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Treasurers Meeting Minutes Vanish, Gambling Proceeds Unaccounted For? Shriners: Part 15

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Sandy Frost Newsvine

Treasurers Meeting Minutes Vanish, Gambling Proceeds Unaccounted For? Shriners: Part 15

Sun Apr 22, 2007

Sandy Frost

Editor's Note: A response to my questions, an email from the secretary of the Shriners Treasurers Association is posted in the comments section.

The Washington Post reported last Thursday that current IRS Commissioner Mark W. Everson was chosen by the Red Cross Board of Governors to lead the $6 billion disaster relief agency. As IRS commissioner, Everson aggressively pushed for greater non profit compliance, accountability and disclosure by “cracking down on the dubious use of tax-exempt status by charities and nonprofit groups.”

Everson will soon start working to make sure the Red Cross complies with all IRS non profit laws. Complaints from victims of Hurricane Katrina, local chapters and whistle-blowers prompted Congress to pass amendments designed to streamline the only individual charity mandated by the federal government to help Americans in the midst of catastrophe.

Non profits are big news worldwide.

A week ago, The Independent (UK) reported that the Smithsonian Institute was rocked by “allegations of graft and extravagance” and that chief executive, Lawrence Small, left last month “following an audit which exposed lavish expenses including $12,000 (£6,100) for swimming pool upkeep, and more than $1million of mortgage allowances for a $3 million official residence which carried no mortgage.”

The New York Times ran a story on Tuesday, November 7, 2006, describing how the Decatur Shrine Club was unexpectedly seized and shut down by the Cahaba Shrine Temple of Alabama for contributing 51% instead of 100% of the charitable proceeds to the Shriners Hospitals for Children. “I guess Shrine law supersedes the city ordinance,” said club member Lucian McCulloch, who was quoted in both the Times article as well as in a story run by the Decatur Daily on Wednesday, November 8, 2006.

Last month, a March 1, 2007 New York Times article, “IRS Finds Tax Errors in Reports of Nonprofits,” detailed how 600 charities have had to file amended tax returns, how 40 individuals were asked to pay a total of $20 million in excise taxes on excessive benefit transactions and how Yale University did not fully report on its securities transactions as well as what portion of specific expenses were spent on it’s programs administration and fundraising.

Two weeks later, a New York Times front page story reported that money collected by the Shriners temples and clubs to benefit the Shriners Hospitals for Children was being misspent.

Or even worse.


Two decades ago, an Orlando Sentinel investigation found that most money raised by the circuses was withheld from the hospitals. The newspaper received a tip from Shriners who had been ordered to resell circus tickets, resulting in an estimated loss of $8,000 to $30,000. The Shriner whistleblowers had reported their concerns two years earlier to a pair of law enforcement officers who ultimately did nothing.

They were also Shriners.

The Sentinel staff also found that money raised for the hospitals was misspent on liquor, clothes, travel, parties and jewelry.

Before going on, let’s make one thing very clear.

This is not about the 425,000 fraternal Shriners, some of whom have volunteered for decades to help the sick and crippled children. These guys will roll out at zero dawn thirty on a Saturday morning to set up for a pancake breakfast. Or carefully apply heavy make up, pull on colorful costumes and not give a rip about what anyone thinks of a clown driving down the road, on his way to help heal the hospitalized children with laughter, the best medicine.

This is about Shriner chains of command that refuse to answer financial questions, though the charity is worth over $10 billion. This is about Shriner leaders who embrace secrecy instead of answering questions such as “Where does all the money go?” In the extreme cases of Shriner Vernon Hill and former IRS agent, Paul Dolnier, both Shriners groups sued them for defamation instead of answering their questions.

In contrast, 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. (1)

According to the group’s February, 2007 newsletter, the S.T.A.N.A. Ledger, former U.S. Congressman Bilirakis (R) of Florida’s 9th District was scheduled to address the treasurers' mid-winter seminar. His position was just replaced by his son, Congressman Gus Bilirakis (R). The 9th congressional district includes Hillsborough County, where both Shriners groups are headquartered. Both are Masons and Gus is a member of the Egypt Shrine Temple. Shrine executive vice president, Mike Andrews, as well as Imperial Recorder, Jack Jones, are also members of the same temple.

So, who pulled the previous minutes offline and then ordered that the March, 2007 minutes be kept secret, especally when they contain, among other things, former Congressman Bilirakis’ remarks?

Let's move on and look at how these two groups differ.

The Shriners are made up of two non profit groups who have two different IRS classifications. The Shriners Hospitals for Children is a 501c3 non profit charity. The Shriners who meet in the 191 mosques or temples across the country are classified as 501c10 non profit fraternal groups.

Analysis of the Shriner Hospitals for Children tax returns reveals that certain transactions and relationships are not disclosed. These include:

• Single and multiple mortgages between the Shriners Hospitals for Children and Shriner executives, officers and employees.

• A registered lobbyist who was hired to lobby against the post-Enron Sarbanes-Oxley Act, designed to enforce greater corporate compliance with higher standards of disclosure, accountability and transparency.

• Affiliations with other non profit groups such as the Masons, Knights Templar and Jesters.

• Conflicts of interest between a shared Board of Directors that serves both groups.

• Changes to governing documents.

Coincidentally, some fraternal groups seem to fill out their tax returns in much the same way.

All Shrine temples and clubs must obey specific federal, state and Shriner non profit, fundraising and disclosure laws.

For example. on the state level, the Georgia Secretary of State mandates that all non profit groups must register through the Securities division.

The Yaarab Shrine Temple is so registered.

The Gwinnett Shrine Club is not.

These fraternal groups must also disclose financial and fundraising information on their federal tax returns as well as obey the procedures detailed in section 5 of the Shrine Temple Financial Manual, “Fraternal and Charitable Fund Raising Activities.”

Online press releases, related articles and archived websites describe how the Gwinnett Shrine Club benefited from proceeds generated in a commercial co-venture with SportsCrew.com, which is a “high traffic sport and gaming portal that focuses its resources on the promotion and expansion of the online poker and gaming industry.”

This co-venture raised money for the club and hospitals from both online and Atlanta based charity poker tournaments or “Bar Wars.”

Sportscrew.com reported that:

They raised, with the Gwinnett Shrine Club, over $90,000 in 2004 “for the cause of these children.”

On March 28, 2005, a check for $60,000 was presented by SportsCrew.com and GamingClubPoker.com to “The Potentate and High Priest and Prophet from the Atlanta Divan of the Shriners Hospitals for Children.”

In one month, March, 2005, over $160,000 in poker tournament proceeds was donated to the Shriners.

In order for this to be legit, the President of the Gwinnett Shrine Club had to have followed the steps spelled out in the Shrine Temple Financial Manual, starting with submitting the proper paperwork up the chain of command, to the Yaarab Temple Potentate who would then sent it up to the Imperial Potentate (Head guy of the fraternal), the Chairman of the Board of Trustees (hospital) and the fraternal executive vice president. After the last poker tournament, the temple had 60 days to submit the event’s results as well as the net proceeds up the same chain of command.

Then, at the end 2004 and 2005, this fundraising information should have been reported on the Yaarab Temple’s tax returns.

Now for the technical stuff. If you really want to follow along, these documents can be found at Guidestar.org. Search for “Yaarab Shrine Temple" and click on the first of two “Ancient Arabic Order” Atlanta, Georgia listings. The first listing provides the temple's 2004 and 2005 individual returns. The second listing contains the temple's 2004 and 2005 group returns filed on behalf of the clubs they oversee.

• The returns show how the poker tournaments and other discrepancies were or were not reported. For example:

• The Yaarab Temple reported on all four returns that no funds were raised from special events and activities, including gaming.

• The Yaarab Temple clubs operated at losses of $35,764 (04) and $114,210 (05).

• The Gwinnett Shrine Club was not listed on the 2005 group return.

• The 2004 and 2005 group returns indicate that no Clubs solicited for any non-tax deductible contributions, though the Gwinnett Shrine Club did so.

The Temple’s newsletter, the Basharat, lost $101,618 in 2004 and $72,821 in 2005.

• The temple double deducted $80,885 on both the 2005 individual and group returns for a total of $161,770 as paid compensation to the temple’s business manager, though no employees were reported.

Coincidentally, one of the Shriners Board of Directors, Imperial Treasurer Gene Bracewell, has served on the board for a decade, served as Imperial Potentate during 1984-1985 and is also a member of the Yaarab Shrine Temple.

One would expect the Imperial Treasurer and former Imperial Potentate’s own temple to be a shining example of accurate record keeping.

In summary, it appears that:

• The Gwinnett Shrine Club benefited from online and satellite charity poker tournaments without being registered with Georgia’s Secretary of State. (2)

• The Gwinnett Shrine Club benefited from online and satellite charity poker tournaments without the proper Shriner authorizations.

SportsCrew.com reported that for two years, the Shriners benefited through gaming but the Yaarab Temple failed to report this on their tax returns.

The Yaarab Temple failed to list the Gwinnet Shrine Club on their 2005 tax returns, though SportCrew.com claims that they raised $160,000 for the club that March.

The question that must be asked is “Why?”

(1) The missing minutes can be found by going to Yahoo’s search engine and entering “Shrine Treasurers Association of North America.”

On the proper result, click on “Cached.”

On the next page, click on the last words, ‘the Internet Archive.”

On this page, 74 pages are divided into six columns marked from 2001 to 2006. These pages contain the missing minutes.

(2) Online gambling is illegal in Georgia.

All copies of material reprinted or duplicated from by Sandy Frost must include the following credit line: From http://sandyfrost.newsvine.com/ Copyright © 2007 by Sandy Frost. Used by permission.

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Public Discussion (7)Sandy FrostHere is the Shriners' response to my questions about the missing minutes:

Hi Sandy:

Actually the minutes of our meetings were never intended for public consumption. We are aware that they were available for the public to view, and we were never concerned with that because we have nothing to hide from the public. We removed them from the web site because we discontinued the recording and publishing of the minutes. That action was taken because we could not justify the expense of hiring a Court Reporter for the recording and transcribing, as well as the printing, binding, and mailing to all of our members. We are now compiling the minutes in a condensed, summarized format, and those minutes are available to all of our members upon request.

Thank you for your interest in the Shrine Treasurers Association.

Paul (Churchwell, Secretary of the Shrine Treasurers Association)
1!#1 - Thu May 10, 2007 2:03 PM EDTFreemasonAs a Mason in another state I find this very interesting. I am not a Shriner. I am disappointed the business practices of a select few are tarnishing the Fraternity as a whole. I would like to ask the public to please keep in mind these are the actions of a select few and they DO NOT represent Masons or Shriners.

Sandy, you are to be commended for bringing this to light. I hope everything works out for the GA Shrine.

I am sincerely disappointed in the Georgia Shriners and hope each state examines their organizations books to avoid things like this in the future.

Becoming a Mason was one of the best decisions I have ever made and I would whole-heartedly recommend it to any other man.
0!#2 - Thu May 10, 2007 3:11 PM EDTSandy FrostDear Freemason,

Thank you so much for your comments. I appreciate the positive feedback. Most of the time I worry about the readability of my articles as they tend to be dry and technical.

I try to paint a picture for the reader who has followed this investigation as well as for the first-time reader.

And I totally agree with you. This is not about the average Shriner who pays and pays and pays to be a member and pays some more because the Imperial Divan overspent their budget. Rather it's about the leadership who seems to be betraying the trust of the public, the membership, the donors and our government. As I've said over and over, this is about claiming to be a non profit group but not adhering to the highest standards of accountability, disclosure and transparency.

Instead of being forthcoming with financial information by providing the tax returns, the Shriners have ignored my requests for tax returns for nearly 10 month. Below is a copy of the third email in this regard.

*email start*

May 1, 2007

Dear Alicia (Argiz-Lyons)

It has been 262 days since my last unanswered request for tax returns.

Here is a link to the IRS defining written requests, to include email requests:


I'd like to, for the third time, request the last three years of tax returns for the Imperial Council Session of 2005, Inc., Imperial Council Session of 2004, Inc., Imperial Council Session of 2003, Inc., and if the 2005 return is not available, then the Imperial Council Session of 2002, Inc.

It would be so easy just to email me back the pdfs of these returns.

So far, it's been 262 days since my last request. At a rate of $20 a day for not providing the returns, the possible fine for not providing the above mentioned returns is $5,200. Each failure is calculated separately, so the total potential fine is 4 X each request for a total of $20,960. This fine may apply to the "persons of a tax exempt organization who fail to provide the documents as required."

If the returns are not provided within the 30 day deadline, copies of these emails will be sent as a formal complaint to the E/O enforcement division in Texas.

Thank you for attending to this matter,

Sandy Frost


At this point, I think that these matters have been brought up to nearly every three letter agency out there.

OK, maybe not the PTA. Or the KGB.

And if you liked this article, you'll love the next one!

Thank you,

2!#3 - Sat May 12, 2007 7:41 PM EDTPotentate 00I have evidence of shrine abuses as well as masonic. Evidence about Royal Order of Jesters the elite secret group of the Shrine. I am a Past Potentate, Past Director of ROJ, and sec/treasure of one of the shrine associations. I would like to discuss this with Sandy. Please let me know if you are interested

2!#4 - Sat Jun 2, 2007 8:14 PM EDTSandy FrostOf course. Email me at: Cassandrafrost@yahoo.com. You are brave for sharing this in public.

Thank you,


1!#5 - Sat Jun 16, 2007 1:56 AM EDTmelodee hallettSandy, How do I get a hold of all of your Shriner articles? I never hear them specifically mentioned when I hear or read Masonic history. I find the interesting part of the group is their costume and apparent ceremonial practices to be in conflict with this country's supposed opposition to the Middle East at this point in time. They seem to be missing in the discussion. M. Hallett

1!#6 - Mon Jun 18, 2007 11:43 AM EDTPamela DrewWhat a fantastic job you have done with these Sandy and I understand the problem that you noted between supporting the good works of the many who are selflessly committed and targeting the few corrupt ones who act in the name of the organization.

Unfortunately this is too often the case where the good deeds of the many are exploited by the few dirtbags as a way to shield and defend against public criticism when the surface story is so easy to spin to their benefit. It is the same with so many of our Federal regulatory Agencies with political appointees working for industry and the many on the bottom working hard get neither the benefit of a job well done or the recognition to go with it. Instead their efforts are squandered and it is important for the good hearted to know very many of us do see the difference.

One would expect the Imperial Treasurer and former Imperial Potentate’s own temple to be a shining example of accurate record keeping.

This made me chuckle as an accurate example of how to try an effective swindle! You go girl, this is awesome!!

1!#7 - Fri Jan 25, 2008 5:05 PM EST

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