In this fifth in a series of posts on Barter, I summarise some of the issues contained in a string of complaints, gripes and accusations I’ve received via the tipline over the last year relating to IRTA. I give my commentary on the nature of the fire under the smoke as I assess each of the issues. In summary, there appears to be me to be validity to most of the issues raised. IRTA is a highly political operation with a long history so some of the issues are not always clear-cut, but examining the claims raises more questions than answers.
I said in my previous post that IRTA (The International Reciprocal Trade Association) is “an association that engenders high emotions. Love ’em or hate ’em, there is clearly a long history with the organisation and everyone I speak to reports their own experiences quite passionately.” This bears repeating when diving into the IRTA can of worms!
There is an enormous cloud of smoke surrounding the organisation. Feedback from around the globe, from industry professionals of all types, sizes and demographics has been negative, some extraordinarily negative, and to say the industry is divided and the organisation has a credibility problem is an understatement. IRTA’s current leadership is essentially defensive. When speaking with Ron Whitney and others about this negativity (and I have, more than once at length), he is quick to move criticisms into the category of historical dissatisfaction and points out the positive aspects of their work in recent years.
He has a point. There have been success stories. They have not been sitting on their hands or twiddling their thumbs. There is a divided (and as I said in my last post) an ineffective board. That would make it hard for any Executive, and human nature finds it a lot easier to knock than to encourage.
BUT . . . specific complaints and issues still exist, and many of them have not been addressed, certainly to my satisfaction. IRTA does not have a lot of credibility and the current Bartercard fiasco indicate that the leaders’ conduct is worthy of further examination.
Endorsing Bartercard – Exclusively
In previous posts I have revealed that Bartercard has an exclusive agreement with IRTA to promote their software platform as the preferred provider (best solution in the world) for a period of 15 years (5+5+5). IRTA to date has not verified this claim and there is a possibility that Bartercard, who has always been an aggressive self-promoter might have jumped the gun, distorted reality, stretched the truth a little or even made the whole story up BUT I do lean towards Trevor Dietz’s comment that IRTA approached then for a solution to their desired change from the current Universal Currency platform and that a deal was done very likely exactly as the Prospectus presents it.
I’ve already commented that if this is the case, then it was strategic stupidity on the part of Bartercard to attempt listing with such a dodgy deal and on IRTA’s part to associate with any one of their members, let alone with a company clearly in trouble, with old technology (rest assured that a portion of the float will be needed to upgrade aspects of their system) and a very poor reputation in the industry.
From what I have seen and heard it is my deduction that IRTA’s Executive Director (Ron Whitney), President (Annette Riggs), Bartercard’s representative on the IRTA Board (Paul Bolte) and Bartercard chief (Trevor Dietz) colluded to do the deal. In due course I’m sure the facts will all come out but how they got it past the IRTA board, got their approval or endorsement (or even if they did) beats me. There is certainly some funny business going on!
In examining IRTA’s role in the fiasco, the questions I have are:
- Who determined that IRTA should move from the current platform? When and why?
- Who approached Bartercard for their solution and what research into various options was conducted?
- What deal was struck, when and with who’s authority?
- Has the Board of IRTA signed off on the deal and on what basis (with what information/understanding) did they sign off?
- What impact analysis was conducted and how was the decision fitted into IRTA’s mandate, objectives and strategic plan?
- How were the issues of secrecy/transparency of an association dealing with a sensitive commercial arrangement dealt with?
- What was the agreement between Bartercard and IRTA in regards to the announcement? Did they intend for the deal to remain secret, and if so for how long, and why?
- How was the clear conflict of interest between a Bartercard representative on the IRTA Board handled, both during the negotiations and during any Board approval or discussions.
These are my questions to date. No doubt more from others will arise as people contact my tipline and spill the beans.
My examination of the conduct of IRTA leadership to date reveals strong grounds for further investigation. As people have said to me in various ways . . . “I smell a rat!” and “It stinks!” Heads will surely have to roll over this debacle.
It’s my assessment that Ron Whitney, Executive Director is not universally liked nor trusted. I’ve never had any beef with him personally or professionally. I’ve found him a little defensive, perhaps overly so, and I’ve told him that several times, and I’ve noted a streak of opportunism, but at the end of the day he has always honoured his word and I would consider us to have a professional, cordial relationship, thus far anyway.
But that appears not to always be the case. Accusations that could be summarised as that of high self-interest, dishonesty and deviousness have not just come from those that he has offended or crossed swords with, but from a wide spectrum of the industry. He appears to me to know a lot of people, and to work with a lot of people and closely with a few. He clearly works in a highly political environment and has challenges with an organisation lacking clear vision and strong leadership. I don’t feel in a position to assess his professional conduct over the years that he’s been in the box seat BUT I’ve heard from many that they are dissatisfied.
I don’t want to repeat any stories or gossip because I can’t verify or validate them but there has been a lot of smoke arising from the Virginia offices for quite some time – from the outset of his employment contract right until now. It seems that the Bartercard revelations have brought a lot of these issues to the surface.
Annette Riggs the current President has brought in similar feedback. As far as I can tell, people have a degree of respect for her passion, and commitment but also a degree of mistrust, with the general aroma of self-interest hanging around. Again, personally I have never had any problems and would consider my relationship professional and cordial, but I too get the feeling that there’s a little more going on behind the scenes and what we see on the surface is only a part of the story.
Examining the whole IRTA Board to Executive relationship may expose things that neither want made public and I think that the Membership of IRTA will get a nasty surprise and will not be happy when the fires under that smoke are revealed.
In summary, I view the Executive to have a credibility problem, and that this is not entirely without justification. The details I will leave to others to deal with for the moment.
I have previously commented in depth about the Board of IRTA, assessing them as ineffective, divided, lacking vision and absent of strong leadership. It’s almost as if the Executive rules the Board. This might be a little harsh and not quite literally correct but there are certainly power and control problems in there.
I do not feel comfortable commenting on any individual Board Member, for (except in regards to Paul Bolte) I have not had any direct contact with any of them personally, but as a Board they really do have issues. I think that putting them all under the microscope individually would be a constructive exercise. I think that they have a lot to answer for. For example . . . what was their voting on the Bartercard endorsement? Did the Board members who are Bartercard’s direct competitors endorse the decision to give Bartercard an exclusive? Did they agree that Bartercard’s [partly aging] platform was the best in the world and would continue to be for the next 15 years?
If they were kept in the dark, how the heck can they say that they have represented the Members’ best interests? If they knew about it but chose to keep quiet about it, then why? If they were too scared to rock the boat then what sort of leadership credibility do they have now that the story has broken? If they couldn’t speak about it for some [currently unknown] reason, then why couldn’t they?
The Board as a whole needs to reassess their performance. Individual board members will need to reassess their own positions in light of this recent fiasco and make them clear. I see three options for them individually:
- Resign in protest at corruption, politics, hidden agendas, backroom deals, manipulation or whatever they see as the trouble in there. Doing so would send a strong message to the members (and the world) that they are people of ethics, especially if they make clear statements to the Members (and the public) as to why they acted as they did. Doing this immediately shows a strong commitment to ethical conduct. Delaying it will indicate more of a desire for self-preservation or opportunism rather than living by principles.
- They can stick in there (and break any confidentiality agreements if necessary) to get the skeletons out of the closet. Sure they may be fired as a whistle-blower but this is still an option. It would make the strong statement that they were people of ethics BUT still committed to pushing through with putting IRTA back on track.
- Do nothing. Keep quiet and play the game, hoping that the whole thing will die down and that they can escape the ire of disgruntled members and hoping to do what they wanted to do when they agreed to the things they have in the past.
The IRTA Board and individual Board Members have some serious issues to deal with.
IRTA has copped some flak in the past for its handling of the issue of industry deficits. To my way of thinking, its responses have been short-sighted, shallow and basically a dangerous position to take. While some have taken an aggressive approach towards IRTA over this issue, I don’t think the matter is as simple as either side makes out.
The issue of deficits is the biggie of the industry. It is my understanding from anecdotal evidence and various industry sources over many years that a large proportion of Commercial Barter/Trade Exchanges run house deficits (sometimes very large) and attempt to conceal this information from their members (and/or from the public). Bartercard’s recent Prospectus is a perfect example of this. Nowhere in any public documents do you see any reference to this liability. It’s neither mentioned, accounted for nor available, except to the well-informed.
But there are also other deficits that can have serious impact upon the status of a particular barter currency, and/or exchange operator – their deficit to reciprocal exchanges and deficits internally within their system, as well as their own deficits in a house account from spending. For example a deficit within a system may occur with the bankruptcy or default of a member. A deficit within an exchange can occur when another trade exchange sells to them, thus creating a liability to return the trade. Thirdly of course is the big one that everyone in the industry knows about which actually has sales tax, income tax and serious financial ramifications – the organisation’s own in-house account, almost always an account in deficit.
IRTA’s reponse to the issue has been both defensive, in the face of an attack, and to my mind quite shallow considering the importance of it – dealing with the matter with one report/advisory that states their position as a guideline to be used across the industry. A session at their upcoming conference is scheduled to clarify the matters surrounding their advisory. I think that they should be worried, if they are not already.
My concerns on this matter are not new. I’ve always made it clear to all I speak to including the IRTA Executive that I do not blindly accept IRTA’s take on the matter. The issue should be explored thoroughly and discussed in a manner that brings the skeletons out of the closet. IRTA has a conflict of interest doing this because the subject is not an easy one for many of their members. If their members mostly all have large house deficits through internal spending, and if they do not want to deal with this situation or for the authorities or public to know their exposure, then pushing buttons in this arena will be like shooting themselves in the foot. They’ll be out of business pretty quickly as only the exchanges ready and willing to address the issue would remain members. That would certainly decimate IRTA overnight. Look how much Bartercard wants to protect that deficit! Many of the other big exchanges too would not want open books.
My own personal take is that any Trade Exchange can do whatever they like, even buying 100% of the goods and services from their members and running the exchange into the ground (as the conman Daniel Evans pretty much did in New Zealand with his initial Ozone offering) OR run a clean ship with no deficit or internal spending in the slightest. The issue for me is not whether there is a deficit or even how big/much it is, the issue is one of disclosure. If the members know that their currency provider is in debt to their members then they have a choice to trade, invest into the currency, trade away merrily or bail out as they so wish – all based on quality information. Full disclosure is the key for me, not so much what the rules or practices actually are.
In examining IRTA in this area of dealing with deficits, sadly, I find the organisation with a conflict of interests and its responses wanting.
I’ve been trying to grapple with IRTA’s role, mandate, intent towards, conduct with, performance of, management of and relationship with Universal Currency for a while now. The more I dig, the more I have questions and the more concerned I become.
With revelations in the recently released Bartercard Prospectus that IRTA has entered into an exclusive agreement to use and endorse the Bartercard platform, my concerns have gone into hyperdrive.
I would like to understand the history of Universal Currency more.
Who set it up and who owns it and how this benefits the industry?
What’s the story behind the platform and the conflict of interest between the GETs founder Richard Logie (an ex-IRTA Board Member who I am told was evicted due to a conflict of interest) and the Universal Currency system. As far as I can tell, IRTA has used GETs for quite a while, dumped it once and then gone back to it, then appears to be dumping it again in favour of the inhouse Bartercard system that will likely be hurriedly tweaked to handle the UC requirements. What the *** is happening? I hear one story from Richard and another from IRTA. Why?
What is the strategic purpose and how has this been outworked? When was this strategy set (or changed) and who did it? Was it another secret Board decision (like the secret Bartercard deal seems to have been) or have the Members been up with the play, involved and contributing to the decision-making? I do not see a lot of transparency in this area and with yet another change planned with an attempt at developing their own software, (I understand that this attempt was vetoed by the Board) I’m wondering what the real story is behind the scenes. I’d like to know more.
I am intrigued in the operational matters – from where and why does IRTA receive its UC income? Who manages the accounting and how is this audited? I suspect that there are actions of a financial nature that are either hidden or disguised because while I only had access to the system for a limited time, some things didn’t add up or make sense to me. I also tried to contact some of the members without any joy. If this is as a result of my ignorance or access to limited information, then so be it, but I’m usually fairly good at smelling a rat and most of my hunches generally turn out pretty right. There’s something going on in there!
I’d like to know more about recent rulings relating to Universal Currency as pass-through entities (and thu s do not have to issue 1099B’s because it represents duplicate transaction reporting) and its application IN PRACTICE. IRTA appears to assume that all members of UC operate in the same manner and that NONE of them trade using the currency in their own right. That’s a big hole that you could drive a Kenworth truck through if you ask me. What processes does UC have in place to ensure that all trades/traders/transactions ARE actually third-party transactions? I simply do not believe that this is fully the case. Ditto with individual Trade Exchanges currencies, but that’s a separate issue aside from UC.
I believe that anyone investigating the Universal Currency thoroughly will find some things not right. It’s too early to say if it is widespread deception or just some things around the edges not exactly kosher, but the Board, or the new Board or the auditors or somebody else with the clout and smarts to do so, should act to deal to my concerns. There’s certainly smoke arising from in there for me but how big the fire is I actually don’t yet know.
When I look at the IRTA operation, the public interface (their website), the outbound communications (their media releases and member communications) and speak to those currently within the organisation, those like me on the outside and those on the outside but with experience or contacts on the inside, I am totally confused.
Six different people reporting six different stories . . . actions that run counter to stated mandates and objectives . . . conflict and politics spilling into the public space . . . dissatisfaction from multiple corners . . . glowing reports of growth and success . . . then the insanity of the probable exclusive Bartercard endorsement . . . it goes on.
I’ve highlighted Board weaknesses and issues with the Executive but in some ways this is a little unfair to hammer the existing Board Members. Sure they carry the can for now, but the IRTA challenges go back a long way.
I would like to know exactly what IRTA stands for and how they are going to achieve whatever they want. It’s no good saying that we represent the industry; work for the industry and have done so for yonks. It has to be real; tangible benefit; planned and pushed through with people who believe in it and make it happen. It’s also no good saying that they don’t have any, or enough money. Sure there will always be freeloaders but if the people that benefit aren’t prepared to resource it, then don’t do it! I’ve never found that money is the first step in a successful operation. Vision, passion and leadership mixed with creativity and the gumption to DO it will always find the resourcing to achieve the goals.
I’d be analysing where the money comes from and then goes then assessing the sustainability of that system. If Peter pays IRTA so that Paul gets the benefit, then you’ve got a problem in structure. IRTA will have troubles surviving until it gets a real visionary; then sets agreed objectives and then delivers. That’s smart strategic thinking, strong dedicated leadership and then ethical committed implementation.
They’ve got a long way to go looking at it from the outside.
I’d like to know more about the deal that IRTA brokered and proudly announced that Bartercard was re-entering the USA market and that they had negotiated a payout of a portion of their debts using UC credits. It sounded too good to be true at the time but how did that one get done? As I understand it Bartercard paid out using UC. Where did they get that credit from? How much was it and when and how did they pay for it? Did they actually pay out 50c in the dollar? What happened to the creditors who did not have a UC account . . . or were not IRTA members? What about Canada? What happened up there? Would IRTA do the same for other members who got into a pickle? If so under what criteria would they do that? Too big to fail? I really do question some of IRTA’s relationships and decisions!
There are many more issues worthy of examination but these have been important ones nonetheless.
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