SEMPO & Non-Profit Legal Issues

[bethabernathy]

8/10/04 – Today I spoke with Dana Todd, Christine Churchill and Ian Mckinon (sp). Ian is acting in an advisory legal capacity for Sempo. At one time he was an Intellectual Property Attorney. He is now providing SEO services.

My main focus, related to the call, was if Sempo was aware of the IRS’s rules related to member and sponsor advertising. They said they look at this similar to a membership directory. I asked them if they had plans to hire a Non-Profit Attorney to review this issue and issues related to membership structure, stipend caps and whether or not there is a conflict of interest related to Barbara Coll operating as a member of the board, President and Executive Director.

They said they do have plans to get several professional legal opinions together, but they could not commit to a timeline to when they will get this coordinated.

I offered to assist them in this regard and they were hesitant as they are concerned that I would make all findings available via the internet. I told them that I would not make the legal investigation public, but that if the findings required them to make changes to their organization they would have to be held accountable and make those changes whether they liked the findings or not. The changes would be able to be seen by simply going to their website.

I pointed out to them that if they didn’t have the time to get a legal opinion together that they will most likely be audited by the IRS, so that time is of the essence in this regard. I told them that I could get this taken care of within 10 days. They indicated that they all run prominent businesses and again cannot commit to a timeframe to obtaining a legal opinion. I told them that if they would like me to help to please get back to me one way or another within 72 hours. They agreed that they would do this.

I said that going forward, it would be prudent not to include their personal businesses in their advertising. They said they would look into this to see if they were in any sort of violation.

I also told them that another option would be to re-organize as a For Profit Corporation. In doing this, I indicated that they would need to see how that would affect them looking back.

So, we will see if they want my help or not. I would assume we will see changes made if they are required by law, short of any loop holes.

[ihelpyou]

In other words, pooey on you. They can simply read at the IRS if they need confirmation that a 501c non-profit should NOT be promoting it's own members.

And why would there be anything to look at or think about with this issue of the promotion of members? Can't they understand the great majority of SEM people do NOT agree with their organization and how it's run? Funny about that; about two months since it's inception, there were about 100 members in total. 13 months after that and there are still less than 300 members. Not a good record considering there are hundreds and hundreds of sem firms on the planet. Maybe thousands.

Goodness, do they need a wet noodle aside their noggins?

[bethabernathy]

Related to my post about Sempo members not being allowed to post in forums, Dana Todd contacted me to clarify as follows "what I stated was that a member of the Board is not authorized to address legal matters in a public third-party forum."

[steve sardell]

quote from Beth Abernathy
They indicated that they all run prominent businesses and again cannot commit to a timeframe to obtaining a legal opinion
Getting a U.S. legal opinion as to whether SEMpo qualifies as a NFP or NP, , should have been a high priority during the start up phase. Surely there was an opinion sought on the initial business model. It appears, however, the initial mission has been distorted.

Seeking a revisited opinion does not require a great expense nor does it require a great deal of time or effort. It would be prudent the CEO immediately get a legal verification. It would be a well spent $500, if only precautionary.

[bethabernathy]

Well their whole operation is at stake, so they must figure why bother? They are going to have to repay members, etc. I have found a lawyer up here that will assist at $200 per hour and has non-profit experience.

[BlackRhino]

I hate to say this but their attitude does not surprise me. After the meeting at SES I had the chance to talk with several of the board members. Not about anything in particular but to introduce myself and volunteer some of my time in any way that they might need.

I was brushed off with barely any acknowledgement. That's fine but does indicate to me how much they honestly care about their members and the organization.

I wish you luck Beth and if you need any assistance just let me know.

[bethabernathy]

This IRS document discusses "Automatic" Excess Benefit Transactions under IRS 4958.

http://www.irs.gov/pub/irs-tege/eotopice04.pdf

[bethabernathy]

"Another significant fact that will help demonstrate that a tax-exempt ... organization promotes the ... community as a whole, rather than private interests, is that the board of trustees and all committees with board-delegated powers require that, as part of their systems of controls, all tax-exempt organizations ... conduct periodic reviews of their activities to ensure that the organizations are operating in a manner consistent with accomplishing their charitable purposes and that their operations do not result in private inurement or impermissable benefit to private interests. Issues of special concern are:

A. Whether compensation arrangements and benefits are reasonable and are the result of arm's length negotiations..."

http://www.irs.gov/pub/irs-tege/topic-c.pdf

Page 7

[orion]

Hi, everyone. With all these focused threads, not sure if this is the right place to post. If not, my apologies in advance.

Rather than going over old findings, or making new statements I have decided to ask just questions. I need some data gathering. So any help will be very much appreciated.

1. What is SEMPO's legal status?

On Wed Mar 24, 2004 12:35 am in this forum
http://www.cre8asiteforums.com/viewtopic.php?t=7143&postdays=0&postorder=asc&highlight=orion&start=75&sid=d9969618f4ea5ff3f16a4f3115fdb564

Barbara Coll states

"SEMPO is a non-profit 501(c)3 organization. The Board of Directors have received no financial compensation for their volunteer position on the board of SEMPO." Barbara C. Coll; CEO, WebMama.com Inc.; President & Chairperson of the Board, SEMPO Inc.


Now the SEMPO site states the following
http://www.sempo.org/faq.php#legal

"SEMPO is a non-profit, tax-exempt organization; Federal Tax ID #14-1891138. The organization is a 501(c)(6) chartered in the state of Delaware."

Thus, after publicly stating they are a 501(c)3 now they state are a 501(c)(6).

The difference? According to the IRS site (http://www.irs.gov/charities/business/index.html)
501(c)(6) is for Business League Orgs
501(c)(3) is for Charitable Orgs
Note: Click on the left column links of above IRS page to find out the corresponding status.
So essentially my questions are: For how long they have been claiming 501(c)(3) status? When the change, if any, took place and why? I'm just curious.

2. What is SEMPO's mailing and physical address? For mailing address the site states

SEMPO ,Inc.
665 Lytton Ave,
Palo Alto,CA 94301

WebMama site http://www.webmama.com/contact.htm shows that

WebMama Office Address
665 Lytton Avenue
Palo Alto, CA 94301

Why make the mailing address of a non profit the same as a for profit site? What is the physical address of the non profit organization as stated in the filings?

Any information regarding 1 and 2 is greately appreciated. Thanks.

Orion

[bethabernathy]

Hi Orion - I can probably get the answer related to their filing status tomorrow a.m. from the State of Delaware and will get back to you. :)

[Anthony Parsons]

Well, I'll be quite honest about it. I've never been nor ever will be a supporter of SEMPO, and all I can say is, "get your tap shoes on SEMPO", because you have some serious tap dancing ahead of you to get yourselves out of this one.

I am absolutely disgusted that a non-profit organisation that has taken hundreds of thousands of dollars in monies has not sort legal advice for the proprietary of initial business setup. You have to be kidding me, honestly. Someone is getting a fatter pocket, which is about to be lightened by the authorities and quite frankly, wouldn't bother myself it if some jail time come from it also. I would only say that it is deserved for constructing a non-profit organisation with no legal standing.

I guess this is why many of these business behind something like SEMPO go broke, as they most likely haven't received legal advice for those either. Someone, or several; need to go back to business school by the sounds of it.

My 2 cents.

[bethabernathy]

Hi There - Sempo filed for incorporation with the State of Delaware on 4/3/03. Their application for Tax Exemption as a 501(c)(6) was approved by the IRS in 4/04. As far as I can tell B. Coll must not have known the Corporation's status or where they were chartered i.e. California or Delaware.

[orion]

Could a religious association affect their 501(c)(6) status?
Is there any association between SEMPO and Scientology?
Can someone shed some light on what is claimed below? Just asking questions. Not making any statement or accusation in any way or matter.


According to the apologeticsindex.org site
http://www.apologeticsindex.org/n/n13.html


In addition to the apparent association, there is a sort of "pr lines jacking" story to add.

The pr in question, signed by Georgina Tweedie, is at
http://www.pressbox.co.uk/Detailed/16573.html

and reads

"Assisted by the Church of Scientology International this new group will help non-profits gain exposure for the causes they serve."


The broken link mentioned by the apologeticsindex site appears to be moved to

http://www.sempo.org/editorials/nonprofit-sem.php

and the line in question in this SEMPO link now reads

"This new group will help non-profits gain exposure for the causes they serve."

This SEMPO article was Written by Georgina Tweedie and has a link pointing to The Church of Scientology.


This SEMPO link http://www.sempo.org/about-sempo.php interestingly starts as follow:

"The Search Engine Marketing Professional Organization (SEMPO) was formed to help spread the good news about search engine marketing (SEM)." and is signed by B. Coll.


The link that lead me to the above sequence of event is this one.


http://www.google.com/groups?q=sempo.org&hl=en&lr=&ie=UTF-8&selm=l2eih09pje7kk7r8a0gbocu09h10i9mob9%404ax.com&rnum=1



Orion

[bethabernathy]

The deal is that a 501(c)(6) is much more loosely governed by the IRS than a 501(c)(3). The IRS looks to the membership to monitor a 501(c)(6).

The membership advertising and the dual advertising in their PR is their main and very large problem. This is where they are jeopardizing their exemption status. The following Federal Tax law is specific to a 501(c)(6):

See: http://www.irs.gov/irm/part7/ch10s09.html

-------------------------

"7.25.6.7.1 (10-19-1998)
Advertising Activities
Advertising that carries the names of members generally constitutes the performance of particular services for members. Thus, an association of the merchants in a particular shopping center whose advertising material contained the names of the individual merchants is denied exemption (see Rev. Rul. 64–315, 1964–2 C.B. 147) as is an association created to attract tourists to a local area, but whose principal activity is the publication of a yearbook consisting largely of paid advertisements by its members (see Rev. Rul. 65–14, 1965–1 C.B. 236). In another case, exemption was denied an association that published catalogues that listed only products manufactured by the members. See Automotive Electric Association v. Commissioner, 168 F.2d 366 (6th Cir. 1948)."

[ihelpyou]

Really now; What the heck is going on here?

http://www.apologeticsindex.org/n/n13.html

Is this how SEMPO is claiming non-profit status? Are they or board members also members of the Church of Scientology?

Yes. I'm asking the questions also and I would like an answer as to why all these religious type websites are also promoting SEMPO, and that SEMPO is somehow a saviour to the non-profit communities.

This is a paragraph in those press releases:

The Search Engine Marketing Professionals Organization (SEMPO) is one such non-profit organization promoting and providing search marketing services. Run by professional leaders in the industry, they invest their personal time into something they believe in.

Recently representatives from well-known and respected non-profit organizations such as the Salvation Army, United Way, and World Vision were interviewed. Despite mixed levels of experience with SEO, most stated that they do care about exposure on the Net. Some confessed to spending money with an SEO company to help them.

Few SEO companies seem to provide discounts for worthwhile causes. An unwary novice stepping into the shark infested waters of SEO can be in for surprises and unexpected costs, as many will attest.

When this occurs for non-profits, charities in particular, it defeats the purpose. A specific example cited is the Salvation Army which only has a budget of 4 cents per dollar allocated to marketing. Their funds are reinvested into disaster relief and help for the underprivileged. The general consensus is that this is where most of their funds should be expended, and should not be spent on a marketing budget. This is a point that could be argued; however, another school of thought has surfaced.
Members of a newly formed group, Non-Profits in Search, note that search engine marketing issues for non-profits have employed time, money and energy competing with the business world. Further they agree that the non-profits' "competition" should be limited to other organizations within this sector.

With this in mind, Non-Profits in Search has been launched; its mission is to help non-profits improve their search engine visibility, while also improving relevancy and the quality of informational search results.

Assisted by the Church of Scientology International this new group will help non-profits gain exposure for the causes they serve.
What is this? Is "Non-Profits in Search" also SEMPO? Do they have a partnership with the church of scientology? And is this the non-profit connection for non-profit tax status?

The first paragraph above also claims SEMPO "provides search engine marketing services". Do they really? So now we all have to compete with the non-profit organization and helping client's with SEM?

[bethabernathy]

In reading that they are providing SEM services, that is another ding i.e.:

http://www.irs.gov/irm/part7/ch10s09.html

7.25.6.1.2 (10-19-1998)
Basic Tests

E. Its activities must be directed to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons.

---------------

Although when I receive all their paper work we'll be able to get to the bottom of it. :confused:

[orion]

Aside the obvious connection to 501(c)(6) violations, let revisit the Scientology side and the "pr line jacking" issue.

The original article is more enlightening.

According to this Google cache link http://64.233.161.104/search?q=cache:zCINc38itYoJ:www.sempo.org/articles.php+scientology+barbara-coll&hl=en&ie=UTF-8

Georgina Tweedie's original article/link was from 7/26/04
The original url was http://www.sempo.org/articles/nonprofit-sem.php and was removed.

We found a cache copy of the original article. Here is

http://216.239.39.104/search?q=cache:y_3jxGdQBusJ:www.sempo.org/articles/nonprofit-sem.php+georgina+tweedie&hl=en&ie=UTF-8

As the apologeticsindex.org site states, it clearly reads

"Assisted by the Search Engine Marketing Professionals Organization (SEMPO), this new group will help non-profits gain exposure for the causes they serve."

The apologeticsindex.org site points out the following and I quote:

"The press release quoted above was first posted - as an article - on July 26, 2004 at the SEMPO website, albeit with two small differences from the version released at pressbox.co.uk:...

"Assisted by the Church of Scientology International this new group will help non-profits gain exposure for the causes they serve."

which is how reads now in this pr http://www.pressbox.co.uk/Detailed/16573.html

Now, the original SEMPO article was moved to http://www.sempo.org/editorials/nonprofit-sem.php

and now the line in question reads

"This new group will help non-profits gain exposure for the causes they serve."

Here is the deal. Compare line by line the Google cache copy, the revised SEMPO copy and the pr of Georgina Tweedie and draw your own conclusions.

Evidently, the line above was under scrutinity and editing...but why? Now that the Church of Scientology emerges in the scene, how SEMPO members will look at the whole SEMPO thing? Just a question.

One more thing...Who is Georgina Tweedie? I don't know.

However, according to this link

http://www.lisamcpherson.org/cos/coscorps.htm and to this link http://buttersquash.net/archives/000033.php there is a Georgina Tweedie listed behind RTC Australia Inc., one of Scientology's Corporations and Organizations.


Orion

[bethabernathy]

Very interesting. I get your drift. Wonder how those sponsers will look upon the relationship????

[Anthony Parsons]

Well Orion, you just keep justifying my post and thoughts on the organisation. SEMPO is making money, hiding dealings, changing statements, invoked with who knows behind the scenes, and all the time still bleating about how they need more members. What for? I guess to pay there fee's, being not for profit and all. I don't see the salvation army taking any sort of huge payment or fee's for running the organisation. I believe there head people are actually one of the lowest paid in the world for the size of an organisation run. Interesting. I have had a little to do with the salvation army over the last 10 years now, and never seen any of them getting these sort of fat cat payments like Barbara Coll!

I think SEMPO need to have their license revoked, refund all memberships to those that have paid, and stop further corrupting an organisation that is already profound by corruption, deceipt and dishonesty. They aren't doing the SEO / SEM industry any favours by naming themselves up the top of the food chain at present. They are just as dishonest as those unethical types taking peoples money for shotty SEO / SEM services provided. Go figure huh?

Hell, I will just throw all my cents into this one. Good on ya SEMPO! Bleat about the industry corruption, and you're leading the pact. Yeh!

[ihelpyou]

Danny Sullivan is the "only" one to stop this.

Danny; You must call on SEMPO to give up it's non-profit status immediately. They must stop functioning right now. They must completely get rid of all board members, etc, and quit all business. In other words, close up shop for now.

Rebuild with a new site, concept, new Corporate Name, new irs status, and refund all monies to all members. At least refund all sponsor monies.

It's too far out of hand now.

Something easy that should have been done over one week ago, and would take about one second to do:

http://www.sempo.org/about-sempo.php

That link is "STILL" there.

Danny; What does all of this tell you? Please put your foot down. It's the only right thing to do at this time.

[Elisabeth]

doug, I think it's pretty unfair to lay that responsibility on danny like that -

yes, it's true that danny is effectively the 'leader' of this industry, but it shouldn't be up to him to make that call.

It should be a majority of the collective members of SEMPO - if they've been following these issues, then they should be the ones to force the organization to change.

[ihelpyou]

Yes, I understand that Elisabeth. We can clearly see how quickly these people want to do anything. The concerns have been there for along time. New things are popping up daily, and none of it good. All of it bad. Very bad.

Take something as easy as logging into the server....finding the 'about us' page file....changing one or two links.....logging out.

How long from start to finish?

They ALL know those links are very bad, but yet, they still exist over one full week later. Last week the excuse was:

"they just got back from the conference"

What's the excuse now?

This is why I mention Danny Sullivan. He is the only one with any kind of influence over the likes of a few of those people. Most of them snub their noses at all of us. They only listen to Danny. I highly doubt they would listen to Jupiter Media either. Even-though, I have to think that Jupiter is becoming highly teed off right about now. That's my opinion anyway if they are any kind of a decent business.

Not only has this group made the industry look bad; It makes Jupiter AND Danny look bad by default. I'd be steamed if I were Danny and seeing all of this deception and greed.

[ihelpyou]

Oh; Why would the members force change? I heard many of them at the meeting said everything was just fine and they did not want any change? So why do we think anything would be done by them?

Also; the members who do want change, seem to be afraid to say much of anything because of "who" the leadership of sempo is. I see the problem clearly. Danny is the only one to make the change happen.

There are only a few of us out there that have the guts enough to voice opinions strongly. Even this is not doing any good. It's got to the point of no return. The org must stop functioning right now. It must start over with brand new faces.

[bethabernathy]

Oh; Why would the members force change? I heard many of them at the meeting said everything was just fine and they did not want any change? So why do we think anything would be done by them?

I was at that meeting and when Sempo asked the audience if they thought they were doing a good job, it was silent, then Dana Todd, said something like "common guys" and then I personally felt obligated to applaud. I do not agree that the overall membership is happy with Sempo for that reason. The whole meeting was conducted like that.

Related to the membership, per the IRS, they look to the membership to monitor a 501(c)(6). Other than that, they are in violation of their tax status in many ways. I would like to see the board resign with the membership's effort in appointing a new qualified board. Although, a new board would be faced with putting together an entirely different operation and possibly repaying membership fees and tax on the money earned for those fees to date, plus penalty fees. Just my two cents.

[orion]

More questions.

In post #9 of this thread I mentioned that

On Wed Mar 24, 2004 12:35 am in this forum

http://www.cre8asiteforums.com/view...16a4f3115fdb564

Barbara Coll states

"SEMPO is a non-profit 501(c)3 organization. The Board of Directors have received no financial compensation for their volunteer position on the board of SEMPO." Barbara C. Coll; CEO, WebMama.com Inc.; President & Chairperson of the Board, SEMPO Inc.


However, now the SEMPO site states the following

http://www.sempo.org/faq.php#legal

"SEMPO is a non-profit, tax-exempt organization; Federal Tax ID #14-1891138. The organization is a 501(c)(6) chartered in the state of Delaware."

The key question is: how many instances are outthere in which they have claimed in public a 501(c)(3) status? Now, according to Beth (see post #12)

"Sempo filed for incorporation with the State of Delaware on 4/3/03. Their application for Tax Exemption as a 501(c)(6) was approved by the IRS in 4/04. As far as I can tell B. Coll must not have known the Corporation's status or where they were chartered i.e. California or Delaware."

Dates and timeframes are important here.

Now the religious connotation may (or may not) has different legal degrees of relevance for (3) or (6).

Looking at the above "pr nightmare" (read now SEMPOGATE), the three articles talk about the launching of a new organization named "Non-Profits in Search".

Google cached copy says (http://216.239.39.104/search?q=cache:y_3jxGdQBusJ:www.sempo.org/articles/nonprofit-sem.php+georgina+tweedie&hl=en&ie=UTF-8)

"Members of a newly formed group, Non-Profits in Search, note that search engine marketing issues for non-profits have employed time, money and energy competing with the business world. Further they agree that the non-profits' "competition" should be limited to other organizations within this sector.

With this in mind, Non-Profits in Search has been launched; its mission is to help non-profits improve their search engine visibility, while also improving relevancy and the quality of informational search results.

Assisted by the Search Engine Marketing Professionals Organization (SEMPO), this new group will help non-profits gain exposure for the causes they serve."

Georgina Tweedie prbox release (http://www.pressbox.co.uk/Detailed/16573.html) has the last line changed to read

"Assisted by the Church of Scientology International this new group will help non-profits gain exposure for the causes they serve."

And the modified version at SEMPO site (http://www.sempo.org/editorials/nonprofit-sem.php) reads

"This new group will help non-profits gain exposure for the causes they serve."

Thus, several questions arise

1. Why change where it reads "Search Engine Marketing Professionals Organization (SEMPO)" for "Church of Scientology International" in the corresponding versions?

2. Why was the pr moved from location, modified and then placed in another directory in the SEMPO site to read now "This new group will help non-profits gain exposure for the causes they serve."? What they are trying to hide or show?

3. Without making any accusation, implication, insinuation, claim, or statement, I honestly have to ask this: What is the relationship between SEMPO and some of its members with, Scientology and the recently launched "Non-Profits in Search" organization? Fair question. (So far we know that according to Mike Grehan, Georgian Tweedie (note Grehan's apparent typo in the first name) is associated with Scientology.net http://www.e-marketing-news.co.uk/march_2004.html site)

4. The three versions of Georgina Tweedie's piece ends with the following line:
"Focusing on correct representation in search engine results, Non-Profits in Search utilizes the pooled resources and experience of industry professionals to effect positive change for those who help others."

Who are these "industry professionals"? What are their professional affiliations?

5. According to the pr "Non-Profits in Search has been launched; its mission is to help non-profits improve their search engine visibility". How Google's previous legal battles with Scientology might play into the picture?

I don't know the answer to these questions.

One more thing, according to the Secretary of State (SS)'s site Kevin Shelley (State of California), out of state corps need to register with the State http://www.ss.ca.gov/business/corp/corp_faq.htm#question8 to comply with their Code Section 191.

At the SS site, a search for sempo returns two results, non of them appear to be related with the SEMPO organization. These are:

Corp Number Date Filed Status Corporation Name Agent for Service of Process
C1874805 12/9/1994 suspended SEMPO INSTITUTE FOR HUMANITIES CHRIS POPOV
C1710995 8/10/1992 suspended SEMPO SUGIHARA FOUNDATION KIYOSHI KAWAI


Note that the SEMPO name is dated 1994 and 1992, respectively. Also note please that since the SS site updates their database weekly, clearly either the current SEMPO organization is not in compliance with California Code Section 191 or the database has not been properly updated as of today (08-14-04).


Before ending this post, I want to make very clear that I'm not making any insinuation, claim, statement or anything like that between Scientology, the current SEMPO organization with the first or second entry found in the Secretary of State Kevein Shelley's site. We are all here trying to decipher all this maze of events. No more, no less.


Having said that let me ask a final questions. Does anyone know something about


"SEMPO INSTITUTE FOR HUMANITIES" ?
"SEMPO SUGIHARA FOUNDATION" ?


Files at

http://kepler.ss.ca.gov/corpdata/ShowAllList?QueryCorpNumber=C1874805
http://kepler.ss.ca.gov/corpdata/ShowAllList?QueryCorpNumber=C1710995


show limited information. These two entries may be irrelevant leads to the discussion. Still, any information gathered in this regard will be greately appreciated.

Note: The SEMPO SUGIHARA FOUNDATION and the “Sugihara Foundation – Diplomats for Life” are not the same thing. The “Sugihara Foundation – Diplomats for Life”, was established in December 1999 in honor of former Japanese Consul and national war hero Sempo (Chiyune) Sugihara. To know more about Sempo Sugihara's work and life see http://www.vdu.lt/sugihara/index_a.html and http://www-personal.umich.edu/~szwetch/Stamps.of.Israel/sugihara.html


Orion

[polarmate]

orion, it is my understanding that Sempo is a Japanese name.

[bethabernathy]

The Church of Scientology is listed as a "Contributor" on the Sempo site and their listing reads:

"Church of Scientology International, Los Angeles CA USA.
Works in Internet public affairs. Interested in helping non-profits on the Net."

I didn't know the Church of Scientology was involved in Internet public affairs, maybe I am missing something?

Then the editorial on the Sempo site at:

http://www.sempo.org/editorials/nonprofit-sem.php

I just was hoping for some clarification related to this statement on the editorial. Maybe it is obvious, but who is this newly formed group "Non-Profits in Search" and who are there members?:

"Members of a newly formed group, Non-Profits in Search ... With this in mind, Non-Profits in Search has been launched ..."

Is this Sempo or the Church of Scientology?

Then this statement, we have been discussing on this thread:

"The Search Engine Marketing Professionals Organization (SEMPO) is one such non-profit organization promoting and providing search marketing services."

Does anyone know in what form Sempo is "providing search marketing services"?

Just a bit confused here.

[ihelpyou]

I doubt they answer all the questions.

It's clear that this group has to go the way it is. No need for the board to say one word. Just leave.

More stuff is found "daily". It's a never ending stream of steam.

[steve sardell]

Members of a newly formed group, Non-Profits in Search ... With this in mind, Non-Profits in Search has been launched ..."

Is this Sempo or the Church of Scientology?

From what I have found is is a group recently formed and backed by the Church of Scientology.

ww.factnet.org/discus/messages/3/2947.html?1092259786[/url]

Link left dead intentionally.

Snippet from above site
Members of a newly formed group... Non-Profits in Search has been launched; its mission is to help non-profits improve their search engine visibility, while also improving relevancy and the quality of informational search results.

Assisted by the Church of Scientology International this new group will help non-profits gain exposure for the causes they serve.

[bethabernathy]

FREAK SH0W!!! Anyway, it would be interesting to find out how many members of Sempo are members of the Church of Scientology? Also, when I get their financials it will be interesting to see if I can find a sizable donation made by the Church of Scientology (that is if I get their financials - I think I will get them).

[orion]

Actually Steve the link is active and is

http://www.factnet.org/discus/messages/3/2947.html?1092259786

nothing more but a copy of Georgina Tweedie's pr.

Orion

[Elisabeth]

Yes, beth, I agree, all of these threads on SEMPO are becoming a bit of a Freak Show! :D

this is certainly a bizarre twist to the discussions at hand, with the C of S being involved in any way, but they would likely have their own motives for donation. will be interesting to see the full connection there, but I don't think it's relevant whether any sempo members are also CofS members or not- .

but let's hold judgement on this until we know a little more about it.

[steve sardell]

If there are no ties between SEMpo and NPS, I do not understand why GT's press release for <Non-Profits in Search> is posted on the SEMpo site. Oh what a tangled web it is. This all gets curiouser and curiouser.

[mcanerin]

I'm rather concerned about the direction of this discussion.

First off, I'm not associated with the Church of Scientology or any other religious organization, but that doesn't mean I think it's OK to bash people based on their religious beliefs. I'd be just as concerned if there were people complaining that a Jewish, Muslim or Christian society was involved this. Heck, I'd be concerned if it was Satanists or Atheists, too.

Come to think of it, I'd also have issues with it if it was based on gender, race or country of origin, too.

ANYONE with any marketing savvy whatsoever knows that marketing on the internet is critical. People, this is what SEMPO is all about!

I'm not surprised in the slightest that Scientologists have an interest in marketing on the internet. In view of their issues with Google, I'd be amazed to find out they didn't join SEMPO. I'm actually wondering why other marketing savvy, internet aware groups aren't joining up just as fast.

There have been complaints all along that SEMPO was accepting anyone and everyone, but at the same time, as long as they are a non-profit and open to the public, how can they be restrictive? What is the limit?

Frankly, if they paid their dues, the Nazi Party, the Vatican, the NAACP, political parties, the military, your local soccer team and any other group interested in reaching out to potential members via internet marketing can and probably should join.

Did you think that only stand alone SEOs would be interested? Why wouldn't non-pure SEO firms want to join? Anyone who has a website and is interested in marketing it is welcome. There are no restrictions. And if you are a member, why wouldn’t you want to write an editorial?

I’m assuming that the Church of Scientology joined (I don’t know) I don’t care if they donated 2 million, 2 cents or nothing – what does that have to do about it? Google donated money. I could donate money. It’s rather expected in non-profits. I suspect it would be illegal to refuse them as members based on their religion, and I’m VERY concerned that some people seem to feel that they should be.

Does the membership form ask you to state your religion, gender, race and political affiliation on it? Should it? What if I don’t like those darn Americans? Better ask for country of origin too. There is every indication currently that SEMPO is US based. Maybe it’s an imperialist conspiracy :rolleyes:

A connection does not mean control. I can draw connections to almost anything. Give me enough time (and a will to do so) and I could show that SEMPO had connections to terrorists, Satanists and even *gasp* Canadians :p

I could also find connections with their current issues in biblical prophecy, Nostradamus's writings, Kabala, and astrology. So what? It's one of the wonders of the internet. Everything is connected, eventually. Get used to it. That's what the "inter" part of the "internet" means.

Show proof, not innuendo. There are enough REAL issues that clouding them in the smoke and mirrors of innuendo does no good and possibly significant harm. No doubt Barbara is also an alien life form and is maybe even Elvis in disguise. But if it's not relevant, then I question the motives behind the claims.

Stick with the facts. Or at least logical questions that don't draw upon theories of religious, racial, or any other prejudices. Would this have been an issue if it was a Catholic group? Muslim? To some people, perhaps even MORE of an issue. And just as irrelevant.

I'd be more than happy to bash religion, politics and belief systems that I disagree with in the appropriate forum. But this isn't it, IMO.

Ian

[steve sardell]

Ian, I agree with the tenor of your post, but my question remains. Why is there another organization's press release posted on the site?
And if you are a member, why wouldn’t you want to write an editorial? I would, but it would be an editorial or an educational work. IMHO, the piece questioned is not truly an editorial, but is more a press release for NPS. Basically, it is a marketing plug. With slight wording modifications, it has been posted as a press release on other sites.

But, let's call it an editorial. First off, I did not realize SEMpo would publish editorials. What is the procedure to get one posted? Is there a review process? If there is then who reviews? If there is not, can any member get any editorial published on the SEMpo site? I am not expecting you to have these answers, but rather they are questions that come to mind after seeing and reading the piece. If it were an editorial then this should have been edited Unfortunately, in today's fast-paced cyber-marketplace, non-profits don't get many breaks; like everyone else they have to fund pay-per-click, paid inclusion and other pay-for-performance programs. It has become "pay up or don't be seen" regardless of any other factors, including who the organization is and the worthiness of the cause

I see the need and place for educational articles, but I do not think we can term the questioned piece either an article or an editorial.

[bethabernathy]

Bottom line is the Church of Scientology relation does not make one bit of difference. The point is that Sempo is proving many means for advertising for their members, which makes them in violation of their Federal Tax Exempt status. This is what needs to be ended. Again, I have suggested just a simple list of members, but then they would desolve. It is a simple marketing scheme to attract members for ?????perhaps????? a good purpose, but done very clearly in the wrong way.

Back to the Olympics.

[orion]

Let's not dilute the discussion.

Let's keep the eyes focused on the ball and on the legal points raised in posts #9, #13, #17, and #25. We still need to know why the three different press release versions in connection with SEMPO, Scientology and the recently launched Non-Profits in Search organization.


Orion

[bethabernathy]

Exactly, again we are seeing the dual advertising. I think that is what you mean Orion, right?

[orion]

Right and well put, Beth. Why Georgina Tweedie's pr, one version advertises or promotes the work of The Church of Scientology and the other version advertises or promotes the work of SEMPO (same line, different versions)? Why then, tried to hide the pr moving it to another location and edited? What they are hiding?

Orion

[orion]

The story about Scientology, Non-Profits in Search and SEMPO is being pick by others in the news, as it can be seen from the following links:

NEWSTROVE.COM
http://churchofscientology.newstrove.com/

This news site writes
"Non-Profits in Search
Published in Apologeticsindex.org - Indexed on Aug 13, 2004
Organizations that might be interested in the services provided by Non-Profits in Search should be aware of the following: The Church of Scientology operates, supports - or is otherwise involved in - a number of front groups used to promote Scientology's controversial teachings and practices. For example, one of these front groups, WISE (which stands for "World Institute of Scientology Enterprises") promotes the use of the so-called "L. Ron Hubbard Management Technology." The late L. Ron Hubbard was a science fiction author and the founder of the Church of Scientology."

RELIGIONNEWSBLOG.COM
http://www.religionnewsblog.com/8270-Google_s_ad_rules_complex,_controversial.html

This is an article by Verne Kopytoff, Chronicle Staff Writer of San Francisco Chronicle discussing what popular search engine accepts, rejects. The article prominently displays a link that reads "Non-Profits in Search : a Scientology-related organization wants to help non-profits market themselves online"
Possibly, the link was added to the article by the blog site. Either way, Verne Kopytoff writes "Google gives special scrutiny to ads promoting the Church of Scientology. Workers are told to make sure the ads clearly disclose their affiliation to the church, presumably so that users know exactly what they're clicking on. If the ads don't, workers should reject them. No other religions are mentioned."

Now can some ask Google the following question: Should Google apply the same "most-disclose-scientology-connection" policy for documents and paid-result/ads optimized by or through the Non-Profits in Search organization?

GoogleGuy, are you there?

Orion

[bethabernathy]

So it looks like this non-profits in search group is some sort of front group for the Church of Scientology? I am a bit lost here. Either way you look at it i.e. Dual Advertising or Sempo related to some cult out there in the media (i.e. those articles Orion has listed) it does deserve some clarification. I keep searching and finding more references to the two, which unfortunately probably should be addressed and clarification made related to what this is all about. At the very least, Sempo should make the clarification on the article on their website. Too weird?

[orion]

The scientologywatch.org site is running today the SEMPO/Scientology story http://www.scientologywatch.org/postnuke/index.php They mention some background and legal twists between Google, Scientology and RTC as follow and I quote

"An organization known as the Search Engine Marketing Professionals Association, or SEMPO, recently issued an odd press release, stating in bland prose that SEMPO intended to assist nonprofits in their search engine placement. It is only odd and of interest because of its closing line:

Assisted by the Church of Scientology International this new group will help non-profits gain exposure for the causes they serve.

The broken link is as it was in the original post. The press release was signed Georgina Tweedie. Georgina Tweedie was listed in an attachment to Church of Scientology International's IRS Form 1023 of September 1993 as a Trustee of a Corporation called RTC Australia, presumably a counterpart or foreign subsidiary of Religious Technology Center, the same branch of Scientology responsible for the legal threats against Google."

End of the quote. Interesting post.

We still need to know the legal implications of the use of a press release to double promote the work of both, SEMPO and Scientology. Possibly those contributing to SEMPO may not know how their contributions were used.. Again, more questions and no answers.

All indicates this SEMPOGATE is not going away any time soon. Almost every day we found more stuff across the Web. Now that the story apparently is under scrutinity by other groups, I must ask: Where is this heading to?

Orion

[bethabernathy]

501(a) Governs all Sections of 501(c) this includes 501(c)(6) and encompasses the disclosure rules. See section 6104.

[ChrisO]

It's worth mentioning that Scientology has something of a history of search engine manipulation - a couple of years ago, they got caught manipulating Google's PageRank system by registering scores of domains and pointing them at each other. They also had a friendly editor on the Open Directory Project listing numerous spam domains (she got kicked off for doing this). http://www.operatingthetan.com/google/ has the details. Incidentally, I believe this is why Google now requires Scientology to disclose its websites in sponsored links - although Google publicly denied that Scientology's manipulation had any effectit was very noticable that Scientology's page rankings changed considerably after the strategy was exposed.

I don't know whether this may be a factor behind its involvement with SEMPO (maybe it's a more subtle way to achieve the same thing?). It's worth keeping an eye on it, though.

[orion]

I should have posted this at the "SEMPO Needs Breathing Room Articles". Either way, while sitting in the room they may wanto read some "magazines".

Here is a resource list for keeping non-profit organizations out of legal troubles.

1. Five tips for keeping a small charity out of legal hot water
http://philanthropy.com/jobs/2004/08/19/20040819-50109.htm

2. The Top 5 Reasons Associations Get Sued
http://www.nonprofitlaw.com/top5.shtml

3. A list of resources on legal issues for nonprofit groups
http://philanthropy.com/jobs/2004/08/19/20040819-201565.htm

4. Checklist of mandatory filings and a CEO sample contract
http://www.nonprofitlaw.com/

5. IRS's TAX Information for Non-Profits (already referenced by Beth's excellent posts)
http://www.irs.gov/charities/index.html)


Orion

PS. Well put, Beth and Chris. Chris, many are watching these recent developments.

[bethabernathy]

They've got their 4K a month PR Guy talking over here:

http://www.highrankings.com/forum/index.php?showtopic=8725&view=getnewpost

[orion]

Beth, I checked those posts at Jill's forum. My honest impression?

Based on posters reacting to SEO-PR Guy (Greg), it seems each time he opens his mouth is digging a hole. While, Jill's, Beth's and Mike's questions at that forum remain unanswered, the PR Guy is looking more like The PR Nightmare Guy. (And charging SEMPO 4K a month? WOW)

Check his statements at

http://www.highrankings.com/forum/index.php?showtopic=8725&st=15

http://www.highrankings.com/forum/index.php?showtopic=8725&st=30

and subsequent posts.


Orion

[bethabernathy]

Based on posters reacting to SEO-PR Guy (Greg), it seems each time he opens his mouth is digging a hole. While, Jill's, Beth's and Mike's questions at that forum remain unanswered, the PR Guy is looking more like The PR Nightmare Guy. (And charging SEMPO 4K a month? WOW)


Sad but true.

[polarmate]

I wonder why was this not disclosed to any member at the SEMPO meeting in San Jose? Maybe they were planning to disclose it at the next meeting ;)

[bethabernathy]

Interesting the way the money has been dispersed in the 1st year.

[orion]

Here is a story about the Public Interest Watch Group (PIW)
(http://www.publicinterestwatch.org)

They are calling for an IRS Investigation of Top Environmental Charities

http://biz.yahoo.com/prnews/040820/dcf015_1.html

The pr says

"About Public Interest Watch

PIW was established to shine a spotlight on the activities and finances of nonprofit organizations, exposing specific instances of misconduct. PIW also plans to advocate for legislative reforms that would require improved financial disclosure by such groups. PIW is a 501(c) 4 non-profit organization. Donations to PIW are not tax-deductible."

Interesting!

Orion

[bethabernathy]

I have re-thought it. After going through the tax law, I think they need a Tax Lawyer and a non-profit lawyer. As I suggested to them last week, they should consider re-filing as a for-profit corp.

Give Mr. Blair a call. He's quite knowledgeable.

[Jill Whalen]

For what it's worth, Georgina Tweedie works for the Church of Scientology and attends many of the SES conferences. I would imagine she's gotten to know quite a few SEMs there and possibly some of the board members. I've met her myself, she's a very nice lady. (I think she's on my Orkut friend's list ;) )

That might explain the relationship a little bit. (Not defending the press releases nor do I know anything about them, but thought I might shed a little light.)

[bethabernathy]

Thank you Jill. It is difficult to get through this reasonably. Short of watching the advertising scheme for 1 year and thinking ... Time to go. Bottom line is that after all the talk I still think in order to believe in Sempo, I need response. It is part of PR.

[orion]

I'm happy to see Jill making a clear distinction between individuals, prs and actions. That kind of distinction (or discernibility, if you wish) is what we need to make here and in other threads at this forum. For that, I applaud Jill.

Personally, I have nothing against any religion or non-profit organization. Actually I believe that good, nice and bad, grumpy people can be found in any group or organization, whether these are religious, political or non-profits (eg., Mormons, Scientologists, Jehova's Witnesses, Catholics, Muslims, Democrats, Republicans, Non-profits from planetoid Xenutum, SEMPO, SEOs from Hell, etc.). I have meet friendly, good, honest Mormons, Scientologists, Jehova's Witnesses, Catholics, etc. That's not the point here.

As such, particular individuals -SEMPO members or not- as their personal or religious "credos" are irrelevant to the main topic of this thread. We need to differentiate between individuals and organizations. No one is suggesting a witch hunt or anything like that.

Here is the deal. What is incomprehensible is that SEMPO let someone promotes SEMPO and the Church of Scientology with two different versions of the same press release. The stupid notion, that there is nothing wrong with double advertising both SEMPO and member businesses or institutional members (Scientology in this case) seems to be inherent within the stubborn board of SEMPO and their inner circle.

This pedantic and stupid attitude ("tomorrow, business as usual") is the main issue, here. It is the one is dragging the most the several threads we have here about SEMPO. Just take a look at those threads outthere. In this particular thread, the religious issues are just a side show of the story, but equally important and with serious implications for the future of SEMPO. In the particular case of Scientology, news and stories are outthere that suggest they are not strangers to Google, DMOZ, the State of California and others.

Last, but not least, from the SEMPO members list one can see that Scientology is the only church listed as a SEMPO member. Since they have opened that door, I would think SEMPO is open to accept other churches or religious institutions looking for SE visibility (Muslim Congregations, the Mormon Church, Jewish Synagogues, Catholics, the Aryan Church, Church of Chickens, Church Neo Nazi Catholics, The Church of the Blue Clown, etc) or face a discrimination lawsuit.

Sorry I have to sound a bit harsh (or ridiculous, I must conceed). But is part of my frustration with this little experiment called SEMPO and their tragicomedy of pr nightmares (with such prs, who need enemies?). Maybe, "no breathing room" or diluting posts but more incisive posts is what SEMPO needs to react on time -without getting personal. Or maybe we need someone like Mike, Doug and others willing to put together a real organization. If such, you can count on me.

Just my honest two cents given in good faith.


Orion

[bethabernathy]

Here's the page:

http://www.irs.gov/pub/irs-pdf/p557.pdf

that states that a 501(a) is the governing body for a 501(c). See page 2.

"Organizations that are exempt under section 501(a) of the Code include those organizations described in section 501(c)."

jump to page 48 and it begins about the 501(c)(6). Then go to page 49 and it specifically talks about ADVERTISING:

"Improvement of business conditions
Generally, this must be shown to be the purpose of the organization. This is not established by evidence of particular services that provide a convenience or economy to individual members in their businesses, such as advertising that carries the names of members ... assigning exclusive franchise areas..."

[bethabernathy]

http://www.irs.gov/charities/charitable/article/0,,id=123301,00.html

Rebuttable Presumption
If an organization meets the following three requirements, payments it makes to a disqualified person under a compensation arrangement are presumed to be reasonable ... The three requirements for establishing the rebuttable presumption are:

1. The compensation arrangement must be approved in advance by an authorized body of the applicable tax-exempt organization, which is composed of individuals who do not have a conflict of interest concerning the transaction,

2. Prior to making its determination, the authorized body obtained and relied upon appropriate data as to comparability, and

3. The authorized body adequately and timely documented the basis for its determination concurrently with making that determination.

The documentation of the authorized body should include the terms of the transaction and the date of its approval, the members of the authorized body present during the debate and vote on the transaction, the comparability data obtained and relied upon, the actions of any members of the authorized body having a conflict of interest, and documentation of the basis for the determination.

The Internal Revenue Service may refute the presumption of reasonableness only if it develops sufficient contrary evidence to rebut the probative value of the comparability data relied upon by the authorized body.

If an organization does not satisfy the requirements of the rebuttable presumption, a facts and circumstances approach will be followed.

[I, Brian]

I'd be more than happy to bash religion, politics and belief systems that I disagree with in the appropriate forum. But this isn't it, IMO.

Ian I think the concern is one of not seeing where the interests are actually differentiated.

The idea of being associated with scientology is extremely dangerous in Public Relations terms. Not least because if SEMPO is seen to be nothing more than a cash cow for that organisation (or any other) - then SEMPO has no fighting chance of gaining credibility, and all in an environment already highly critical of it's current actions.

SEMPO already needs to satisfactorily address the perception of it being a self-serving clique, and being connected with the promotion of Scientology is highly damaging.

[bethabernathy]

The Church of Scientology is listed as a "Contributor" on Sempo's site. That would mean they donated at least $800, possibly more. The editorial (as they categorize it) is currently dated 7/26/04. Was the editorial reviewed prior to posting it or was it posted because the contribution was large enough to let it in?

[bethabernathy]

Anyway, here is a good one. At the Sempo join page:

http://www.sempo.org/sempo-membership-information.php

4 rows down, they offer "ADVERTISING" to Sempo circle members"

http://www.integratedresourcemgmt.com/images/sempo-advertising.gif

If this picture is too big let me know.

[bethabernathy]

Hi There - On 7/29/04 I faxed a request to Sempo to provide me with a copy of their annual report. It is their legal requirement to provide that to me within 30 days. That 30 days has passed. The IRS states that if they don't comply with requests for documentation within 30 days, they will be penalized $20.00 per day until the paperwork is received.

From what I have read, this 30 day timeline also includes requests for By-Laws etc. It is my understanding that you do not have to appear, in person, at their office to make these requests.

I made a request to Sempo via email to provide me with a copy of their By-Laws on 8/3/04. The 30 days has not passed yet for them to produce these, but will in a couple of days.

Here's the law:

http://www.irs.gov/publications/p557/ch02.html#d0e2343

(go to the section entitled "Penalties"):

"Penalties. The penalty for failure to allow public inspection of annual returns is $20 for each day the failure continues. The maximum penalty on all persons for failures involving any one return is $10,000.

The penalty for failure to allow public inspection of exemption applications is $20 for each day the failure continues.

The penalty for willful failure to allow public inspection of a return or exemption application is $5,000 for each return or application. The penalty also applies to a willful failure to provide copies.

The penalty for failure to allow public inspection of a political organization's section 527 notice (Form 8871) is $20 for each day the failure continues.

The penalty for failure to allow public inspection of a section 527 organization's contributions and expenditures report (Form 8872) is $20 for each day the failure continues. The maximum penalty on all persons for failures involving any one report is $10,000. "

[Jill Whalen]

Ian McAnerin was the attorney who did the preliminary review for SEMPO, and he has allowed me to post some info on that at my forum.

SEMPO's Preliminary Legal Review (http://www.highrankings.com/forum/index.php?act=ST&f=43&t=9146)

[bethabernathy]

I get Ian's post. Makes good sense. Is he willing to answer additional questions or is that it? Happy Labor Day in Advance. :)

[mcanerin]

I can answer questions related to my duties that are not in conflict with my duties to my client. In short, I can clarify things I said, but I can't speak *for* SEMPO. Keep in mind that SEMPO doesn't want to use this forum as a method of communicating to members, and rightfully so, in my opinion. So pretty much anything I say would be unofficial in nature, unless specified otherwise.

Be aware that my answer in advance to some questions will be "that's up to their current lawyers/BOD to answer." I'm not in a decision making position in SEMPO and all I can do is make recommendations to the best of my abilities.

I know that sounds like I'm planning on being unhelpful, but I'm honestly not the right guy to answer many of the questions here - I've only been involved with SEMPO for about a month or so, and much of what I learned during that period is covered by my legal confidentiality duty to my client. I trust everyone understands.

Ian McAnerin

[bethabernathy]

O.K. So can you tell me why Sempo's Executive Administrator faxed me a letter indicating that they would not produce their Public Record By-Laws unless I provide them with a reason as to why I would like to review them. Is it your understanding that their whole application for tax exemption (which includes By-Laws) is public record and to be produced within 30 days to anyone who makes a request? If you can't answer I understand. :)

[steve sardell]

Hey Ian,

I know you are in a tenous position, and I do not want to open more cans of worms. But, (oh that magic word) are you able to clarify the *reviewer* who changed the initial registration from a (3) to a (6)? By clarification, I am meaning was this done by the IRS field agent or internally by SEMpo?

[mcanerin]

My understanding was that the forms were filled out as a 501 c 3 internally, using the equivelent of a standard incorporation kit (which is fine - this should not be rocket science). My understanding was that this was the recommended type by a member (not Barb) who had done incorporations before. The kit's forms default to a 3 (the most common type) and they simply chose the default paperwork. Normally not a problem.

The reviewer (quite correctly) decided that SEMPO really should be a 501 C 6 and altered the application documents to suit. For some reason (quite INcorrectly, IMO) this was not communicated properly to SEMPO. The reviewer apparently did not make any changes to things such as bylaws, etc at the time.

So SEMPO was incorporated as a 6, but thought that it was a 3 for some time, hence the original conflicting statements. When everything went through, they began to operate as planned without being informed as to the change in status. It is clear to me from my discussions that this initial misstep was entirely inadvertant and performed in good faith.

The good news is that it's entirely fixable. The worst case practical scenario would be that they would have to pay taxes, just like everyone else. The fines and penalties associated with failure to comply with the rules are usually only used for organisations that try to use these types of incorporations as covers for tax fraud, which is clearly not the case here.

I don't believe the worst case scenario will even be an issue - as long as everything is fixed and the appropriate disclosures and paperwork filed, there should be no problems (though once again, this is now the job of the new firm). They did the right thing, IMO, of contacting legal counsel immediately upon learning there was an issue, and I can tell you they have been extremely supportive and indicated at every step of the way a strong desire to fix this up and to do it properly.

This does not mean it is not serious and needs to be reviewed, but the sky is not falling. :)

As for requesting the documents, I strongly urge people at this point to realize that you are probably NOT entitled to the wrong documents - so if the documents filed need to be revised (this is up to the current lawyers to decide, not me) then you should probably wait until the correct ones, reflecting the ACTUAL status of the corporation, are properly filed. Then look to your hearts content. It's not a coverup - there is enough confusion right now as it is - to actually release documents that may be misleading to the membership would be strongly inadvisable, and I've indicated such. The fact that this was in part due to the reviewer not communicating the change (which would have probably triggered a review of the paperwork at the time) does not change the fact that SEMPO would be the one disseminating the information, and therefore on the hook.

I've advised them to keep communications as small as possible in any area where the communication *could* change after review, even in very minor ways. The members are not entitled to information - they are entitled to *accurate* information. I trust the distinction is clear.

I believe the best response would be to wait until the proper paperwork is reviewed and filed (it would be announced), then, if it's not available on the website by then, request the information and begin watching the response time.

I would be very leary about handing out *any* information right now that was under review - to send out documents that that lawyers are still reviewing would be very inadvisable - I know I would not be happy if my client started handing out information I was supposed to be dealing with - to the point I'm not sure I would continue to work with them.

Please don't put them in a position where they have to balance a members (rightful) curiosity about the organisation against their obligations to the IRS and their lawyers - making sure the paperwork is in good shape and that *proper* disclosure is made to members.

The timetable at this point is being set mostly by the new firm, so I could not begin to guess - but I know for a fact that the BOD is working very hard, and that everything is fixable.

Remember this is not an official announcment, but rather my view and understanding on this.

[Jill Whalen]

Ian, I'm still not clear on who the "reviewer" is. Is this someone you have to hand the paperwork to? Someone within SEMPO? Someone else all together?

[mcanerin]

To be clear - a reviewer is someone at the IRS - not a SEMPO member. The government employee who gets the application, reviews it, and decides whether it is acceptable or not.

Ian

[Jill Whalen]

Ah, okay. That explains a lot. Weird that they didn't tell anyone at SEMPO though!

[steve sardell]

The reviewer (quite correctly) decided that SEMPO really should be a 501 C 6 and altered the application documents to suit. For some reason (quite INcorrectly, IMO) this was not communicated properly to SEMPO. The reviewer apparently did not make any changes to things such as bylaws, etc at the time

Thanks Ian,
This now makes more sense. Instead of denying the application, the reviewing agent accepted the application with a status modification. Normally a letter is then sent to the legal address informing the organization of the status change. It is then the organization's responsibility to modify its set up to become in compliance. If, infact, no letter had been sent then it is understandable SEMpo would not be aware of its status change until after the initial year ending filings.

Of course, you know as well as I,the proper expenditure for initial competent leagal advice would have saved some headaches and embarrassment. How does the cliche go? An ounce of prevention is worth a pound of cure! In this case, followed by, no use crying over the spilled milk.

[mcanerin]

That's right, Steve.

I got the impression that this kind of thing happens at the IRS on a fairly regular basis and it's usually left to the coorporation to fix the paperwork, which means that many non-profits (and normal corporations, for that matter) operate for a short while with the wrong paperwork (until they make the alterations) without any issues.

This is a bit longer than normal but still very fixable. The IRS was given all the pertinent information (full disclosure), it was just on the wrong form. They know what's going on, else they would not has authorized the 501 C 6 status.

I didn't personally talk to anyone who was aware last year that the status had changed and that changes to the paperwork were necessary - if a notice was sent, I don't know what happend to it, personally.

Moving forward, once SEMPO gets this straightened out, I imagine you can expect to see a lot more communication, since they will be allowed to do so without potential issues, and will have a clear framework to do it in.

Yours,

Ian

[bethabernathy]

Hi Ian -

Thank you for your posts. That clarifies the By-Laws issue for me. Although, remember what started this, it was the stipend. How it was not unilaterally approved and voted on. Then there was the board members self promotion. The By-Laws were just one aspect of confusion related to Sempo.

Then there is the membership hierarchy and enhanced advertising that is being offered to the circle members. This type of advertising does not benefit the community as a whole, it actually puts a smaller SEO at a disadvantage. From my research, it appears that any form of advertising for members can cause the IRS to deny a corporations tax exempt status. Can you make any comments on this?

Again, thank you for your posts. -Beth

[mcanerin]

Anything outside of the initial review is also outside of my ability to comment on, sorry. I do know that the BOD is very aware of the issues you refer to and intends to address them, but I understand they want to make certain that in the process of addressing one issue they do not create others, and are therefore waiting on many of them to get a legal blessing, so to speak.

The order will probably be:

1. Fix paperwork based on legal guidance
2. Create clear communication and other rules that are legally sound and well researched
3. Address the issues you refer to (among others) with those rules

At this point, unless there is a need to clarify something I have related (ie the confusion as to who the "reviewer" was) I'm going to have to refer other questions to people who are in a better position to respond. I have neither the authority or knowledge to answer questions regarding things that happened before I was asked to help.

Yours,

Ian

[bethabernathy]

But ... short of any Federal Tax law, if the board really were in it to be a Non-Profit Corporation to help the industry as a whole, THEY WOULD NOT BE PROVIDING ENHANCED ADVERTISING TO THOSE WHO PAY MORE FOR IT. This is a clear disadvantage to the smaller SEO/SEM. Why would you need legal advise on this if, in fact, your REAL GOAL is to promote the industry as a whole? The longer this advertising runs, the longer it is clear about what Sempo is really about. Certainly not the industry as a whole from what I can see. Would like feedback. :confused:

[bethabernathy]

Hi Ian - Can you tell me definatively if Sempo has formally retained a lawfirm? Thanks, Beth :)

[Jeremy_Goodrich]

I'm a bit confused - according to the location field, it says Ian (the lawyer who consulted recently a bit with SEMPO...) is located in Canada.

That doesn't preclude him from knowing a lot about legal issues, but it makes more sense to get a lawyer familiar with the laws of
1) federal US
2) non profit stuff and
3) perhaps the states that SEMPO is involved in (eg delaware & california, I think)

I find it hard to believe that if examined in detail, the links on the SEMPO website could be construed as anything *except* advertising - especially since the link structure, robots meta tags, etc - all point at being advertising.

It's Professional SEOs - or at least professional SEM's who should know a fair bit about how SEO works - that founded this org - so why oh why do they need to retain a law firm to figure out how SEO works...eg, if what they're doing is advertising for their members, or not?

Anybody calling themselves an SEO could tell you what those links are for! Change them to a redirect, javascript them, etc - and you eliminate the advertising end of things. This hasn't been done, imho, because the goal remains the same - to promote those who pay more $$$.

When's the train wreck happen, I wonder, that we all see coming...?