Response to Fred Meuller's Letter to AESF Members on 9-8-06

September 10, 2006

Mr. Fred Mueller
AESF National Headquarters
1155 Fifteenth St. NW, Suite 500
Washington, DC 20005

Dear Fred,

I have read the response that you sent to all of the members on Friday September 8, 2006 concerning the list of candidates on the “AESF for the Future” slate.  Frankly, I am very disappointed in you and Tracey Kohler for taking such as aggressive stand against Paul Fisher’s letter.  Releasing this document to all of the membership with the inaccuracies it contains requires that a correction be sent out promptly.

I am NOT convinced there was any need to send this letter.  If you needed to send a letter, I would have not been nearly so concerned if this letter simply stated that the Fisher communication was not from AESF National.  You could also stated that some of the “AESF for the Future” candidates were not candidates selected by the Nominating Committee but may be choosing to run from the floor at the Council of Delegates Meeting during SUR/FIN.  The remainder of the letter was completely not required.

Point #2 states “Most of the persons identified in the Fisher communication are NOT currently official candidates for AESF national officer or board positions…”  The word “Most” clearly does not include all of the candidates in the Fisher communication or website.  This statement makes no reference to the FACT that Mike Faulman and I are official candidates selected by the AESF Nominating Committee.  It could easily be argued that the statement would “suggest” any of the candidates listed in Paul Fisher’s communications are not candidates selected by the Nominating Committee.  I know for FACT that Paul Fisher has submitted his documentation to AESF National and has been notified he is eligible to run for any position in National AESF from the floor at the Council of Delegates Meeting during SUR/FIN.  These issues must be corrected.  At this time I am unsure if Ted Mooney, Ira Donovan and Bob Goulet have completed this requirement.  The FACTS concerning these three men should also be listed correctly.

Concerning Point #3, NASF does not have a clear plan for AESF to withdraw from the Industry Reorganization Agreement and if there were a plan, AESF would NOT have anything to take with it but a name.  The next three paragraphs will clarify the reasons for this one simple statement.
 
Point #3 of your letter is nothing less than a complete deception and could be the basis for legal action if a group of AESF members wanted to withdraw AESF from NASF if consolidation is approved by the Council of Delegates.  The truths in these statements are that AESF as a corporation will continue to “exist” if the Industry Reorganization Agreement is approved and it will be placed on a “back burner” within the AESF Council.  The deception is there will be nothing left to take off the back burner.

“All or substantially all of AESF assets will be donated to the Foundation” is written in item 7 of the preamble of the Industry Reorganization Agreement.  The Foundation listed is the Metal Finishing Foundation which will be renamed The AESF Foundation and indirectly controlled by NASF Board of Directors by the Foundation’s Board of Trustees.  Donation as defined by Webster’s Dictionary is “a gift, esp. of money, to a society or institution ~ the act of making such a gift”.  A “gift” clearly indicates the AESF legal entity has no further ownership of the existing assets.  All of AESF assets including SUR/FIN, the education courses, AESF Research Fund, AESF Scholarship Fund and all other monies will be not be connected to the remaining “back burner” AESF legal entity and will not be a part of an AESF withdrawal from the Industry Reorganization Agreement.

The Industry Reorganization Agreement documents do not have any clearly defined method for one of the groups to withdraw from NASF once the agreement is completed.  This point has been completely ignored by the NASF Transition Board because in the words of Joelie Zak during a meeting with the Florida AESF Branches “The Transition Board did not focus on a method of failure”.  AESF cannot make statements to the membership to indicate otherwise.

Furthermore, AESF legal entity (not the Foundation but the corporation that will reside within the AESF Council of NASF) is presently a 501(c)3 corporation as defined by the IRS.  NASF will be a 501(c)6 legal entity.  Because AESF legal entity (also called AESF Corporation by some people) will be a subgroup of NASF, it may be required to surrender the 501(c)3 status and become 501(c)6.  Furthermore, there is a serious question if the existing AESF legal entity can remain a member corporation since all of their existing members would be redirected to NASF.  These changes of legal tax status may not be important for AESF Corporation as part of the Industry Reorganization Agreement.  These changes could be a serious issue in the future should AESF choose to withdraw from the agreement.  Some of the tax advantages AESF has enjoyed as a 501(c)3 public benefit corporation would not apply as a 501(c)6 trade association.  The significance of these differences should be discussed so everyone is aware of potential changes.

Item #3 of your letter also protests that AESF is not dissolving.  I agree with this point, with a disclaimer.  What AESF is actually accomplishing is a merger with three other associations.  Merger is defined in Webster’s Dictionary as “the combination of two companies or businesses”.  I continue to wonder how AESF can merge into a new organization and not consider it a merger.  Merger by any other name is still merger.

Therefore, I am demanding that you and National AESF issue another mass e-mail before noon EST Monday September 11, 2006 with the following key points.  Failure to execute a rebuttal will force me to act in a manner I see appropriate to honestly inform the AESF membership.

•    Jerry Phillips and Mike Faulman are official candidates for AESF Board of Directors because they were selected by the AESF Nominating Committee and have submitted all of the required documentation to run for this position.

•    Paul Fisher has submitted his documentation to AESF National headquarters and has been notified he is eligible to run for the AESF Board of Directors or a National AESF office if he chooses to run from the floor at the Council of Delegates Meeting during SUR/FIN.  This would also apply to Ted Mooney, Ira Donovan and Bob Goulet if their documentation has been sent to National AESF.

•    AESF as an incorporated entity will “exist” within the AESF Council of NASF if the Industry Reorganization Agreement documents are agreed upon by the Council of Delegates.

•    The legal entity of AESF will donate all of its assets to The AESF Foundation and will have no assets should it try to withdraw from this agreement.

•    AESF as an incorporated entity will have assigned all of its members to NASF and will have no members should it try to withdraw from this agreement.

•    The existing 501(c)3 status of AESF Corporation may be compromised and taken away by the IRS if this agreement is accepted.  AESF as an incorporated entity will be a subgroup of NASF which will be a 501(c)6 not for profit entity and therefore AESF may be ruled by the IRS as a 501(c)6 entity also.

•    Withdrawal procedures from NASF for any one single entity is not clearly defined in the Industry Reorganization Agreement or related documents.  Withdrawal from NASF by AESF is not a reality in the Industry Reorganization Agreement documents as presently written.

The previous demand is based on the fact I have and continue to believe that only FACTS should be presented to the membership to consider.  My position on this issue is not because I have an opinion on how the Council of Delegates should vote on the Industry Reorganization Agreement but because I strongly believe any statement made publicly to the membership needs to include all of the FACTS and not a slanted half truth.  In my opinion, your letter sent to the membership on September 8, 2006 includes many half truths with the purpose of deception.

Fred, I have truly enjoyed the opportunity to get to know you better during the past year.  I know you are an honorable man and have the interest of AESF near to your heart.  I respect you enough to know that once I have pointed out these obvious problems with your letter to the membership you will want to correct the damage done to all of the candidates or potential candidates and most importantly the AESF members.  Releasing a rebuttal on Monday morning will be the first step to accomplishing the goal of providing the Council of Delegates accurate information to base their decisions upon.

I will be in my office most of the day on Monday and would welcome the opportunity to discuss any questions you may have prior to releasing your rebuttal.

With AESF in my Heart and facts on my mind,

Jerry W. Phillips