{UAH} Response to Brian Kwesiga: Conflicts of Interest
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12:01 AM |
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Brian,
I agree that a conflict of interest can arise if UNAA leaders lend money to UNAA. But it is common for leaders of non-profit organizations to lend crucial funds to their organizations, making it possible to get through a temporary cash shortage or get started on a new project. Still, there are also examples in which loans from leaders have led to resentments and accusations, and the loans are not repaid to some or all of the leaders.
Because there is a danger for self dealing/conflict of interest, when non-profit organizations like UNAA file their tax return, there are several specific questions the IRS asks in relation to loans to/from current leaders as well as past leaders and their families. There is a specific form that has to be filled to show details of the loans. For example, look at the attached UNAA tax return for 2011. You will notice that 3 leaders are said to have lent money to UNAA. On page 4, look at questions 26, 27, and 28 and a related details on schedule L (page 22).
In my view, leaders can lend money to UNAA but the process should be transparent.
Because there is a danger for self dealing/conflict of interest, when non-profit organizations like UNAA file their tax return, there are several specific questions the IRS asks in relation to loans to/from current leaders as well as past leaders and their families. There is a specific form that has to be filled to show details of the loans. For example, look at the attached UNAA tax return for 2011. You will notice that 3 leaders are said to have lent money to UNAA. On page 4, look at questions 26, 27, and 28 and a related details on schedule L (page 22).
In my view, leaders can lend money to UNAA but the process should be transparent.
- Have legal documents drawn up and reviewed by an attorney for UNAA. In addition, each UNAA leader lending money should have the documents reviewed by his or her own lawyer or financial adviser.
- The Executive (and the Council) should formally vote to accept any loans from UNAA leaders and approve the terms of such loans, and any UNAA leaders lending money should be excused from the vote.
- If all or the majority of Executive members are lending money, the loans and the legal documents should be accepted by roll-call vote of the whole Executive and recorded in the minutes.
- Make sure the lending Executives understand that in bankruptcy or liquidation, lenders who arein leadership positions are considered "insiders" whose loans may be "subordinated" -- pushed down to the last in line for payment. Among reasons for subordination: perceived board mismanagement of the organization.
Questions for you Brian: can you show us documents proving that loans from present and past leaders were done properly? do we have related minutes? do we have receipts? do we proof that the money was actually spent on UNAA activities, if so, what were those activities?
Please keep in mind that Ms Aisha Ogwang, the current Secretary refused to provide minutes of the Council...just like her predecessors. But when I look at the numbers, I can understand why UNAA Secretaries hide the documents. Aisha's refusal to show documents is contrary to State law and UNAA's constitution.
thanks
For a faster response please contact me at 415.789.6427
Please keep in mind that Ms Aisha Ogwang, the current Secretary refused to provide minutes of the Council...just like her predecessors. But when I look at the numbers, I can understand why UNAA Secretaries hide the documents. Aisha's refusal to show documents is contrary to State law and UNAA's constitution.
thanks
For a faster response please contact me at 415.789.6427
From: Brian Kwesiga <unaa@memberclicks-mail.net>
To: joseph.musoke@ymail.com
Sent: Wednesday, June 11, 2014 8:25 PM
Subject: UNAALIST Response to Michael Kimbugwe: New Ideas
Joseph,
The topic of conflict of interest or at least potential conflict of interest is indeed a very important discussion to have. What is your opinion on the potential conflict of interest of have a trustee or trustees or an elected officer also be a creditor to the organization and how that potentially biases their decision making process. Does UNAA have people in leadership whom it owes or potentially owes? Are we breaking the law?
Consider Durfee v. Durfee & Canning, Inc., 323 Mass. 187, 196
(1948)
§8.2.1 Corporate Fiduciaries
(a) Directors and Officers. Directors of a Massachusetts corporation clearly "stand in a fiduciary relationship toward the corporation"
and owe it a "paramount duty . . . [to which] their personal pecuniary interests are subordinate."
I want to be educated.
Brian M. Kwesiga
President and CEO,
Ugandan North American Association - UNAA
972.415.6372 | www.unaa.org | "United We Stand"
On Wed, Jun 11, 2014 at 11:04 PM, Joseph Musoke <unaa@memberclicks-mail.net> wrote:
Michael,--
the example you give is off-mark. Unlike you, I have NEVER charged UNAA any money for my services. Any services I have offered UNAA were free of charge. When I was still practicing in DLA Piper, I didn't even earn pro bono hours for my time because DLA Piper did not recognise UNAA as one of its approved groups that the firm offered pro bono time.
Except for a time where I'd to drive 200 miles to attend an administrative hearing to save someone's nursing license, I have NEVER taken fees from ANY Ugandan based in North America for my services focused here. The only time I have charged fees is when someone wanted me to advise them on issues outside North America (buying land in Uganda, adoptions, international transactions, etc).
thanks
--In UNAANET@yahoogroups.com, <mkimbugwe@...> wrote :Bwana Mayanja,Thank you for positing. This is very interesting. In other words anyone who is a professional in something, if they volunteer their services and expertise, it creates a conflict of interest.Following Joseph's concept, he is saying he should have never run for UNAA president since that would have caused a conflict of interest because he offers his legal professional advise to Unaa membersVery interesting indeed!
Regards,Michael KimbugweOpinion | By Joseph Musoke | Why I think there Is Consensus that UNAA's New Constitution is not working | Welcome to the Ugandan Diaspora News OnlineOn Jun 11, 2014, at 9:17 PM, "Ronnie Mayanja ronnie.mayanja@... [UNAANET]" <UNAANET@yahoogroups.com> wrote:
Ronnie MayanjaUgandan Diaspora News | www.ugandandiasporanews.com |Ugandan Diaspora Network | Event website | www.ugandandiaspora.com |Soreel Mayas Grafx Ltd | www.soreelmayas.net | UG Media |Skype | ronnie.mayanja | Twitter | @rmayanja |Click here to Reserve your Room for UNAA San Diego at the Hyatt Regency La Jolla.
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Ugandan North America Association6257 N McCormick Rd #118 Chicago, Il 60659Email: info@unaa.org
Click here to Reserve your Room for UNAA San Diego at the Hyatt Regency La Jolla.
(The Only official UNAA Convention Hotel)
Click here to register for the UNAA San Diego Dinner Cruise
(The Only official UNAA Convention Hotel)
Click here to register for the UNAA San Diego Dinner Cruise
How to UNSUBSCRIBE.
- Go to UNAA.ORG
- Login. The Member Login feature is a red button on top of the menu to the left of the home page
- After logging in Members will automatically be directed to the "My UNAA" page
- Hover the mouse over the "My Features" Tab and select the "E-Lists" option at the bottom
- Here a member will see all the E-Lists (UNAALIST is an E-List) they are on.
- A member has two options
- Click edit on the right and turn off Email delivery. This stops the emails from automatically coming to your email and but you can still login into "My UNAA" and find discussion forum emails under the "My Profile" tab and clicking "Email History".
- Click "unsubscribe" which basically stops you from receiving discussion forum emails including any official communication emails sent to UNAALIST.
Ugandan North America Association
6257 N McCormick Rd #118 Chicago, Il 60659
Email: info@unaa.org
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