Thursday, September 8, 2016

The Living Guru Financial Imbroglio (Mrgendra Das)

Oath of Allegiance


Sep 06, 2016 — LOS ANGELES, USA 

I have read the article by Gadi Prabhu on love and trust.

I agree with him that a society can not foster love and trust by legal documents. However, Srila Prabhupada was concerned with protection of the Society's assets by legal documents. For example, about 80% of his Last Will and Testament was directly related to protecting temples by having them put into Trusts. 

If any of the readers want more details about the Trusts he ordered for the temple properties, let me know at my email address below. The present "Oath of Allegiance" is deficient and even a proposal for strengthening that is deficient. See the "Minutes from the Euro RGB meeting in Villa Vrindavana, May 24-25, 2014", which are available here. An excerpt:

"It is resolved that within 6 months of the passage of this resolution every ISKCON Guru/Sannyasi must submit a will that contains directions as to the disposition of the assets under his/her control, making sure that they remain under the control of an approved ISKCON organization.

This will must also detail the nature of any memorial to be constructed. Details must include, size, location, and worship to be done. It is important that limits be put on the size of such a memorial.

The GBC EC will review this will and instruct the Guru/Sannyas as to modifications that must be made in the will.

After making sure all the Gurus/Sannyasis are in compliance the GBC will work on a system to ensure an appropriate will is written for others that may control assets and have followers."

However, a Last Will and Testament ("Will") is not the preferred method for a denomination to insure the use of assets held by its leaders, preachers or teachers. Even if such a person properly executes a Will and provides an original to the GBC EC, a few days later or anytime later, that Testator (the one whose Will it is) can simply revoke that Will. 

That is called "freedom of testamentary disposition", which is recognized both in Common law countries (the United States and the 53 Commonwealth countries), and also in Civil Law countries on the European Continent. "The testamentary freedom is expressed through the free choice of the form of will, free determination of its content, revoking the will etc. (see first two pages of this article). For example, in German law §2302 BGB, contracts to make wills are not enforceable.

I believe, then, that, instead of a Will, in most countries the preferred method of accomplishing what the ISKCON GBC would want is the trust form. Each devotee who holds assets that are to be dedicated to the purposes of the ISKCON GBC should be required to put all of those funds into an irrevocable trust. The beneficiary of the trust would be the ISKCON GBC or another ISKCON entity not affiliated with that sannyasi and the trustee may even be that sannyasi. Then the protection is established not only for the time when the devotee passes away, but for anytime before that.

I have spoken to several senior ISKCON sannyasis who inform me that currently a sannyasi may deposit funds into his own personal account or into an account of a nonprofit corporation that he and his disciples control. 

[PADA: OK, is this one of the prime reasons for the "living guru program"? There seems to be a free range, unbridled economic policy where ISKCON funds can be co-mingled with the GBC "guru's" personal account, or with the guru's personal and separate charity, or filtered off into many unknown offshoots, and rumor has it, into Swiss Bank or Cayman Island hidden accounts and so forth. 

This pretty much means there is no solid financial accounting for most of the activities of these ISKCON leaders. We also know that while the GBC gurus were often living like opulent kings, the gurukula children were many times being deprived of common needs, so there has been a siphoning of funds meant for one program being taken off to support the jet set lifestyles of some of these leaders, or who knows what else programs.]    

If such a sannyasi decides that he no longer wants to work under the authority of the ISKCON GBC, he just takes the money and uses it for anything he wants. For example, he could purchase a big house and put title in his own name. But, if there was a proper trust, even though the Sannyasi would be the only trustee, and could, therefore, be the only signer, when and if such a person leaves the control of the GBC, the beneficiary ISKCON entity would have standing in court to seek an order from the judge that the assets be re-dedicated to the religious purposes that the money was originally dedicated to. 

[PADA: Long overdue. However, almost anyone who suggests these changes has been branded as "blaspheming the guru" etc. This is not about a sannyasa deviating with funds, it about making false acharyas who then cannot easily be questioned deviating with funds, and the sub-violent "guru cult" atmosphere that makes it difficult to challenge these deviations. ISKCON has however clearly lost tons of money as these gurus bloop out and take with them manpower, funds, and other assets, or they have been siphoning these assets off for years and they already have a stockpile of stolen funds before they leave. Never mind all the manpower / devotees that the GBC has also siphoned off to the Sridhara Maharaja, Narayana Maharaja, Babajis camps etc.]

There may be some variations in different countries and the trust may also have a requirement that any checks over a certain amount and expenditures over a certain amount would require the approval of an ISKCON GBC-appointed person.

Below are more details for those who are interested to read more:

Srila Prabhupada liked trusts. The trust system actually already exists for Indian sannyasis and it is enforced by Indian courts, even when there is not a written trust (express trust). Srila Prabhupada's renunciation of property to his Society follows not only the tradition for sannyasis in general, but also the example of his Guru, Srila Bhaktisiddhanta Sarasvati Maharaj, who controlled 64 maths. That history is given in detail in a Calcutta High Court ruling of 1999:

"[Bhaktisiddhanta Saraswati Swami] was the original founder of the deities and of the debuttar [temple] estate of Sree Chaitanya Math, Mayapur and the subsequent acquisition of the properties were also, as found accretion to the said debuttar estate...That such properties by reason of dedication, express or implied, become an accretion to the original debuttar estate is now a settled law."

(Samit Pani Brahmachary vs. Mayapur Chaitanya Math, AIR 1999 Cal 132 which is available here)

In The Law Relating to Hindu and Mahomedan Religious Endowments, published in 1905, author Pudukota R. Ganapathi Iyer on page 109 compares the matha favorably to the concept of the corporation sole, "The head of the mutt [matha] may be a good example of a corporation sole" and in that chapter states that sannyasis did not hold religious property for themselves but for the matha, citing to the examples of Sankarachaya, Ramanujacharya and Madwacharya. (See article here)

The type of property that a sannyasi would own himself and not be holding in trust for his religious institution would be only his personal property that he could "use", like clothing, phone, and computer.

[PADA: What happens if the sannyasa is also a guru and he orders funds to be placed into private accounts etc.? Who can challenge that process without making "guru aparadha"? This is why they make themselves into gurus, then there is no means of challenging their authority -- as they fly off with a brief case full of cash to the Cayman Islands.]

Therefore, we would expect that, besides having a small account that would be for one's own use, a sannyasi or other preacher would agree that he is holding assets in trust for the religious institution. The GBC has a duty to keep track not only of those personal accounts but also of the accounts of religious entities, like nonprofit corporations, that were started by such a person or affiliated with him. 

An "Oath" signed by such a devotee, such as the "Oath of Allegiance" that we see on the GBC site is faulty because it names the beneficiary as "ISKCON" which is a vague word and should be replaced by the "ISKCON Governing Body Commission, a West Bengal Religious Association" or the name of some other ISKCON entity. The GBC members would need to sign the oath and not just speak it out-loud so that it would then be enforceable.

[PADA: Right, there probably needs to be a specific named charity to be the beneficiary, good.]

Future grants into trust are generally not recognized. The multi-volume treatise Scott on Trusts reports in § 86.4, "An interest that has not come into existence cannot be held in trust." Therefore, annually, the sannyasi would need to, in writing, add his recently acquired assets into the trust.

In section 7.21A of his Tagore Law Lectures on Hindu Law of Religious and Charitable Trusts, fifth edition (1983) B.K. Mukerjea related:

"Yajnavalkya, as stated already, has laid down special rules for succession to the property of ascetics who have been divided into three classes, namely, Brahmacharis, Vanaprasthas or hermits and Sannyasis or Yatis. These rules imply that ascetics can have property, though commentators like Vijnaneswar, Mitramisra and others have explained the text as referring to the books, clothes, sandals and other articles which are necessary even for an ascetic. It cannot be disputed that the very meaning of the word "Sannyas" implies compete renunciation and, in fact, the ideas of renunciation and acquisition of property are wholly repugnant to each other. There are various texts in Hindu religious treatises which prescribe voluntary poverty for an ascetic ..."

The principle of sannyasa, which developed in India, appears to provide a presumption that property except for that which is used by the sannyasi such as his cloths and shoes would be granted, right after acquisition, by a sannyasi to his religious institution as that is the tradition.

B. K. Mukerjea continues on page 33, in commenting on the nature of temples and maths, "The idea of a corporate personality as distinct from that of the individual members was recognised by the Smriti writers. .. It seems that the different corporate bodies had their own laws and regulations which were enforced by the King."

In The Law Relating to Hindu and Mahomedan Religious Endowments (1905) author Pudukota R. Ganapathi Iyer on page 109 states that sannyasis did not hold religious property in for themselves but for the mutt, citing to the examples of Sankarachaya, Ramanujacharya and Madwacharya. Iyer does point out, though, that the Madras High Court has held that a sannyasi "can acquire property for his own use". (See article).

The type of property that a sannyasi would hold individually within the temple or matha would be what he could "use", like clothing.

In addition to insuring the beneficial use of a sannyasi's accumulated assets that are presently in personal accounts, the GB Commission has a duty to insure the good use of assets that are held in entities, such as nonprofit corporations, that are ostensibly not the assets of the sannyasi, but, which are, in fact, controlled by them. For example, if a sannyasi sets up a Nonprofit Corporation in the State of California with the name "Hare Krishna of Culver City, Inc.", the GBC Body must require an annual accounting from that corporation and require at least one member of the Board to be appointed by the GBC Body, even if that corporation is not a temple. 

Otherwise, a sannyasi could easily control a corporation by having the Board composed only of himself and a couple disciples. He could then avoid putting his assets into a trust, such as I described above. Even though the nonprofit corporate form does provide some protection because state law requires their assets to be used for charitable, religious or educational activities, the nonprofit corporation could be used, when controlled by a sannyasi, to fund a lavish lifestyle should he, for example, decide to get married and preach in his own new-age way. 

[PADA: Right, often GBC gurus leave and they may take with them manpower, money, buildings, vehicles, whatever they can grab while exiting. There is currently no apparent checks and balances to contain or control this process.]

Therefore, additional controls are needed and those controls are enabled when the corporation has at least one GBC-appointed director. Of course, the articles of incorporation of that corporation would state that all assets are to be used to spread Krishna Consciousness as defined by the ISKCON GBC.

After I wrote the above to several Sannyasis and to some non-Sannyasis who are GBC members, one member of the GBC asked me why the Oath of Allegiance is not sufficient to protect assets.

That GBC member asked me specifically what was the problem with having in the Oath "ISKCON" or "International Society for Krishna Consciousness". The problem is that, by using a term that does not refer to a specific juridic entity, no entity has standing in court to enforce the trust should the devotee use part or all of those named assets for his own personal use. 

[PADA: OK but a lot of ISKCON is not in the name of ISKCON, the GBC has been making separated charities registered in the names of their disciples. For example Radhanath's Chowpatty program is not in the name of ISKCON, but he collects funds and makes followers as if he is ISKCON.]

Curiously, the GBC Association has given the term "ISKCON" an expansive meaning - equating that to the "Hare Krishna Movement", and clearly, that indicates some elements that are way beyond their control and is, therefore, a bad definition. In any case "ISKCON" is not a satisfactory designation for the beneficiary of a trust or nonprofit corporation.

I recommend a standard trust declaration document be used for this purpose, but, if the GBC Association is not going to adopt the pretty-much standard declaration of trust form, then at least it would want to make the Oath enforceable. If the GBC Association does not want to replace in the Oath the word "ISKCON" with the "ISKCON Governing Body Commission, a West Bengal Religious Association", then it would need to replace "ISKCON" with some other entity. 

For example, the oath for a devotee who holds his assets primarily in the U.K. could have as the beneficiary the ISKCON charity in the U.K. that is the "mother charity" there. For a devotee whose assets would be primarily in U.S. bank accounts, then a U.S. entity, such as "International Society for Krishna Consciousness of California, Inc." or "Bharati Center, Inc. (New York)" could be designated as beneficiary, depending upon the area of the country where that devotee usually preaches.

Another problem with the Oath, as it is presently worded, is that it attempts to effect assets that are not owned by the particular devotee. It attempts to address "ISKCON's funds, assets and properties under my control or direction, including anything ISKCON may have acquired under my direction". 

Assets that are already in the name of an "ISKCON" entity, whether a limited company (Ltd), nonprofit corporation or charity, are not at all affected by the Oath when the individual only holds one board seat among many. In fact, the designation of the property that is subject to the Oath is flawed as it does not at all address the individual's own assets. 

He may have received hundreds of thousands of dollars in gifts that were donated with the understanding by the donors that the funds were to be used in the mission to spread Krishna Consciousness. Those funds are not addressed in the Oath. At least the Roman Catholic Church's Canon Law at 1267 § 1 provides, "Unless the contrary is established, offerings given to superiors or administrators of any ecclesiastical juridic person, even a private one, are presumed given to the juridic person itself."

A trust is established when a person states that he is holding assets for another. On page 80 of the 404 page Treatise Gilbert on Trusts, Professor Gilbert explains, "To create a living or inter vivos trust, there must be an effective, present transfer of the trust res. A conceptual problem exists regarding a declaration of trust. 

The present declaration may be said to substitute for a transfer, but it could also be said that there is a transfer—from the settlor as an individual to the settlor as trustee." When signed by a devotee the Oath is such a declaration of trust (although the beneficiary designation is defective). The Oath includes, "that all ISKCON's funds, assets and properties under my control or direction, including anything ISKCON may have acquired under my direction, is the sole property of ISKCON and in the event of my death, resignation or other relinquishment of all ISKCON responsibilities, all these shall accrue solely to ISKCON and at all times I shall have no claim on them whatsoever."

Once we understand that a trust has been created by the written declaration which is signed by the devotee, then the next step is to ascertain what type of trust it is. Section 4 of the 1205 page summary of law volume AmJur2d on Trusts relates that "It has been said that trusts are generally divided into two main classes: private trusts and charitable trusts... It has also been said that the fundamental distinction between private trusts and charitable trusts is that in a private trust, property is devoted to the use of specified persons who are designated as the beneficiaries of the trust, while a charitable trust has as a beneficiary a definite class and indefinite beneficiaries within a definite class, and has a purpose which is beneficial to the community".

The use of the term "charitable trust" often causes confusion because a private trust may name, as beneficiary, a particular charity or charities (or religious organizations). If the word "ISKCON" is used in the Oath in order to establish a trust, then the trust will be seen as benefiting a definite class (persons or entities in the Krishna Consciousness movement) and indefinite beneficiaries (there are hundreds of beneficiaries and regularly some are added). The California Supreme Court explained how the common law deals with such a situation - "Beneficiaries of a charitable trust are ordinarily indefinite and therefore unable to enforce the trust in their own behalf." Therefore, it is important to have definite beneficiaries not just something indefinite like "ISKCON".

The Poverty Law Journal explains why the Attorney Generals in each of the States has been given authority over trusts for charitable purposes - "Individual beneficiaries of trusts were thought to be too numerous and indefinite to achieve standing to sue on their own behalf."(see page 17). But the GBC Association would not want to have to rely upon the Attorney General to enforce the terms of the trust. It would want definite, named beneficiaries, who could enforce the trust. The Attorney Generals have limited resources and do not, therefore, enforce many charitable trusts, even when there are complaints from many of the indefinite beneficiaries. Susan N. Gary, "Regulating the Management of Charities: Trust Law, Corporate Law, and Tax Law", 21 U. HAW. L. REV. 593, 623 (1999) (surmising that "[t]he worst abuses receive attention, but many problems probably go undetected or unaddressed").

In 1994 an Indian Court explained that in India, the same principle in overseeing religious assets exists:

The following passages from the "Hindu Law of Religious and Charitable Trusts" by Justice Mr. B. K. Mukherjea, Fourth Edition, pages 452, 455 and 456 and 460 were relied on:

"Remedies for breaches of charitable trust in English law:-- In English law, charitable trusts are synonymous with public trusts, and what is called religious trust is only a form ofcharitable trust. The beneficiaries in a charitable trust being the general public or a section of the same and not a determinate body of individuals, the remedies for enforcement of a charitable trust are somewhat different from those which can be availed of by beneficiaries in a private trust. In English law, the Crown as parens patriae is the constitutional protector of all property subject to charitable trusts, such trusts being essentially matters of public concern. The Attorney General represents the proper person to take proceedings on this behalf and to protect charities."

Certainly there are elements other than the beneficiary's name that would normally be included in the signed statement to establish an enforceable trust.

Mrigendra das

[PADA: This is all good but does not address the root issue, the leaders of ISKCON are siphoning off manpower, assets, vehicles, buildings, deities and so on for years and it should be addressed as illegal co-mingling of funds, illegal personal use of charity funds, or more simply -- theft from ISKCON. And right now the people who helped siphon off manpower to the Narayana Maharaja camp, like Sivarama swami, or off to the Babaji camps for example like Indradyumna and Sacinananda, they are still considered as big leaders, never mind they are the same overseers of the society and its gurukula debacle that bankrupted the society.

Nothing is done when money, assets, manpower etc. is taken away from the society, which is why these leaders have resisted having this controlled, they are profiting too much from the current process. And as long as the siphoning is done in the name of acharyas and gurus, its even harder to contain these deviations.

Of course again, the same people who bankrupted ISKCON by orchestrated mistreatment of children are still basically in charge as well, so bad or even criminal behavior is rewarded by being awarded the biggest posts of acharyas and gurus in the ISKCON society, or whatever ever dwindling parts of that society that are still left in the official legal name of ISKCON. Rocana did a nice charity search for Alachua area and he found dozens of spin off charities that are operating as quasi-ISKCON, but they are not, its a big charity creating shell game that seems to be getting worse and not better. Anyway bravo to Mrgendra das for starting to address this. As Sulochana said, this is largely an economic war against us God brothers, they are stealing our society, and that is correct. ys pd]

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