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Update: Turmoil at the ATA

The American Teleservices Association will send a letter to its membership that provides full disclosure about its fiscal and managerial problems a week after a financial presentation at its annual conference caused private complaints and at least one member cancellation. The letter caps a week that also included the resignations of all of the ATA’s incumbent board members.

The letter was still under revision, but in addition to more comprehensive financial information, it is expected to describe the transitional management structure resulting from the resignations of seven of the 10 board members, according to Steven R. Brubaker, president of the ATA board.

The decision to disclose the full state of finances in a letter rather than at the annual convention in Nashville, TN, was made to avoid publicly airing the situation to nonmember attendees, Brubaker said.

“This is something we want to communicate to members one-to-one in a letter, not out in public,” he said.

For Oetting & Co., New York, which withdrew from the organization in a letter dated Oct. 15, the delayed disclosure is not enough and represents a broken promise of open discussions at the conference.

“We wanted the issue discussed in an open forum, where members could ask questions publicly rather than discuss it through e-mails and post-conference conversations,” said Geri Gantman, senior partner with Oetting & Co. and author of the withdrawal letter. “Had the presentation been handled differently, that letter would not have been written. It’s a lot more complex, more critical than it was portrayed.”

Though blame for the financial crisis was pinned on the ATA’s departed CEO, J. Scott Thornton, fiscal mismanagement preceded Thornton and has existed for four years, Gantman said, noting that Oetting & Co. officials gained a closer look at the organization’s management through its years of strong involvement. The problem stemmed from the association’s move from a volunteer-based group to a staff-run one that was growing beyond its means, she said.

“It was clear to some of us that were involved that the staff was so big they were spending more than they were taking in,” she said. “It was not just about an irresponsible CEO, it was about whether a CEO, good or bad, was the right path to go.”

Adding to the ATA’s problems, attendance at its annual convention – normally a big revenue generator – was down significantly this year. Though complete numbers were not available, ATA communications manager Michael Llach estimated attendance at 650, which would indicate a drop of more than 30 percent from last year’s attendance of 950. Members blamed inefficient marketing, which was caused by the internal confusion.

Oetting & Co. remains dedicated to the concept of the ATA and would support a viable organization dedicated to those principles, Gantman said, but the problem was not handled in a way that encourages management confidence.

The resignation of the association’s seven incumbent board members were tendered Oct. 14 to the ATA’s newly created management advisory council, which is made up of past presidents.

“We felt we needed [the management council’s] vote of confidence to go on,” said Donna Bryce, who has been serving as communications director of the ATA board.

The decision to resign was voluntary and was suggested to other members by Bryce, she said. The board members are continuing their duties as they await the management council’s decision on how to proceed. In addition to Bryce and Brubaker, incumbent board members include Cathy Bradley, vice president; Jay Vogel, treasurer; Chip Eagle, legislative affairs director; John Miklosovic, director of ethics/standards and TeleWatch; and Mary Anne Falzone, director of educational programs.

The three newly elected members who have not resigned are Kent Stormberg, Gordon McKenna and Bill Miklos.

Although the ATA has launched a fundraising campaign to make up its shortfall, several members have expressed concerns that more information must be provided to encourage membership to help bail out the organization. At the conference this month, Bryce said the association’s bank allowed Thornton to use $310,000 from ATA accounts without proper authorization. Privately, others put a much higher figure on the association’s troubles.

“More information has to be put on the table,” said one member who asked not to be identified. “I think there are other people in the organization who have some culpability who have to come forward about it.”

Another ATA member said she won’t renew her company’s membership.

“It would have been more helpful to have all the facts at the business meeting where it could be discussed in the open,” she said, adding that with full disclosure, members would have a common problem to rally behind. “The financial troubles can be overcome, but the way it was handled and the internal turmoil has been disheartening.”

Meanwhile, DMA officials, preparing for their annual convention in Toronto, would not comment on the situation or its implications for the DMA except to say that the two groups have collaborated on some legislative and ethical issues.

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