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Moore Mess with Texas

After only a month on the job as president of the Texas Conference, Larry Moore was chosen to be the new president of the Southwestern Union Conference at the union constituency meeting May 9.

The surprise election came about because the day before the constituency session, Max Trevino announced that he was retiring. He had served as president of the union for 16 years.

 Moore assumed the union position immediately leaving the Texas Conference Executive Committee the task of selecting another president. The April conference constituency when Moore was elected in Texas was filled with drama.  A brief report about the conference and its controversies appears in the current issue of Spectrum. It appears for your convenience below. —Bonnie Dwyer

The situation in the Texas Conference which resulted in the expulsion of Leighton Holley as president on April 3 has a long and rather complicated history. As is often the case when passions run high in church politics, money is a factor. But so are individual egos, conflicting agendas and generational changes.

The 73-year-old Holley, who had been elected president in 2004, was not renominated by the nominating committee, which made its report to the constituency in early March. Also rejected by the committee were Errol Eder, treasurer, and his wife, Bonnie Eder, who had held the position of education director. A field of three new nominees was offered to the constituency which would gather on April 3 in Keene to accept or reject the nominating committee’s slate.

Holley’s leadership had been controversial for several years, primarily over a situation regarding the conference’s boarding school, Valley Grande Adventist Academy in Weslaco, Hidalgo County, in the southern tip of the state. In the 1960s (long before Holley’s term began), a nursing home currently named Valley Grande Manor was established on the property of the academy to serve the community and also to provide a source of steady income for the academy, which had struggled like many other denominational boarding academies throughout North America. An income of $450,000 per year was contractually agreed on, with the money deposited in a newly created entity called Valley Educational Foundation (VEF) in order to keep the revenue stream directed to the academy (and not to the parent conference).

When the foundation was created, three healthcare facilities were placed under its aegis. Two were faltering and were eventually closed or sold off. Valley Grande Manor is the surviving facility, and it experienced a major turnaround under the leadership of Glen Hamel, its current head. Hamel came to the facility originally as a consultant and eventually took over fulltime. He oversaw the creation of an entity called ElderCare to operate the manor and contract with VEF. The manor became a respected care facility, winning awards and serving as a training ground for health inspectors because of its outstanding reputation. For many years, it was financially sound and proved to be a financial lifeline for the academy.

However, in the past decade care facilities for the elderly have increasingly encountered financially troubled waters as Medicaid and Medicare payments were cut. Malpractice insurance also rose in cost to the point where premiums effectively cost more than coverage. Financial problems at ElderCare began in 2004 when Hamel and his group chose not to renew insurance coverage through the General Conference’s insurance program. Hamel says the coverage was not mandatory; it appeared they were conserving cash at a difficult time.

Holley and other directors of the VEF argued otherwise, saying that Hamel and ElderCare had violated Texas law by giving up the coverage, and that as a result ElderCare had defaulted on its lease. Efforts to force ElderCare to reinstate its insurance coverage failed, and the foundation noted that ElderCare also failed to renew its lease agreement when it expired on December 31, 2007. Holley further argued that Hamel and ElderCare had transferred their operations to a shell corporation, also in violation of their lease with the foundation. Rather than negotiating with ElderCare, the foundation directors sued ElderCare to force their eviction for alleged violations of their lease agreement.

ElderCare filed bankruptcy to stop the eviction. They also countered with a suit against the foundation, seeking to cut its rent almost in half. They further sought to recover more than one million dollars in alleged damages from the foundation. All of these actions embroiled both parties in a multi-year legal action that continues to this day.

The case was first heard in bankruptcy court where the court denied VEF’s motion to compel ElderCare to vacate the premises. On appeal, the District Court reversed the judgment of the Bankruptcy Court rendering its opinion in a brief, telephonic hearing. Neither side was pleased and both sides appealed to the 5th Circuit Court of Appeals where retired U.S. Supreme Court Justice Sandra Day O’Connor, who takes cases on assignment, was appointed one of the judges to hear the appeal. The court ruled in May, 2009, reversing the district court’s decision and coming down in favor of ElderCare (and against Holley and the foundation).

“I think the new conference president (Larry Moore) will find it extremely risky, politically, to try to continue to fight,” Hamel said. “It could be risky for him even to try to settle with us now. I think our best chance is for a third party to act as a mediator between us and come to a settlement.”

Hamel says he has five to six more years on his current lease, and he hopes to continue operating the manor during that time and perhaps “earn-out” some of the money ElderCare is seeking from the foundation.

“I told them, you can pay me now or pay me later,” he said. “But the conference rejected us. It became a very personal issue—Holley wanted me and my company out of the picture.”

In the meantime, legal costs have mounted. For the foundation, the tab is estimated to be at least $800,000 (some sources say it is closer to $1 million). When the legal actions became known, Seventh-day Adventists in the conference had several reasons to be concerned. One was moral and religious—in view of biblical and church teachings which strongly advise against members going to court against members, how could an SDA organization sue another SDA organization when both are controlled by Adventists? 

This fact was noted in the ruling by the Court of Apppeals. “In light of the church’s policy that its members should not litigate against one another, the lease agreement included several uncommon provisions requiring good faith negotiations and mediation in certain contexts,” the ruling said. The 31-page document tells the story of the many ways that negotiations and mediation failed.

The second reason for concern was financial. At a September 26, 2009, constituency meeting of the academy, Holley affirmed that to date ElderCare had not missed an annual payment of at least $450,000, in spite of the legal costs to both sides, but he was asked in the forum whether ElderCare could continue to support the academy foundation in the future, when presumably legal costs and possible fines or penalties could mount up.

Holley assured the academy’s constituents that the foundation’s legal actions were solely aimed at upholding the lease’s validity and trying to uphold income for the academy. He admitted, however, that there was little likelihood of regaining the $800,000 to $1 million already spent in legal fees.

Phillip Brantley, an attorney with homes in both Berrien Springs, Michigan, and Sugar Land, Texas, has been active on behalf of ElderCare. He has spoken out publicly against the leadership of Holley and Eder. He has appealed to the national church leadership (General Conference President Ted Wilson and North America President Dan Jackson) to use their influence to resolve the situation in the Texas Conference.

Interestingly, Wilson made a special trip to the conference in early March. While he and Jackson have no direct responsibility for what takes place in a local conference—and in fact cannot influence the course of events—he conducted several speaking engagements, exhorting the faithful and seeking healing for all.

For his part, Jackson had responded to a letter from the Valley Grande Academy Alumni Association siding with them in their request for a chance to speak at the constituency meeting. He said their request that funds from the conference reserve be used to refund the Valley Educational Foundation for the money lost through the ongoing litigation deserved to be heard by the entire constituency, not just the conference executive committee. Jackson copied his letter to many people at the General Conference, the Union, and the Conference. The Alumni Association was given a spot on the agenda.

When the date for the conference constituency meeting approached in early April, the nominating committee was called back on Saturday night, April 2, because their nominee for Superintendent of Education had declined the position. Many mem­bers were absent, and the few who did attend chose to change their original slate and place Bonnie Eder’s name back in play for the education slot. This created a firestorm on Facebook, Twitter and regular e-mail throughout North America. By Sunday morning, people were using phones and Blackberries to parse every word that was said, in public and often in private.

Retired Texas Conference president Steve Gifford had been selected to speak on behalf of the alumni association. He was to be allotted 10 minutes for his speech; he and others had also prepared documents to support his case. The documents were confiscated at the door by conference personnel. And when it was time for Gifford to talk, the chair Max Trevino (Southwestern Union Conference President) put it to the vote of the constituents as to whether Gifford, a non-delegate, would be allowed to speak. This marked a turning point in what had been a decorous meeting to that point when, after remarks about Gifford were made from the platform, the constituents voted down giving him the microphone. Suzanna Facundo, the immediate past president of the Valley Grande Alumni Association was drafted to read from Gifford’s prepared remarks. When the request for money that the Alumni Association was asking for from the conference was put to a vote, the constituents voted no.

Gifford and the alumni association representatives were displeased by the way that the meeting was going and the remarks that had been made.

Many bloggers and Tweeters suspected a conspiracy—some said the conference leadership was eating up the time with nonessential trivia and votes on other issues, hoping to delay the inevitable. Since the constituency meeting was held in Keene, many hours’ drive for delegates from across the state and removed from many of the population centers, it was feared many anti-incumbent voters would give up and leave for home (and for work the next day) before the crucial votes took place, and that loyalists (conference workers, etc.) would remain to vote Holley, Eder and Mrs. Eder back in office.

But when the mid-afternoon votes finally took place, it was clear that the change in leadership the nominating committee had begun would be the order of the day. Larry Moore was elected conference president by a vote of 720–250.

When Bonnie Eder’s name was brought to the floor, there was a request that it again be sent back to the nominating committee which held a meeting in one of the back rooms. When they returned with William Reinke’s name, instead of Eder’s, he received an overwhelming vote of support.

What remains to be seen is how Moore and a new leadership team in Texas will handle the relationship with ElderCare. 

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