Sunday, May 14, 2006

Shriners in hot water again?

While most of conventional Freemasonry is gearing up (if they've thought about it at all) for the increased interest in Masonry that the opening of The Da Vinci Code movie is expected to bring, Shriners may be wishing for a litte less Light to be beamed in their direction.

The Shrine is a separate organization, not officially a part of Freemasonry. Curently, one of the requirements for becoming a Shriner is that you be a Mason in good standing. The Shrine has in the last several years openly discussed removing that requirement, thus opening membership to men who don't want to be bothered with actually learning anything about Freemasonry first.

For the record — this blog-writer (The Widow's Son) is not and has never been a member of the Shrine or the Scottish Rite of Freemasonry. I do hold a membership in the York Rite (which more properly could be called the American Rite, since no one in England or at the Grand Lodge of York claims any association with the York Rite). I no longer participate in the York Rite, having found nothing of interest in that organization other than one particularly impressive ritual that either they or I completely misunderstood. After my treatment for asking questions in my Blue Lodge, I knew better than to inquire too deeply into the "secrets" of the Royal Arch degrees.

Investigative journalist Cassandra Frost on May 12, 2006 released an article titled "Shriners in Hot Water Again?" which you can read below, or at Rense.com or newsvine.com. Links to various Shrine-related charities' tax returns can be found by following links in the story. A notice on one site today says that additional information regarding Pennsylvania Shrine activities will be posted this weekend. One wonders if the timing of these articles has anything to do with The Da Vinci Code premiere, but I guess that's fodder for a more conspiratorial article at some other time.

Cassandra Frost's current article repeatedly refers to articles published in the Orlando Sentinel in 1985 which exposed "financial irregularities" in the Shrine organization.

Shriners Hospitals for Children (which is legally a separate organization from the Shrine):
...is a network of pediatric specialty hospitals, founded by the Shrine, where children under the age of 18 receive excellent medical care absolutely free of charge. There are 18 orthopaedic Shriners Hospitals, three Shriners Hospitals dedicated to treating children with severe burns, and one Shriners Hospital that provides orthopaedic, burn and spinal cord injury care. Shriners Hospitals are located throughout North America — 20 in the United States and one each in Mexico and Canada. These "Centers of Excellence" serve as major referral centers for children with complex orthopaedic and burn problems.

There is never a charge to the patient, parent or any third party for any service or medical treatment received at Shriners Hospitals. Shriners Hospitals accept and treat children without regard to race, religion or relationship to a Shriner. Any child may be eligible for treatment at a Shriners Hospital if the child is under 18 and if, in the opinion of the hospital's chief of staff, the child has an orthopaedic or burn condition that Shriners Hospitals can help.

All of the orthopaedic hospitals are equipped and staffed to treat children with congenital orthopaedic deformities, problems resulting from orthopaedic injuries, and diseases of the musculoskeletal system. Three of the orthopaedic hospitals (in Chicago, Philadelphia and Sacramento) also have special programs dedicated to caring for children with spinal cord injuries.

The Shriners Hospitals in Boston, Cincinnati, Galveston, and Sacramento treat children with acute, fresh burns; children needing plastic reconstructive or restorative surgery as a result of "healed" burns; children with severe scarring, resulting in contractures or interference with mobility of the limbs; and children with scarring and deformity of the face.


Here is Part 1: Shriners in hot water again? by Cassandra (Sandy) Frost:

Four years ago, Vernon Hill, a retired insurance broker and Shriner of 15 years, was driving sick children to the Shriners Orthopedic Hospital in Greenville, North Carolina and Cincinnati, Ohio. As he waited to drive the kids back home, he’d visit with other Shriners from around the country and began to hear things that disturbed him. Like how officers in various Temples allegedly misappropriated the money that was raised for the hospitals. How the general membership had no idea of the way donations seemed to go towards any and everything but the hospitals they were raised for.

As Hill began asking questions, he learned of a series of investigative articles published by the Orlando Sentinel in 1986 that the popular advice columnist Ann Landers characterized as distressing. In response to a reader, Landers wrote:

“The Sentinel reported that in 1985 the Shriners kept a whopping 71 percent of the money raised, about $21.7 million. This went to pay for a range of clubhouse expenses, including the upkeep of private bars, restaurants and golf courses. They also used the money to pay for conventions, travel and entertainment for their 880,000 members and, again, fund raising. The Shrine's most lucrative source of income is the circuses throughout the country. They generated about $23 million in 1985, the paper reported. The records show that LESS THAN 2 percent, or $346,251, went to the medical care of the children. I find this shocking. The Sentinel cited Internal Revenue Service records showing that although the Shrine is the richest charity in the nation, it gave its 22 hospitals for children less than one-third of the gross collected from the public in 1984. The REMAINDER was spent on food, travel, entertainment, fraternal ceremonies and fund-raising.”

Later that year, the Shriners Announced Fund-Raising Guidelines For Temples and according to an AP story dated October 28, 1986:

“TAMPA, Fla. - The Shriners have agreed to a new set of fund-raising guidelines after a newspaper reported that less than one-third of the money raised by the fraternal organization each year goes to its charities. A list of 10 recommendations was unanimously adopted Monday by the Shriners board at a quarterly meeting, according to a news release. The standards "are intended to assure the public that information on Shriners fund-raising activities is sufficient to easily identify those activities which benefit the Temples and those which benefit Shriners Hospitals," said Mike Andrews, Shriners public relations director.

Under the guidelines, all 189 temples nationwide must maintain detailed financial records relating to all fund-raising, the head of each temple must approve all fund-raising done under the auspices of his temple, and temple accounts must be regularly audited or reviewed by accountants.”

Expecting the Shriners to abide by their own new guidelines, Hill kept asking questions and found information to the contrary. The head of an online nonprofit group suggested that he contact a tax specialist named Paul Dolnier. After a few emails, they spoke on the phone.

“Paul asked me about ten questions and after fifteen minutes, we knew we could work together,” Hill explained.
Dolnier has been a tax accountant since 1991, has a Masters Degree in Taxation and spent three years as an IRS Revenue Officer.

“After working for the IRS, I became a nonprofit consultant of sorts,” Dolnier explained. “They are unique clients and I helped them with their IRS applications and accounting.”

“I don’t have an axe to grind,” Dolnier stated. “What I do know is that after I checked out his story, I’ve worked with Vernon the past 16 months to obtain hundreds of pages of documents from the IRS in Ogden, Utah. We requested the 990’s directly from the IRS rather than ask the individual groups. As I reviewed the forms, it became clear to me that the Shriners have over $8.5 billion in the bank. They have the largest charitable endowment in the USA according to the Forbes Magazine Charity List for 2004. If they don’t raise another dime, they can run the hospitals for the next 40 years, no problem.”

According to Dolnier, “The Orlando Sentinel investigation emphasized the need for the Shriners to keep detailed financial records related to all aspects of fund raising. Today, the question that needs to be asked is: Why does the overall percentage of fund raising expenses all over the country based on REVIEW, always favor the fraternal fundraising (as in LOWER % of expenses) and always have higher expenses for charity?"

“It would seem that maybe some expense shifting might be going on to ‘keep more money’ in the local Shrine Temples for fraternal member’s purposes RATHER than sending more to help support the Charity Hospital,” Dolnier suggested.

Back in 1999, Hill remembered over hearing the Potentate or head of his Shriners Temple. “I was standing four feet away and heard the Potentate tell a new officer about all the good times they were going to have, about all the trips they’d go on.”

As Hill asked more questions of the Shriners leadership, a letter from the group’s corporate offices told the head of the Sudan Shrine Temple to do what they wanted to Hill. He found himself removed from the Road Runners, the group that drives the sick and crippled children in the vans to the hospitals. He was also removed from the temple’s PR committee.

It appears that Hill was removed from both committees for asking about the group’s financial accountability as well as for asking “Where does all the money go?”

This ties into an issue cited in an April, 2005 report on the Shriners provided by Give.org, the nonprofit watchdog group that is part of the Better Business Bureau. The report states:

“Shriners Hospitals for Children (Shriners) does not meet the following Standard for Charity Accountability. 10: Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity’s unrestricted net assets available for use should not be more than three times the size of the past years expenses or three times the size of the current years budget, whichever is higher.

Shriners does not meet this standard because according to its 2003 audited financial statements, total unrestricted net assets (after excluding $757,707,000 of land, buildings and equipment) are $6,266,520,000. This amount is greater than 11 times the total expenses ($535,834,000) for 2003. As a result, Shriners does not meet this standard.”

The Give.org report did state that the Shriners met all the other charity accountability standards except this one.

The specific issue that both Hill and Dolnier are currently focusing on involves Shriners temples in the state of Pennsylvania. Dolnier formed, along with Hill and others, a new-profit organization called Charity Watch Center.

The Charity Watch Center web site alleges: “Attorney General's Office of Charitable Registration for the State of PA is looking at this group as a "matter of great interest " concerning past and current charity fundraising policies and procedures throughout the entire State of PA which includes ALL Shrine Temples and Groups and Clubs located within the State of PA.” 1

Dolnier explained how he recently met with the chief investigator, auditor and counsel for Pennsylvania’s Charitable Special Investigation unit. “They were in Florida on another matter and I sent them documentation. They took it so seriously that instead of flying straight home, they came to Fort Lauderdale and spent about six hours with me as I explained what I’ve found.”

According to Leslie Amoros of the Special Investigation Unit’s Press Office “We can’t confirm or deny any investigation. Period.”

Charity Watch Center explains that: “Under (Pennsylvania) State Charitable Solicitation Law, when you ask the public for donations, and you tell them the proceeds will be going to a non-profit public charity, BY LAW you will transfer 100% of the net proceeds to that named charity. If the organization that made the charity solicitation, FAILS to do what it promised the public to do, it is in VIOLATION of the Charity Solicitation laws of the state. Based on the FACTS that Charity Watch documented from this groups Federal Tax Returns for the State of PA, Charity Watch investigation documented facts that show that this group FAILED to transfer 100% of the net charitable proceeds to the approved public charity as REQUIRED by state and federal charity and tax laws. The Internal Revenue Service has serious concerns regarding organizations that FAIL to completely transfer 100% of net charitable proceeds to an approved 501(c)(3) public charity."

“IRS allows for the following actions for groups that fail to do this, the Donations made to this organization will be considered as "Non-Tax Deductible donations" under IRS Tax Code Section 501(c)(10).

Plain English Explanation: If your donation was made and you deducted it on your personal federal and/or state tax return and IRS deemed it to later be “non-deductible," you would be REQUIRED to go back and AMEND every year of your previously filed tax return and REMOVE the deduction, and pay any taxes that might be owed when that happens.”

Dolnier’s 15 years of tax accounting experience, his Master’s in Taxation and his experience as an IRS Revenue Officer dealing with IRS rules and regulations has enabled him extensively review Shriner returns from Pennsylvania, New York, California. These results are posted on the Charity Watch Center website at:
http://www.help-page-nonprofit.org/pages/8/index.htm

“This is an on going review that provides the latest updates and additions to the site as things develop,” Dolnier explained. “The returns show either bad book keeping or that someone may be hiding things. My analysis shows that only 23% to 48% of the Pennsylvania groups’ charitable donations are going where they are supposed to.”

“Take, for example, the 2003 return for Pennsylvania’s Irem Shriner Temple that is posted online,” he continued. “According to my calculations, the Temple listed a net income, which is the reported fundraising portion of the temple’s income, of nearly $300,000. Half of this is supposed to go towards local charities. Under “Functional Expenses: Page 2, Line 43,” Charitable Contributions are listed as $50,000. So, Charity Watch Center asks: “Where did the other $100,000 go?”

“Another confusing thing,” he added, “is that the returns aren’t clear if the money raised through bingo or the circus or raffles or other events is for the fraternity or the charity? It is ok for the fraternity to raise money for the member’s benefit as long as it is listed as such. It is not ok to raise money through bingo or the circus or the raffle for the hospital and not label it as such. The returns don’t seem to indicate how much money is raised through the events for the fraternity and how much is raised for the charity. The returns are done by certified public accountants and I’m surprised that these types of details may be either overlooked or may be intentionally left out.”

According to Hill, things seem to have not changed since the 1986 investigation. “Today, they seem to be more secretive with no accountability. If you ask questions, they kick you out of the Shrine. I want to emphasize that the average Shriner, the general membership, has no idea what is going on. To everyone, it’s Chevrolets and apple pie. I’ve spoken with numerous other Shriners in other states and they allege corruption but no one does anything because they are scared of losing their positions, both in the Shriners and in their professional lives.”

“It’s a good old boy system,” Hill continued. “In my temple, the Sudan Shriners, the 2003 tax returns showed that they spent $154,000 on miscellaneous expenses with no documentation. If anyone asks what the money was spent on, they will be thrown out. Is that any way to run an organization?”

Hill maintains that the “good old boys” got “appointed, anointed, and elected…to run things in a secretive mode of operation on a ‘see nothing, hear nothing, admit nothing, know nothing’ basis to the general membership.”

“The Orlando Sentinel investigation proved that they solicited charitable donations through the circus to help burned and crippled children and that the millions raised did not go to the hospitals,” Hill concluded. “I’ve spent the past four years digging into this and have sent emails, letters and documentation to everyone from the FBI to the Pennsylvania Director of Charitable Giving to the heads of the U.S. Senate Committee on Finance who are holding hearings on rewriting the IRS nonprofit laws and regulations. The Shriners had a chance to make things right, seem to have failed and may have been caught again. What I find amazing is that I’m seeing the power of how one or two people can make a difference by standing up for what we believe in.”

Background on the Shriners:

The Shrine is an international fraternity of approximately 500,000 members who belong to Shrine Center throughout the United States, Canada, Mexico, and The Republic of Panama. Founded in New York City in 1872 the organization is 191Temples, or chapters, located in the United States, Canada, Mexico and the Republic of Panama. One must be a Mason before becoming a Shriner.

Originally published 5-12-6

1 – Legal Disclaimer: The Charity Watch Center does NOT provide legal counseling or legal opinions.

All copies of material reprinted or duplicated from “by Sandy Frost” must include the following credit line:

From http://sandyfrost.newsvine.com/ Copyright © 2006 by Sandy Frost. Used by permission. For more information, contact SandyLeeFrost@yahoo.com.

Part 1: Shriners in hot water again?
Part 2: Did Shriners retaliate against whistleblower?
Part 3: Conflicts of interest among the Shriners?

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12 comments:

  1. Hmmm...as an active Shriner I certainly hope that this information is not true.

    If there is something scandalous going on I can assure you that the average Shriner knows nothing about it. The men I have met are devoted to this great charity and dedicate an enormous amount of their personal time and energy in fundraising for this cause.

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  2. Aha!

    I knew there was an inner Secret Shriner Circle! Like the secret levels in Wolfenstein 3D.

    More light!

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  3. The Scottish Rite is the world bank with 34 BILLION CASH in their coffers so shine the Light their way also.

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  4. It seems that they have no intentions of giving up their money-hoarding ways...and children still suffer.

    FRDS

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  5. Alabama-Free-Mason:

    What is your source of information for your statement that that the Scottish Rite has that kind of money?

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  6. In all these groups, the average schmoe knows nothing and likes it. Well, burying ones head in the sand is being an enabler to evil brothers who take advantage of the situation where most don't know anything. Sitting around on their hands letting brothers do these things. Whether in blue lodge or appendage bodies, or grand level, men are abusing the system for personal gain and advancement in a made up organziation, make believe group. It sickens me how brothers turn their heads in ignorance believing it can't happen under their noses..
    Wake up brothers.. a needed change is comming.

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  7. A google search of the term "orlando sentinel shriner" returned these links:

    * http://freemasonrywatch.org/dear_annlanders.html

    Fri, April 24, 1987
    SOUTH HAVEN DAILY TRIBUNE
    South Haven Michigan

    Shrine Records Shocking

    Dear Ann Landers: That glowing letter about how much good the Shriners do was only half of the story. I believe you were taken in. The issue is not how much money the Shriners pass on to the hospitals they support but how much do the temples keep for themselves.

    The Orlando Sentinal did a terrific series on this subject recently. I am enclosing part one. It will tell you all you need to know.

    ---R.L.,
    TIPP CITY, OHIO


    DEAR TIPP: Thank you for your letter and part one of the series by Orlando Sentinel. John Haile, editor of the Sentinel sent me part two. I was distressed by the information contained in that prize-winning story.

    Shrine refers to their hospitals as "The soul of the Shrine"" and the Sentinal cited Internal Revenue Service records showing that although the Shrine is the richest charity in the nation, it gave its 22 hospitals for children less than one-third of the gross collected from the public in 1984.

    The REMAINDER was spent on food, travel, entertainment, fraternal ceremonies and fund-raising.

    The Sentinel reported that in 1985 the Shriners kept a whopping 71 percent of the money raised, about $21.7 million. This went to pay for a range of clubhouse expenses, including the upkeep of private bars, restaurants and golf courses. They also used the money to pay for conventions, travel and entertainment for their 880,000 members and, again, fund raising.

    The Shrine''s most lucrative source of income are the circuses throughout the country. They generate about $23 million in 1985, the paper reported. The records show that LESS THAN 2 percent, or $346,251, went to the medical care of the children. I find this shocking.

    In 1922 the Shriners established hospitals for burned and crippled children. Today they operate 19 orthopedic hospitals and three burn centers. I want to make it clear that I have received dozens of letters from readers who have told me they took their children to a Shrine hospital after a terrible accident, the youngsters received wonderful care and not one cent was charged. This an extraordinary testimony and a glowing tribute.

    The facts uncovered by the Orlando Sentinel''s investigative reporters in no way diminishes services performed by the Shrine hospitals. The complaint is that a great deal of money that people think is being given to help crippled and burned children never gets there. In all fairness, I want it understood that every penny sent directly to the hospitals is spent solely to help the children.

    Thousands of Shriners were appalled when the Orlando Sentinel made its findings known. They had no idea as to the financial workings of their fraternity. To their credit, many Shrine leaders are now demanding that the temples make clear whether fund-raisers benefit the children or the Shriners themselves. Four cheers for them.

    * http://www.lilnet.org/Shriners.html

    They claim about 300 Million Dollars a year to hospitals and other institutions, which is good but not that much, considering that if every Mason contributes just 5 Dollars per week, they can collect 1.3 Billion Dollars per year... they are a good way to deceive the outsiders, like its secrecy, it is often a cloak to hide its real teachings and goals, and a good way to obtain propaganda... and even the so called "charity" is a way to get money for the Order: In 1985, "Circuses" of the Shriners generated 23 Million Dollars, and only 2% went to medical care of children. In 1984, out of 17 Million Dollars only 1% went to charity, the rest for the Order!

    Orlando Sentinel
    June 29, 1986.

    * http://www.highbeam.com/doc/1G1:137870063/Shriners,+other+service+groups,+struggle+to+recoup+members.html?refid=SEO

    The Orlando Sentinel (Orlando, Fla.) (via Knight-Ridder/Tribune News Service); 10/12/2005

    Byline: Martin E. Comas

    ORLANDO, Fla. _ At 44, Mike Sazma feels at ease chatting with men decades older than him at the Bahia Shrine Temple in Orlando, Fla.

    Sazma, who became a Shriner about five years ago, said the organization has provided him with close friendships and a warm feeling that he's part of a centuries-old fraternity that operates pediatric specialty hospitals throughout the country that treat children younger than 18 free of charge.

    But like most service groups, including the Lions, Elks, Moose and Rotarians, the Shriners' numbers are steadily ...

    [Story continues but a fee to read it is required.]


    * http://www.saintsalive.com/newsletters/april_2002.htm

    Dear Ann Landers:
    That glowing letter about how much good the Shriners do was only half the story. I believe you were taken in. The issue is not how much money the Shriners pass on to the hospitals they support but how much do the temples keep for themselves. The Orlando Sentinel did a terrific series on this subject recently. I am enclosing part one. It will tell you all you need to know.--R. L., TIPP CITY, OHIO

    DEAR TIPP: Thank you for your letter and part one of the series by the Orlando Sentinel. John Haile, editor of the Sentinel, sent me part two. I was distressed by the information contained in that prize-winning story. Shrine refers to their hospitals as "the soul of the Shrine" and "the reason for Shrinedom," but the Sentinel cited Internal Revenue Service records showing that although the Shrine is the richest charity in the nation, it gave its 22 hospitals less than one-third of the gross collected from the public in 1984. The remainder was spent on food, travel, entertainment, fraternal ceremonies and fund raising. The Sentinel reported that in 1985 the Shriners kept a whopping 71 percent of the money raised, about $21.7 million. This went to pay for a range of clubhouse expenses, including the upkeep of private bars, restaurants, and golf courses. They also used the money to pay for conventions, travel and entertainment for their 880,000 members and again, fund- raising.

    The Shrine's most lucrative source of income are the circuses throughout the country. They generated about $23 million in 1985, the paper reported. The records show that less than 2 percent, or $346,251, went to the medical care of children. I find this shocking. In 1922 the Shriners established hospitals for burned and crippled children. Today they operate 19 orthopedic hospitals and three burn centers. I want to make it clear that I have received dozens of letters from readers who have told me they took their children to a Shrine hospital after a terrible accident, the youngsters received wonderful care and not one cent was charged. This is an extraordinary testimony and a glowing tribute. The facts uncovered by the Orlando Sentinel’s investigative reporters in no way diminish services performed by the Shrine hospitals. The complaint is that a great deal of the money that people think is being given to help crippled and burned children never gets there. In all fairness, I want it understood that every penny sent directly to the hospitals is spent solely to help the children. Thousands of Shriners were appalled when the Orlando Sentinel made its findings known. They had no idea as to the financial workings of their fraternity. To their credit, many Shrine leaders are now demanding that the temples make clear whether fund-raisers benefit the children or the Shriners themselves. Four cheers for them.


    Most of these sites are zealot Christian anti-Masonic sites.

    The Orlando Sentinel expose' of the Shrine's finances was published on June 29, 1986.

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  8. Sounds to me liks this is an old article and it doesn't sound very balanced. As a point/counterpoint is another article on the topic.

    http://www.shrinershq.org/whatsnewarch/archives01/smartmoney5-01.html

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  9. I no longer participate in the York Rite, having found nothing of interest in that organization other than one particularly impressive ritual that either they or I completely misunderstood.

    Which degree in YR did you like? Having been through the Chapter and Council, I'm interested to hear.

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  10. Widows Son,

    A friend yours and mine told me so.
    "A great Masonic historian and does great articles"

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  11. Below is a response to one of my true Alabama Brothers it is his reaction to the article about the Shrine and what he witnessed first hand.
    I left of his name and the name of the brother he is speaking of out of concern for them within the old system of idiots who are thirsty to drink the blood of their own. Especially since I left before they could drink mine.
    ___________________________________

    "If you recall, I was "shunned" when my "Road Runners Driver's Reports" were completely candid about drunk drivers and such.
    I dropped out.
    Then, when ____________ asked for my help, I jumped back in.
    Soon, strange things began to happen.
    Patients and their escorts did not show up.
    One driver is reported to have been "stood up" 5 consecutive times.
    60% of the drivers resigned.
    Then ____ found out that there was a "parallel bookkeeping system" wherein more money was paid out to reimbursements for travel than he had spent, but he was not allowed to see those books.
    He resigned.
    So did I.
    BUT, I resigned by registered mail, citing "funny with the money" as my reason.
    Can you just imagine what would happen if ALL fraudulent expenses were considered crimes and prosecuted?
    That'd clean out the rolls of evil-doers in a hurry.
    If you think rats and roaches run from bright light, you'd have to re-prioritize.
    But, what a pain in the ass to read this e-Mail!
    Personally, I hope any evil conspirators are jailed.
    They knew, and took the risk.
    (Beretta's old quotation.)
    Also, this story proves reincarnation, since you can't get this stupid in one lifetime."

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  12. I read these comments with great interest.
    No, there is no timing with "The Da Vinci Code."
    Vernon Hill, the Shriner whistleblower, sent me an email and I was the first of many journalists to respond, research, write and publish the story.
    If anyone has any information on the double bookkeeping system or any other financial irregularities, I'd appreciate an email to Cassandrafrost@yahoo.com.
    More articles are forthcoming and there are many more questions that need to be answered.
    Thank you for your interest,
    Sandy Frost

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