AMVETS Old Guard Ousted in Dispute

Tulare - Manuel Toledo, a retired businessman responsible for bringing hundreds of veterans into AMVETS over the past six decades, now finds himself at age 91 expelled from the organization and involved in lawsuits involving the service foundation he once headed.

“I never did anything wrong; I always tried to do everything right,” Toledo said.

He was president of the AMVETS Department of California Service Foundation in 2008 when an on-going disagreement over whether the foundation could use a portion of its approximately $47 million to support the state AMVETS organization reached a boiling point.

Foundation trustees maintained they could only legally give state AMVETS money for purposes directly benefiting veterans. Facing a campaign to replace two of them with state AMVETS members who thought differently, Toledo and his board in May 2008 gave themselves sole power to elect their replacements.

The vote to change the foundation's constitution came without consulting the state AMVETS, who responded by suing the foundation and its trustees in Orange County Superior Court in June 2008, installing a new board (after which the foundation no longer was a defendant in the case) and expelling the old members.

The battle to establish which was the legal board had begun.

A judge ruled in May 2009 that the former trustees' vote was improper, but that decision is on appeal before the Fourth District Court of Appeal in Santa Ana.

Other Tulareans

Toledo isn't the only Tulare AMVETS member involved in the dispute. George Maness, a retired high school administrator who, like Toledo, has been active for decades with AMVETS and served on the foundation board, was among those expelled. So was Joaquin Silva, who died last year.

A fourth Tulare resident Jim Pidgeon, was commander of the state AMVETS organization and as such held a seat on the seven-member foundation board when it voted 6-1 to change the constitution. He was the lone “no” vote.

State AMVETS argued its members had elected foundation trustees at the state convention for decades and the action by the six “rogue” trustees, as they have become known, was illegal on two fronts.

Their vote violated the foundation's own constitution and by-laws and also the California's Corporation Code, the state AMVETS lawsuit contended. Stephen W. Johnson, a Laguna Hills attorney representing the former trustees, disagreed.

On May 29, 2009 – nearly a year after the controversial action – Judge Geoffrey T. Glass ruled the foundation vote violated the Corporation Code and, therefore, was improper.

Whether the foundation violated its by-laws and constitution was a question Glass said required a trial to answer, but because he had ruled the action violated corporation law that trial was not necessary.

In his appeal to the Fourth District, Johnson continues to argue on that because the Corporation Code became effective in 1981, it could not modify existing rights and relationships established before that day. In addition to Toledo and Maness, Johnson is representing Joseph Kolano, who also was the paid director of the foundation, Joel C. Devenish and Donald G. McDonald.

Attorney Ronald Larson, who represents the state AMVETS, asserts that while the 1980 code is not retroactive to prior years' actions, it does cover actions by all corporations since that date.

The legal dispute involves such intertwined issues as:

· The nature of the relationship between the AMVETS service foundation and the state AMVETS organization, which are separate corporations. Johnson argues that although the foundation uses the name AMVETS, its articles of incorporation does not indicate an affiliation with either the state or national organization. Larson agrees with the Judge Glass' finding that the state AMVETS and the foundation are in a “parent/subsidiary” relationship.

· Who are members of the foundation? The question goes to the heart of whether the vote by the former trustees was legal. State AMVETS contends its members are foundation members and cannot be deprived of their vote under state corporate law, but Johnson maintains the foundation's constitution indicates only foundation trustees are members and thereby have the right to amend the constitution without involving state AMVETS. Foundation trustees gave convention delegates the right to elect trustees at some point and they can take it away, he argues.

Two More Lawsuits

State AMVETS has filed two other lawsuits, which are pending the outcome of the appellate court review, Larson said.

One alleges the former trustees breached their fiduciary obligation as trustees of the foundation funds and is seeking to collect for monetary losses resulting from their action, including legal and accounting fees, he said.

The department also has filed a lawsuit against Robert D. Salisbury, who Larson said served as legal counsel for both the state AMVETS and the foundation and assisted the foundation with rewriting of its constitution in May 2008.

Contacted at his Santa Ana office, Salisbury said he would not discuss his role with the foundation and state AMVETS or any other questions because of the pending lawsuit.

According to documents provided the Tulare Voice, Salisbury sent letters to the state Department of Justice in January and February 2008, asking whether the office would object to the foundation making grants to the state AMVETS.

In his reply on March 7, 2008, James M. Cordi, supervising deputy attorney general, indicated the department would not object to the foundation making grants “restricted to charitable purposes such as counseling and rehabilitation of veterans” but indicated contributions for “non-charitable purposes such as recreation and social purposes” could pose a problem.

Cordi reported state AMVETS was not registered with the Attorney General as a charity and its articles of incorporation indicates it was not formed exclusively for charitable purposes, factors apparently pertinent to his opinion.

He also noted that while Salisbury had described AMVETS as the “parent” of the foundation, the articles of incorporation did not indicate that. “For example, there is no indication that AMVETS controls any voting memberships or has rights to select any directors of the foundation,” Cordi wrote.

Salisbury reported Cordi's response to Pidgeon, Toledo and Kolano in a letter in which he indicates he had been telling the state AMVETS and the foundation for years that “the service foundation is a separate and stand-alone entity.”

He also said the comment of the Attorney General's Office “is more controlling than a casual suggestion of a member or officer of the organization” and that if the advice is not followed the Attorney General's Office “could step in and mandate through a legal action.”

Salisbury wrote emphatically: “The service foundation must deny all requests that are not for charitable purposes.”

Governing documents of both the foundation and state AMVETS have been revised since the removal of the former trustees, but that does not change the fact foundation assets were seized at a time when the documents did not allow funding of the state AMVETS, Johnson said.

“I have filed a complaint with the AG's [Attorney General's] office,” he said. “So far, no response.”

Documents provided by Johnson indicate state AMVETS' 2009-10 budget, as presented for approval last year, included $453,400 in foundation grants. Total income was $536,500.

Johnson said state AMVETS has taken “well over $1.5 million [from the foundation] for its own use” since the changing of the board.

Larson said state AMVETS officials are working with the Attorney General's Office, the Internal Revenue Service and the state Franchise Tax Board to make sure “everything they do fully complies with limits and restrictions” of the law.

Since a new foundation board was seated, his law firms and other firms specializing in non-profit law have been hired to work with both the foundation and state AMVETS, he added.

While this issue of whether the foundation could fund the state AMVETS triggered the former trustees action, the issue before the appeals court deals solely with the legality of the former board's vote amending the foundation's constitution, Johnson emphasized.

Rumors Abound

Toledo, Johnson, and local AMVETS Post 56 Commander Tom Donwen – who supports the state AMVETS' attempt to protect the voting rights of members to elect foundation trustees – say this internal dispute has led to unfounded rumors in the community regarding the former foundation board.

“There are so many rumors and falsities,” Johnson said. “I have not seen one bit of evidence or proof they've misused money at all.”

One of the first things that occurred after the former trustees were suspended was a forensic audit, Larson said.

“When we first began, the perception was there must be misappropriation of money going on; why else would they be doing this,” he said. “Why were they acting so foolishly … unless they were benefitting.”

Those initial concerns were unfounded, as the audit uncovered no embezzlement, Larson said.

But a money issue does exist and, if the appeals court upholds Judge Glass' ruling, will be dealt with in the pending “breach of fiduciary responsibilities” lawsuit against former foundation trustees.

In late October 2008, before a ruling on the initial lawsuit and while a motion by Johnson for a restraining order was pending, the state AMVETS “broke into the Anaheim headquarters,” changed locks, posted guards and took over all books, records, assets and bank accounts, according to court document.

Larson said state AMVETS took the action after Kolano was served with a letter informing him of his suspension as foundation service director.

“Mr. Kolano refused to leave voluntarily, however, and was later observed removing documents from plaintiff's office,” a court document said.

Larson said after Kolano was relieved of his duties as the paid service foundation director, he took checks payable to the foundation, opened up a second bank account and eventually cashed out the checks and used the money, “which is illegal under every jurisdiction.”

He said it is his understanding “a significant portion” of the funds have been used for legal fees in connection with this dispute and the state AMVETS wants the money back.

Post 56

The local AMVETS group is named the Manuel Toledo AMVETS Post 56 in recognition of Toledo's many contributions and devotion to the organization.

Donwen, the post commander, said the dispute between the old foundation board members and the state AMVETS has not caused a major rift at the local level.

“We have had several people who are upset, and collectively, I think, the whole post thinks this is a tragedy – which it is,” he said. “Nobody hates Manuel Toledo or any of the other guys.”

His view of the situation is that “the old foundation tried to take our vote away” in what has turned out to be a tragic episode, he said.

Anger initially directed toward Pidgeon for his role seemed to subside for the most part after copies of the lawsuit and judge's ruling were delivered to members, Donwen said.

Pidgeon said he could not comment for the story because of the pending litigation.
The organization continues to attract about the same number of members per meeting, although at times more have attended in an effort to learn more about the issue and particularly Toledo's status, Donwen said.

Post 56 suspended Toledo on Sept. 26, 2008, a decision upheld on the national level, after he failed to appear for a December 2009 hearing, according to a letter from the national AMVETS grievance board.

Johnson said he showed up at a national grievance board hearing in December 2008 in Baltimore and was told he could advise his clients but could not speak on their behalf. The board also indicated it would wait until the outcome of the lawsuit in Orange County before acting.

After Judge Glass ruled in the case and an out-of-state grievance hearing was held in December 2009 but Toledo could not attend and his appeal was denied.

“I was sick and I had a doctor's note; I couldn't go. I had the shingles,” Toledo said.
“Mr. Toledo does not deserve what he got here,” Johnson said.

Larson said state AMVETS initially suspended all the former foundation trustees, but later rescinded the action against Toledo in “an act of kindness and sympathy” and because of the “perception he was misled.”

The suspension was reinstated because he continued to “bad mouth” existing management, he said.

Toledo denies that.

“I've never badmouthed anybody,” he said. “There's a few guys there I call weasels.”

While AMVETS has given him the boot, family members say he still continues to encourage others to join the organization. He also remains a member of the Tulare Veterans Memorial District Board.

“I still help veterans,” Toledo said. “I vowed when I got wounded during the war, if I'd ever walk again, I'd help veterans.”

Toledo's story is well-known to local residents who lived through World War II. In 1944 he was severely injured while fighting with the Army's 7th Infantry Division on the island of Leyte in the Philippines and was left for dead. Three other soldiers from Tulare happened upon his body, detected a pulse and carried him through a swamp to a field hospital where his long recovery began.

Unlike Toledo, who remains very upset over the turn of events, Maness appears to have distanced himself somewhat from the controversy.

“I've tried to put this thing clear out of my mind,” he said. “I felt we were being responsible because we were trying to protect that money.”

While he said he is not bitter, he admits he is offended.

“I just want justice to be done,” he said. “As far as AMVETS, as far as it is being run now, I have no desire to be involved at all.”

Like Toledo, he continues to work on behalf of veterans in other venues and has been instrumental in supporting the annual Veterans Opportunity Day.

Larson said AMVETS is very sensitive about its reputation and “the heart and soul” of the organization has to do with veterans helping veterans.

“All this litigation is taking away from the good the organization can do,” he said. “It's keeping the focus away from that.”

He called the situation “very unfortunate” and said it didn't have to go this way, except the former trustees “put their own personal interest and desire to stay in control ahead of the interests of the corporation.”

The appeal by Toledo and other the former foundation trustees is scheduled to be heard at 9 a.m. July 20 in the appellate court in Santa Ana.

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Eight File Brown Act Lawsuit

Tulare - Less than a month after he alleged the City Council violated the state's open meeting law on April 20 and May 18 by not stating publicly why it was going into closed session, Visalia attorney Michael Lampe filed a lawsuit on behalf of eight Tulare residents charging that and a Public Records Act violation.

The lawsuit alleging violations of the Ralph M. Brown Act was filed in Tulare County Superior Court on June 15 and later that evening Lampe appeared before the council, threatening to amend the lawsuit to include another violation if the city did not explain in general terms why it was going into another “anticipated litigation” closed session.

In a 3-0 vote, the council – Council members David Macedo and Wayne Ross were absent – decided not to disclose the reason, although City Attorney Steve Kabot said later he advised them in open session prior to the closed door meeting that they could do so and it would be the path of least resistance.

Lampe has said the April 20 and May 18 closed door sessions had to do with allegations City Manager Darrel Pyle made on behalf of himself and “certain department heads” about comments Macedo and Ross made to them. (Lampe has previously said he advised Ross in this matter.)

He told the council he suspected the June 15 “anticipated litigation” item had to do with Pyle's reaction to a newspaper story quoting a department head who said she has no problems with either Macedo or Ross.

“There is much talk in the community about an incident involving the city manager following an article authored by Julie Fernandez which appeared in the June 3 issue of the Tulare Voice,” he said.

Employees have told him Pyle “threatened to fire any department head who spoke to the press from that day forward without first clearing the statement through his office,” Lampe said.

“This conduct, if true, is really quite egregious and, judging from the totality of the circumstances known to me, I suspect that you will be meeting in closed session in a few minutes to discuss this matter,” he said.

After urging the council to announce “the facts or circumstances” giving rise to the claim, he suggested the wording: “Conference with legal counsel to discuss a hostile work environment claim by a subordinate employee against a supervisor.”

Lampe's contention is that the council in the three incidents was in violation of the Government Code 54956.9 (b) (3) of the Brown Act, because “there were no 'existing facts and circumstances' to justify a closed session without giving the public more information.

The Brown Act describes circumstances in which public governing bodies can go into closed session to discuss “anticipated litigation” without disclosing generally facts and circumstances but the sections are “vague,” City Attorney Steve Kabot said.

When the City Council went into closed session in April and May it did so under the subsection that indicates information need not be disclosed if the matter involves facts and circumstances that potential plaintiffs might not be aware of and could constitute grounds for litigation, Kabot said.

Pyle has said human resources attorney Shelline Bennett made that call and had to do so without knowing the facts.

Kabot said he had more information going into the June 15 session, but “to me it's still a vague area,” he said.

As for the alleged Public Records Act violation, the lawsuit said the city has failed to produce a report prepared in connection with the investigation of Ross and Macedo.
The response to Lampe's Public Records Act request was “the city is not in possession of such a report,” but the lawsuit said the report exists, the city owns and controls it and it was used at the May 18 closed session.

The lawsuit alleges the city refused to produce other documents on grounds they were exempt, when they were not.

Lampe is filing the lawsuit on behalf of: Brent G. Sparlin, Dr. Thomas Drilling, who is a former mayor, Tony Nunes III, David Phelps, Doe Clark, Bud Mouw, and his parents, John and Joyce Lampe.

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‘Bye Bye Birdie’ Kicks-off Encore Season

Tulare - Encore Theatre Company is kicking off its 32nd season with one of the most popular musical productions of the last century, “Bye Bye Birdie,” a satire inspired in part by the hype surrounding Elvis Presley after the rock-and-roll heart-throb was drafted into the Army in 1958.

The storyline revolves around rock and roll superstar Conrad Birdie, who is about to be inducted into the Army; his agent, Albert and his faithful secretary, Rosie; and a planned farewell performance on the Ed Sullivan show during which Conrad will kiss a member of his fan club from a small Ohio town.

This is the third time Encore Theatre has produced the play, which was the company's first offering after it was formed in 1979. The play was presented again in the 1988-89 season under the direction of David Burley. Burley's wife, Susan, is the enthusiastic director of this third production.

“It's just a really fun show,” said Susan Burley, who not only played the role of the over-the-top Mae Peterson in Encore's original production but has directed the play twice at Cherry Avenue Middle School, where she teaches.

“It's one of those shows that's everyone's favorite,” Burley said.

The show offers many musical selections, which even those who have not seen the show may have encountered elsewhere. Among the more well-known are:

“Telephone Hour,” “Put on a Happy Face” and “Kids.”

“Bye Bye Birdie” garnered several Tony Award nominations after its Broadway debut and ended up winning in the categories of Best Musical, Best Choreography, Best Direction of a Musical and Best Featured Actor, who was Dick Van Dyke in the role of Albert.

Other productions have included a 1995 television film and a 2009 revival on Broadway.

Playing the lead roles in the upcoming Encore production are: John Rowley as Conrad Birdie; Karen Burley as Kim MacAfee, the lucky teenager who Conrad will kiss; Ryan Bettencourt as Albert Peterson, Conrad's agent; and Gloriann Boni as Albert's girlfriend, Rosie, who is despised by Albert's bigoted mother.

“It's a great cast and they're all hardworking,” Burley said.

Other shows on Encore's schedule this season include:

• “Play On,” the story of a community theater group's disastrous attempt to produce a British murder mystery. Sept. 24-26 and 30. Oct. 1-3.

• “Every Christmas Story Ever Told,” the story of three actors' attempt to perform every Christmas story ever told. Dec. 3-5, 11-12, and 16-18.

• “Males Order Brides,” a melodrama about four men awaiting the arrival of their brides. Feb. 18-20, 25 to 27 and March 3-5.

• “Gypsy,” a musical story of an aggressive stage mother and her daughters. April 29-30; May 1, 6-8 and 13-15.

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