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Shriners file lawsuit against Charity Watch Center as they were engaged in an active investigation of Shrine financial irregularities using a retired I.R.S. agent

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Sandy Frost Newsvine

Defamation? Shriners: Part 8

Thu Sep 21, 2006

Sandy Frost

The Shriners, both fraternal and charitable, are suing the non profit Charity Watch Center website and Vernon Hill, Shriner whistleblower, for defamation, monetary damages and a jury trial. (The site has since been taken down due to these legal actions.)

According to a September 21, 2006 article in the St. Petersburg Times, “Shriners Sue Over Website’s Charges”:

“The suit, filed in Hillsborough Circuit Court, accuses J. Vernon Hill and the other members of his company, Charity Watch Center, of spreading lies about Shriners Hospitals, a non profit headquartered in Tampa.

The lawsuit claims Hill used the site to spread misinformation about the Shriners, including allegations the charity is being investigated by the Pennsylvania Attorney General's Office for misusing donations. Those allegations are false, said the Shriners' attorney, G. Donovan Conwell Jr.

'It's very important as a charitable organization that its reputation is not tarnished by people making false statements about them,' Conwell said.

Hill said he's asking legitimate questions about an organization that takes in millions of dollars in contributions each year.

'When you have an $8-billion corporation taking on the little man for asking questions about financial accountability, it makes you wonder - what are they hiding?' Hill said.

Hill remains a Shriner despite his doubts. 'I believe in what we do for the kids,' he said, referring to the Shriners hospitals that treat crippled and burned children for free.

The Shriners are seeking more than $75,000 in damages against Hill and Charity Watch Center, saying the misinformation has hurt fundraising.

Conwell said the lawsuit was a final resort after Hill refused to remove information from his Web site.

Paul Dolnier, president of Charity Watch Center, said the center doesn't have the money to hire a lawyer, but is determined to take on the Shriners in court. The group will represent itself, if necessary, he said.

'It will really be David vs. Goliath,' Dolnier said.”

It seems that rather than answering questions about their finances, the Shriners claim that they have been defamed by those asking the questions. The Shriners need to prove that the fact based statements allegedly made by Charity Watch and Hill were false and made with malice.

According to one definition, "The law of defamation is supposed to protect people's reputations from unfair attack. In practice its main effect is to hinder free speech and protect powerful people from scrutiny. Defamation actions and threats to sue for defamation are often used to try to silence those who criticize people with money and power."

The Charity Watch center analyzed thousands of pages of Shriners 990 tax returns and found that only 23% to 48% of the net proceeds (as opposed to the required 100%) raised in Pennsylvania were actually going towards the charity. Dolnier, Charity Watch founder, met with investigators from Pennsylvania who reviewed his findings.

It has also been discovered that the Shriners have failed to disclose on their tax returns information about their affiliations, governing documents, lobbying, receivables from officers, trustees and key employees and real estate loans.

Twenty years ago, the Orlando Sentinel investigated a Shriner circus ticket scam and discovered that less than 2% of what the Shriners raised on behalf of the sick and crippled children actually went towards their medical care. The articles also detail how the Shriners were ultimately fined in 1987 for violating the Florida's charitable solicitation and registration laws.

The Shriners are claiming that Charity Watch and Hill have damaged their ability to raise money. According to Dolnier, if they never raise another dime, the Shriners can run their hospitals for the next 40 years based on what they already have , which is about $10 billion. The Shriners have been criticized by charity watch dog groups for "hoarding" money that should be going towards their stated primary mission; that of operating the Shriners Hospitals for Children and providing medical care at no cost to sick and crippled children.

Now, the Shriners are using their "tax- deductible charitable contributions" to launch a jury trial in an already overburdened Florida court system.

Prior to this, the Shriners failed to use their own "due process" to address Hill's concerns and determine if he violated Shriner law by questioning their finances. They also refused invitations to meet with the Charity Watch Center and/or Hill to address the questions both have asked the past two plus years about their finances. The Shriners also failed to attempt to resolve their perceived issues through mediation.

Instead, they have taken a very public legal action that will make others in the media sit up and take notice. What will they do when reporters, congressional committees and three letter government agencies begin to ask:

"What questions were being asked and why have they refused to answer?"

"What do the tax returns show?"

"What do the real estate records show?"

"Where does all the money go?"

"Why all the secrecy?"

Others may wonder why the Shriners are asking tax payers to pay for an expensive jury trial that they will probably never win. Cases like this are more commonly known as "strategic lawsuits against public participation" or SLAPP lawsuits.

As defined by Britton D. Monts, a Texas defense attorney in the SLAPP suit filed in 1999 by Life Partners, Inc.:

'"The purpose of SLAPP lawsuits is to chill freedom of speech and press by bankrupting the defendant. This is how wealthy companies abuse the legal process and the justice system. On one side is a company that resents criticism, and is eager to stifle the voice of a public advocate who speaks out on a controversial issue. On the other side is an outspoken individual committed to preventing companies from victimizing investors. As in all SLAPP lawsuits,' said Monts, 'First Amendment issues are at risk. This is a clear challenge to freedom of speech and freedom of press."

The term "SLAPP," coined by University of Denver sociologist Penelope Canan and law professor George Pring, authors of "SLAPPS: Getting Sued for Speaking Out," refers to strategic lawsuits against public participation. "SLAPPers" usually are private parties," they wrote. "Big money interests who intimidate people from speaking out since the expense of defending themselves can bankrupt most individuals. SLAPP suits commonly are brought by corporations, real estate developers, or other private parties who object to letters to the editor, web site criticism or other publications, testimony at zoning hearings, petitions to Congress or state legislatures, or who file public interest lawsuits."

"Unless quickly extinguished by the courts," the authors continued, "SLAPPers chill the democratic process. That is why more than a dozen states have anti-SLAPP laws. These laws allow SLAPP victims to bring a motion early in the case, before expenses go through the roof, to force the SLAPPer to present evidence that it has a reasonable chance to win."

All copies of material reprinted or duplicated from by Sandy Frost must include the following credit line: From http://sandyfrost.newsvine.com/ Copyright © 2006 by Sandy Frost. Used by permission.

Further Reading:

The Royal Order of Jesters - The Shriners Secret Society Secret Society - 'Mirth is King'

The Shriners - The 'Krafty' Klowns