10/29/98
The family feud within the Maine Christian Civic League may be
over with the ousting of three dissident members at a board
meeting on October 17. And then again - maybe not.
Lisa Lumbra, now former chair of the CCL finance committee; Rep.
Henry Joy (R-Crystal) and Gary Holcombe, the deposed trio of CCL
members said their ousting will not stop them from proceeding
with a lawsuit they filed last July demanding that the league
open its financial and other books including those with donor
lists.
But perhaps the lawsuit is frivolous harassment. And perhaps
Lumbra already has the information requested in the lawsuit
because Lumbra and others entered the CCL offices in late March,
photocopied records and took the records with them. CCL Director
Michael Heath, who was in Washington at the time, said Lumbra did
not have permission to copy the records. Lumbra said she did.
Heath does not know what records were copied and has insisted
Lumbra return or identify the records. Lumbra has refused to
date.
There are two stories about this CCL polemical matter. One has
been made public. The other, which may be a plausible reason for
its contentious genesis, has not.
First, the public media reports say that Lumbra, Joy, Holcombe
and perhaps others were concerned in late 1997 that financial
records of the CCL might be in disarray but declined to speculate
in public that there was any "wrongdoing" on the part
of CCL director Michael Heath. Lumbra wrote the CCL office
insisting she, as finance chair, be given access to all of the
league's financial data including the donor list. The policy of
the CCL was to keep the donor list confidential to only the CCL
director and staff as it was the majority wishes of donors.
Heath refused Lumbra's request. At the time the league was
heading up the people's veto to overturn Maine's statewide gay
right's law. The league ultimately won a surprising victory.
Lumbra et al in March requested a CCL audit, then filed a
lawsuit. Lumbra and Joy also took the matter to the Maine
Attorney General's office which apparently saw no jurisdiction or
reason to investigate the complaint.
In April, Heath announced that he would proceed with an external
audit using a firm recommended by Lumbra. According to sources,
Lumbra "leaked" the confidential draft audit to a
television station prior to it being presented to the CCL board.
The audit, although noting several instances of sloppy
bookkeeping and financial transactions not itemized by Heath,
nevertheless found no misuse or misappropriation of funds at CCL.
Nothing, that is, illegal.
At the October meeting of the CCL in Scarborough, the
overwhelming vote was to remove Lumbra, Joy and Holcombe from
membership - and a strong voice of support for Heath. He had
previously announced that he had accepted another position in
Washington with the Family Research Council but would be
remaining with the league for a few more weeks.
Although ousted, Lumbra, Joy and Holcombe said they would press
on with their lawsuit but with the audit completed, Lumbra et al
ousted, it is not clear on what grounds the lawsuit has any
standing.
From many sources over several weeks, the second unpublished
story of the feud has emerged.
On September 24, 1997 at the CCL finance committee meeting in
Bangor, Lumbra spoke about a plan to raise several million
dollars for CCL. At that meeting, Lumbra's husband, Scott Carter
who was not a CCL board member, was also in attendance.
The plan would be discussed later, Lumbra said, but before a full
presentation of the plan could be given, CCL Director Heath would
have to sign a "confidentiality agreement" on behalf of
the league. Heath did sign the agreement as did Scott Carter
acting as a representative for Capital Partners Funding Group.
CPFG is a Delaware corporation with offices in Chico, CA.
At the CCL board meeting on November 14, 1997, Scott Carter gave
a presentation of CPFG's "L.I.F.E. Heritage Program"
designed for organizations with an IRS 501 (c)3 tax status. The
CCL has a 501 (c)4 status but its affiliated Christian Education
League is a 501 (c)3.
The program worked this way: CCL would set up a trust, the CCL
trust purchases and owns life insurance policies issued on lives
of people. There is no premium paid by the individual insured
persons. When the insured dies, the benefit goes to the trust as
the beneficiary owner of the policy and premium payer.
Too good to be true? Well, there would be start-up expenses, fees
and initial insurance premiums which required "seed
money" from CCL. CPFG would require $100,000 on the signing
of the agreement. And $1.3 million from CCL during the
"implementation phase" of the program based on a
percentage of total insurance policy face amounts of between
3,000 and 5,000 enrollees and ongoing program fees for a minimum
period of 20 years after the closing period.
CPFG's independent agent Louis Aubuchon, and CPFG's independent
subagent, Scott Carter, Lisa Lumbra's husband, were to be the
agents of record for the program. No specific agent fees were
disclosed in the presentation.
According to the minutes of the meeting a motion was made to
proceed with the program "subject to legal review." The
vote was 5 in favor, one against and one abstaining.
Heath was concerned about that much "up-front seed
money" that CCL certainly did not have. CPFG suggested that
seed money could come from CCL's own cash reserves and investment
funds, a local bank, major donors and large financial
institutions. Heath was also not sure about the legality of the
program. Despite the "confidentiality agreement"' that
he signed, Heath nevertheless contacted the Maine Bureau of
Insurance (BOI) for advice on CFPG's legal status and the
"institutional beneficiary statute."
BOI responded to Heath on April 7 that Scott Carter was licensed
to sell insurance in the state of Maine "but Capital Funding
Partners of California is not." BOI also said that it was
reviewing group life sales to benevolent/religious organizations
as permitted under the "institutional beneficiary
statute" in regard to CPFD.
BOI sent letters to Scott Carter and CFPG saying BOI's concerns
had to be resolved "before they could proceed with this
venture." According to BOI officials, neither Carter nor
CFPG responded to the BOI requests.
On May 1, a subpoena was hand-delivered to CCL's Heath signed by
Alessandro A. Iuppa, superintendent of insurance, commanding
document copies of any and all sales literature and/or marketing
material supplied by Agent Scott Carter on behalf of CPFG.
Also:
Whether the program had a "legal basis for the marketing
scheme of insuring someone's life without an insurable
interest" as described by the Bureau of Insurance in a
letter of April 7, 1998 to Director Heath, is in question but may
be a moot point as CCL is not now involved.
It is not surprising that the CCL decided not to enter any
agreement or program with CFPG.
Whether Lisa Lumbra's ongoing allegations and lawsuit against CCL
and Director Heath are based in a lost and apparently generous
fee and commission for her husband, Scott Carter, is speculative.
And whether the CFPG program was legal or illegal under Maine
statutes is unresolved because the BOI did not rule on the issue.
But an intrigue that has heretofore mysteriously enmeshed the
Maine Christian Civic League in plausibly undeserved controversy
for a year now becomes more transparent.