Crisis at Pink Triangle Services

pink Triangle Services is in crisis amid accusations from some of its founding members of financial missteps and an illegally appointed board.

Disagreements over important procedures and roles of responsibility have turned personal against the backdrop of PTS’ vitally important donor drive and an organization in transition with four paid staffers.

A Sep 6 e-mail, originally destined for one board member but accidentally sent out to the broader members of the glbtottawacentre listserv, accused the board of being illegally constituted after falling below quorum.

A quorum is the minimum number of directors required to make proceedings valid under the organization’s bylaws. Pink Triangle Services requires seven of the 12 directors be present. There are now only five directors on the board

The e-mail has become a catalyst for change by bringing public attention to several alleged dysfunctions within the board. As a result, some board members resigned over the issues and a meeting has been called to try to get PTS back on track.

Judy Girard, a founding member of PTS and a former president of the board of directors, wrote the e-mail – since widely disseminated in Ottawa’s queer activist community – in which she asked several questions regarding the financial responsibilities of the organization and expressed her concern about the lack of board liability insurance.

“When was the last time an audit was completed?” she asked in the e-mail, aware that the board must provide audited financial statements each year. “How many stale-dated cheques were found in the filing cabinet last week?” she asked in reference to the ongoing discovery of undeposited donor cheques from last year’s fundraising drive.

“When you go on a board of directors, whether or not you realize that, you make a commitment to run the organization according to sound financial principles and established financial procedures,” she told Capital Xtra in an interview.

Girard’s e-mail also expressed her concern that current president Ruth Dulmage would allow “interpersonal and inappropriate sexual relationships” between herself and other board members to disrupt the organization. Girard finished by suggesting the president should resign.

But three days after her first e-mail, Girard issued another message to the list to clarify the intention behind her previous posting.

“Notwithstanding my continued concern over the issues of financial accountability, liability coverage and conflict of interest, I had hoped to employ a more principled approach to getting attention to these issues,” she said in her second e-mail.

“I have a great love for PTS, and I had no intention of ‘blind-siding’ the members of the board who are all volunteers and donating their time and effort to manage this agency, often without recognition or thanks.”

Girard fears the accidental delivery of her e-mail to the broader community could harm PTS – an organization dependent on local fundraising and government support. “My e-mail that I sent, which ended up going out to the cast of thousands, I thought I was sending to just one person. I don’t have any intention of hurting PTS, that is not my goal,” she told Capital Xtra. She was, however, trying to get information and was upset a letter she had earlier sent to the board had not yet been answered.

“I was reacting out of anger which makes my language a bit more colourful and maybe a little bit more regrettable.”

QUESTIONS OF QUORUM

But Girard is in good company. Barry Deeprose, another PTS co-founder, finds it hard to believe the board went ahead and appointed new directors when they were below quorum.

In his own letter to the board dated Jul 25, he noted that he had questions as a concerned and founding member. When the board falls below quorum, it has no choice but to go to the membership with a special general meeting, he wrote.

In an interview, Deeprose says the concept of a quorum is to establish the “bare minimum requirements to keep the organization legitimate.

“When they fell below quorum, for whatever reason, they simply were not in a position, legal position I believe, to appoint new board members to bring it back up to quorum. It’s the craziest thing I’ve ever heard.

“My sense is they might be running around trying to run the place and the urgent always overtakes the important and I can imagine they’re really trying to keep the place together.”

The board first fell below quorum in mid-July when four members resigned, including the president and the treasurer. Director Kevin Bisback resigned because the board lacked liability insurance. The other resignations followed the board’s rejecting then-president Keith Duncanson’s suggestion that then-vice-president Ruth Dulmage step down from the executive. Duncanson was concerned about difficulties in the functioning of the executive after the relationship breakup between Dulmage and then-treasurer Sandi Bonini.

When originally informed of the relationship on Mar 6, Duncanson had not asked either Dulmage or Bonini to step down.

Duncanson reasoned to the board in July that, in light of the board’s already reduced numbers, the importance of board continuity dictated it would make more sense that the treasurer, who had experience in the position from two separate sittings, remain on the executive. Someone else could step up to take over the position of vice-president.

“It just became very clear and very apparent for me that maintaining the current composition of Ruth and Sandi and myself as an executive wouldn’t fit,” says Duncanson now.

But only Bonini and director Joe Cloutier agreed and Duncanson felt, among other things, he had lost the board’s confidence in his leadership. Within days of each other, the three tendered their resignations.

“In my personal opinion,” says Duncanson, “I think as soon as any of these problems occurred, a second general meeting should have been held and that was a decision that was made by the board at that time, not to go down that road.”

Duncanson says if he were in the same situation again he would handle things differently. “I would have actually asked one of the executive to actually stay on the board but to step off the executive itself.”

To deal with the quorum issue, the board sought legal advice through the services of legal advisor Ted Mann and then called a meeting to deal with the crisis. Minutes of the Jul 21 meeting show the only executive member of the board in attendance was then-vice-president Ruth Dulmage, now president of the board. Four other directors attended as well.

At the meeting, the board agreed with Mann’s advice and decided section 10 of PTS Bylaw 1 allowed them to elect replacement members even though they were below quorum. In section 10, the bylaw states, “Vacancies occurring in the board of directors or among the officers between the time of their election and the next annual general meeting of the association shall be filled by a majority vote of the board of directors or, in the alternative, may be filled by a vote of members at a general meeting of members duly called for such purposes.”

When asked in an interview why the board members didn’t immediately decide to go to a special general meeting when they fell below quorum, Dulmage says they were comfortable with Mann’s legal advice. But she also says it would be difficult to go to the membership without having their financial house in order, as the 2004 financial statements had yet to be audited.

“We were afraid we’d look like idiots,” she says. “Also, we were worried it was going to look like sour grapes. We didn’t want to say anything bad about people who had just left because how’s that going to get interpreted?”

She doesn’t agree the board is an illegal entity because it fell below quorum and appointed new members. “We acted in the spirit of the bylaws,” she insists.

“Certainly from the legal advice we received and the advice of others in the community, other leaders in the community, others that have been involved in PTS, we did what we could. We certainly have seen ourselves as being a legal board but the bylaws are open to interpretation.

“You know, we want the public to hear how hard people work and how great things are because there are so many great stories. So we felt we needed to get our house in order. We had inherited more of a mess than we had ever realized and people worked their butts off to clear it up.”

DONOR CHEQUES

In a response to Girard’s first e-mail to the listserv, Dulmage also sent an e-mail to the list, having previously hoped to no avail that her accuser would attend the Sep 13 board meeting. In her e-mail, Dulmage responded to the allegations, admitting some of Girard’s accusations are sound. Questions remain about whether funding report deadlines were met and if the budget is on track.

In her Sep 22 e-mail, Dulmage outlined her perspective on the circumstances behind the board resignations that led to falling below quorum and how the board handled it. She mentioned plans to obtain board liability insurance and discussed the three new board members appointed Jul 22: Lisa Ostapyk, Cynthia Shelswell and Emily Troy, including the subsequent resignations of two of them. Her e-mail appears to affirm certain financial concerns, including the discovery of undeposited donations and incomplete donor reports.

“The last audited statements of the books were for the fiscal year of 2003. It is correct that stale-dated cheques and unprocessed credit card transactions from the donor drive of 2004 were recently found. The executive director has been tasked with immediately setting up and implementing a procedure to ensure that this situation never repeats itself,” she wrote. Dulmage also pledged that incomplete reports will be dealt with immediately.

Treasurer Michael Henschel downplays the discovery of donor cheques, which he says amounted to around $1,000 as “typical stuff to happen to a volunteer agency.

“It’s a non-starter. It’s evidence that when you have a volunteer organization things fall through the cracks every once in a while.

“Now we’re not going to allow it to happen again and we have processes in place that make sure that that won’t happen again, but those things, cheques and things, predate any staffers that we ever have had on.”

Henschel says the new policy ensures that “it’s not the volunteers who are responsible for putting money in and out of the bank.”

Former treasurer Sandi Bonini told Capital Xtra that the financial questions are a red herring. She’s worked to bring the financial statements up to date, she says, and an auditor will validate them “as quickly as possible.” There will be audited statements for the special general meeting, she says.

PERSONAL RELATIONSHIPS

In her e-mail, Dulmage also conveyed displeasure at her personal life being brought up in Girard’s e-mail.

“It is highly unfortunate that through this process my personal intimate relationships have been commented on in public. However, in order to respond to these comments, the following information is offered.”

She then detailed her relationships with two board members – Kerry Beckett in 2003 and Sandi Bonini more recently when they both served on the three-person executive – including how the relationships came about, and how Dulmage tried to ensure the relationships wouldn’t impact their work on the board.

Former treasurer Bonini emphasized the hard work that the volunteer board members perform. And she says she doesn’t see why personal relationships are being discussed in public. “I really don’t want to get involved in commenting on my personal relationships. I think that is very inappropriate.”

But she adds, “If the mem-bership feels they need to have something like this in place [to avoid executive or board members from being in a relationship], then so be it.”

In closing, Dulmage claimed Girard’s e-mail caused the resignations of two of the new board members and board member Nathan Hauch, and tried to look forward, appealing to all members to attend the SGM at the PTS offices, now rescheduled for Oct 25.

Hauch says he had originally agreed to stay with the board when it fell below quorum on the condition there were no challenges from the community and was deeply troubled that both Deeprose’s and Girard’s letters remained unanswered.

“It wasn’t that I thought people were trying to hide things, per se, from the people at all, that’s not what I thought. But I thought that things had gotten too big for the board that was currently constituted to be able to manage everything,” he says.

“I had said that now that we had these people that had their challenges and that they were frustrated, one had already gone to the community, whether intended or not, that we had to have a meeting as soon as possible.”

Hauch says he would only consider returning to the board if the community supported it.

“I think there are people on the board that have strong skill sets but, at the same time, I don’t think that the board as a whole has the confidence of the community at this point and that’s why a meeting has to come forward and that’s when, I think, when we get the meeting that comes forward with the information, when a new board is able to be constituted, that it will have the full confidence of the community.”

LIABILITY INSURANCE

Dulmage also says liability insurance has become a priority. Several of the recent board resignations were because the board wasn’t insured.

“I think the time is absolutely perfect and it was unfortunate the board member who did orientation with new board members coming on hadn’t happened to have mentioned that [we didn’t have liability insurance].”

Emily Troy was brought onto the board Jul 22 while it was without quorum and resigned soon after learning the board had no liability insurance. She was also concerned there were issues from the community that weren’t being addressed but feels all issues will be addressed at the SGM.

“I think that’ll all change. I have a lot of hopes for the special general meeting coming up and I think that there will be people who will step up.

“And definitely having insurance in place would be a big bonus, a big draw.” She said she would consider returning to the board once insurance is in place and membership has an opportunity to discuss the issues that concern them. But she would also like to make sure problems of the recent past aren’t repeated.

“Well, I have to say, I guess the only thing I suppose I would need to know is that there’s going to be complete policies in place around things like relationships and also around communication and what’s appropriate to send out on the listserv and what’s not. I think there needs to be a process in place that maybe will help prevent something like this in the future.