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Tom Gow responds to report in August JBS Bulletin
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In contrast to the measured commentary on the settlement of the RWU court case posted on our website, the JBS in its August Bulletin missed the accuracy mark by a mile. RWU’s VP Tom Gow responds below.
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Fact or Fiction in August JBS Bulletin?
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“Truth is our only weapon” – Robert Welch
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Our Only Weapon
Mr. Welch was supremely dedicated to the truth. In fact, he believed that “simple truth is the very core of morality” and that “when we persuade enough people to make truth the prerequisite to all statements and the accepted guide to all actions, at least half of the world’s problems would rapidly disappear.” (April 1966 Bulletin) Because of that commitment to the truth, JBS members in the Society’s early years learned that they could go to the bank with what was printed in their monthly Bulletin, and, as a result, they developed great confidence in their leader.
Subsequent leaders and publication writers and editors followed in Mr. Welch’s footsteps. They too recognized how important it was to uphold a high standard of truth and accuracy if the Society were to attract and maintain a devoted following, willing and able to tackle the pervasive lies of the Establishment.
So it is particularly disheartening to see that standard trashed by short-sighted JBS leaders who are clearly using the printed word to deceive. As our example, we take the article in the August Bulletin entitled “JBS Loses, then ‘Wins,’ Court Case That Threatened Its Future.”
This short, front-page article attempts to put a positive spin on a legal defeat. However, it is filled with so many false and misleading statements that few readers would be willing to read the many pages needed to refute them all. So we have elected to comment here on only a few of the claims (in red):
“The case was based on a claim that Smith and his management team were the rightful owners of Robert Welch University (RWU).... On Wednesday, July 12, the Outagamie County district court judge who heard the Smith group’s case ... ruled against JBS on a motion requesting final judgment in the matter, a decision that meant Smith and his group would own RWU outright, and that JBS officials might be liable for damages after a jury trial scheduled for Monday, July 17. But the trial was never held.” – August Bulletin
Correction Please! No wonder Art and Jack lost the case. They never even understood it. The case was to decide the relatively simple question of which individuals and boards controlled, not owned, RWU and determine the damages caused by the defendants in attempting to seize RWU by force based on a contested board meeting. No one owns a 501(c)(3), nor does anyone own JBS. But elected boards and officers properly control each.
Moreover, Judge Dennis Luebke never “ruled against JBS on a motion....” JBS was never even a party to the case!
For public relations purposes, the defendants in the RWU case have attempted to portray the lawsuit as an outrageous attack on JBS led by former JBS CEO G. Vance Smith: “JBS can now move forward without a black cloud hanging over its collective head.”
Apparently, the individual defendants didn’t want to be personally liable for their actions and so have sought to make it appear that they were acting on behalf of JBS, even though they never dared to state as much in court.
“‘This has been a terrible burden on our own management and staff over the past eight months,’ said McManus. ‘Everyone has been worried about the future....’”
As quoted above, the August lawsuit article further misleadingly omits the fact that the new leaders at JBS, who carelessly conceived the action to seize RWU by force, precipitated the entire mess themselves. A few individuals, acting ostensibly on behalf of RWU, not JBS, following a contested board meeting, broke into the RWU building, changed the locks, occupied the building with round-the-clock vigils equipped with sleeping bags, and purported to fire Vance and three members of his staff.
The above statement’s inversion of the truth is like blaming a victim of car theft for starting a fight by calling the police to recover stolen property. In deciding in favor of plaintiffs’ motion for summary judgment the court ruled, in part:
“Therefore, under either of the only viable conclusions to be reached in this case, defendants are unable to validate, under the governing rules of RWU, their right or entitlement to do as they did in their efforts to wrest control of RWU from the plaintiffs, or to otherwise justify their efforts on equitable grounds. As such, plaintiffs’ motion for summary judgment as to liability issues is granted, subject to trial on damages, if any, they may be entitled to.”
That’s another reason why the Defendants lost the case. They didn’t have one. Instead they plied the court with constantly shifting and often irrelevant legal theories invented after they got their hands caught in the cookie jar. And in proclaiming their theories and accusations in court, which they echoed to JBS and RWU donors, they cost RWU hundreds of thousands of dollars to respond. At the same time, they had the audacity to complain to the world that RWU was not engaged in expensive marketing to bring in new students.
The front-page article in the August Bulletin also fails to point out that the JBS was party to a different lawsuit, however. This was a lawsuit instigated by JBS at the behest of several of the defendants in the RWU lawsuit. This lawsuit was filed against G. Vance Smith, Thomas G. Gow, RWU et al.
“But contrary to long-established precedent, and though the two men [Vance and Tom] resigned, they continued to try to assert control over JBS-affiliated assets, including claiming control of Robert Welch University. When previous JBS leaders were appointed, it was assumed by all concerned that the CEO appointment included appointment to all JBS-affiliated corporations, including John Birch University.”
I am appalled at the ignorance of my former colleagues about matters of corporate governance. They are suggesting that the boards for the various corporations are mere fictions. And that when some JBS board (which one?) appoints a CEO, that JBS board’s decision should be binding on the boards for the other corporations. In the early 1990s, that thinking threatened to make the Society very vulnerable to another “Gertz vs. Robert Welch Inc” case or other hostile lawsuit directed at a member of the JBS family of corporations. In order to have the protection of independent corporations, corporate formalities must be followed. During the reforms of 1993, more defensible guidelines were implemented to keep the corporations together.
The problem is not that Jack and Art didn’t and don’t understand these guidelines, but that they didn’t think it sufficiently important to find out if there were dangerous minefields and traps about which they were unaware – before they tried to speak with authority. But from the beginning that was their attitude toward replacing Vance Smith and taking authority away from the Executive Committee – “No problem. It can’t be that difficult to fly this plane. We can even do it remotely – from Boston, Dallas, and Spokane.”
“The moral position on this court case can best be presented by asking a simple question: ‘Does Robert Welch University belong to G. Vance Smith and his small group or does it belong to The John Birch Society?’”
Jack loves to point out missing alternatives, but he missed this one: Why doesn’t Jack admit they made a mistake and cooperate with Vance and Tom in the best interests of both organizations? In addition, if Jack would reconstitute the Executive Committee as it was prior to October 2005, then the Executive Committee would exercise controlling influence over both organizations.
Even their so-called moral position was developed after the defendants’ illegal acts had failed to get them what they wanted. But what’s worse, their so-called moral position totally inverts the truth about who was responsible for the separation.
Certainly, the people who invested in and labored to build the Society and RWU did so with the hope that both would remain in Birch hands. Jack and Art apparently never paid attention to the steps taken to ensure that RWU would remain securely in Birch hands. The plan was never that the two organizations would have the same CEO forever. Particularly as RWU grew it would deserve to have its own officers. Nevertheless, everyone wanted to ensure a mutually supporting relationship – one that would also keep RWU on track.
This tie was intended to be implemented at the board level. G. Vance Smith, Tom Gow, Wayne Rickert, and Walt Ruckel did not steal RWU from JBS. Jack’s Board of JBS Incorporators “stole” JBS from the control of the JBS Executive Committee, through which interlocking boards controlled both JBS and RWU.
Yet even with that break at the board level, there was no obvious reason that Birchers in charge of both organizations could not act professionally and work together in the long-term interests of both organizations. Although the relationship would have been strained, Vance and I were fully prepared to work with JBS in areas of fundraising and student recruitment. After all, both organizations were intended to have a future far beyond the careers of the leaders at either JBS or RWU.
However, there are not so obvious reasons why the leaders at JBS would not work with RWU and would insist on a separation, while blaming the separation on Vance Smith. Yes, they insisted on separation.
“JBS founder Robert Welch originally created the university to supply future leaders to the organization.”
Where’s the documentation for that paraphrase of Mr. Welch’s intent? It sounds to us like someone is substituting his imagination for research. In recent years, the potential of the University to generate high-quality candidates for JBS positions (both volunteer and staff) has been favorably mentioned as a wonderful by-product. But that was never Mr. Welch’s reason for starting a university.
Mr. Welch’s desire to create a true liberal arts university stemmed not from a concern over a shortage of potential JBS leaders, but from the disastrous state of higher education in America. He was very familiar with that dismal condition, having studied at Harvard and having served as chairman of the Education Committee of the National Association of Manufacturers.
“JBS sent a selection of the organization’s top personnel to create Robert Welch University;”
Correction Please! Even this simple statement is calculated to mislead. It was not the impersonal JBS, but the personal dynamic leadership of G. Vance Smith that provided a staff for RWU. After selling his proposal for RWU to the JBS Executive Committee, in 2002 Mr. Smith took steps to have JBS purchase the adjoining headquarters building so that JBS would have more space and so that RWU could purchase an unoccupied headquarters building, where its new staff could focus on university matters.
Vance also selected the initial full-time staff for the new facility. Two, exactly two, full-time employees at JBS (Ph.D.-candidate Steven Bonta and Research Assistant David Spilker) were recruited and transferred to the new RWU payroll. Their mission: To design and implement the University’s program and business plan. Alan Scholl initially went to RWU in order to run the youth camps, not to get involved with the adult program at the University. But that’s another story. RWU then hired several new, non-Birch staff and a former JBS accountant (part time). However, RWU continued to receive direction from Vance and support from Tom Gow, Paul Smith, and a few others on the JBS payroll.
“As JBS CEO Art Thompson observed, ‘In the struggle for ownership and control of RWU, it is the university that was harmed by Smith’s actions; regardless, we know the JBS mission will prevail. [At RWU? at JBS? or in America?] This unwanted fight has made our staff even closer ....’”
“This unwanted fight”? Again, the would-be car thieves are inverting the truth as to who started the fight and are trying to portray JBS as a defendant. Although Vance and I were angry over the tactics used to push us out at JBS, we nevertheless understood our responsibility as professionals to cooperate with JBS in the best interests of both organizations. When we relocated our offices to RWU, we were determined to support the member investment in RWU and demonstrate by success at RWU that the charges of Smith’s mismanagement while at JBS were unfounded.
Recognizing that these would-be leaders were ill-prepared to lead (and, as we later discovered, not even really inclined to do so), we fully expected that JBS would soon get itself in trouble. Accordingly, we had another motivation for wanting to keep our team together in Appleton – we wanted to be able to help with the JBS rescue operation if our help was requested by responsible authority.
In the meantime, we expected to maintain a professional relationship with the JBS leaders. My early (November 4th) letter to JBS regarding return of the youth camp program was evidence of the expected spirit of cooperation: “If you decide to resume your sponsorship of the [camp] program, please let us know what files or assistance are needed to allow for a smooth transition.” That spirit was not returned.
We fully expect to have more to say in the future about the freedom fight and its leadership.
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