Shriners Make SLAPP History? Part: 21
Fri Jan 11, 2008
Sandy FrostDisclaimer: I was named as a secondary party of interest in this defamation lawsuit when the Shriners asked for, in their first and second requests for production of documents, “emails, letters, notes, phone records, contracts, payments, etc.,” between both Vernon Hill and Paul Dolnier AKA Charity Watch Center (CWC) and myself. In my opinion, this is nothing more than an end-run by the Shriners to circumvent Florida’s reporter shield laws as they try to find out if I’m being fed information and/or being paid to write these articles on someone else’s behalf, implying that my work is not original, that I am not capable of producing this body of work on my own and that I am, otherwise, for sale. What a public insult. (1) – Sandy Frost, Starbucks, Washington
As of Friday, January 4, 2008, the Shriners continue to make history as the largest non profit group to use a SLAPP lawsuit to silence their critics, including one of their own. And it is believed that this is also the first time a SLAPP lawsuit has been used to obtain otherwise privileged communications between a reporter and their sources.
According to the Society of Professional Journalists, a SLAPP lawsuit is described as:
“The essence of a SLAPP suit is the transformation of a debate over public policy – including such local issues as zoning, environmental preservation, school curriculum, or consumer protection – into a private dispute. A SLAPP suit shifts a political dispute into the courtroom, where the party speaking out on the issue must defend his or her actions.
Although SLAPP suits may arise in many different contexts, they share a number of features:
1. The conduct of the targets that are sued is generally constitutionally protected speech intended to advance a view on an issue of public concern. In most cases, a SLAPP suit is filed in retaliation for public participation in a political dispute.
2. Targets typically are individuals or groups that are advancing social or political interests of some significance and not acting solely for personal profit or commercial advantage.
3. The filers are individuals or groups who believe their current or future commercial interests may be negatively affected by the targets' actions.
4. The actions tend to be based on one or more of the following torts: defamation (libel or slander); business torts (interference with contract, business relationships or economic advantage, or restraint of trade); misuse of process (abuse of process or malicious prosecution); civil rights violations (due process, takings, or equal protection); or conspiracy to commit one or more of the above acts.
5. Damages sought are often in the millions of dollars. According to a study by the Denver Political Litigation Project, the average demand was for $9.1 million. See Penelope Canan and George Pring, SLAPPs: Getting Sued for Speaking Out 217 (Philadelphia: Temple University Press, 1996).
6. Almost all SLAPP suits are eventually dismissed or decided in favor of the defendants. Canan and Pring reported that targets win dismissals at the very first trial court appearance in about two-thirds of the cases. Id. at 218. The problem with the current legal framework is that it takes too long to get SLAPP suits dismissed. According to Dr. Pring, the average SLAPP suit proceeds for 40 months – more than three years. During this time, the suit inflicts massive emotional and financial harm on the defendant, and often the defendant withdraws completely from action involving public participation and petition. By the time the SLAPP suit is dismissed, the plaintiff has thus achieved its goals of retaliation and silencing protected speech.”
The timeline goes like this.
Vernon Hill, himself a Shriner, began working with Paul Dolnier, an IRS agent with a master’s degree in taxation, over three years ago to review the tax returns of some of the 191 Shrine temples, the Imperial Council and Shriners Hospitals for Children. Dolnier began asking technical questions on his website such as:
“Why does the group collect MILLIONS of dollars in charitable funds yearly and turns over anywhere from 10% to 40% to the Shriners Hospital for Children and they seem to keep the rest of the funds for non-exempt and non charitable uses such as excess travel, entertainment, conventions and parties?”
Hill had questioned the Shrine leadership the previous five years about financial accountability and after being “stone walled” and in his own words, “retaliated against,” has since been an outspoken critic.
The CWC website suggested that the Shriners might “be of interest” to Pennsylvania authorities after Dolnier spent most of a day with investigators from Pennsylvania in Ft. Lauderdale as he explained his findings, based on tax returns, that showed that instead of the required 100%, only 23% to 48% of what was raised by some Pennsylvania Shrine temples was going to charity.
The original defamation complaint was filed in the 13th Circuit Court, Hillsborough County, Florida, on September 1, 2006 when the Shriners accused Hill of creating the Charity Watch Center with Dolnier and that both “used the CWC web site and emails to publish false and defamatory information about the plaintiffs.”
The original complaint can be read here.
They claimed “these publications falsely communicate to the public that there are facts which would support the messages that the Plaintiffs are violating the law by not properly using or applying contributed funds; that there is corruption within Shriners that has led to investigations by law enforcement agencies; and that money donated for charitable purposes is being used for non-charitable purposes.”
Over a year later, on November 6, 2007, the clerk of the court filed a “Notice of Intent to Dismiss” the lawsuit because of “lack of prosecution.” This means that for the ten months previous, the Shriners had failed to pursue the case. Noting this, the clerk of the court sent out the “Notice of Intent to Dismiss” to all parties, letting them know that a hearing was scheduled for January 18, 2008 at 9 a.m. before Judge Charlene E. Honeywell.
The Shriners had 60 days after the court’s motion to dismiss was served to keep the suit alive, so to speak. In a legal flurry, about 4 p.m. on Friday, January 4, which was day 58, they created a “record of activity” by filing with the court at the last minute, a REQUEST FOR ENTRY TO INSPECT, a second REQ FOR PRODUCTION OF DOCUMENTs, their OPPOSITION TO Hill’s MOTION TO DISMISS, a MOTION TO COMPEL and requested a hearing for March 26, 2008 at 9:30 a.m.
Can the Shriners afford to manipulate and tie up the legal system to silence their critics?
Shriners Hospitals for Children alone is worth over $10 billion.
The usual SLAPP tactic, at this point, would be for the Shriners to try intimidating both Hill and Dolnier behind the scenes into agreeing with some sort of “settlement agreement” that would stop the lawsuit after they signed away their first amendment rights to free speech.
Previous Shriner whistleblowers have been subjected to disciplinary hearings, otherwise referred to as "kangaroo courts," and, according to one charged with un-Shrine like behavior a decade ago, "was denied witnesses" and other due process because, according to bylaws and articles of incorporation of the Imperial Council, "Shrine Law does not include the law of the land."
"I think the Shriners will make the defendants a deal they can't refuse," he said. "And they will use Vernon Hill as an example to show other Shriners that if they want to keep their red fezzes, they will keep their mouths shut and not ask any questions, especially when it comes to money."
According to another Shriner similarly tried, he spent over $50,000 in legal fees before he was kicked out of the fraternity in 1997. “I spoke out about and defended a black couple after I found out they were suing the Shriners for racial harassment and employment discrimination. I went to the media and the Charlotte Observer ran a story about it. (2) I know firsthand how these guys operate. The Shriners will try to cut a deal with Vernon Hill by telling him that if he resigns from the Shrine, never mentions the Shrine or utters the name and never petitions any other jurisdiction to join the Shrine, then they will drop the defamation lawsuit.”
If both refused to settle, the Shriners would, most likely, then threaten to pursue the case again and attempt to shackle Hill and Dolnier, as it could cost them individually as much as $100,000 to defend themselves.
The next scheduled event would be when the Shriners go before Judge Honeywell on January 18 to try and convince the court not to dismiss the case and, though they failed to prosecute it for nearly a year, that they should be allowed to continue their SLAPP lawsuit against Hill and Dolnier.
From a tactical standpoint, the Shriners are also Masons, and as members of the Grand Lodge of Florida, prohibit women and minorities from joining. Do the Shriners want to go before Judge Honeywell and try to convince her that though they have done nothing for nearly a year, they should be allowed to pursue, at the last minute, a 65 year old whistleblower who is also a cancer survivor and recent stroke victim as well as an IRS agent with a master’s degree in taxation?
Do the Shriners want to take the chance that Judge Honeywell, who is married to a Tampa Police Major, will learn that the Shriners incriminated themselves in their own Treasurer’s minutes (3) by openly discussing crime in front of those sworn to uphold the law, who are then expected to turn a blind eye and fail to prosecute Shriner crimes to, instead, stay out of the headlines?
This is similar to what the Orlando Sentinel found after investigating the Shriners over twenty years ago. The newspaper found hints of a cover-up, incomplete and missing tax returns, disappearing circus revenues tied to a suspected ticket scam and charitable donations misspent on liquor, parties, travel, ceremonies, regalia and jewelry.
According to a New York Times front page article that ran in March, 2007 that questioned the Shriners spending, not much seems to have changed.
It will be interesting to see if the Shriners intimidate Hill and Dolnier into settling out of court or if they will be forced to appear before Judge Honeywell on January 18 and take the chance that she will see their lawsuit as a waste of court time, charitable donations and taxpayer dollars and, as the court has already recommended, dismiss it.
If the complaint is dismissed, the next questions that should be asked are:
“Is any of this related to or a pattern of what the Orlando Sentinel first discovered twenty years ago?”
“Have the Shriners committed tax fraud by failing to report legal settlements, insider loans and affiliated groups, such as the Masons and Royal Order of Jesters, to the IRS?”
“Why do the Shriner leaders consistently report ‘0’ under expense accounts?”
“Is this defamation complaint really an act of retaliation against whistleblowers who are otherwise protected under the Sarbanes-Oxley Act?”
“Have any Shriners in positions of public trust used insider information for private gain?”
“Should the Shriners be allowed to take advantage of the IRS and their non profit status while they, as Masons, openly discriminate against women and minorities?”
Who can find the answers?
Congress? The IRS? The Securities and Exchange Commission? The FDA?
No one will confirm if any of these agencies are currently investigating the Shriners, but for the public good, they should be.
(1) When I realized that the Shriners were trying to get their hands on my privileged information, I wondered: “Do the Shriners think that I’m being fed the information and am being paid for writing my articles?” and “Why would they make the mistake of trying to violate Florida’s reporter shield laws?”
Reporter’s privilege is defined in the Florida statues as:
PRIVILEGE -- A professional journalist has a qualified privilege not to be a witness concerning, and not to disclose the information, including the identity of any source, that the professional journalist has obtained while actively gathering news.
The Privilege Compendium states that:
“The privilege exists in the common law and constitutional law of Florida and embodies a recognition that protecting a free and unfettered press is a sufficiently compelling interest to justify depriving litigants of potential sources of information in many cases.”
Now, pay attention.
No one has guided me in this investigation.
No one has paid me to write except for Newsvine.com when I got a $60 check last October for pass-through revenue. Though Paul Dolnier is an IRS agent and has a Master’s in taxation, I do not communicate with him or consult with him about anything I write, especially when it comes to 990 analyses.
Vernon Hill had spent three years looking for an investigative journalist to continue what the Orlando Sentinel began two decades ago. I’d spent the three years previous investigating the non profit claims of another group. The month after they posted their documents online that proved they were finally compliant with non profit laws, Hill sent me an email in his search for a journalist willing to listen to whistleblowers’ accounts of discovering theft or fraud, asking financial questions and demanding financial accountability and then being punished for it.
After checking his story out, I wrote back that I could hit the deck running.
And I have.
I now have nearly five years experience investigating non profit groups.
I come up with the story ideas, do the research, write and copy edit and publish these articles by myself.
No one tells me what to write or how to write it.
No one feeds me information.
I find it all by myself.
Or maybe, the information finds me.
No one told me about the pattern of irregular Shriner executive mortgages and satisfactions where they will take out a mortgage on their personal home and pay it back in an unusually short time. Like paying back $142K in 90 days. Or paying back $51K in four months. Or paying back $100K in a year.
I found this myself as I dug through the online records of Hillsborough County, Florida and the Massachusetts Recorder of Deeds.
No one told me about the FDA warning letters recently sent to the Shriners Children’s Hospitals in Cincinnati and Sacramento.
I received a Google alert about one of the letters after the FDA News ran a story about it.
No one pointed out how the Shriners incriminated themselves in their own Treasurer’s Association minutes.
I found the minutes, made a list of the crimes discussed, compared this list to crimes prosecuted and did the math to realize that the Shriners prosecute only about 16% of the crimes discussed at the Treasurer’s meetings.
No one told me about the Shriners undisclosed lawsuits including wrongful death, multiple malpractice and liens, except for one.
The exception is a federal discrimination lawsuit filed in North Carolina that was settled out of court. Incidentally, these are the kinds of settlements that should be disclosed on the Shriners’ tax returns and, for some reason, are not.
(2) On February 28, 1996, the Charlotte Observer reported that “COUPLE'S RACIAL HARASSMENT SUIT SHAKES SHRINERS.” It describes:
“Terri and LaVern McCray say they felt like slaves. Married with five children, they grew up in a modern world, where black people and white people went to school together, shopped together, even lived side by side. But when they went to work at the Oriental Shrine Club, they say they felt as if they had stepped into their grandparents' skins. Black @!$%#. Boy. Nigger. These are the words Terri and LaVern McCray allege in a lawsuit they heard for five years when they...”
On June 1, 1996, the Charlotte Observer reported that “RACE BIAS SUIT AGAINST SHRINERS DISMISSED.” It describes:
“A racial harassment lawsuit against the Oriental Shrine Club of Greensboro has been dismissed. Greensboro lawyer Kevin Morse voluntarily dismissed the lawsuit on May 10. Morse represents LaVern and Terri McCray, who worked as cook and waitress at the club and alleged a pattern of ‘constant and unrelenting racial harassment by certain members of the Oriental Shrine Club.’''
Then, on May 16, 1997, the Charlotte Observer reported that “COUPLE'S BIAS SUIT VS. SHRINERS REFILED.” It describes:
“A black couple are using federal employment discrimination law to sue a Greensboro Shriners club - and its Charlotte parent - for more than $1 million, alleging racial and sexual harassment by white club members. LaVern and Terri McCray, former kitchen workers at the Oriental Shrine Club, filed suit in state court in 1995, but withdrew the complaint last May. Just short of the one-year deadline to refile, the McCrays took their case to U.S. District Court in Greensboro.”
(3) From “Treasurers Meeting Minutes Vanish, Gambling Proceeds Unaccounted For? Shriners: Part 15” published on Saturday, April 21, 2007:
“…crimes and fraud are openly discussed and recorded in the Shrine Treasurers Association Meeting minutes. For example:
• $1.2 million missing from one bingo game’s proceeds.
• $160,000 spent to settle multiple sexual harassment lawsuits.
• Over $5,000 in credit card fraud committed by a past Potentate.
• Over 30 temples reporting crime and fraud, with one missing over $300,000.
• Only 16% of crime and fraud cases prosecuted.
• $1,334,000 overspent by the Imperial Council, to be covered by each member at a rate of over $3,000 per capita.
• IRS returns to be filled out with minimum information.
• The Chairman of the hospital board advising members it’s ok to break HIPAA hospital privacy laws.
Pages 4 and 5 of the current Shrine Treasurer Association Policies and Procedures manual state that: ‘The Secretary-Treasurer must promptly have the minutes transcribed so they can be presented to anyone interested via the association’s web site, www.shrinetreasurers.org .’
It was discovered on 4/21/07, that all previously available Shrine Treasurers Association meeting minutes were taken offline. According to the site:
‘The minutes from our March 2007 Seminar Meeting are available to Shrine Treasurers (only) in hard copy form upon request and, for the first time, are not available to the public.’”
All copies of material reprinted or duplicated from by Sandy Frost must include the following credit line: From http://sandyfrost.newsvine.com/ Copyright © 2008 by Sandy Frost. Used