From: les@sail.stanford.edu (Les Earnest)
Subject: U.S. cycling governance: A Knight in Shining Armor [part 8 of 10]
Organization: Computer Science Department, Stanford University
Date: Wed, 27 Jan 1993 09:09:16 GMT

Rich DeGarmo, who became USCF President in 1987, liked people to like
him and was uncomfortable with the ongoing adversary relationship
between USCF and USPRO.  He reopened communications between the
organizations and set out to negotiate an affiliation, whatever it
took.

DeGarmo soon discovered that what Simes wanted most was money.  He
somehow convinced the USCF board that it was a good idea to give USPRO
money even though USCF would get nothing of value in return.  He kept
the specific terms of the proposed agreement secret from the board and
even from the Executive Committee and, like a bunch of foolish sheep,
they went along with this and got fleeced.  More accurately, the USCF
membership got fleeced.

At one point I had managed to convince the board that they should at
least read the agreement before it was signed.  Copies of the dozen or
so pages of legalese were placed in the hands of directors for a few
minutes during executive session, then taken away and destroyed.
Based on that brief review, it appeared to me that approval of that
proposal would be inconsistent with the fiduciary responsibility of
directors, which could expose us to legal action.  I said so, but no
one else expressed concern and the negotiation proceeded with board's
blessing.  I tried to point out that the only reason for keeping the
terms secret was that they were so bad as to be embarrassing, but
I was talking to deaf ears.

Not only were large amounts of cash handed over but USCF helped get
sponsorship for USPRO, provided them with insurance at well below
cost, and made all USCF races with large prize lists open to pro
riders -- with out this provision there were not enough pro races in
the U.S. for them to make a living.

In the first year of the agreement, Simes took the money and ran,
leaving U.S. professional competitors at the World Championships
unsupported, contrary to what had been discussed.  No problem.  The
next year DeGarmo negotiated a revised agreement that offered a
potentially larger sum, still with no visible return to USCF other
than the goodwill that DeGarmo so badly needed.  In 1991 I wrote a
letter to VeloNews publicly congratulating Jack Simes on again
outsmarting the USCF, which earned me more warm regards from the USCF
board.

Over the three years ending in 1992, USPRO reportedly received
$231,000 in cash from USCF plus a very large insurance subsidy.
$21,000 of the cash gift was reportedly spent on programs such as team
support and the rest went for ``administrative expenses.''  Jack
Simes' private corporation seems to have profitted handsomely and his
new restaurant is reportedly doing well.  There is big money to be
made in ``nonprofit'' corporations if one goes about it right.

Finally, in September 1992 the USCF board decided that the USCF-USPRO
agreement should be cancelled.  Under the one-sided terms of that
agreement, USPRO gets to keep everything that had been given to them.

I hope that the next time that USCF leaders tell the board that the
terms of a prospective contract must be kept confidential, even though
the only plausible reason for doing so is that it is a senseless
proposal, that they will insist on public discussion and consider the
true interests of the organization.

Relations are now again chilly between USCF and USPRO.  It remains to
be seen whether a sensible working relationship can be developed.  I
certainly hope that no one proposes to throw any more money at them --
USCF has already given USPRO far more than their organization is worth
by any rational valuation, yet owns no interest in it.

If open turf wars break out again, as I expect they will, the USCF
goal should be to put USPRO out of business as quickly as possible,
then get on with the development of the sport.  I estimate that this
stuggle will last about two years.  Oh well, we've already wasted 18
years since USCF supposedly took control of professional racing.

[Next part: Shifting to high gear]
--
Les Earnest (Les@cs.Stanford.edu)               Phone:  415 941-3984
Computer Science Dept.; Stanford, CA 94305	  Fax:  415 941-3934
Newsgroups: rec.bicycles.racing