More unprofessional response

Hanon,

You can make all the claims you want about me and my supposed "untruths" but your son. You and I have had this discussion about what actually happened at the US Amatuer Team East, and you know for a fact it is true. You are an attorney - put up or shut up.

Randy Bauer

Mr. Russell's last response

Here is the final response by Mr. Hanon Russell:

Bill:

I appreciate your taking the time to reply. First, let me note that although a number of people have reacted to my initial message (and certainly more may in the following days and weeks), I have neither the time nor inclination (with one exception) to respond to each email and I will not do so. No one should mistake my choosing not to respond to any point that may have been raised as an admission, acceptance, waiver or anything else on my part. I shall deal with the one exception later in this message.

You raise an apparently valid point about the arrangement with the House of Staunton, to wit, it appears that we were offered the same "arrangement" and turned it down. Well, this is not exactly what happened, and the differences are critical and the reason why I have turned the matter over to our attorney.

I had been approached several years ago by Bill Hall to include some USCF Sales material in the mailings that the USCF made to new members. It was recognized then, as now, that the new member group did indeed purchase equipment, books and the like at a significantly higher rate than would normally be expected. I was offered the opportunity to have the back side of the introductory letter/card feature some products in return for splitting the cost of the printing. My recollection is that the cost to USCF Sales was a little less than $4,000 at the time. We elected to try it. It was not successful.

When the initial printing had been used up, Bill Hall contacted me and asked if I was ready to do it again. I declined, citing the minimal return for the dollars spent. He understood and that is the last I heard of it until Lev Alburt contacted me. He wanted to promote his books and asked what my position was. I told him I had no objection so long as USCF Sales was able to make the sales. Lev agreed and the flyer that was reviewed by the USCF and me and included in the new-member mailing specifically referenced USCF Sales - its address, toll-free 800 number, catalog numbers. Everything.

Apparently still seeking sponsors for the new-member mailing, the House of Staunton was contacted. I say "apparently" because I did not find out about the arrangement between the USCF and the House of Staunton until the beginning of April 2008. It is not insignificant that in stark contrast to the Alburt flyer, neither the USCF nor the House of Staunton ever informed me about what was going on. Not once, in spite of multiple contacts with both concerns. My understanding is that I did not find out about this arrangement for almost a year.

When I did discover what was taking place, I immediately confronted Bill Hall. His response was (1) USCF Sales had declined to be involved in this project and so the USCF was free to bring another firm into the arrangement; and (2) there really was no difference between what was going on with the House of Staunton and advertising by other companies in Chess Life. As far as the first point is concerned, had it been done properly, like the Alburt flyer, I would not only have had no objection, I would have welcomed it. However, it is difficult based on how this arrangement was carried out by both sides for me to believe that in fact everyone understood what was being done and what should and should not be disclosed.

In fact, USCF Sales has always offered chess sets from the House of Staunton. We would have been pleased to have the House of Staunton promote its products in the same manner as Alburt was promoting his books - by including a flyer promoting the sets and directing them to USCF Sales for purchase. Instead, the HOS material included (a full color flyer and a second "coupon" offering 10% off) had no mention of USCF Sales and encouraged the recipient to contact HOS directly. Sales by USCF Sales of HOS sets that may have been made as a result of this mailing were lost; we made none.

To take the position that a select, targeted mailing to a group known to spend a lot more easily in the first few months of a new membership is no different than advertising in Chess Life reflects either a complete unfamiliarity with marketing and sales or disingenuous spin. Or both. For God's sake, a new member is receiving the first contact from the U.S. Chess Federation and in it are flyers encouraging the member to buy fine chess sets, (the "official" USCF sets I believe is a term used more than once in the paperwork) directly from a vendor other than USCF Sales. Remember USCF Sales? We send you 12% off the top of every purchase. Even when we sell a HOS chess set. 12%. I am sorry if you cannot differentiate this from a paid ad in Chess Life. I see the difference very clearly. So do our attorneys.

Now for the "exception" to which I referred. A member of the Executive Board, Mr. Bauer, chose to respond to my initial message. You along with everyone else on the list received his message. I had put forth what I had thought was a legitimate concern, constructively questioning decisions I saw as bad for the USCF and bad for USCF Sales. Instead of replying in similar fashion, he chose to create untruths out of whole cloth, fashioning a personal attack against me and my son. One wonders what color the sky is in his world. Mr. Bauer's reputation for conducting himself in this disgraceful manner should not have come as a surprise to me, and I already know from private messages that it was not a surprise to others who saw what he wrote. However, that does not change the fact that these comments are beneath contempt.

Bill, I respect your different views on these matters but must also assert that I strongly disagree. As the HOS matter is currently being handled by our attorneys, and the Chess Life matter may soon be, I regret that I will not be responding any further to your or anyone else's remarks. Not even when Mr. Bauer again launches personal attacks...

Regards,
Hanon

Hanon W. Russell
USCF Sales.com
http://www.uscfsales.com/
ChessCafe.com
http://www.chesscafe.com/
Toll-free (orders only please) 1-800-388-5464 (KING)
General Offices: 203-783-9866
Fax: 203-783-9673
234 Depot Road
P.O. Box 5460
Milford, CT 06460 USA

My response to Mr. Russell

This was what I responded to Mr. (Hanon) Russell:

Hanon,

I do not know about other board members but Paul and I were not told about the House of Staunton deal. We first heard about the (legal) problems at the latest board meeting.

Susan Polgar

I have to add that this is not the first time where important matters were hidden from other board members, at least to Paul and me, until serious problems occurred. There were instances in the past where the current USCF President and the current the USCF Executive Director made decisions in various critical matters without disclosing them to the other board members. Significant decisions which involve legal matters were made without the knowledge of anyone else. Some of these decisions have created serious legal problems for this federation, and money is being unnecessarily wasted.

Unprofessional response by the USCF

Hanon:

As one who maintains a popular Internet website, I am surprised that you would suggest that the only viable method for maintaining a close connection with USCF members would be through a print magazine. The proposal suggested by Bill Goichberg would provide all the Chess Life content to all members - it would only vary the way they received it. As one who has printed lots of content from online Chess websites (including your own), I fail to see how this would lead to the negative consequences you claim.

As for your odd decision to mix a business issue with a USCF governance issue - needless to say, the USCF did not enter into an exclusive marketing agreement with you when you took over the books and equipment business. We accept advertising from lots of books and equipment vendors in Chess Life and elsewhere. That has been the case before and during the entirety of your contract.

Your wish to only view our relationship as a partnership is specious, given your past willingness to withhold funds that were rightly owed to the USCF to renegotiate a contact you freely entered. As for your legal threats, all I can say is so be it. It would make a great story in court. Maybe you can get the contract history excluded, but juries eat that stuff up. I would also love to tell the story in court about your ..... (I removed this because I feel that the text is quite unprofessional and completely inappropriate).

Sometimes it is not better to start airing your laundry in public.

Randy Bauer

More USCF legal problems

Bill (Goichberg):

It has come to my attention that there is a proposal that would reduce the number of copies of Chess Life distributed to the membership. Although I appreciate the board's desire to cut expenses in these trying economic times, this idea is a bad one for several reasons.

Without the magazine arriving each month, any stimulus for members to become more active, participate in chess events, follow the goings-on in American chess, not to mention purchase chess books and equipment from their national federation, will slowly but surely erode. The identity of the USCF will be at risk, becoming only the custodian of a chess rating system, not the face for the history and culture of chess. A monthly publication encourages a sense of community, an affiliation with others which a bare bones organization can never hope to achieve.

It will also reinforce the perception, real or otherwise, that the weakened financial position of the USCF is only getting worse. This will hardly be a situation that will encourage more people to join or renew.

There are several ways to deal with declining revenues. Attempts may be made to cut expenses, increase revenues, or seek somehow to combine the two. It seems to me that the emphasis should be on increasing memberships, and therefore revenues. The real problem facing the USCF is that memberships are either declining or at best, remaining stagnant.

The decline or stagnation of core memberships should be the real concern, for regardless of any steps taken to cut expenses, such measures are bound to fail if the number of members continues to decline.

From the point of view of retail sales to USCF members, this is another discouraging development. We have already had to bring in legal counsel as a result of what I considered an egregious material breach of the agreement relating to a secret arrangement with the House of Staunton. For over a year, the USCF was paid by the House of Staunton to include promotional material to new members, including but not necessarily limited to discount coupons, which promoted and directed new members to patronize the House of Staunton.

Considering that the group of new members has historically and demographically been the highest spending group per capita for retail sales, this clandestine arrangement was particularly appalling. This strategy was short sighted, seeking quick gains in ad revenues and overlooking potential deep losses in sales revenues. This purchasing pattern of new members was known, or should have been known by the USCF when entering into this arrangement with the USCF, and it almost certainly was known by the House of Staunton.

When a letter from our attorney demanded that this cease and desist, not only did it continue (and my information is that it continues to this day), we did not even get the courtesy of a response. Nothing at all. Be advised that matter is still very much active, pending the results of legal research that is still ongoing.

Now it appears that one of the significant vehicles for USCF Sales to promote and market books and equipment is being reduced, perhaps even eventually eliminated. There seems to be no regard or even realization that this may have the effect of rendering the USCF brand worthless as USCF Sales tries to promote retail sales on behalf of the federation. USCF Sales relies on the ability to reach members with catalogs that are bound into Chess Life as well as monthly advertisements in Chess Life. Equally discouraging is the USCF's inability to understand and appreciate the value of Chess Life to the chess community.

To my knowledge, there is no member of the board, or any officer, who has any meaningful retail sales experience or marketing skills. Yet the board appears to take steps – intentionally or unintentionally, it hardly matters which – to undercut the efforts of USCF Sales to sell, promote and market on behalf of the USCF, while of course it simultaneously deplores the decreasing revenue sales generated and assumes that these actions should have no bearing on minimum guarantees or other indicia of performance. In fact, these actions have the effect of gutting some of the core provisions of an agreement that is already is under pressure.

As the discussions about what to do with Chess Life and memberships continue, I felt I should weigh in on the matter. It is distressing that after more than four years of handling the retail sales for the USCF the relationship seems more adversarial than one of partnership. I understand that there will be those who will genuinely disagree and there will be those who will want to simply "circle the wagons," rejecting any contrary views as they promote a personal agenda.

I am reminded of the one-liner that a camel is really a horse designed by committee. I fear the same is going on here with the redesign and restructure of the USCF, albeit by those who may mean well. Please re-think the proposed changes in Chess Life. If implemented, these changes will be essentially irrevocable. Consider hiring someone who has professional marketing and public relations experience with other organizations. Focus on reversing membership trends. I have been a member of the USCF for over 45 years and have actively supported it at all times. I very much want to see it continue and flourish.

Regards,
Hanon

Hanon W. Russell
USCF Sales.com
www.USCFSales.com
ChessCafe.com
www.ChessCafe.com
Toll-free (orders only please) 1-800-388-5464 (KING)
General Offices: 203-783-9866
Fax: 203-783-9673
234 Depot Road
P.O. Box 5460Milford, CT 06460 USA