From: OIADA Staff
Subject: Response to Recent NIADA Communication
To: OIADA Members
You may have received or may soon receive a letter, email, fax or other form of communication from NIADA regarding OIADA’s disaffiliation with NIADA and an option for you to join NIADA for $60.00. Please understand - YOU DO NOT HAVE TO JOIN NIADA. Membership in NIADA is strictly optional and does not impact your membership in OIADA in any way. The communication from NIADA is to publicize the OPTION to join that association. We at OIADA apologize for the confusion that NIADA has created for those in receipt of that communication. We would appreciate your letting us know if you receive such a notice.
The OIADA staff wants you to be aware that certain comments in the NIADA communication ARE NOT NECESSARILY FACTUAL. For instance, the NIADA dues for many OIADA members will not expire until the anniversary date of your OIADA membership. For some members, that will be well into 2014; others will extend into 2015.
The OIADA learned (over a period of more than a year of discussions and polling most of you) that the benefits and services offered by NIADA were of minimal value to OIADA members. Further, those discussions and pollings indicated that, for all practical purposes, the dues money demanded by NIADA would be of more benefit to OIADA members when applied to continued and enhanced services at the State level. Certainly, not every member agreed with dissolving the OIADA/NIADA Affiliation Agreement, but it is safe to say that more than 95% of OIADA members supported the decision. For those few that wished to continue as NIADA members, that option was available for $199 per year.
According to this recent communication, that exorbitant $199 NIADA direct member dues assessment has now been reduced to $60. So much the better – if you believe that membership in NIADA returns you $60 in benefits, you may now join at that reduced rate. We appreciate NIADA making that offer to you (even though we believe that it is a violation of IRS Rules for a 501(c)(6) non-profit organizatoin to offer different member fees to different members). But again, membership in the NIADA is optional – you are not obliged to commit that $60 unless you find that much value in NIADA membership.
Let me offer one note of caution with regard to NIADA membership fees – NIADA establishes membership fee schedules without consulting the general membership. For instance, in January 2012, just as the industry was beginning to recover from the extended 2007 recessionary period, NIADA leadership increased the dues assessment that they imposed on OIADA from $50 per member to $60 per member. Now, without consulting you and WITHOUT CONSULTING MEMBERS IN OTHER STATES, they have established a special rate just for Oklahoma dealers. Direct members outside Oklahoma are still assessed the $199 membership fee. With this most recent rate change, the NIADA leadership has created an inequitable situation that may necessitate yet another membership fee change.
What is the rest of the story?
Most of you won’t be interested in the details that led to the disaffiliation action and newsletter cancellation. For those who are interested, however, the rest of the story begins here. It is posted in its entirety here on the OIADA website, www.e-oiada.com. Feel free to review all the communications and actions leading up to the changes. Documentation of subsequent actions regarding the issue that NIADA has raised with their recent communication to OIADA members will be posted here as well.
This version of the “rest of the story” is strictly from the perspective of the OIADA staff. I’m sure that NIADA Executive Vice President Steve Jordan (the author of the above referenced recent NIADA communications) could provide a different version. If you are interested in that version, feel free to contact Mr. Jordan.
The Magazine Agreement with NIADA was cancelled, in part, because of revenue issues and, in part, because of our desire to provide information to OIADA members in a more timely fashion. As background, in October 2004, NIADA invited O&R Morgan, Inc., dba OIADA, to join with other state associations in a cooperative venture for state newsletter/magazine publication by NIADA Services, Inc. That entity, NIADA Services, is a for-profit corporation of NIADA. The stipulation in the Magazine Agreement was that NIADA would incur all costs which included, but were not limited to, advertising sales, magazine layout and design, editorial review, printing and distribution. In addition, the Agreement stipulated that NIADA would annually share with those state associations, on a 50/50 basis, net profits from the magazine publications.
O&R Morgan, Inc. responded to that invitation by executing the Magazine Publication Agreement and the publications began on March 1, 2005. Over the years, OIADA staff expended considerable time and effort researching issues and preparing editorial content in order to keep Oklahoma dealers informed. NIADA did a beautiful job of producing the magazine - AND WE BELIEVE THE OIADA MAGAZINE CONSISTENTLY MADE A PROFIT. Because of the way the Agreement was written (and agreed to), profit produced by the OIADA magazine was apparently used by NIADA to cover costs associated with the production of some fifteen other state magazines that had fewer locally produced articles. (Please realize that this is not a complaint. It is just an effort to explain the circumstances surrounding the decision to cancel the Agreement.) At any rate, in the eight years of publications, the NIADA Services “for-profit” corporation NEVER returned any profit distribution to O&R Morgan, Inc., dba OIADA. In addition, the delay between the time of our content submission and the NIADA’s production of the publication was approximately two months. That caused the information reaching the dealers to be outdated.
For those reasons, and because our research indicated that a profit could be made by contracting with other publishers, we cancelled the Magazine Publication Agreement with NIADA Services, Inc. We have since contracted with another publisher to produce a quarterly magazine. Volume I of the new Dealers’ Resource was mailed to all members and Oklahoma dealers in mid-April. In addition, we have updated the O&R Morgan, Inc.-owned website www.e-oiada.com to provide timely information to dealers. Frequent updates are posted and current news is available to dealers across the state. On the website, OIADA staff maintains a library of state and federal regulations, reports of agency actions and decisions, and other late breaking information all directed at helping Oklahoma dealers with compliance issues. Development continues on the new website and member-only pages offering special information as well as opportunities to post questions and comments will be available in coming months.
Two primary reasons existed for considering cancellation of the OIADA/NIADA Affiliation Agreement. The first was to overcome a shortage of revenue for adequately funding OIADA services to the OIADA membership. The second reason – the last straw, if you will, – was to distance OIADA members from the reach of an organization that supports an executive abusing the power of his office to foment dissension and division within the very industry he is charged with protecting.
The issue of revenue shortfall will be addressed first. The OIADA Bylaws dictate that certain services will be provided to the membership. The bulk of those services include:
O&R Morgan, Inc., the Management Company for OIADA, working in concert with the OIADA Board of Directors, had made an intense, but fruitless, search for ways to overcome the budget shortfall. The shortfall had developed because of a drop in membership from 305 members in September 2010 to 251 members in December of 2012. The drop in membership was due primarily to the effects of the 2007 recessionary slump. O&R Morgan, Inc., And the OIADA Board of Directors were in agreement that an increase in dues assessment would not be an effective way to increaes revenue because of the potential for losing additional members.
Discussions with and polling of most members over a period of more than a year revealed that most members were realizing little, if any, benefit from their membership in NIADA. The NIADA portion of the OIADA dues assessment was equivalent to the OIADA budget shortfall. Therefore, after careful thought and due deliberation, including consultation and fruitless negotiations with NIADA for relief, the decision was made to cancel the OIADA/NIADA Affiliation Agreement and apply the former NIADA dues revenue to the OIADA budget for 2014. Considering the Association’s financial situation at the end of 2013, the only other alternative would have been to dissolve the OIADA completely, leaving Oklahoma dealers without representation at the State or Federal level.
Toward the latter part of 2013, OIADA staff was still trying to negotiate with NIADA and pursue other means of finding enough revenue to maintain an OIADA affiliated status with NIADA when we learned of a particular NIADA action against a sister State association. That information caused us to immediately cutoff negotiations with NIADA in order to protect the integrity of OIADA members – and to preclude the possibility of NIADA threatening personal liability actions against OIADA Board Members by the IRS.
Here is the straw that broke the camel’s back…
OIADA staff came into possession of a letter dated September 23, 2013, from a law firm in the employ of NIADA. The letter was addressed to the then-president of the Michigan Independent Automobile Dealers Association (MIADA) and signed by Shaun K. Petersen of the law firm MacMurray, Petersen and Schuster, LLP. The letter indicated that the NIADA Executive Committee, scheduled to meet in the latter part of August, would discuss the affiliation agreement between NIADA and MIADA. Mr. Petersen indicated he would respond with NIADA’s position at some point after the NIADA board meeting.
Needless to say, since the MIADA/NIADA Affiliation Agreement was the subject of possible action by NIADA, that letter prompted me to further investigate the issue. What I subsequently learned was that, with this letter, NIADA was attempting to coerce MIADA into paying a $60 NIADA membership fee for 188 MIADA honorary dealer members. Those 188 dealers had been temporarily granted honorary member status by MIADA in order to acquaint them with the benefits of regular membership in MIADA/NIADA. Honorary members have no voting rights and pay no dues unless and until they choose to become regular dues paying members. This is an action that is wholly permissible under the NIADA Bylaws and is occasionally used by IADAs to encourage dealers to join.
At some point, NIADA leadership jumped to the conclusion that MIADA had violated their Affiliation Agreement and owed NIADA payment for those dues. The MIADA Executive Director’s point of contact at NIADA for this issue was Steve Jordan, NIADA Executive Vice-President. We may never know whether it was because of Mr. Jordan’s reasoning, or another’s, but that erroneous conclusion resulted in a letter from the NIADA attorney demanding immediate payment of $11,280 in membership dues plus late penalty of $850 for a total of $12,130. The NIADA letter further accused the MIADA Board members of breach of contract and failure to comply with IRS rules and regulations. The letter stated that a breach of this nature could result in personal liability against the board members.
When we learned of this threat to the MIADA board members, it became abundantly clear that OIADA should not be affiliated with an organization headed by staff that had no qualms about sic’ing the IRS on an affiliated association – particularly when the organization’s leadership did not even understand their own Bylaws and did not realize the Bylaws were not violated.
OIADA staff immediately finalized the OIADA Executive Committees’ authorization to cancel the OIADA/NIADA Affiliation Agreement. OIADA, its governing Board of Directors, and its general membership are now free of NIADA and their threats.
In a word - No.
A postscript on the NIADA communication to OIADA members states: “NIADA will be forming an Exploratory Committee of Oklahoma’s automobile dealers to consider the formation of a Board of Directors for a NIADA Oklahoma Association that will be a new, more representative voice for Oklahoma’s auto industry. This important organizational step will allow NIADA and Oklahoma dealers to continue our combined efforts to advance and protect the best interests of independent automobile dealers in both Washington, D.C. and Oklahoma City.”
On the surface, that statement, if true, merits OIADA’s endorsement and support since we support any effort on anyone’s part to enhance a dealer’s ability to succeed. The OIADA motto, after all, is “Our Mission, Your Success”, and we believe that sincerely.
We do not, however, support any effort that, on the surface, smells like a vindictive move that is designed to enhance the egos of anyone at the expense of Oklahoma dealers. And this proposal has that smell.
It is possible, but I do not think very likely, that someone can or will develop a more representative voice for Oklahoma’s independent auto industry than currently exists within OIADA. Certainly not an entity like NIADA that, at least in recent years, has had the opportunity to do so, but has not put forth one shred of effort to help OIADA get the job done.
As an example, let me quote from the second paragraph on page 2 of the referenced NIADA letter, i.e., “Additionally, for the first time in 14 years (emphasis added), last November, NIADA held its National Leadership Conference and Legislative Day on the Hill in Washington, D.C.” And then the next paragraph had this sentence underlined, and I quote, “Oklahoma had neither automobile dealers represented at this event nor any state leadership of the OIADA.” While both of these statements are true, let me ask whether you got an issues document outlining the objectives of the visit? I certainly did not. And without an issues document – and a great deal of preliminary effort – you might as well stay home.
Trips to Washington, D.C., to visit congressional delegations are very expensive and can be a major waste of time and money unless one is properly prepared to achieve some specific worthwhile objectives while there.
In my 15 years of making annual Congressional visits to the Hill, both as a local governmental representative and an executive officer of the Association of Central Oklahoma Governments, one thing I learned is that, if you expect to be effective when you spend the money to make that trip, you must first make extensive preparations. For instance, you consult with your constituents regarding the issues that are important to them and you prepare an issues document outlining those subjects. Then, well ahead of your visit to the Hill, if you’re not already acquainted with the staff members of your targeted senators and congresspersons, you contact them and become acquainted with them. You then provide the congressional staff with your issues document on subjects that are relevant to the congressperson’s areas of interest and authority so that their staff and the congressperson(s) can be familiar with your position on the issues. Finally, if you expect to see and visit with the congresspersons themselves, you make appointments with staff to do just that. That way, their time and your time on the Hill can be productive because all are familiar with your issues and your mission has a better chance of being successful.
Again, let me ask whether you got an issues document outlining the objectives of the visit? I certainly did not. If you go to the NIADA website and review the report of their Washington, D.C. trip, all you get is an assimilation of meaningless words but not a hint of even one dealer issue that was resolved.
On November 18, 2013, Rose Morgan had an enlightening telephone conversation with Steve Jordan regarding the activities of the NIADA Washington, D.C. trip. A synopsis of that conversation is available here. You will be amazed.
Rather than reciting here the effort OIADA is currently undertaking at the Oklahoma State Capital, let me refer you to the State Agency News page of the OIADA website.
Any OIADA dealer who might choose to accept NIADA’s offer to form another Oklahoma association should be aware that NIADA tolerates leadership whose purpose is directed toward ultimate control of affiliated IADAs. NIADA is currently advertising to hire state executive directors to manage state IADAs, report to, and be under NIADA control. The following links demonstrate that objective:
Both postings indicate that the selected individual will be "...an employee of NIADA directly..."
The details of this entire unfortunate episode are posted on the OIADA website. In addition, a copy of this communication is being sent by email to all OIADA members as well as to Steve Jordan and NIADA’s Executive Committee members.
Executive Director, Oklahoma IADA