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CMSA sports group responds to financial scandal
CMSA letter below
by Ross Forman, Windy City Times
2017-01-27

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A major, internal financial scandal has rocked the Chicago Metropolitan Sports Association (CMSA), Windy City Times has confirmed.

Just under $40,000 was embezzled from CMSA over a multi-year period by a longtime, multi-sport participant who also was the former commissioner of multiple CMSA sports and was a member of the CMSA Hall of Fame, according to multiple sources.

CMSA president Michael Erwin was informed of possible financial misappropriation last summer. The organization ultimately confronted the former commissioner and an agreement was reached for repayment. No charges were pressed, nor was there police involvement, sources said.

"Last year, CMSA became aware of and concerned about a former commissioner's actions related to financial reimbursements," Erwin said in a statement sent to the Windy City Times. "The CMSA Board of Directors engaged counsel and undertook a thorough and fair investigation. This investigation led to serious disciplinary action and remedial action to recover the full amount CMSA believes is owed to it."

The settlement agreement called for a monthly payment to CMSA, which started last fall, according to sources. The first few payments were sent, but none have been sent since, sources said.

Erwin would not comment beyond his emailed statement.

Erwin did not name the former commissioner; however, Windy City Times has acquired an email Erwin sent last October to CMSA league commissioners, the CMSA board and select others. The email explains the settlement agreement and names the former commissioner.

Erwin's email states that CMSA entered into an agreement with the person, "to settle possible financial-related claims." Windy City Times has tried to reach the accused, and is not using his name at this time until there is further verification of the incident. The man has also not responded to attempts to contact him.

"As part of that settlement agreement, [this person] has agreed that [their] membership and affiliation with CMSA have been terminated for life," Erwin's email states. "That means [the person] shall be prohibited for life from participating in any and all future CMSA sports leagues and participating in or attending any and all future CMSA-related sports, parties, fundraisers, charity events, or other related activities, with no right of reinstatement."

In addition, the former commissioner has been banned for life from the North American Gay Amateur Athletic Alliance (NAGAAA), which operates the annual Gay Softball World Series, it was confirmed Jan. 29.

Erwin told Windy City Times that the CMSA Board of Directors "has put new safeguards in place to protect against similar issues in the future," however, he did not explain what the new safeguards are, or will be, nor what they were in the past.

Windy City Times has learned that funds were misappropriated for multiple sports that the former commissioner ran, sources said.

Windy City Times spoke with a multi-sport CMSA participant of more than 10 years. The athlete is "upset and shocked" to learn of the financial scandal, especially that there was no safeguard in place to prevent it. The athlete added that the CMSA board has "ignored" its membership by not coming forward with its findings.

Matt Moeller, 33, has played in CMSA's Open Sunday Softball league for six years. "There are a lot of athletes who pay their hard-earned money to participate, and it seems like the settlement agreement was a second-chance that, maybe, this person did not deserve, especially now that the settlement agreement has not been lived up to."

Moeller added, "The chances are over [for the former commissioner] and [CMSA] needs to be respectful and responsible to the [membership] that pays its money to this organization, if we want to see it survive and thrive."

Moeller said the settlement agreement "was one chance too many … I think [CMSA] should have pursued legal options from the beginning. You can't sweep embezzlement under the rug."

Ashley Mahn, 32, of LaGrange Park, plays CMSA softball and volleyball.

"The fact that this individual did not have proper repercussions for the actions is very concerning. A payment plan is not an acceptable punishment for how large of an amount of money this was," said Mahn, who is straight.

Matt Levin, 47, lives in Grand Rapids, Michigan, yet was a multi-sport CMSA member from 2000-2003 and 2006-2014. "The lack of transparency [from the accused] drove me nuts. It wasn't just finances—it was everything. The commissioner elections, the ratings system ... it all seemed dirty, secretive, and heavy-handed," Levin said. "I lost my cool a couple times, and, in 2010, I sent the commissioner an email predicting that corruption would be the lasting legacy of his tenure. I still have that email; history has proven me right.

"Needless to say, I was aghast when CSMA put [this former commissioner] in the Hall of Fame."

Brad Trowbridge, a Chicago-based attorney who plays CMSA softball, said that the CMSA board of directors, as is true of all non-profit boards, "has a fiduciary duty to its membership to exercise reasonable diligence and due care in conducting the organization's affairs."

"By law, board members are required to act in good faith when they make decisions, and always try to avoid the misuse or waste of its assets," Trowbridge said. "In Illinois, a board's decisions are evaluated according to what is called the 'business judgment rule,' which requires a board to make decisions on an informed basis and in good faith. It's difficult to know if the CMSA board made decisions on an informed basis and in good faith in this situation.

"To my knowledge, they have not disclosed the issue to the membership. If you read the board minutes for the past few months, only vague references are made to the misappropriation of funds and to a settlement agreement. Of course, rumors are out there. The most common one is that [the former commissioner] turned in false receipts in the amount of about $40,000 over his years as [a] commissioner, it was discovered, the board elected not to prosecute but rather to enter into a repayment plan, and [the former commissioner] made only two payments of $500 and has refused to honor the settlement agreement.

"Whatever the circumstances, the board owes a full explanation of the situation to the membership. That's the only way we will know if they acted appropriately."

Erwin, in his statement to Windy City Times, noted that "CMSA is an all-volunteer league that has been run successfully by volunteers for decades to provide a safe and inclusive environment for LGBTQ athletes. CMSA and the Board of Directors take the trust and best interests of its membership very seriously and expect CMSA's officers and commissioners to carry out their responsibilities ethically and responsibly.

"The Board of Directors hopes that this isolated and unfortunate situation will not detract from the dedicated and honest efforts of the numerous volunteers who have helped make CMSA one of the largest and most successful LGBTQ athletic organizations in the country."

CMSA is the largest not-for-profit LGBT sports organization in the Midwest, perhaps the world. CMSA was founded in 1978 as the Gay Athletic Association (GAA) and softball was its first sport. The organization changed its name in 1985 to the Metropolitan Sports Association (MSA) and in 1998 became the Chicago Metropolitan Sports Association.

CMSA runs 12 sports, including flag football, basketball, softball, bowling, soccer, golf and volleyball.

CMSA is an all-volunteer organization and all registration—yearly dues and player fees—must be done online, which "saves both Commissioners and CMSA Treasurer time by taking away the handling of money," according to CMSA's website.

In Fiscal Year 2015, CMSA reported revenue of $619,091 and expenses of $592,004, according to its IRS 990 form. In FY 2014, it had revenue of $658,264 and expenses of $707,857. Softball and beach volleyball have the largest operating budgets for the organization, and beach volleyball is CMSA's largest sport in terms of registrants. CMSA has about 4,000 members.

Erwin has been the CMSA president for several years. The board also includes Felipe Rojas (vice president), Matt Simpson (vice president), Joshua Dehnke (secretary), Michael O. Rice II (treasurer), and six appointed directors are: Courtney Briggs, Diane Carniello, Greg Jung, Julie Norris, Jonathon Shaw and Christine Wiesmore Roberts.

The CMSA Hall of Fame committee was established in November 2005, and the first class was inducted in the spring of 2007.

The Hall of Fame ceremony honoring the Class of 2016, announced last October, will be Feb. 11, from 7-9 p.m., at Hamburger Mary's, Andersonville. The new class is Frank Kisner, Brian Kupersmit, Mark Liberson (sponsor inductee), Mark Sakalares, Brian Sommer and Leslie Wallin.

Erwin did not comment on the CMSA Hall of Fame status of the former commissioner; however, the former commissioner's Hall of Fame bio has been removed from the CMSA website and sources said the former commissioner has been permanently removed from the Hall.

"When I first found out about this [matter], I was extremely disappointed that this individual took advantage of our trust by stealing from this great organization," said a CMSA Hall of Fame member who is still an active athlete. "I am hopeful that the current board will be able to recover all of the money from this individual, and if this individual defaults on their obligation to pay [CMSA] back, then he should be pursued criminally.

"It's not right that this person was in a position of power and trust, and that was betrayed to the maximum."

[The above article was updated online on Jan. 30, 2017]

[The following letter was sent to CMSA members on Jan. 31, 2017, and then forwarded by members to Windy City Times. Numerous active CMSA members told Windy City Times that they did not receive this emailed statement from CMSA, though.]

Members,

We have received several inquiries over the last week regarding reports in the Windy City Times that a former commissioner misappropriated funds from CMSA. The media accounts are partially accurate, but also contain some inaccuracies and omit some relevant details. We wish to be as open and transparent as we can with our members about this situation, as the reports relate to claims of misconduct in connection with the use of CMSA funds, and those funds come from our members. At the same time, some of the details are sensitive and could still become the subject of future legal action. With that in mind, we are going to describe the circumstances and answer whatever questions we can in this statement, and ask you to understand that there are some specifics we cannot fully share at this time.

Last year, while making an inquiry with a vendor, CMSA became aware of and concerned about a former commissioner's actions related to financial reimbursements. Specifically, CMSA found that a number of reimbursements submitted to CMSA by the former commissioner could not be reconciled with the vendor's records. CMSA then inquired of several other vendors whose invoices had been submitted by the former commissioner for reimbursement, and found similar discrepancies. Put simply, the invoices submitted for reimbursement did not match the vendors' records, raising serious concerns about misappropriation of CMSA funds. The Board of Directors promptly engaged experienced counsel and undertook a thorough investigation. Through this investigation, the Board discovered unverified reimbursements to the former commissioner totaling approximately $33,000.

The Board promptly commenced disciplinary proceedings against the former commissioner. Additionally, with the advice of its counsel, the Board contemplated various options, including criminal charges and a civil lawsuit. The former commissioner was given notice of a disciplinary hearing and was advised that he could, if he chose, hire his own attorney to represent him in connection with this matter. The former commissioner chose to be represented by an attorney, and CMSA and the former commissioner then engaged in discussions to determine whether the dispute could be resolved without undertaking the time and expense of a civil lawsuit. At all times, the Board was guided by two core objectives: (1) full reimbursement must be made to CMSA for any and all amounts (plus interest) that had been misappropriated from the organization; and (2) any misconduct by the former commissioner involving misappropriation of funds would require the most serious and severe disciplinary action, with or without a settlement.

The Board and the former commissioner were ultimately able to reach a settlement agreement. To be clear, this agreement does not represent a second chance or a reprieve of any kind. The former commissioner must repay the entire amount owed to CMSA, plus interest. To date, the former commissioner is still making payments. Should the former commissioner default on payments, the entire amount (including interest) will be immediately due, and the settlement agreement includes security interests and enforcement mechanisms that would facilitate much quicker enforcement than CMSA could have obtained if it had been required to file a lawsuit from the outset. The agreement also includes a lifetime ban from all CMSA activities, including permanent removal from the CMSA Hall of Fame. The agreement has no effect on possible criminal charges against the former commissioner.

While CMSA already had significant safeguards in place at the time of the unverified reimbursements, needless to say this situation has required the organization to reevaluate these safeguards and controls. The CMSA Board has since enacted new, more stringent safeguards. For example, the Board lowered the reimbursement threshold triggering a requirement for specific Board approval prior to purchase, and also now requires purchases exceeding a certain amount to be paid to the vendor directly by the CMSA Treasurer. CMSA will continue to evaluate its financial safeguards regularly going forward as part of its annual review process.

CMSA is an all-volunteer league that has been run successfully by volunteers for decades to provide a safe and inclusive environment for LGBTQ athletes. CMSA and the Board of Directors take the trust and best interests of its membership very seriously and expect CMSA's officers and commissioners to carry out their responsibilities ethically and responsibly. The Board of Directors hopes that this isolated and unfortunate situation will not detract from the dedicated and honest efforts of the numerous volunteers who have helped make CMSA one of the largest and most successful LGBTQ athletic organizations in the country.

Please direct all inquiries to me at president@chicagomsa.org .

Thank you,

Michael Erwin

CMSA President

Chicago Metropolitan Sports Association

The Chicago Metropolitan Sports Association (CMSA) is the largest not-for-profit gay and lesbian sports organization in the Midwest. We offer recreational and competitive level play in a variety of athletic leagues throughout the year


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