The Supervisory Committee's Statement on Appeals Relating to the IFCSS Financial Inspection

July 18th, 1994

From December of 1993 to January of 1994, four appeals were brought to the attention of the Supervisory Committee (SVC) of the IFCSS. On December 6, 1993, Mr. Jinghong Li of University of Dayton charged the Co-Chairman of the 5th term Council, Mr. Yungui Ding of Iowa State University, for announcing the organization of a task force to expand the implementation of Council Resolution 5011 (CR5011), without the Council's approval or even knowledge. Second, on December 9, 1993, the Headquarters (HQ) of the IFCSS, alleged that Mr. Hongguang Zhou of Emory University, a 5th term Council member from Southeastern District, involved an unauthorized person in the IFCSS' financial affairs, and 'lied' to the HQ about this fact to the HQ staff. On January 9, 1994, Mr. Jinghong Li challenged the legitimacy and truthfulness of an open letter released by the Finance Committee (FC) of the Council. Finally, on January 11, 1994, the Finance Committee, represented by Mr. Hongguang Zhou, accused Mr. Changsheng Lin, the 5th term President of the IFCSS, and the HQ for refusing to cooperate with the Council Inspection Team (IT) in implementing CR5011.

All four appeals centered around the implementation of CR5011, which represents the Council's effort to improve the financial management of the IFCSS. In this statement, the SVC presents to you, the constituents of the IFCSS and the concerned public, the results of our investigation and our verdicts on the four cases. During the process of our investigation, the events were continuously evolving. We have discovered many incidents in which the rules were violated. However, these incidents were not mentioned in any of the pending cases. As the branch entrusted to safeguard the Constitutions of the IFCSS and various established rules, it is the responsibility of the SVC to bring your attentions to these incidents. Although these incidents are not addressed in our verdict, they are discussed in a detailed investigation report at end of this document.

What we are going to demonstrate here is a complicated case, because this case is highly contested, also involving many people and incidents. This necessitated a lengthy investigation. To be responsible to our community and to the parties involved, we open to you the process of our investigation. In addition, to help put the related events into a historical perspective, and to demonstrate the effort by the SVC in reaching a fair and constructive viewpoint, the SVC takes the liberty to render a brief review of the history of the financial management of the IFCSS. We realize that such a review is beyond the four appeals per se, and is by no means an easy task. Yet in doing so the SVC hopes that all the concerned IFCSS members, particularly the involved parties in the four cases, can put behind what rather unfortunately happened, go beyond the differences we may have, and move forward to improve our Organization. Please bear in mind that we are all here for a common cause.

This document is organized as such: the results of our investigation is summarized in the first section; the verdicts regarding to the four pending cases are deliberated in the second section; the third section is the closing statement, in which some important issues beyond the specifics of the four cases are addressed in the context of the IFCSS operation and organization. The last two sections are a brief historical review of the IFCSS' financial management and a detailed account of the events of the financial inspection by the 5th term Council, which serve as supplements to the second and third sections.

The Investigation of the Supervisory Committee

In what follows, we shall give a summary of our investigation, providing the facts of some key events directly relating to the four appeals. A more detailed account of our investigation is presented at the end of this document.

Soon after the first appeal submitted to the SVC, We immediately started an investigation. On Jan. 7, 1994, the SVC sent out a questionnaire to all Council members. Up to now, eleven of the sixteen Council members have answered the questionnaire. Throughout the investigation, the SVC could never obtain a complete and updated directory of all Council members. The SVC sent several memos to the Council Chairman, Mr. Liqun Dong just for this purpose. The SVC contacted Mr. Cheng Liu, Mr. Bing Qi, Mr. Feng Zhang, and Mr. Hongguang Zhou via telephone, e-mail and personal contacts. They simply refused to cooperate with the SVC. Since we never got the address and phone numbers of Ms. Tong Shen, we delivered her a copy of the questionnaire during the working meeting held in D.C. this past February. So far, she has not responded.

Mr. Yungui Ding, the Co-Chairman of the Council, openly protested the investigation by the SVC. In a letter to the SVC dated Jan. 7, 1994, he expressed his view on how the SVC should conduct such investigation: "I think the SVC should judge whether the Council, Council members, or Council sub-committees are working along the line of the IFCSS Constitution, the by-law and/or regulations. ... I think the work for the SVC to do is to judge whether the Committee's inviting Bai Yan to assist its work on financial inspection and representing the Council in financial matters obeys the Council's rules and the IFCSS' other rules. SVC is IN NO POSITION to get into the micro-operation of the Council or its committee." Mr. Yungui Ding also provided the SVC "an unofficial record of whole issue". Based upon our investigation, though, what stated in the record is not entirely truthful and factual.

Rather alarmingly, the SVC has noticed that the statement from Mr. Liqun Dong, the Chairman of the Council, denies that he had any prior knowledge of Mr. Yan Bai's trip to D.C., as he openly stated on the second regular meeting of the Council. We have evidence to prove that not only he was fully aware of the trip before hand, but also he personally gave the approval for Mr. Yan Bai's trip. The SVC believes that Mr. Liqun Dong's false statement was to avoid his responsibility. In effect, Mr. Liqun Dong has committed a perjury by submitting a false statement to the SVC.

Because there were complains that the work by the inspection team was not up to the professional standards, the SVC consulted an independent accounting firm for advise. The SVC provided the firm with the following documents: the memo by the inspection team to Ms. Zuihong Jiang, Ms. Jiang's reply to the memo, and the opinion report prepared by Mr. Yan Bai. (All these materials were published by Chinese Community Forum (CCF) and other electronic news media in e-mail networks.) A senior accountant of the firm provided the SVC with the following written statement: "The following comments are based on the documents provided by Mr. Li-Shi Luo. Based upon the questions answered in the memo prepared by Ms. Z. Jiang, it may be concluded that those questions are irrelevant to auditing standards. The user (the IFCSS), therefore, may not accept the report issued by Mr. Bai Yan, who prepared the question list." It was also indicated to us that the opinion report by Mr. Yan Bai may seriously implicate the financial activities of the IFCSS. In other words, the wrongful allegations in Mr. Yan Bai's opinion report were serious enough to have warranted criminal investigations by the U. S. government on the IFCSS' financial management.

After the Finance Committee released the open letter which misinformed the public about "missing funds in the IFCSS financial records" on January 8, 1994, the SVC started its investigation on the incident. We found that the open letter was drafted and discussed among a small group of people including Council members: Mr. Yungui Ding, Mr. Liqun Dong, Mr. Cheng Liu, Mr. Bing Qi, Mr. Feng Zhang, Mr. Hongguang Zhou, and volunteers Mr. Yan Bai, and Mr. Ning Luo. The letter was released from a council archive account chair@ifcss.org by Mr. Hongguang Zhou without any prior approval from the Council, nor was the leadership of the Council informed.

Our investigation has showed that there was a consistent pattern of repetitively violating the rules by a small group of Council members. Those Council members who assisted the SVC in the investigation all stated in their written testimonies to the SVC that they did not know Mr. Yan Bai, nor his participation in the inspection team before his arrival in D.C. They also stated that they were not informed when Mr. Yungui Ding sent the memo to the HQ to confirm the Council's invitation to Mr. Yan Bai. None of the subsequently released documents which bear the name of the Council or its Committee, such as the announcement of forming a finance task force, the Opinion Report, seven more items for Treasurer's duties, and the open letter, had ever been discussed in the Council. The majority of the Council members did not have any knowledge of these documents before they were released to the public. It was also the same small group of the Council members, who repeatedly violated the rules, who refused to cooperate with the SVC. One could argue that any of the aforementioned misdemeanors could be caused by innocent neglegence or ignorance about the rules. However, after closely and carefully examining the case of whole and connecting an array of unusual events together, It became apparent to us that the rules were deliberately ignored and violated.

The Opinions of the Supervisory Committee

Quoted in the following are some relevant statutes from the Constitutions and Bylaws adopted on the 5th Congress of the IFCSS, and the Bylaws, Regulations and adopted Resolutions of the 5th term Council.

Article IV of the Bylaws of the Council: "The Council may, by resolution adopted by the Council, designate one or more committees, each committee to consist of two or more of the members of the Council, which, to the extent provided in the resolution, shall have and may exercise the powers of the Council in management of the business and affairs of the Council. The name, chairperson and members of each such committee may be determined from time to time by resolution adopted by the Council."

Article 11 of the IFCSS Financial Regulations: "The Treasurer must open all accounting books and other financial records to the Council or any authorized agent of the Council with no less than two representatives all financial records upon a written request from the Council or authorized Council Committee."

Resolution CR5011, in part: "The members of financial committee will go to HQ and give a clear report for last term and a list of the IFCSS equipments."

Based upon the aforementioned Bylaws and Resolutions and our investigation, the SVC concludes:

The announcement of organizing a task force in extension of the inspection team, by Mr. Yungui Ding, without the Council's knowledge and approval was inappropriate and illegitimate. Mr. Ding's self-appointment of the coordinator for the task force was illegitimate because it clearly violated the Bylaws of the Council and infringed the rights of other Council members.

The participation of Mr. Yan Bai in the inspection, without the Council's consent or even knowledge, was improper and illegitimate. The disclosure of the IFCSS financial records to Mr. Yan Bai without any consent from the Council and any prior written request to the Headquarters was inappropriate and illegitimate. Those involved Council members, Mr. Liqun Dong, Mr. Yungui Ding, Mr. Hongguang Zhou, Mr. Cheng Liu and Mr. Bing Qi should bear the fully responsibility. Mr. Hongguang Zhou's concealing the facts of involving unauthorized party in the financial inspection to the Headquarters constituted a serious violation to the rules and basic working ethics.

After Mr. Yan Bai's arrival in D.C., on Nov. 6, 1993, Mr. Yungui Ding sent a memo, co-signed by Mr. Liqun Dong, Mr. Yungui Ding and Mr. Hongguang Zhou, stating that ``... the Council has invited Mr. Bai Yan of Texas to join the team to provide some technical help to the financial matters". This statement misrepresented the Council, because neither had the Council been properly informed, nor had the Council reached a consensus regarding the matter. Mr. Yungui Ding's misdemeanor seriously violated the Council's Bylaws, infringed upon the rights and privileges of other Council members, and damaged the credibility of the Council as a whole.

Given the fact that the inspection team had significantly deviated from the tasks prescribed in CR5011, violated the rules and regulations, and gone beyond its authorized power, it was justified for the Headquarters to refuse to cooperate.

The release of the open letter by the Council Finance Committee constituted the most serious wrong-doing of all. The open letter violated the confidentiality agreement with IFCSS, and misled and misinformed the public with false statements. Furthermore, the members of the Finance Committee abused the privileges of an elected public officer entrusted by their constituents and the Council. The members had the privilege to access the financial records, and thus were responsible to present to the Council and the public an objective report. Instead, they released distorted and/or false information to the public. The SVC requests the Finance Committee and those involved Council members retract their statement, as it has been proven false. If not, IFCSS should seek proper legal actions for damage control and restoring IFCSS' credibility and reputation.

The means by which the open letter was released was also intolerable. The chair@ifcss.org account has traditionally been used for maintenance of the Council's e-mail network, etc. Only three persons have the password for the account: the Chairman, the Co-Chairman and the Secretary of the Council. However, the system record showed that it was Mr. Hongguang Zhou who entered the account and released the open letter. Again, this was done without the Council's consent. The Chairman, Mr. Liqun Dong, and the Secretary of the Council, Mr. Dong Chen, stated that they did not have any knowledge about the release of the Open Letter. This left the only other possibility: that Mr. Yunqui Ding somehow allowed access to the account by Mr. Hongguang Zhou. The SVC requests the Council to take decisive measures to prevent such incident to occur again in the future.

The opinion report released by the Finance Committee (prepared by Mr. Yan Bai) was not up to professional standards. It would not have been a serious problem had it been limited to internal circulation, and had the Finance Committee acted more responsibly. This opinion report should also be retracted, because it wrongfully and seriously implicated the financial activities of the IFCSS, and caused great damage to the IFCSS' reputation and credibility.

As to the question of openness of the Council working net, it is the opinion of the SVC that the Council has the right to decide such a matter. However, the SVC would also like to stress that traditionally the operation of the IFCSS has been open to the public and such traditions should be followed, and it should only be changed when necessary and justified, with due process.



Closing Statement



The SVC believes that the central issues surrounded by an array of events we observed in the inspection process are of vital importance to the IFCSS. Such issues, if left unresolved, would severely undermine the very existence of the IFCSS.

First of all, the financial operation of the IFCSS by the Headquarters lacks professionalism and has never been transparent enough to the general public. These are the very origin of the problem. The Headquarters was unwilling to cooperate with the Council and even tried to stop the inspection at the beginning. Mr. Changsheng Lin even went as far as to try to lobby some Council members unethically. Only after the extreme actions by some Council members, the Headquarters decided to hire professionals to complete the inspection. Although the reports from the professionals did prove that there had no funds missing from all the IFCSS' accounts, this fact does not imply in any way that the financial resources of the IFCSS had been well managed. On the contrary, evidence showed that the Headquarters did misuse some funds. For instance, 1) the Headquarters reimbursed Mr. Hongguang Zhou $226.24 for food in the first site inspection, despite that there was a specific restriction by a clause in the Resolution CR5011 stating that "Cost involved: travel and lodge expenses by the Finance Committee"; 2) the Headquarters reimbursed Mr. Hongguang Zhou $477.74 for a round trip air ticket and one week car rental for his less-than-two-hours visit to the Headquarters, despite that this trip had never been approved by the Council, and the Headquarters had been strongly opposing the trip before it took place; and 3) during the annual working meeting held in D.C. this February, Mr. Hongguang Zhou rented a van without any authorization from either the Council and the Headquarters, despite that there were strong opposition from the Council members and the Headquarters staff, and the usage of the van was not entirely for the meeting, the Headquarters fully reimbursed Mr. Hongguang Zhou for the rental van and accounted the cost in the Headquarters' account. These are simply unjustifiable, and indeed are one major reason that causes the distrust by the public and tarnishes the integrity of the IFCSS.

However, the problem goes way beyond the financial management of the HQ. The operation of the 5th term Council has demonstrated that the Council as a whole lacked responsibilities, professionalism and respect for rules. For instance, the way the Council managed its own budget was astonishing. Besides the above examples, the budget of the current term Council is over ten thousand dollars (which is significantly higher than any previous Council's budget), without any reasonable justification. The telephone bill of Mr. Hongguang Zhou alone for the first quarter of 1994 has exceeded one thousand dollars. The direct expenses for the inspection exceeded $1500.00, which still dud not include the $658.00 air fair for Mr. Yan Bai and the indirect cost such as telephone bills, etc. The estimated total cost certainly exceeds the fees ($2500.00 for the period of July 1992 -- December 1993) the IFCSS paid for the professional service, not mentioning the differences between the results and consequences. From the very beginning, the Council opposed to hiring professionals to conduct the inspection for various reasons, one of which being that the IFCSS can not afford such a professional inspection. It becomes very obvious why the Council failed to oversee the budgetary matter of the IFCSS, for it could not even responsibly oversee its own budget. Up until now, the Council has done nothing about the budgetary review, which is one of the most important task of the Finance Committee. In some point, the Council had the serious difficulty to conduct its e-mail meeting, simply because the quorum could not be reached.

Here we name those elected officers who are directly responsible and accountable for the aforementioned rule violations: Mr. Changsheng Lin, the President of the IFCSS, Mr. Liqun Dong, the Chairman of the Council, Mr. Yungui Ding, the Co-Chairman of the Council, Ms. Tong Shen, the Chairwomen of the Council's Committee for Financial Affairs, and Mr. Hongguang Zhou, the Council member from the Southeastern District. Council members Mr. Cheng Liu and Mr. Bing Qi are also responsible to certain extent because they were directly involved in the inspection in which the rules had violated. Mr. Feng Zhang, a Council member from the Midwest District, should also be named for not cooperating with the SVC in the process of investigation.

According to the existing Constitutions and Bylaws of the IFCSS, there is no disciplinary action we can take other than impeachment. We believe this is a shortcoming of our system. It is up to you, the Constituents of the IFCSS, to decide how to correct such defects in the upcoming Congress of the IFCSS.

There are some more profound problems with regard to the structure and operation of the IFCSS as was revealed by the financial inspection incident. Some have argued that the Council should be the 'boss' of the IFCSS, and the Headquarters should report to the Council. As was pointed out, that the Council has been registered as the Board of Directors in the IFCSS' Constitutions filed in the State of Maryland. If this was so, then the legitimacy and validity of all the decision made by the Congress of the IFCSS would simply vanish. We do realize that there are some discrepancies between the registered Constitutions (in English) and the ones adopted by the Congress (in Chinese). However, such imperfections in the system should not be used to overrule the power of the Congress, which we should all recognize. Nevertheless, the system certainly needs a thorough improvement and systematic overhaul. This has become an urgent issue which we cannot afford to delay any longer.

The lack of stability of the structure of the IFCSS and consistency in its policies have also plagued the IFCSS' short history. The vitality of the IFCSS are very much dependent upon the quality of its elected officers. Astoundingly, the IFCSS does not have an effective mechanism to safeguard itself if the elected officers violate the interests of the IFCSS. Such incidents have occurred in the past, as well as what we have observed in the events of the financial inspection. Part of the reason, we believe, lies in the fact that the IFCSS does not have a stable and purely operational organ, which are not affected by the annual election of the IFCSS officers. Such an organ should be responsible to oversee the daily operation and office management of the HQ. In other words, the management of the IFCSS' daily business needs to be professionalized. Our recommendation is to principally follow the Civil Service System adopted in many developed countries.

In summary, it is the opinion of the SVC that the aforementioned issues need immediate solutions: first, the imperfection in our system (the Constitutions, the Bylaws, and so on) needs to be mended; second, the stability of the IFCSS' internal structures and the consistency of the IFCSS' policies need to be drastically improved; and third, the operation of the IFCSS Headquarters needs to be professionalized to the commonly accepted standards.

We sincerely hope that we all will benefit from what have happened in the past. And through this learning process, the IFCSS shall become more and more mature. There is no doubt that we need an institution at the national level such as the IFCSS. the IFCSS should be an institution to embrace people with different view points and beliefs. It should not be a question that whether dissidence should be tolerated within the IFCSS. Rather, the question should be how dissidence can become constructive in our Institution. It is our vision that, in the future, the IFCSS will provide leadership in advocating the interests of Chinese community in USA, advancing the social status of ethnic Chinese in the political system of this country, and striving to improve the social environment of our home land in all possible aspects. To accomplish these goals, the IFCSS has to be well and strong. We must stop letting elected officers go free to do whatever they wish, regardless their campaign promises. We must constantly exert public scrutiny. Yet, we must also realize the imperfection of the system and seek the remedy for the shortcomings. The upcoming 6th Congress of the IFCSS provides an excellent opportunity. Most important of all, we, the constituents, must participate and involve in the operation of the IFCSS. Without our dedication and devotion, the IFCSS simply cannot exist.



A Brief History of the IFCSS Financial Management



The financial management of the IFCSS was not been the general public's focus of attention in its early stage of existence. During the first and the second terms, the scrutiny of the Headquarters' financial activity was a task of the SVC: a member of the SVC would visit the HQ quarterly to verify and inspect the financial records. There was no professional bookkeeper in the HQ. In the late part of the 2nd term, the SVC reached a consensus that business should be conducted in a more professional fashion, and declined to audit the bookkeeping of the HQ. Later, during the 3rd Congress, a resolution by Mr. Ning Luo of SUNY Buffalo and Mr. Li-Shi Luo of Los Alamos National Laboratory, both SVC members then, on the professionalization of the Headquarters' management was adopted. However, this resolution was not implemented in the 3rd term. Meanwhile, the 3rd term SVC formally abolished the role of the financial auditor. During the 3rd term, in the late part of 1991, the IRS notified the 3rd term President Mr. Haiqing Zhao, warning the HQ that the IFCSS had not filed tax returns for the previous two years (1989-1990). The 3rd term Council, under the leadership of Mr. Xun Ge of Texas A&M University, took immediate action when the problem was brought to the Council's attention. The Committee of Financial Affairs of the Council, led by Mr. Qiqi Dong of Occidental College, with two other members, Mr. Ping Lu of University of Miami and Mr. Shaojian Sun of SUNY Buffalo, was authorized to take charge of the matter. Among other achievements, the 3rd term Council completed filing of tax returns for 1989 and 1990, and established The Financial Regulations for the first time. The Regulations specifically states that the amendment of the Regulations needs two thirds of the Council's votes. The Regulations were amended slightly by the 5th term Council.

In compliance with the Regulations, the HQ hired a part-time bookkeeper, Ms. Zuihong Jiang, of Virginia Tech, during the 4th term. There was a dispute between the HQ and some Council members during the end of 1992 and the beginning of 1993. The Council members were not satisfied with the financial statement prepared by the Headquarters. The President of the IFCSS then, Mr. Xiao Geng, cooperated productively with the Council in seeking a solution. In the meantime, Ms. Tong Shen of Foothill College, a Council member from Pacific region, initiated to have a site inspection at the HQ. This initiative was never considered by the Council because most members of the Finance Committee and some other Council members felt that it was not necessary, the financial cost of the inspection was not justified, and that none of the Council members had the professional expertise. In the end, the Council approved the financial statement presented by the HQ. The format of the financial statement was set by the 3rd term Council Finance Committee, and has not been changed since.

Another noticeable event occurred in the 4th term attracted much of public and the Council's attention, that is, the dispute between the IFCSS and the May Fourth Foundation. This dispute was inherited from the beginning of the IFCSS. Under an agreement between the two organizations, the May Fourth Foundation had been raising part of its funds for the IFCSS for some designated purposes at the time. The Council of the IFCSS was designated to oversee the operation and to conduct annual inspections under the agreement, while the Board of Directors of the Foundation was to manage the funds. However, the Foundation refused to let the IFCSS take control of the part of fund which the IFCSS was entitled to. A team of the 4th term Council Members, led by Ms. Wenyan Li of Highland University, with Mr. Yuhe Liu of University of Maryland, and Mr. Jianxin Tang of Brandies University, was sent by the Council to review the May Fourth Foundation's financial records. After the review, the May Fourth Foundation issued a positive statement indicating that there were no problems in its financial records. However, the Council was not very satisfied with the result and did not issue any statement regarding this matter. Some Council members felt that the review had not been conducted in a professional manner, and there existed some technical problems in the financial records. Even the members of the team could not reach a consensus. Later, the 4th term Council adopted two resolutions which instructed the HQ to terminate the financial ties between the IFCSS and the May Forth Foundation, and to collect the IFCSS's funds from the Foundation. Up until today, the IFCSS still cannot gain the control of the funds it is entitled to. So far, this case is not resolved yet.

These incidents left a negative impression on the general public about the financial management of the IFCSS. It is fair to say that the financial management of the IFCSS had been far from satisfactory, and was certainly not up to the generally accepted standards in this country, although some positive progresses were made. However, we should also recognize that, starting with next to nothing and almost with no professional assistance, today the IFCSS has a fiscal budget close a half of million dollars and is providing various services to our community. The IFCSS has made unprecedented achievements in our community. The credits should go to our supporting public, those selfless volunteers, and our dedicated officers.



Financial Inspection by the 5th Term Council



The 5th term Council decided to improve the situation of financial management of the IFCSS. In the first half of the 1st regular meeting of the 5th term Council, the budget proposal by the HQ was not passed, because it was too crude. Then, the Chairwoman of the Finance Committee, Ms. Tong Shen, proposed to conduct a site inspection at the HQ (CP5020). The proposal was rejected because the cost of the inspection could not be appropriated and justified. In the meantime, the HQ vigorously lobbied the Council members not to vote for the proposal. There were allegations, that Mr. Changsheng Lin, the President of the IFCSS, was trying to dissuade some Council members from supporting the proposal unethically. The investigation of the SVC supports such allegation. The HQ's resistance and unwillingness to cooperate with the Council caused resentment and suspicion of some Council members. During the second half of the 1st regular meeting, the proposal CP5020 was brought on the floor again. In persuading the Council to pass the proposal, Ms. Tong Shen stated that the Council members were liable for misconduct of the HQ. In responding the opponents' suggestion to have inspection done by professionals, Ms. Tong Shen dismissed the idea, because, as she stated, first, the IFCSS could not afford the cost, second, if the inspection were to be conducted by professionals, the HQ office would have to be closed during the inspection, so that the daily operation of the IFCSS would have to be shut down. The Council member from the Southeastern District, Mr. Hongguang Zhou, further argued that if the HQ got any problems, then the hired professionals would immediately report the problems to the IRS, then all the Council members would be in trouble. Therefore, "it was better to let our own people do the inspection". The Council adopted the proposal CP5020 as the Resolution CR5011 with nine yes, four abstain and three absent, on August 21, 1993.

After the Council adopted CR5011, the Finance Committee started to communicate with the HQ, and to ask for financial documents. However, the HQ could never satisfy the seemingly endless demand from the Finance Committee. Lengthy arguments happened between the HQ and the Finance Committee, and the site inspection in the HQ was delayed. The HQ provided the Finance Committee general journal for every the IFCSS account for the period from July 1st, 1992 to Sept. 17, 1993, and bank statements for all accounts for the period from July 1992 to Sept. 1993, but declined to provide copies of original checks and invoices, out of concerns that some beneficiaries (e.g. families of some 6.4. victims) back in China maybe exposed to unnecessary danger. Finally, an inspection team arrived in D.C. on November 5th, 1993. The team included two Council members of the Finance Committee, Mr. Bing Qi and Mr. Hongguang Zhou, one other Council member from the Eastern District, Mr. Cheng Liu, and a volunteer Mr. Yan Bai of Texas Tech. However, neither the HQ nor the Council was informed of Mr. Yan Bai's participation before his arrival in D.C. It was further revealed that before his visit to D.C., Mr. Yan Bai had read all the financial records of the IFCSS which the Finance Committee had acquired from the HQ without the consent from either the Council or the HQ. However, when Mr. Xiaozhu Liu, the Executive Director of the HQ, asked him specifically over a telephone call just a few days before the team arrived in D.C., Mr. Hongguang Zhou simply concealed the facts and told Mr. Xiaozhu Liu that no one else but the involved members of the Council had access to the financial records of the IFCSS. We also found out that the decision to invite Mr. Yan Bai to come to D.C. was made in a hasty fashion, the air ticket for Mr. Yan Bai was purchased on Nov. 1st, only four days before the departure day (Nov. 5th), and the cost of the ticket was $654.00. Because the Council did not inform the HQ about Mr. Yan Bai's participation in the inspection in any form, and Mr. Yan Bai was unknown to the HQ officers, the HQ refused to let the inspection proceed, for the same reason not to endanger unnecessarily some of our beneficiaries. Then the Coordinator of the SVC, Mr. Li-Shi Luo was called upon. In the conversation with Mr. Li-Shi Luo, Council member Mr. Cheng Liu firmly stated that the Council had indeed informed the HQ about Mr. Yan Bai, he further insisted that the Council had, in fact, reached a consensus. (These statements had been proven untrue later.) Mr. Cheng Liu also sincerely stated that "if the Council did not inform the HQ, then the Council owes the HQ an apology." But, this apology has never been made. After a fierce dispute, the inspection proceeded. Before leaving the HQ, the inspection team left a memo to the Treasurer, Ms. Zuihong Jiang, asking her some questions about accounting practice in the IFCSS. On Nov. 16, 1993, Ms. Zuihong Jiang sent a message to the Council via e-mail on Council-l@ifcss.org, basically stating that the questions in the memo were irrelevant. On Nov. 19, 1993, Mr. Hongguang Zhou released a Progress Report on Financial Inspection, with a very negative and problematic Opinion Report prepared by Mr. Yan Bai. All these materials were further released to electronic news media networks, without any consent from the Council or the HQ. The Finance Committee also released a list of duties for the Treasurer, which in effect is an amendment of replacement of the financial regulations. It was not even discussed in the Council before it was released.

On Nov. 6, 1993, Mr. Yungui Ding sent a memo to the HQ, co-signed by Mr. Liqun Dong, Mr. Yungui Ding and Mr. Hongguang Zhou, stating that "... the Council has invited Mr. Bai Yan of Texas to join the team to provide some technical help to the financial matters." Mr. Songlin Ren of Boston University, a Council member from the Northeastern region, immediately protested for he had never been informed of the matter. Mr. Yungui Ding dismissed the protest, because, as he indicated in a message dated Nov. 19, 1993, that "1. It (the decision to invite Mr. Yan Bai) was a correct decision of the Finance Committee. 2. It was within the authority of the Council Finance Committee. 3. As a Council member, and as the co-chair of the Council, I was aware of the decision, did not and do not oppose it. I don't not see anything wrong in the process of this matter. In regard to Mr. Ren Songlin's request to apology, I view it very rude, very inappropriate, a challenge not only to the decision itself, but also to the authority of the Council. ..." He further argued, later in another message of Jan. 16, 1994, that ``... Apparently, he (Mr. Ren) forgot the notice from Dong Liqun regarding Bai Yan's participation in IT." The notice Mr. Ding referred to was a message from Mr. Dong on Oct. 21, 1993, in which the only related statement was "... Thanks for Qi Bing, Liu Chen, and Hongguang's hard work and Bai Yan's help." After carefully examining the message within the context, the SVC cannot see it as a proper and informative notice of the matter. Any reasonable person would, perhaps, not be able to anticipate, from the message alone, Mr. Yan Bai's participation in the inspection work in the future, nor could any one interpret the message as an official invitation to Mr. Yan Bai.

On Dec. 5th, 1993, Mr. Yungui Ding, the Co-Chairman of the Council, made an announcement to extend the inspection team into a task force, including more Council members (Mr. Liqun Dong, Mr. Yungui Ding, Mr. Cheng Liu and Mr. Feng Zhang) and volunteers (Mr. Yan Bai and Mr. Ning Luo). This announcement immediately triggered Mr. Jinghong Li's appeal to challenge the legitimacy of organizing the task force without the Council's approval. On Dec. 8, 1993, the HQ formally appealed to the SVC, charging Mr. Hongguang Zhou for the involvement of, and the disclosure of the financial documents to, an unauthorized person (Mr. Yan Bai). The HQ also charged Mr. Hongguang Zhou for misstating to the HQ on the fact that the IFCSS financial records had been revealed to an unauthorized person (Mr. Yan Bai).

On Dec. 21, 1993, Mr. Hongguang Zhou sent the HQ a memo, announcing a follow-up site inspection in D.C. with members of the original inspection team including Mr. Yan Bai. The HQ sent the Council a memo refusing to receive the team in D.C. Despite the HQ' refusal, Mr. Hongguang Zhou went to D.C. alone without the consent of the Council. Mr. Zhou visited the HQ on Dec. 29, 1993, for about two hours. Later, his travel expenses amounted to $477.74, including a car rental fee for one week, was fully reimbursed by the HQ.

In the late part of December 1993, the HQ started to solicit professional accounting firms to bid on compiling financial records of the IFCSS. There were four accounting firms responded to the bidding. The HQ sent the proposals from accounting firms to the Council on Jan. 3rd, 1994, asking Council's choice of accounting firms.

During the second regular teleconference held on Nov. 20, 1993, the questions concerning the funds from CSPA Information Center etc. were asked and answered. There were other two problems the inspection team members insisted on: one was that the registration fees (of the 5th Congress) deposited seemed to be more than what ought to be; the other was that Ms. Zuihong Jiang wrote a check (from the IFCSS' account) to pay for her housing subsidy. There were also specific questions regarding to various funds. By listening to the record of the meeting, one could reasonably conclude, based upon the information given by Ms. Zuihong Jiang in the meeting, that there was no missing funds, at most there were problems with the accounting formality and practice. However, on Jan. 8, 1994, the Finance Committee suddenly released an open letter to public networks, warning the public that "... some missing funds in the IFCSS's accounting records." The letter created a shocking effect among many. The open letter was not signed by anyone in particular, and was released from the account chair@ifcss.org, which was the Council's working and archiving site. There were only three Council members who had access to the account: The Council Chairman Mr. Liqun Dong, the Co-Chairman Mr. Yungui Ding, and the Secretary Mr. Dong Chen. After fierce reaction from the public, Mr. Hongguang Zhou declared that the letter was indeed "authentic", meaning it was the Finance Committee's decision to release the open letter. The open letter provoked a second appeal to the SVC from Mr. Jinghong Li on Jan. 9, 1994. In his appeal, Mr. Jinghong Li requested the SVC first, to declare the open letter illegal; second, to investigate who was responsible of the letter, and whether the Council leadership was aware of the letter prior to its release; and finally, to assess the damage caused by the responsible ones.

On Jan. 11, 1994, Mr. Hongguang Zhou sent the SVC an appeal, charging Mr. Changsheng Lin for violation of the IFCSS Bylaws by blocking the follow-up site inspection. Mr. Zhou also declared that the allegations from the HQ were unfounded but he failed to provide any evidence.

On January 10, 1994, the HQ sent a second memo to the Council with an analysis of the four accounting firms, urging the Council to make a choice from the accounting firms before a deadline of January 15, 1994. However, the Council did not respond to the HQ's call before Jan. 15. The HQ then decided to hire Mr. Jeff Lin, a CPA, to compile the financial records. The Council then voted against the choice of the HQ. The HQ went ahead to hire Mr. Jeff Lin, and a compiled financial statement was due on February 5, 1994, in the annual working meeting of the IFCSS. In the meeting, Mr. Jeff Lin clearly stated that there were no missing funds in all bank accounts of the IFCSS. The report by Mr. Jeff Lin was well received by the attendants of the working meeting, including the HQ officers, all Council members, four SVC members, and Chairmen of several working committees, and others. In the meeting, Mr. Hongguang Zhou declared that, it was members of the Finance Committee who deserved the credits for making Mr. Jeff Lin's work possible, largely due the pressure generated by the open letter, despite the very fact that they had always voted against to hire a professional to conduct the inspection.

During the annual working meeting in D.C., Mr. Liqun Dong, the Chairman of the Council, and Ms. Tong Shen, the Chairman of the Finance Committee, jointly proposed to unfreeze the travel fund for the HQ, and the proposal was adopted by the Council. In the end of the meeting, Mr. Changsheng Lin reimbursed all the expenses of the Council inspection team, except Mr. Yan Bai's air ticket. On the meeting, the question regarding to that Ms. Zuihong Jiang wrote an IFCSS' check to pay her own housing subsidy was brought up again. Both Mr. Changsheng Lin and Mr. Heping Shi stated that they indeed approved the housing compensation to Ms. Zuihong Jiang. However, the fact that Ms. Zuihong Jiang occupied both positions of the Treasurer and bookkeeper is a violation to the acceptable accounting practice. The HQ was responsible for this mistake, for it was the HQ who nominated Ms. Zuihong Jiang to the positions without professional consultation. On the other hand, the Council Finance Committee and the Council approved the nomination on its first regular meeting. On the working meeting, members of the Finance Committee denied any responsibilities. In fact, Mr. Hongguang Zhou clearly stated on the meeting: "We have done nothing wrong!" The meeting did not reach any conclusion about the open letter.

After the working meeting, the Finance Committee vowed to continue the inspection. However, the Finance Committee has not done any budgetary review up to this date. On the other hand, the Council itself is facing a budgetary crisis. The total budget of this term Council is significantly higher than the budget of the previous terms. There are $3,000.00 in the budget for miscellaneous expenses. Use of this part of budget requires the approval of the majority in the Council (CR5009). Up until now, the expenditure of the Council may have exceeded its total budget, including the part of miscellaneous expenses, although there is no specific Council resolutions authorizing the use of the money. The telephone bills of some Council members are phenomenally high. For instance, the third quarter phone bill of Mr. Hongguang Zhou was $1,079.97. When Council member Mr. Dong Chen and Mr. Songlin Ren asked Mr. Yungui Ding to justify such expenses, Mr. Yungui Ding simply answered that there was no regulations or rules in this regard. Mr. Yungui Ding further praised Mr. Hongguang Zhou: "I would like to praise him (Hongguang Zhou): he spent so much time on the phone for the IFCSS business. Even the phone bills get reimbursed, the time he spent still represents a huge value that he contributed to the IFCSS." Also, the phone bills of Ms. Tong Shen, the Chairman of the Finance Committee, for the first quarter of 1994 was over $300.00. During the same period, neither the SVC nor some of the Council members could reach Ms. Tong Shen by any means. Mr. Yungui Ding gave his approval to all these phone bills. After the issue was publicized, Mr. Jinghong Li and Mr. Yuhe Liu, the Chairman and the Co-Chairman of 4th term Council, pointed out to us that in fact there exist some unwritten rules to regulate Council members' phone bill reimbursement, and the Co-Chairman of the Council is designated to oversee the reimbursement process, with the constrain of the Council budget limit. Both Mr. Jinghong Li and Mr. Yuhe Liu specifically testified to us that they did inform Mr. Yungui Ding and other Council members about the rules and procedures to reimburse the phone bills on the joint meeting of the 4th and 5th term Council members right after the 5th Congress. Apparently, these rules have been forgotten or ignored by the 5th term Council.

Dissatisfied by the demeanors of the Council and the HQ, many IFCSS veterans and current term Council members jointly submitted an open request to the HQ, asking the HQ and the Council to reveal to the public about some detailed financial records, such as phone bills and travel expenses of elected officers. Up until today, neither the HQ, nor the Council have responded to the request.

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