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I couldn't resist sharing this with the members of this forum. It is long and worth the read.
RE: ICC Foundation Issues
As many of you are aware, WABO is very concerned with the direction of our
membership organization, the International Code Council. It started with voting
irregularities at the ABM in Minneapolis and as we searched for answers, troubling
financial issues came to our attention. We brought many of these issues to the
attention of ICC, but have yet to receive adequate explanations.
During a review of ICC financial records, we noticed some transactions affecting
membership assets and the ICC Foundation that especially concerned us. As we
began to track these transactions, we discovered ICC is putting millions of dollars of
member-owned assets at risk while costing hundreds of thousands of dollars in
unnecessary rent payments, apparently to support the Foundation.
Two office buildings originally owned by ICBO were transferred to ICC during the
merger of the three legacy groups. These two buildings have a current assessed
value of over $6.31 million1. From 2003 to 2006, these buildings were reported to the
Internal Revenue Service as belonging to ICC. On the IRS reports for 2007,
ownership of the two buildings were moved from ICC to the Foundation. There is no
explanation on either report given for the transfer.
When brought to his attention, ICC’s General Counsel and Senior Advisor to the
CEO, David deCourcy stated that it had been deeded to the Foundation for tax
purposes. But since both organizations are tax exempt, we were unsure what benefit
would be realized. Later, he said the property was transferred to the Foundation by
ICBO at the time of completion of the merger and that it had been erroneously
reported on the ICC & ICC Foundation IRS filings. According to Mr. deCourcy, an
amended 2005 IRS return was filed in 2008, “To report transfer of building in 2003 to
affiliate ICC Foundation: transaction not properly recorded at time of transfer.”
However, despite numerous requests, they have not provided a copy of the amended
return so we cannot confirm his statement.
The same IRS reports for 2007 also reveal that ICC began to pay rent to the
Foundation for the offices ICC maintains in these two buildings. The Foundation has
received rent in the amount of $340,000 per year or more beginning in 2007 and
continuing to date.
That raised the question, “what is the Foundation doing with this money?” Our
research led us to conclude that they are not using it for scholarships or to promote
building safety as one would expect. Instead, it is being given to the Federal Alliance
for Safe Homes (FLASH, Inc.), a Florida organization, who is supposed to be
managing the Foundation’s programs and fund raising to further the goals of the
Foundation. FLASH, Inc. is a non-profit organization devoted to disaster safety and
property loss mitigation.
We have been unable to learn the exact amount of the contract between the
Foundation and FLASH, Inc., but based on ICC financial reports, we believe it is
approximately $30,000 per month or $360,000 per year.
What is the Foundation getting for this not inconsiderable contract? How much money has the Foundation
received through FLASH, Inc.? Through July 2009, a total of $3,000 for the year. How much has been raised in
contributions? Again, through July 2009, a total of $12,5182, much lower than the budgeted year-to-date amount
of $150,0003. Yes, there is a revamped website and a new scholarship program has been developed for
implementation next year, but nothing that couldn’t have been developed in-house for much less than $360,000
per year.
Even more disturbing is the discovery the ICC Board of Directors has also given up control of the Foundation.
The original bylaws of the Foundation specified that they could only be changed by a majority of the Foundation’s
governors and with “written consent of the (International Code) Council.” In October 2008, the Foundation bylaws
were changed so that now they “may be amended, altered or repealed and new bylaws may be adopted at any
time by the Council CEO.” In other words, the ICC CEO (Rick Weiland) has exclusive authority to change the
bylaws in any way he desires. Changes can be made to the bylaws without the consent of the ICC Board of
Directors, its membership, or the Foundation Board of Governors.
Additionally, the current bylaws state there can be two paid positions within the Foundation, the President and the
Treasurer. The ICC CEO can fix the salaries of these two positions. Conveniently, the ICC CEO is also the
President of the Foundation (Dominic Sims, ICC COO is Treasurer) and as such has the ability to set his own
salary. While there is no evidence that the Foundation president is now receiving a salary, there is nothing
preventing that from happening in the future.
There is one other thing worthy of mention. The ICC CEO, who happens to be the Foundation President with total
and unilateral control of the Foundation, also sit s on the Board of Directors of FLASH, Inc.4 According to the
FLASH press release dated September 24, 2007, “International Code Council CEO Rick Weiland today
announced the selection (of FLASH, Inc.) to operate its Foundation programs while the two organizations
evaluate a potential strategic alliance and/or merger.” We believe that the ICC CEO (having the sole authority to
change the Foundation bylaws) and also serving as President of the Foundation while holding a position on the
FLASH, Inc. Board of Directors presents the appearance of a conflict of interest and quite possibly is a conflict of
interest.
It is feasible that if the Foundation is merged with FLASH, Inc., $6.3 million of ICC member assets will disappear,
becoming the property/assets of FLASH, Inc. and there may be nothing the ICC membership can do to stop it.
Also, should a merger between the Foundation and FLASH, Inc. actually occur, ICC could end up paying rent to
FLASH, Inc. for property ICC used to own.
There very well may be a logical and ethical reason for these actions, but we have been unable to obtain
reasonable and complete answers from ICC’s representative. In these troubling times ICC cannot afford to give
away over 20% of the organization’s assets, hundreds of thousands of dollars to another organization for little in
return on the investment.
Our goal for bringing these issues to your attention is in the interest of preserving the ICC and honoring the
mission and values that make this organization unique. Our objective is to further promote transparency within the
organization and we encourage all members to do the same. We urge you to ask your ICC Board representative
and candidates vying for a board position at the ABM for an explanation and how they plan to address these
concerns.
1 King County, WA & Los Angeles County, CA Assessors’ offices2 ICC Financial reports July 20093 In August ICC revised the budgeted revenue. The budgeted contribution income for July, 2009 (year-to-date) was $150,000. The budgeted amount for
August (year-to-date) is reduced to $12,818.
4 FLASH, Inc. 2007 IRS Form 990
RE: ICC Foundation Issues
As many of you are aware, WABO is very concerned with the direction of our
membership organization, the International Code Council. It started with voting
irregularities at the ABM in Minneapolis and as we searched for answers, troubling
financial issues came to our attention. We brought many of these issues to the
attention of ICC, but have yet to receive adequate explanations.
During a review of ICC financial records, we noticed some transactions affecting
membership assets and the ICC Foundation that especially concerned us. As we
began to track these transactions, we discovered ICC is putting millions of dollars of
member-owned assets at risk while costing hundreds of thousands of dollars in
unnecessary rent payments, apparently to support the Foundation.
Two office buildings originally owned by ICBO were transferred to ICC during the
merger of the three legacy groups. These two buildings have a current assessed
value of over $6.31 million1. From 2003 to 2006, these buildings were reported to the
Internal Revenue Service as belonging to ICC. On the IRS reports for 2007,
ownership of the two buildings were moved from ICC to the Foundation. There is no
explanation on either report given for the transfer.
When brought to his attention, ICC’s General Counsel and Senior Advisor to the
CEO, David deCourcy stated that it had been deeded to the Foundation for tax
purposes. But since both organizations are tax exempt, we were unsure what benefit
would be realized. Later, he said the property was transferred to the Foundation by
ICBO at the time of completion of the merger and that it had been erroneously
reported on the ICC & ICC Foundation IRS filings. According to Mr. deCourcy, an
amended 2005 IRS return was filed in 2008, “To report transfer of building in 2003 to
affiliate ICC Foundation: transaction not properly recorded at time of transfer.”
However, despite numerous requests, they have not provided a copy of the amended
return so we cannot confirm his statement.
The same IRS reports for 2007 also reveal that ICC began to pay rent to the
Foundation for the offices ICC maintains in these two buildings. The Foundation has
received rent in the amount of $340,000 per year or more beginning in 2007 and
continuing to date.
That raised the question, “what is the Foundation doing with this money?” Our
research led us to conclude that they are not using it for scholarships or to promote
building safety as one would expect. Instead, it is being given to the Federal Alliance
for Safe Homes (FLASH, Inc.), a Florida organization, who is supposed to be
managing the Foundation’s programs and fund raising to further the goals of the
Foundation. FLASH, Inc. is a non-profit organization devoted to disaster safety and
property loss mitigation.
We have been unable to learn the exact amount of the contract between the
Foundation and FLASH, Inc., but based on ICC financial reports, we believe it is
approximately $30,000 per month or $360,000 per year.
What is the Foundation getting for this not inconsiderable contract? How much money has the Foundation
received through FLASH, Inc.? Through July 2009, a total of $3,000 for the year. How much has been raised in
contributions? Again, through July 2009, a total of $12,5182, much lower than the budgeted year-to-date amount
of $150,0003. Yes, there is a revamped website and a new scholarship program has been developed for
implementation next year, but nothing that couldn’t have been developed in-house for much less than $360,000
per year.
Even more disturbing is the discovery the ICC Board of Directors has also given up control of the Foundation.
The original bylaws of the Foundation specified that they could only be changed by a majority of the Foundation’s
governors and with “written consent of the (International Code) Council.” In October 2008, the Foundation bylaws
were changed so that now they “may be amended, altered or repealed and new bylaws may be adopted at any
time by the Council CEO.” In other words, the ICC CEO (Rick Weiland) has exclusive authority to change the
bylaws in any way he desires. Changes can be made to the bylaws without the consent of the ICC Board of
Directors, its membership, or the Foundation Board of Governors.
Additionally, the current bylaws state there can be two paid positions within the Foundation, the President and the
Treasurer. The ICC CEO can fix the salaries of these two positions. Conveniently, the ICC CEO is also the
President of the Foundation (Dominic Sims, ICC COO is Treasurer) and as such has the ability to set his own
salary. While there is no evidence that the Foundation president is now receiving a salary, there is nothing
preventing that from happening in the future.
There is one other thing worthy of mention. The ICC CEO, who happens to be the Foundation President with total
and unilateral control of the Foundation, also sit s on the Board of Directors of FLASH, Inc.4 According to the
FLASH press release dated September 24, 2007, “International Code Council CEO Rick Weiland today
announced the selection (of FLASH, Inc.) to operate its Foundation programs while the two organizations
evaluate a potential strategic alliance and/or merger.” We believe that the ICC CEO (having the sole authority to
change the Foundation bylaws) and also serving as President of the Foundation while holding a position on the
FLASH, Inc. Board of Directors presents the appearance of a conflict of interest and quite possibly is a conflict of
interest.
It is feasible that if the Foundation is merged with FLASH, Inc., $6.3 million of ICC member assets will disappear,
becoming the property/assets of FLASH, Inc. and there may be nothing the ICC membership can do to stop it.
Also, should a merger between the Foundation and FLASH, Inc. actually occur, ICC could end up paying rent to
FLASH, Inc. for property ICC used to own.
There very well may be a logical and ethical reason for these actions, but we have been unable to obtain
reasonable and complete answers from ICC’s representative. In these troubling times ICC cannot afford to give
away over 20% of the organization’s assets, hundreds of thousands of dollars to another organization for little in
return on the investment.
Our goal for bringing these issues to your attention is in the interest of preserving the ICC and honoring the
mission and values that make this organization unique. Our objective is to further promote transparency within the
organization and we encourage all members to do the same. We urge you to ask your ICC Board representative
and candidates vying for a board position at the ABM for an explanation and how they plan to address these
concerns.
1 King County, WA & Los Angeles County, CA Assessors’ offices2 ICC Financial reports July 20093 In August ICC revised the budgeted revenue. The budgeted contribution income for July, 2009 (year-to-date) was $150,000. The budgeted amount for
August (year-to-date) is reduced to $12,818.
4 FLASH, Inc. 2007 IRS Form 990
