And that Oregon funding article isn't the first about an NFB shady deal to
be posted to this list. Remember this one?


Diebold and the Disabled

By Kim Zetter
Wired News
October 12, 2004
Story location:
http://www.wired.com/news/evote/0,2645,65292,00.html


   In the controversy over electronic voting machines, activists
for disability groups have been at the forefront of campaigns to
convince counties and states to purchase touch-screen voting
systems. They've attested to the security and accuracy of the
machines, going so far as to sue counties and states that don't
purchase the machines.

   And they've opposed e-voting machines that produce a paper
trail.

   The disability groups say they're just fighting for the right
to use accessible machines, because touch-screen voting systems
are the only ones that let them cast ballots without assistance.

   But other voting activists say disability groups have become
shills for the voting companies, pressuring counties to buy
insecure voting systems over other options.

   "I feel they're using blind voters to pursue an agenda that's
actually not in the interest of any voters," said Maryland voting
activist Linda Schade of TrueVoteMD. " Because these machines
don't discriminate when they lose votes, they can lose or
inaccurately record the votes of blind voters as well as seeing
voters."

   Financial connections and a partnership between one disability
group and Diebold Election Systems' parent company also raise
questions about motives and conflicts of interest.

   In May 2000, Diebold, a maker of automated teller machines,
agreed to pay the National Federation of the Blind $1 million to
help build a new research and training institute. The money was
offered in exchange for the NFB agreeing to drop a lawsuit it
filed against Diebold for installing ATMs inaccessible to blind
customers, when technology for making the machines accessible was
available. The NFB also formed a partnership with Diebold to help
the company develop and market accessible ATM machines -- an
agreement that later extended to the company's touch-screen
voting systems.

   The NFB, which calls itself "the voice of the nation's blind,"
then used the Americans with Disabilities Act to file lawsuits
against banks not using accessible ATMs. It later sued two states
to force them to upgrade or obtain e-voting machines -- while a
debate about the security and reliability of such systems was
growing nationwide.

   The NFB and its state affiliates have also advised states and
the federal government on accessible voting issues and pushed for
legislation regarding such systems without disclosing the group's
relationship to Diebold. James Gashel, the NFB's lobbyist who
testified on e-voting in congressional hearings in 2001, said
most of the testimony and advising were done in 2000 and 2001,
before Diebold entered the domestic voting business in 2002.

   "I have not said boo to the Congress about voting since March
2001," he said. But even if he were to testify before Congress
today, he said, he would not disclose the information unless
asked because he doesn't think the issues are related.

   "The resolution of a lawsuit involving ATMs (doesn't) have a
thing to do with voting," Gashel said. "Voting and ATMs are two
different kinds of technology." He also said the NFB's
relationship with Diebold isn't a secret -- both entities in 2000
released announcements about the grant, which are posted on their
websites.

   But Alex Knott, political editor at the Center for Public
Integrity, said even if the information is available publicly,
the NFB should disclose it when speaking to states or federal
agencies.

   "It's important to note that his organization shares an
affiliation with a company that has something to gain (from
endorsements he makes)," Knott said. "If you're talking about a
relevant topic and are receiving money from a company like that,
it's important for you to be transparent."

   Gary Ruskin of the Congressional Accountability Project
agrees. "This is basic information that bears on his point of
view and the value of his testimony, and the public needs to know
of any actual or potential conflicts of interest when he speaks
to Congress or to states," Ruskin said.

   By lobbying the government on legislation that would benefit
Diebold while taking money from the company and helping to market
Diebold products, Ruskin says the NFB risks the appearance that
the NFB and its endorsement are "for sale."

   "A million dollars is a lot of money for a nonprofit to
receive," Ruskin said. "Anyone in Washington knows that money
often comes with strings attached. He who pays the piper calls
the tune. That's what Washington lobbying and gift giving is all
about."

   The NFB isn't the only disability group to receive money from
voting companies. The government lobbyist for the American
Association of People with Disabilities, who has traveled around
the country testifying on behalf of touch-screen voting,
acknowledged this year that his organization received at least
$26,000 from voting companies, but only after first denying it.

   When asked in April, Jim Dickson, vice president of government
affairs for the AAPD, told Wired News his organization had never
received money from voting companies. But in June, he told The
New York Times the organization had gotten money.

   Dickson didn't disclose the gifts at hearings in California
this year, where he tried to convince officials not to decertify
touch-screen voting machines made by Diebold and other companies.
Nor did he disclose the information in Washington in May when he
participated in hearings with the federal Election Assistance
Commission.

   "He comes to states where he's not even registered to vote and
he gives this very heartfelt testimony about how meaningful it is
to vote independently," said Natalie Wormeli, an attorney in
California who is blind. "But in his testimony he never says he's
a professional spokesperson, he never says he's not a registered
voter in the state, and he never discloses how he's getting
paid."

   Dickson did not respond to repeated calls for comment.

   The NFB's willingness to align itself with Diebold seems
particularly strange in light of its own policy, expressed by
lobbyist James Gashel before the Committee on Labor and Human
Resources. Gashel told the committee that whenever the NFB tested
technologies to evaluate their accessibility, it always purchased
the equipment, rather than accept it gratis from vendors and risk
the appearance of impropriety.

   "The challenging word is 'buy' -- not 'accept' or 'receive,'
but 'buy,'" Gashel said. "We find the money to support this
effort because we want to be completely independent from
manufacturers or marketing interests. This is essential if the
advice we give or reports we publish are to be regarded as
credible."

   The issue of impropriety becomes especially sensitive where
lawsuits are involved.

   In March 2001, the president of the Vermont affiliate of the
NFB initiated a lawsuit against Banknorth, Chittenden Bank,
Northfield Savings Bank and the Vermont State Employees Credit
Union. A year later Banknorth settled and agreed to install
accessible ATMs at 470 locations in six states. Other banks
settled as well. .

   But when Chittenden announced it would spend $250,000 over
five years to modify or replace 35 of its 68 ATMs, the Vermont
Free Press reported that "the NFB said that was not enough, and
continues to push for more talking ATMs, faster."

   Activists said the goal was to increase Diebold's revenue.

   The company's domestic revenue did increase by about 10
percent, or $2 million, the first year after its legal settlement
with the NFB. But the revenue came mostly from services rather
than the sale of products, which actually dropped during that
period. And domestic revenue the next year dropped to less than a
million.

   "It's a decent increase," Diebold spokesman Michael Jacobsen
said of the initial revenue boost. "But that came from a number
of things. We haven't seen anything in terms of lawsuits against
our bank customers that had an appreciable impact on our
business." If banks upgraded their products to make them
accessible (Diebold and other ATM makers have upgrading kits for
this), it would cost only $1,000 to $2,000 per machine, as
opposed to $40,000 for a new ATM.

   ATM lawsuits aren't the only concerns, however. The NFB and
AAPD have turned their attention to voting lawsuits that promise
to benefit vendors as much as voters with disabilities.

   The NFB, AAPD and individuals with disabilities have filed
half a dozen lawsuits in California, Washington, D.C., Florida
and Philadelphia to force counties and states to purchase
touch-screen voting machines. In Ohio, the NFB filed suit after
Ohio Secretary of State Kenneth Blackwell decided to delay the
purchase of touch-screen machines over concerns that the systems
were insecure.

   In 2002, five visually impaired voters sued Maryland to force
the state to buy accessible voting machines more quickly than it
thought wise, and the NFB joined the suit six months later.
Maryland now uses Diebold machines statewide, except in one
county. This year, the NFB switched sides to defend the Maryland
Board of Elections in a different suit filed by voting activists
who challenged the legality and integrity of the Diebold systems.

   Although in lawsuits the NFB has never specified which brand
of touch-screen machines states and counties should purchase, the
group has made no secret of its preference.

   In 2002, when Maryland's Board of Elections asked researchers
at the University of Maryland to conduct a usability study of the
Diebold system, the researchers reported that visually impaired
voters found the system "confusing and hard to navigate." The
board took issue with the report and defended the Diebold system
saying it "is the system preferred by the National Federation of
the Blind."

   In September 2003, after computer scientists released reports
showing that the Diebold touch-screen system was flawed, NFB
President Marc Maurer said the NFB had "complete confidence in
the proliferation and capacity of electronic voting systems and
in Diebold Election Systems, in particular, to operate at an
optimal level of security, accuracy and accessibility that
protects the integrity of elections."

   Doug Jones, a University of Iowa professor of computer science
and a member of that state's board of examiners for voting
systems, thought it was a strange comment to make for a group
that knows nothing about computer programming.

   "Why in the world would an organization like the NFB, that has
no expertise in computer security or reliability, say something
like that?" Jones said.

   An NFB member wondered the same thing when he posted to an NFB
e-mail list last September expressing concern about a conflict of
interest "if NFB seems to only single out one company, and one
that has contributed substantially to NFB coffers."

   California attorney Wormeli is more concerned that by using
the court system to force counties and states to purchase voting
machines before they can be made more secure, they're putting the
democracy at risk.

   "It's the wrong approach at the wrong time," Wormeli said. "By
letting them be sponsored by these corporations who only want to
sell machines, they don't necessarily look out for our interest,
which is to make sure our votes are getting counted properly."

   As Wormeli told a hearing in California earlier this year, "We
have time to let the technology that's being perfected find its
way to California. I refuse to be an impatient passenger in the
back of the car saying, 'When are we going to get there?' I know
we're going to get there, but I want to get there safely."

Laila Weir contributed to this report.


At 08:11 PM 6/20/05 -0500, Kelly Pierce wrote:
>Eighty cents of nearly every dollar raised in Oregon by the national
>Federation of the blind was shipped out of state to one of its
>nationally-based businesses.  Of the remaining funds, some obviously was
>used for administrative purposes, leaving little on the table for the blind
>of Oregon.  Money raised by Vicug's stays in the community to be used to aid
>blind people rather than line the pockets of wealthy blind business people
>or blind non-profit bureaucrats.  vicug's are transparent in their
>activities and finances and welcome the participation of community members.
>The article below from Sunday's Baltimore Sun describes what apparently is
>commonplace at America's largest organization of blind people.
>
>Kelly
>
>
>The Baltimore Sun
>
>June 19,  2005
>
>
>    business
>
>A warning to charitable donors and a case for tougher disclosure laws on
>nonprofits
>
>by: Jay Hancock
>
>----------------------------------------------------------------------------
>----
>
>    RIIIING. IT'S the National Federation of the Blind of Oregon, calling
>across that state. They want money "to help the blind of the area,"
>according to a fund-raising script from 2003.
>
>    "This year we are working to make more reading materials accessible to
>the blind and to provide more help to blind seniors and blind children,"
>says the telemarketer. "We were hoping you could help us with a donation
>of, say, $25 or so?"
>
>    Helping blind children. What a great cause. You write the check.
>("That would be wonderful!" the telemarketer is supposed to say.) Too bad
>the script left out several pertinent details, the main one being that
>most of your $25 would get nowhere near blind children or any other blind
>people in Oregon.
>
>    Beware, philanthropists. Despite progress in recent years, information
>on where charity donations go is still obscure and often disturbing when
>it emerges, even when the practices appear completely legal.
>
>    An examination of the Baltimore-based National Federation of the Blind
>and its affiliates offers another case for better disclosure laws and, in
>their absence, more openness by nonprofits.
>
>    Of a $25, phone-solicited gift to the National Federation of the Blind
>of Oregon, $15 - 60 percent - would be taken off the top by a for-profit
>fund-raising company called CMS Inc., according to a contract on file with
>Oregon's Department of Justice, one of the few state regulators to police
>nonprofits. The contract is dated 2002, but other documents furnished by
>the regulator indicate that CMS continues to work for NFB Oregon.
>
>    The president of CMS for many years has been Ramona Walhof, a longtime
>director of one nonprofit, American Action Fund for Blind Children and
>Adults, which shares NFB's Baltimore headquarters and has NFB president
>Marc Maurer as its top-paid employee, and another, the Jacobus tenBroek
>Memorial Fund, which owns the NFB headquarters building.
>
>    Taking that $15 cut leaves $10. Half of that would be sent to NFB
>headquarters in a big building in South Baltimore that NFB and affiliates
>recently expanded at a cost of $19.5 million.
>
>    The other $5 would arrive at NFB Oregon, which provides scholarships
>for blind students, lobbies on issues important to the blind and does
>other good work. But $5 is only a fifth of the $25 donation.
>
>    In January, NFB Oregon agreed with the state Department of Justice to
>correct alleged violations that included failure to tell donors that some
>funds were sent to Baltimore and misrepresenting big fund-raising
>commissions as "community outreach" expenses benefiting the blind. In
>correcting the deficiencies, NFB Oregon denied "liability of any wrongful
>acts," according to the settlement.
>
>    Back in Baltimore, legal records and NFB documents show, a house owned
>by Mary Ellen Jernigan, NFB's executive director of operations and the
>widow of late NFB President Kenneth Jernigan, was bought in 2003 for
>$490,000 by the Action Fund. . For 2005 the Maryland Department of
>Assessments and Taxation assessed the house, in Baltimore's Irvington
>section, at $154,040.
>
>    Despite the fact that charity business with insiders often raises
>questions about whether the nonprofit is getting the best deal with donor
>money, the house's purchase was not disclosed in IRS filings by either the
>Action Fund or NFB.
>
>    Nor was the fact that Walhof, a director of both the Action Fund and
>the tenBroek Fund, has been doing big business as a fund-raiser with an
>NFB state affiliate. NFB of Oregon paid $176,836 to CMS in 2002.
>
>    Still glad you wrote the check? NFB says you should be.
>
>    NFB of Oregon President Carla McQuillan did not return my phone call.
>
>    But in its battle with the Oregon Department of Justice, the nonprofit
>contended that the phone solicitations were "community outreach" programs
>worth the 60 percent commission because the script had the telemarketer
>say, "Do you know anyone who is losing vision or blind and may need our
>help?" NFB Oregon contended the calls helped it identify frequently
>isolated blind people.
>
>    "There are many number of people going blind who simply don't know
>about the National Federation of the Blind or the National Federation of
>the Blind of Oregon," said Andrew Freeman, a Baltimore attorney who
>represented NFB Oregon in its dealings with regulators. The calls did
>identify blind people, he said, although he didn't know how many. "From
>our point of view it is outreach, but it is also fund-raising."
>
>    Many calls, however, were directed to people who had a history of
>giving to NFB Oregon, a 2004 letter from CMS to the nonprofit shows. And
>according to the American Institute of Certified Public Accountants,
>fund-raiser compensation hinging on percentages of contributions must be
>reported by nonprofits as a fund-raising expense, no matter what other
>service the fund-raiser may perform.
>
>    Of the 60 percent commissions, Freeman said that "my understanding is
>that it's a market rate" and that because community outreach occurred CMS
>did more than raise money. Regulators' criticism of NFB Oregon for not
>telling donors that funds went to Baltimore was "nitpicking," he said,
>because NFB national serves blind people across the country, including
>those of Oregon.
>
>    CMS head Walhof declined to comment. James Gashel, executive director
>for strategic initiatives for the national NFB, says that he is unfamiliar
>with the Oregon details but that as a blind person Walhof understands the
>needs of NFB affiliates, "is doing a credible job" and "is not living a
>lavish lifestyle." (Does the National Federation of the Blind of Maryland
>hire fund-raisers who take similar percentages? President Sharon Maneki
>says NFB Maryland sometimes uses a professional fund-raiser for a small
>part of its revenue and like other affiliates shares half of what's raised
>with national headquarters. She declined to say what percentage the
>fund-raiser is paid, saying it's proprietary, and there is no Maryland or
>federal law that says she has to.)
>
>    Gashel, who is an Action Fund director in addition to working for NFB,
>also defended the fund's purchase of the Jernigan house. First, $232,696
>of the $490,000 purchase price was for rare, vintage Braille books that
>came with the property, Gashel said. He showed me the books and supporting
>appraisal. Second, he said, the house dates to the 19th century, is much
>bigger and older than neighboring rowhouses and is surely worth $300,000
>or so - again producing an appraisal.
>
>    He's probably right. It's a dignified old mansion, with wide-plank
>floors, nine fireplaces and 12-foot ceilings with plaster rosettes.
>
>    And the house is historic, Gashel said, because it was lived in for
>years by Jernigan, a leading figure in the civil rights struggle of the
>blind by virtue of his longtime NFB presidency. Mrs. Jernigan has moved
>and the house is used by NFB for meetings, parties and quiet work by
>executives, Gashel said.
>
>    "Dr. Jernigan was in effect our Martin Luther King," added Gashel, who
>like all top NFB officials is blind. The Irvington home and the expensive
>NFB headquarters are held in trust for all blind people, and their upscale
>appeal "tells us that we can be first-class citizens," he added. "Most
>blind people don't have that."
>
>    OK, but how about a little more voluntary disclosure and less of what
>looks like somersaults to avoid disclosure requirements?
>
>    Other than perhaps the NFB Oregon issues, alleged by the state
>Department of Justice to constitute "fraudulent and dishonest conduct,"
>all of what is described in this column appears to be within the laws
>governing nonprofits. Because the Jernigan house was bought with Action
>Fund money and not NFB money, and by waiting until five years after
>Kenneth Jernigan's 1998 death to make the purchase, the NFB could sidestep
>requirements to list the purchase on IRS forms asking about insider
>transactions.
>
>    There is little legal limit on what fund-raisers can make; as long as
>some money trickles into a nonprofit, it's OK. Because Walhof is a
>director of NFB siblings tenBroek and Action funds and not NFB itself,
>there appears to be no requirement by NFB to report her work for NFB
>Oregon as an insider transaction on its IRS forms, says Daniel Kurtz, a
>New York lawyer specializing in nonprofit law and a former charity
>regulator.
>
>    And in a landmark case in the 1980s that involved the National
>Federation of the Blind itself, the U.S. Supreme Court ruled that free
>speech rights prohibit regulators from interfering much with nonprofits'
>solicitation pitches. Neither the Oregon Department of Justice nor any
>other regulator can require fund-raisers to disclose fees when they're
>asking for money.
>
>    But is that the best we should expect from a large, nationally
>respected charity and its affiliates?
>
>    NFB does many worthy deeds, furnishing meaning and resources to many
>of the nation's blind. But the disclosure trigger in any charitable
>transaction should be: Is this information that a potential donor and the
>public would want to know? The answer for the items mentioned here, I
>believe, is yes.
>
>    It shouldn't take a snoopy columnist or Oregon regulators, however, to
>find out. Congress ought to make charities disclose, say, a fraction of
>the information required from a mutual fund. And charities should try hard
>to avoid even appearances of conflicts of interest and always err in the
>direction of letting in too much sunshine rather than too little.
>
>    That really would be wonderful. Meanwhile, caveat donor.
>
>
>VICUG-L is the Visually Impaired Computer User Group List.
>To join or leave the list, send a message to
>[log in to unmask]  In the body of the message, simply type
>"subscribe vicug-l" or "unsubscribe vicug-l" without the quotations.
> VICUG-L is archived on the World Wide Web at
>http://maelstrom.stjohns.edu/archives/vicug-l.html
>
>


VICUG-L is the Visually Impaired Computer User Group List.
To join or leave the list, send a message to
[log in to unmask]  In the body of the message, simply type
"subscribe vicug-l" or "unsubscribe vicug-l" without the quotations.
 VICUG-L is archived on the World Wide Web at
http://maelstrom.stjohns.edu/archives/vicug-l.html