Letter from DAN to the Independent Weekly

[Renee Duncan]

2003Jan27

Letter to the Editor of Independent Weekly

This letter is in response to your "Deep Trouble" article by Jennifer Strom that ran on 2003 Jan 15. As the Chairman of the Board of Directors of Divers Alert Network, DAN, I am deeply troubled by some aspects of the article, and would like to try to set the record straight.

I found the article to be well researched and basically accurate concerning the myriad of events during a period of turmoil that DAN has recently experienced. The article appears to be drawn primarily from court documents of a lawsuit initiated by Dr. Peter Bennett, DAN’s founder and President throughout the organization’s 23-year life, and three of his DAN colleagues, against five members of DAN’s Board of Directors. The article reports on the details of the case and is embellished with interviews, but it does not make nearly clear enough that most of the accusations are not substantiated and may not be true.

Of much greater concern, however, is the "packaging" of the article. Although the allegations are unsubstantiated, the first page lead-in and the Up Front editorial page both behave as if the article was the gospel truth, and that is just not so. The implications that Dr. Bennett and allies were "helping themselves" are incorrect and blatantly unfair to Peter Bennett, and are damaging to DAN. It is absurd to compare the situation at DAN to the events at Enron and WorldCom. Rest assured that DAN’s finances and such matters as the employees’ retirement benefits are intact and working as they ought to.

I take issue also with the implication that Dr. Bennett will float down on a "golden parachute." Any retirement that may go to him is well deserved, appropriate, and has been thoroughly studied by the Board and DAN management; the size of it or even whether or not he gets any retirement benefits is an internal personnel matter that is not and should not be public knowledge; this information is being maintained confidential by the parties involved as is customary in virtually all comparable situations. No money donated to DAN is involved here.

For the record, DAN’s for-profit subsidiaries are, like DAN, fully regulated and audited and there is DAN Board oversight of all their Board actions. Although one component is offshore, all U.S. Federal taxes on this business are paid on a timely basis. In addition, revenue from DAN’s insurance component pays for ongoing research in diving medicine and other services to divers, integral components of DAN’s mission. DAN’s insurance for divers continues to be an attractive benefit of DAN membership, and it will continue to be available without disruption.

During the time it took to read the article, it is probable that somewhere in the world a diver was receiving emergency medical assistance—perhaps lifesaving—because of DAN. As your article affirms, DAN would most likely not exist as a global resource without the work of Dr. Peter Bennett over many, many years. It is very easy to criticize the style of entrepreneurs, for they are high profile persons determined to achieve success through their efforts and their passions. It therefore behooves us to honor the works and legacy of Bennett with at least the same vigor as we might use to criticize his style.

R. W. Bill Hamilton
Chairman
DAN Board of Directors

 

[Genesis]

Dr. Hamilton;

I write to you today specifically concerning one paragraph from the letter you penned to the Independant Weekly. It reads:


"I take issue also with the implication that Dr. Bennett will float down on a "golden parachute." Any retirement that may go to him is well deserved, appropriate, and has been thoroughly studied by the Board and DAN management; the size of it or even whether or not he gets any retirement benefits is an internal personnel matter that is not and should not be public knowledge; this information is being maintained confidential by the
parties involved as is customary in virtually all comparable situations. No money donated to DAN is involved here. "


I respectfully disagree.

DAN is a 501c(3) corporation. As such all material expenditures, and all disbursements to any key personnell, must be disclosed annually on IRS form 990, which is PUBLIC INFORMATION.

In my considered opinion there remain several important issues raised by the article in the Weekly, specifically:

1. Did indeed a firm owned and controlled in whole or part by Dr. Bennett attempt, at any time, to purchase the insurance subsidiary? If so, was Dr. Bennett's ownership interest disclosed to the board contemporary with the first introduction of such an idea, and if not, when was it disclosed?


2. If indeed this did occur, why was this not cause for immediate action and censure within the board of directors, or even the immediate termination of Mr. Bennett's employment? This kind of self-dealing is almost exactly the same sort of thing that ENRON was involved in with Chewco and its other "limited partnerships", and whether legal or not, certainly crosses an ethical line. As a former CEO, this is a line I am WELL aware of, and it is NOT fuzzy in any way, shape or form.

3. The most recent IRS 990 available for DAN shows approximately $660,000 in income flowing from the insurance subsidiary. Where can one inspect a balance sheet, P&L, and other standard financial statements for this subsidiary? To the best of my knowledge this firm is not accountable to ANYONE in that regard.

DAN <claims> in its most-recent annual report, that <ALL> operating income from this firm inures to DAN. How can this be verified if the financials of this subsidiary are unavailable? How can one determine what the actual internal efficiency of this firm might be?

How are this firm's reserves?

Why is the firm incorporated in the Caymans? Is it to evade
reporting and disclosure requirements of firms in the United States?

4. Why is Dr. Bennett's "retirement" considered "confidential", and is DAN attempting to use that clause in your settlement agreement to evade IRS reporting requirements? If so then this is an even more egregious violation of the spirit of a non-profit than the original offense!

Dr. Hamilton, these are serious issues. I also note that you are careful in your response to the Weekly to say that the allegations "may not be true."

Well, Dr. Hamilton, either they are true or they are not. These matters are not a matter of opinion. They are matters of fact.

If the allegations are false, why did you not make the statement, on the record and as Chairman of the Board, that they are false? Might that be because at least some of them are NOT false?


Dr. Hamilton, I urge you - and DAN - to "come clean" about ALL of the allegations raised by the Weekly.

Your donors - and members - are listening and paying very, very close attention to DAN's actions over the next few months.

My personal membership does not run until the summer months.

I will find it extremely difficult to continue to support DAN if the
organization is unwilling to provide transparency into both matters of past conduct and for the actions of DAN going forward.

I believe that a significant number of others feel as I do in this
matter, and urge you, and the DAN board, to clear away the confusion and make statements of FACT, addressing each of the allegations raised by the Weekly article, and also disclosing what, if any, renumeration DAN is providing to Dr. Bennett for his retirement beyond that vested in his private 403(b) plan.

Sincerely;

 

[joens]

Genesis once bubbled...



















Your donors - and members - are listening and paying very, very close attention to DAN's actions over the next few months.

that is certainly true.
Joens