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Not all 'beards' are hairy
('Not-For-Profit' does NOT, necessarily, mean 'Charitable')

By: James R. Davis



When George gets an agreement from Tom to 'back him up' should George's wife ask if the two of them were playing poker together the other night, when, in fact, George was having an interlude with Sharon that night, Tom is acting the part of a 'beard'. Of course, Marsha and Jenny could be playing the same game. Not all beards are hairy.

???

Stick with me, please.

Not all scams are illegal, even though they, by definition, are immoral. For example, ...

Assume that a man named John was hired by the manufacturers of Ford, Chevrolet, Toyota, General Motors and Honda to teach oil drilling techniques designed to be environmentally friendly. But John would not be paid based on how environmentally friendly the drilling his students did actually was. Indeed, John would NOT even be paid based on how many students he taught in his classes - no commissions for John. There is a certain sense of 'conflict of interest' associated with commissions.

But he was well paid, nonetheless. Oh, and they made him the president of a company they set up for him.

Then the makers of Mack trucks and Peter built, and a few others heard about John and so they hired him to teach oil drilling techniques designed to be environmentally friendly and which would, incidentally, provide the rigs used by the students while learning to drill in environmentally friendly ways. But John would not be paid based on how environmentally friendly his students drilled their wells, nor on how many students he trained - no commissions for John - but he would receive a handsome salary. However, John would not have to quit his first job, he could have both at the same time. Oh, and they would make John president of a company they set up for him, a different company than the one he is already president of, and he can remain president of that other company, too.

Lest that 'feel' somewhat unfair to you, not to worry, because the manufacturers of drilling rigs heard about John and they got together and hired him to teach environmentally friendly drilling methods, using their drilling rigs. John would receive no commissions based on how environmentally friendly his students drilled their wells, nor on how many students he taught - no commissions for John - but he would receive a large salary and they allowed him to create and become president of a company that provides the curriculum to be used by others when teaching how to drill environmentally friendly wells. Oh, and he would not have to resign from either of the other two companies John is also president of, and they agree, he can continue to receive his huge salaries - but no commissions.

So, John is president of three companies and receives three full-time salaries, but no commissions, so that people will all know that John is not out to 'get rich' by providing environmentally friendly drilling instruction. He identifies himself as being president of a 'Not For Profit' company, not three of them. The fact that he cannot work 8 hours per day for each of the companies does not seem to bother all those stockholders - because John does seem to manage to eat and sleep and otherwise enjoy the good life, despite being paid for 24 hours per day of work.

It just happens to be true that as a result of John's efforts there are more cars and trucks and drilling rigs sold than ever before - just a coincidence, of course. As to safety ... well, there are more deaths, more serious injuries, and environmental damage that result from John's efforts - results for which he is not compensated in any way to prevent - even occurring during John's training classes. But John is compensated and holds these 'jobs', because sales and profits of his stockholders products continue to grow. Despite that, it is clear that what John does is promote environmentally friendly drilling, and safety.

Fantasy? Hardly. Tim Buche is the president of the Motorcycle Safety Foundation (MSF), which is a not-for-profit (INDUSTRY GROUP) corporation owned by the major manufacturers of motorcycles. His company provides the curriculum used to teach rider education. They have an annual budget of slightly more than $8,500,000.

He is also the president of the Motorcycle Industry Council (MIC), which is also a not-for-profit (INDUSTRY GROUP) corporation owned by the major manufacturers of motorcycles. His company is chartered to LOBBY governments and provide assistance in getting motorcycle favorable legislation passed in the United States. They have an annual budget that is 'substantial', but not made public for some reason.

He is also the president of the Specialty Vehicle Institute of America (SVIA), which coincidentally is a not-for-profit (INDUSTRY GROUP) corporation owned by the manufacturers of Arctic Cat, Polaris, Suzuki, Honda, etc. (You know, manufacturers of snow and water vehicles and ATV's.) No idea what their annual budget is.

So Tim Buche is president, a full-time job, usually, for three different companies each of which is owned by manufacturers and is formed as a not-for-profit. That is, they are EACH of them, industry group (501 (c)(6) corporations whose sole purpose in life is to improve the profits of their stockholder corporations.

So why is it that when asked, Mr. Buche implies that he is president of a not-for-profit (education and charitable) corporation? (These are 501 (c)(3) organizations.)

Why, of course, because Tim Buche is ALSO president of yet another corporation - a fourth full-time presidency. He is president of a company called National Motorcycle Safety Fund (NMSF) which IS an education and charitable nonprofit. It has an annual budget of less than $25,000. What does it do? Why it solicits DONATIONS for its owning organization, the MSF! It also publishes some educational and motorcycle promotional material and gives or sells helmets to MSF training providers, (though last year they purchased exactly ONE helmet for $188 so this is not a significant activity). Tim's salary is ZERO for his role as president of this organization. This is, after all, a real, though tiny, educational and charitable organization (which the MSF has apparently no idea what to do with.)

It could also be called a 'beard'.

Any questions?


Copyright 1992 - 2022 by The Master Strategy Group, all rights reserved.
http://www.msgroup.org

(James R. Davis is a recognized expert witness in the fields of Motorcycle Safety/Dynamics.)


     
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