Accounting rules that let banks hide depressed assets in off-book cubbyholes and financial writers who talked about "subprime" loans when a better phrase was "predatory lending," are faulted in commentaries in the New York Times and Columbia Journalism Review.
NYT accounting columnist Floyd Norris, in a Sept. 11 column with unusually harsh language (it was headlined "Accountants Misled Us Into Crisis"), blamed banks that hid "dubious assets off their balance sheets" and the accountants who let them do this.
He is by no means assured that this might not be repeated.
Special aim is taken at the Financial Accounting Standards Board and its international equivalent, saying they are racked by "politics" and unable so far to make needed reforms.
Banks had large losses from assets they did not even report owning, he wrote, because of a loophole called "Qualified Special-Purpose Entities" which were supposed to "operate automatically with others owning the securities."
FASB wants to pull the plug on this device although the move is "years too late," says Norris.
He also reports that FASB and its international equivalent are having trouble coordinating on "fair value" and other rules and that both boards "have been forced by political pressure to back down on some specifics."
Faulty Language Hit by CJR
CJR staffer Elinore Longobardi, writing in the Sept./Oct. issue, says newspapers and other media were bamboozled into using "subprime" as the name for loans to the unqualified when terms such as "predatory lending" or even "liar loans" were more accurate.
Homeowners were led down the garden path when they started dipping into their "home equity" when what they were really doing was taking "second mortgages."
Had the latter phrase been used, homeowners would have been a lot more careful about piling up debt based on the expected ever-rising value of their homes.
Whatever happened to "financial PR?" It basically disappeared as investor relations took over most of the reporting of corporate and bank finances. IR is almost totally oriented to dealing with sell-side and buy-side security analysts.
The veil of excessive "complexity" in financial matters that Norris writes about might be lifted a bit if companies again had PR pros who could explain financial news to a general audience and answered questions from the general press.
Complexity in accounting has unnecessarily exploded, costing businesses as well as individuals a small fortune in CPA fees to deal with it.
The accounting/banking lobbies are strong in D.C., having spent $300 million to overturn Glass-Steagall, which had separated regular banking from investment banking, says economist Joseph Stiglitz.
The PR Society Assembly Nov. 7 in San Diego could "go crazy," parliamentarian Colette Trohan has warned.
It certainly could and one of the chief causes will be "Robert's Rules of Order Newly Revised." ($12.24 via Amazon.com).
Robert's Rules order of precedence. (chart via) |
We have covered at least 35 Assemblies and have seen debate descend into chaos because very few of the delegates knew RONR and especially the Order of Precedence of Motions (11 of them). The chair and/or parliamentarian will shout "out of order" to anyone who violates this order and rattled delegates will try to cope with this.
Besides studying the draconian proposed bylaws, a bald attempt to give greater powers to the executive committee and even rob the Assembly of its right to vet and elect officers and board, delegates must study RONR and additional books such as "The Complete Idiot's Guide to Robert's Rules" by Nancy Sylvester ($11.95 via Amazon.com).
Robert's Rules imposes a rigid straightjacket on gatherings such as the Assembly and those who know the rules have a distinct advantage.
The rules are aimed at encouraging fairness but there's a reason that "parliamentary maneuvers" has entered the language. The rules can be enforced, ignored or falsely stated. For instance, at the 2003 Assembly, a motion to reconsider the vote dropping APR for the Assembly was allowed for the losing side when only the winning side has the right to make such a motion.
In 1999, the parliamentarian ruled that a close vote for a PRS officer position was invalid because the total of the winner was not a majority of the registered voting devices (which were being used for the first time). Some delegates failed to use them properly or in the allotted time. The parliamentarian was over-ruled by PRS lawyer Arthur Abelman.
Parliamentarians are only there as advisers and their advice does not have to be taken.
PRS Leaders Ignore Robert's
The PRS Assembly is still governed by RONR although leaders have opted to ignore the following statement in the newest edition that was aimed at states like New York that accepted the 1987 Revised Model Nonprofit Corp. Act that demanded an explicit prohibition on proxies:
"If the law under which an organization is incorporated allows proxy voting to be prohibited by a provision of the bylaws, the adoption of this book as parliamentary authority by prescription in the bylaws should be treated as sufficient provision to accomplish that result."
What could be clearer than that? RONR is against proxies because they violate the "fundamental principal of parliamentary law that only members physically present can vote" in a legislative body. RONR also adds that proxy voting violates "the principle of one member, one vote" since one member may have "numerous votes."
PRS leaders cite Section 609 of the NYS Not-for-Profit law which says "Every member" may authorize another to "act for him by proxy." But a lawyer consulted by the dissidents says this refers to "regular or rank-and-file members" and not to elected delegates of members.
The Assembly's long history of not using proxies should also be conclusive, lawyers say.
Robert's Rules Is its Own Twilight Zone
Any group of five or ten people who tried to discuss something using Robert's Rules would soon head for the nearest bar.
In fact, under Robert's, the motion that has precedence over all other motions is "Fix the time to adjourn," followed by "Adjourn," followed by "Take a recess."
In other words, "Let's just blow this whole thing off" is the most important thing in Roberts, requiring only a motion, no second, allowing no debate, and only needing a majority to pass.
No. 4 is "Raising a Question of Privilege," which actually means you dislike the sound system, the air-conditioning or some other matter involving comfort. This can be done at any time and does not allow for any debate, does not need a second, and requires no vote of approval.
If a single person is affected, a point of "personal privilege" can be raised.
Assembly delegates tend to confuse this with "Point of Order" which is for charges that rules are being broken. A speaker may be interrupted for this complaint which requires a ruling from the chair who may subject it to a vote of the Assembly.
Few delegates will have the knowledge (or the nerve) to announce, "Division of the Assembly," which means the chair is required to call another vote on something. The chair may use a "standing" vote of the delegates to accomplish this.
The request does not need a second and is not debatable.
Robert's Rules says that if the complaining member is "not satisfied with a rising vote," the chair can move to have the voted counted. A majority vote is needed for this.
Advises the book: "If there is any doubt" about the vote count, the chair can go "immediately to a count vote when requested and this is "usually well worth the effort."
75 Major "Rules of Order"
Assembly delegates need to study RONR because there are 75 major sections in it.
Motions are broken down into those that are main or principle, subsidiary, incidental, or privileged. Members can request that motions be reconsidered, rescinded, renewed or ratified or classed as "dilatory, absurd or frivolous."
They need to know the meaning of such terms as "lay on the table" (end further consideration), "orders of the day" (keep to agenda unless there is a suspension of the rules), "commit or refer or recommit," "call of the house" (bring members to the floor), "committee of the whole," and "informal consideration."
Leaders have signaled their intention to use electronic voting devices for the tenth year although the Assembly has never had the chance to decide if it wants these or not. They are not used by either the ABA or AMA.
Unless there is a motion for a roll call vote, and there has been only one in ten years at the Assembly, the devices block who votes for what. Vote totals are shown on screens for a few seconds. Since the voting devices are numbered and assigned to individuals, there is an immediate electronic record of how everyone voted including who voted the proxies and how they voted.
PRS has not revealed how proxies were voted since they were introduced in 2005 when 81 proxies were voted (out of a total of 240 votes). PRS that year stopped releasing a transcript of the Assembly to reporters and others.
Senior members say rank-and-file members who elect the delegates should know how their delegates vote as a matter of common sense.
They also say it should be a matter of public record how the 17 national directors, ten district chairs and 20 section heads voted last year when a motion was made at 5 p.m. to continue the Assembly. Some delegates were angry that there was no "Town Hall" for the second year in a row.
The motion lost because only 52% favored continuing the meeting and a two/thirds majority was required. |