Inside the Socialist Central Committee, Ltd: Operational Structure

Posted on February 22, 2012 by

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NOTE: This is the fourth in a series of five reports that take you inside the Socialist Central Committee to help the reader understand the PAC’s inner workings, and to expose the dastardly deeds that SPUSA insiders continue to inflict upon America’s only socialist PAC.

When the Socialist Central Committee, Ltd. was originally conceived, Greg Pason was contacting the PAC’s shareholders and trying to assert authority over them. As one can imagine, Pason’s inappropriate attempt to control a private corporation agitated the DSA members and independent socialists who were corporate shareholders not associated with SPUSA; and it worried the SPUSA-associated shareholders as well. In response, the original founding partners selected an independent socialist to act as their Acting Spokesman, someone who was under no obligation to discuss PAC actions with Pason. When the founders relinquished shareholder control to a governing board of independent socialists, that Board of Directors selected the Acting Spokesman to continue as the Executive Director.

Timothy C Platt, MSM

The Executive Director of the Socialist Central Committee, Ltd. is Timothy Platt, MSM. Platt received his Master of Science degree in Management from Indiana Wesleyan University. There have been questions concerning the management and control of the Central Committee PAC. This article is intended to clarify some of those misconceptions.

The founding partners conceived the idea of a socialist-orientated Political Action Committee. And, as is customary among community-based associations, and as required by the federal tax code for PACs, the founders formed a nonprofit corporation.

Associations of any type must first be conceived. Then the concept must be developed by a developer willing to develop the concept into a functioning entity. Many years may pass between the time of incorporation and the association’s eventual self-management. The initial development phase is customarily controlled by the developer; this initial phase is referred to as a Developer Controlled  Association. In fact, the Socialist Party of America went through a similar development phase. But, current SPUSA members inept in business have only been exposed to the fully functional, self-managed association of SPUSA. They are, therefore, oblivious to the special considerations involved in the initial development phase.

Newly established associations are developer-controlled because only the founding partners have any ownership shares in the corporation. As the association grows and shares are dispersed to qualified state organizations, the developer eventually loses enough shares to maintain control, and the association begins to operate independently. The dispersed shares are considered undivided shares. In other words, there is no “piece” in the association for a shareholder to resell. There is only an undivided share in the whole that can be relinquished back to the association.

In the case of the Socialist Central Committee, Ltd., there were five founding partners who each owned a 20% interest. And, as is typical in these type of organizations, the founding partners became silent partners by relinquishing control of their shares to the independent Board of Directors. The Board of Directors now acts as the trustees on the partners’ behalf to disperse their shares in accordance with established protocols.

The Board of Directors is authorized by the silent partners to surrender an undivided 2% interest in the corporate shares to each properly established State Committee. This means the American Socialist Party becomes an independent entity once 25 State Committees are properly formed. The Central Committee continues to function with voting rights for the retained shares. Eventually however, when there is a properly formed State Committee in every state, the Central Committee will have no shares to control, and will therefore be dissolved. Because the Central Committee was formed with a “limited” existence and functionality as a developer, Ltd is attached to the end of its name to signal its limited purpose.

To conclude, the management duties of a developer-controlled association is not any different from that of a members-controlled association. In both situation there is a manager (president, national secretary, executive director, etc.) that works at the direction of a Board of Directors (or National Committee). SPUSA has a board mostly controlled by their National Secretary. ASP’s developer-controlled board just maintains a directional interest during the time that the Board is responsible for providing for the organizational funding. Once the association is established sufficiently to fund itself, the fiduciary responsibilities will be turned over to the association.

While the Socialist Party – USA unincorporated association is mired in mismanagement as a waning association, the American Socialist Party is in the early developmental stages. Comparisons between the two is, therefore, unjustified. SPUSA is in decline; and ASP is in its early developmental phase.

Criticism from inside SPUSA is similar to a Grandfather trying to extol his superiority to a toddler-grandchild. It does not matter how many comparisons the old man makes between himself and the toddler; the toddler is a mere infant, but is growing nonetheless. Whereas, the old man will be dead in a few more years. SPUSA will be long gone by the time ASP matures into a viable political party. And, SPUSA’s demise will not be the result of some intentional action by ASP; SPUSA will collapse due to its own internal conflicts.

The founding partners who believe in a socialized future relinquished control over the Socialist Central Committee to a Board of Directors, which is responsible for underwriting the initial operational costs (caring and providing for the infant association). Conversely, SPUSA is independent, but its has lost control to an inept National Secretary that is driving the organization into financial collapse by using 100% of the membership dues as his own personal income. In the meantime, SPUSA’s investments are being exhausted to cover the organizational expenses.

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Posted in: General Interest