annual fees for maintaining the trust.
  • HSI has been seeking the loan using the Crume Trust as collateral from
    National City Bank
  • The new HSI board treasurer, William Guthrie, is a Vice President of National
    City Bank, which means he wears 3 hats:  he is the beneficiary/borrower (HSI);
    the trustee (thus, personal guarantor of the beneficiary’s loan); and the
    co-trustee/lender, which stands to receive assets from a trust over which it is
    guardian.

More interesting facts:

  • For 24 years HSI has reported the 7929 Michigan Road property and buildings
    (which property belongs to the Mary Crume Trust, and in which buildings and
    improvements the Trust has reversionary interest) as its own assets.  This is
    referred to as commingling of Trust assets with its own assets and is a breach
    of fiduciary duty.
  • HSI officials attempted to pledge the 7929 Michigan Road real estate and
    buildings back to the Trust as collateral if they default on the loan from
    National City. Had the group of animal welfare organizations (thanks to the
    research of mtA co-founder Karen Patitz) not put a stop to this, HSI would have
    committed conversion of property, which means to take exclusive control over
    property that does not belong to you. 
  • All of these acts constitute self-dealing and irresponsible Trust
    administration.  
    1. MtA and the animal welfare service organizations in the case seek to remove
    HSI AND National City Bank from the positions of co-trustees of the Crume Trust
    because of the significant, self-dealing conflicts of interest and mismanagement
    of Trust assets.
    2. Further, mtA, the coalition and 2,500 community members who signed the “Down
    to the Bone” petition (http://www.old.movetoact.org/petition2.htm) feel that new
    leadership is needed to restore trust in the Humane Society of Indianapolis. 
    3. The current and perpetual “old-guard” HSI board members continue to make
    decisions that lead the agency down the path of self-destruction with this
    robbing-Peter-to-pay-Paul “strategic plan.”  This behavior alienates public
    support, perpetuates an atmosphere of distrust and is consequently counter
    productive. 

The next court date addressing the issues of the Crume Trust is an oral argument
as to whether mtA and the other petitioners in this case have “legal standing”
to take this court action against HSI and National City.   August 19, 2004,
9:00a.m., in Marion County Probate Court, 17th floor of the City County
Building.
 
Mark your calendars and plan to attend.
 
If you would like to contribute to this effort to prevent $3.4M from vanishing, donations can be mailed to:
 
Move to ACT
P.O. Box 68658
Indianapolis, IN 46268-0658
 
For more information on the mtA initiative, please visit www.old.movetoact.org .
 
Please forward this newsletter to friends concerned about responsible stewardship of animal welfare dollars in central Indiana.
 
Thanks to everyone for your continued support.
 
Karen and Warren Patitz
co-founders of mtA 

   
   
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