Monday, September 1st, 2014
   

History of Association

 

Chapter Three

DIFFICULT TIMES

During President Dugan’s tenure the State Association celebrated its One Hundredth (100th) Anniversary. Special recognition was made at the Convention, an anniversary booklet was printed and special commemorative badges provided for delegates, life members and guests.

President Dugan continued as President until 1983, at which time President Dugan elected to retire, and Ernest J. Greenwald, Sr. was elected. Immediately after President Greenwald assumed his duties, it was necessary to conduct an audit of the finances of the state office. Information had been received earlier in the year by then Vice President Greenwald that appeared to indicate monies were missing or being spent inappropriately. Also, certain Executive Committeepersons brought attention to the unusual depletion of assets in the General Relief Fund and the other accounts in the State Office. Based upon this information, counsel, the certified public accountant, the new officers and the Executive Committee immediately secured the records and assets of the State Office, commenced a complete audit and changed the office operating procedures. The office coordinator was terminated on March 16, 1984 and the State Treasurer took a leave of absence on April 12, 1984. The banking institutions with which the State Association maintained accounts were put on notice of possible discrepancies, the bonding companies, which provided fidelity bonds, were advised, and the Prosecutor of Essex County notified. (#1)

Following, the vacancy in the State Treasurers office, George Reeves, the Executive Committeeperson from Cumberland County was appointed temporarily to fill the position until the next Convention. Barry J. Osborn, C.P.A. was nominated at the 1984 Convention, as was the former treasurer who took the leave of absence, but Mr. Osborn, was elected overwhelmingly by a vote of 3,470 to 314. (#2)

The investigation by the officers showed substantial financial losses and the assets of the State Office were seriously depleted, impacting the ability of the State Office to function properly. The assets in the General Fund were reduced to $3,093,786.00 and the burial benefits alone were $2,416,610.00 for that year. Therefore during the 1984 and 1985 years, the President and the Executive Committee had to take action so the State Office could continue to operate. The assessments against the local associations were raised to seventy percent (70%) to cover the State Associations expenses. The assessments were reduced to sixty-five (65%) later in the year but the salaries for the officers, staff and Executive Committee were frozen. Also, the delegates’ expenses for attending the Convention suffered the same fate. (#3)

Compounding the impact of the burden on the Local Associations was a noticeable decrease in receipts of the two percent (2%) tax. Many of the larger multi-national insurance companies created wholly-owned New Jersey subsidiaries to avoid paying the tax. This issue was addressed by the officers and the Department of Banking and Insurance and legislation was enacted to control or cap the amount of taxes these companies could avoid. (#4)

Many changes in the State Office were under way. Complete new office procedures were initiated concerning banking operations, contracting and purchasing, and a new computer system was installed. Computer training was implemented, and the Audit Committee revamped. The Executive Committee also authorized the officers to negotiate the purchase of the office building leased by the State Association in East Orange, New Jersey. This was accomplished in 1985, and provided savings and obviated continued rent. (#5)

The problems within the State Association during the years 1983 through 1986 were serious, however, matters soon got worse. A firefighter from Fort Lee was denied membership in the Fort Lee Local Relief Association because of a physical disability and inability to pass the physical requirements set forth in the Compendium and the Rules and Regulations. The eye exam showed loss of vision in both eyes. His attorney, also a member of the Fort Lee Relief Association, brought suit to have the firefighter admitted. The suit challenged the rules and regulations adopted by the State Association and also challenged the “legitimacy of virtually the entire program of administering the Firemen’s Relief Fund through the State Association and some 521 local associations.” (#6) Specifically, they challenged the constitutionality of the state enabling statute N.J.S.A. 43:17-1 et seq., on the following grounds:

  1. That payment of tax money to the State and Local Associations constitutes a donation or appropriation of money to a private entity;
  2. That the statutory delegation of rule-making authority to the State Association lacks “adequate standards.”

The Attorney General of the State was notified and his office entered its appearance. Pretrial procedures commenced and numerous conferences, briefs and discovery conducted. Needless to say, the case caused unnecessary publicity and several newspapers, especially the Bergen Record, had a field day. They raised havoc with sensational reporting, unfortunately much of it far from the truth. (#8) This notoriety caused several legislators including Senator Pat Dodd, Essex, and others to make inquiry and threaten legislature changes. This ramped up the State officers and it was necessary to counter the false and misleading news articles and respond thereto. It also required professional advice to respond and interact with the legislators so a former news reporter and lobbyist was engaged.

On June 12, 1998, Judge Lesseman, Bergen County Superior Court, entered his decision admitting the firefighter immediately to membership in the State and Local Relief Associations. More importantly, he also declared the state statute constitutional. In so doing however, he ruled the state Compendium, Constitution and By-Laws, and Rules and Regulations were not legal and had to be revised to comply with his order entered on September 21, 1988 and the judgment dated October 23, 1988. (#9) The rewriting commenced immediately. Involved in the rewriting was the Plaintiffs attorney, the State Attorney General, representatives of the Department of Banking and Insurance, the State Officers and the Compendium Committee. The new Rules and Regulations were completed, approved by all involved, and adopted by the Executive Committee in January 1989. (#10)

This unfortunately was only the beginning. The various disability and other laws opened a “Pandora’s Box.” Problems involving the Civil Rights Acts (#11), Age Discrimination Acts (#12), Disability Acts (#13), and the complimentary state laws continued to plague the State Association. Also a new Bergen Senator, Louis Kosko, played to the Bergen Record and started Senate hearings into the operation of the state and local associations and their use of taxpayer monies. (#14)

The hearings were long and involved. Considerable testimony was presented but the professional staff and the officers were able to have a favorable influence on the Committee recommendations. The ultimate results were favorable, and new legislation was adopted in 1996. (#15) This new legislation also revamped the operation, collection and distribution of the two percent (2%) tax. (#16)

Under this new legislation all monies received from the two percent (2%) tax are paid directly to the Treasurer of the State Association annually by each foreign insurer. The State Treasurer then distributes the receipts to each Local Relief Association, less any assessment levied against the local associations for the operation of the State office. The tax due for municipalities without any relief association (999 account) is also forwarded to the State Treasurer. The Insurance Services Organization (ISO) which distributed the monies for the insurers was no longer the conduit, although their ISO numbers still identify each local. The last contract with ISO was January 4, 1991 (#17) and Factory Mutual Engineering Company was October 37 1998. (#18) Both were terminated after the effective date of this new legislation. This legislation also requires the State Treasurer to make payment to the Firemen’s Home for both its operating and capital budgets. It does not affect the collection or distribution of the tax on insurance for surplus lines. (#19)

During the period of legislative review in the early 1990’s the State Association had a change in leadership. President Greenwald retired in 1993 and Frank Bocchino was elected President. Ernest Greenwald was then Elected President Emeritus. President Bocchino continued in office until 2003 when Joseph Paola, a write-in candidate, was nominated from the Convention floor and elected. He served for part of the next year, but because of personal problems resigned. H. Leigh Peterson then succeeded Joseph Paola as President. 


Chapter Four

EXECUTIVE COMMITTEE

The Executive Committee is the overseer and governor of all the operations within the State Association including the conduct of the of officers and personnel of the State Associations and all of the Local Associations. It also has complete control over all funds and assets thereof. This power is essentially absolute having devolved over a period of time and was generated by circumstances requiring action necessary to protect the funds and benefits belonging to the firefighters of this state. The statutory provisions enabling the Executive Committee to exercise this control generally followed the actions already taken by the Executive Committee to protect the funds and assets for the firefighters within the State.

Prior to 1885 and the Act of the Legislature creating the State Association there were many disabled, benevolent, relief, or other eleemosynary organizations created by the firemen to obtain the two percent (2%) tax and other available funds. The early statutes and laws pertaining thereto were haphazard and diffuse. The 1885 Act centralized the Local Associations and created a uniform framework for providing relief for firefighters and their families in need. (#1) As an integral part of that framework the Act provided for an Executive Committee. Originally the Committee’s powers were set forth in three sections of the statute, as follows:

  1. Each Local Association was required to incorporate and submit its charter and Constitution and By-Laws to the Executive Committee for approval. (#2)
  2. Each Local Association was required to file reports with the Secretary of State for New Jersey, and the Secretary of the State Association and the Executive Committee were required to examine them and assure their compliance with all laws. (#3)
  3. The membership of the Executive Committee was to consist of the President and Secretary and such other officers as the Constitution and By-Laws provided. (#4)

As a practical matter the Executive Committee comprised the officers at that time, the President, Secretary, Treasurer and the Vice Presidents or Assistant Secretaries, which appear to have varied from time to time. Initially only four were authorized. (#5) Thereafter there were seven Vice Presidents or Assistant Secretaries representing the seven congressional districts in the State of New Jersey. (#6) This appears to have been the official Executive Committee and it met on a regular basis, monthly or semi-monthly, throughout the year. No Constitution or By-Laws authorizing the Committee were found until 1915, although there are hand transcribed minutes of the meetings up to 1890. Later, the minutes were typed or printed and the Executive Committee Report became a regular part of the Convention proceedings starting in 1888. The Executive Committee records are maintained in the State Office.

As the State Association continued to grow, and issues and activities increased, the Executive Committee found itself involved in legislative issues, such as Exempt firefighters, fire departments and the transition from the volunteer department to the paid. As the State Association expanded and more and more Local Associations joined, they required attention that the seven (7) Vice Presidents were not sufficient or representative to handle. Thus at the Forty-First (41st) Annual Convention, at Atlantic City in 1918, the number of Vice Presidents was changed. They were then chosen and voted upon to represent each of the twenty-one (21) counties within the state as opposed to the congressional districts. (#7)

The State Association and the Executive Committee were now being drawn into various state issues. Among them was the contentious issue of the creation of new paid fire departments in some of the major cities in the state and the transition from a volunteer department to a paid department. At issue was the status of the older Exempt firefighters, their membership in a new paid relief association, and of course, control of the funds. This precipitated a better defined roll for the Executive Committee. New legislation was then passed in 1906 which clearly gave it the control over the funds of all the local associations. (#8) This power is essentially unchanged today.

Unfortunately this legislation did not quell the problems incident to the transition of fire departments from volunteer to paid. Debate continued to rage and accusations erupted at the State Association Conventions, and nasty letters and publications circulated throughout the fire service within the state. (#9) Contentious litigation continued in Passaic, Trenton, Atlantic City and other cities. These issues were again pursued in the legislative arena, and after Legislative hearings in 1914, further legislative enactments followed giving the Executive Committee new powers to mitigate and resolve these issues. The first of these new Acts covered the transition issues in departments changing from a volunteer department to a paid department. It gave equal rights in the Local Relief Association to the paid members and also equal access to the operation and control of the funds of that association. It required working together and if the various parties could not work it out amicably, then the Executive Committee, which was given control of the funds, was empowered to make appropriate rules or regulations to carry out the transition and effect the purposes of the Act. (#10)

The second Act reiterates the powers given to the Executive Committee in the 1906 Act and makes it absolutely clear the Executive Committee has power of and control over all the funds in the Local Associations regardless of their sources or origin. Many local relief associations had received monies from old benevolent or disability associations, Exempt associations, and other civic groups collecting funds or receiving a percentage of the foreign fire insurance tax prior to 1885. (#11)

After these acts the power of the Executive Committee was essentially all-inclusive, giving it power to make and establish rules and regulations over the State and Local Associations. It was also complete with regard to the control and protection of the funds, assets, and property of both the State and Local Associations. These powers were translated into operating procedures set forth and compiled in the first “Compendium” which appears to have been adopted by order of the Executive Committee in 1915. This “Compendium” was essentially a recapitulation of all the laws pertaining to the state and local associations up to and inclusive of 1915. It also contained numerous legislative enactments affecting the fire service, municipalities, Exempt firemen and like matters. The Table of Contents identifies each of the designated provisions. (#12)

This 1915 “Compendium” contained the Constitution and By-Laws, but they were extremely limited, to only four pages. (#13) The Constitution provided only essential operations for the State Association, its officers, Executive Committee and representation for delegates to the Convention. The By-Laws covered only the Rules of Order, order of business, and salaries and expenses for the officers of the Local Associations. The Executive Committee was provided for in Article II, Section 1 and its duties set forth in Article III, Section 6, but did not include any language provided by state statute, The duties of the Executive Committee included powers to hear disputes between the members and the officers of the local. It also provided for an appeal process. It did not address the problems arising from the transition of the volunteer department to the paid department. This was addressed at the Forty-Second (42nd) Annual Convention in Atlantic City in 1919 and language from the 1915 enactments was incorporated therein. (#14) This addition gave total supervising powers and authority to the Executive Committee.

This power continued through subsequent “Compendiums” or “Books of Information” for the State Association including those of 1930 (#15), 1940, (#16), 1980, (#17) and others to the present.

The 1930 Compendium entitled “Book of Information for Firemen” was recommended at the Fifty-Second (52nd) Annual Convention. (#18) President Spencer had appointed a Special Committee to prepare and review the same, which was then approved by the Executive Committee at its regular meeting on June 7, 1930 . It was then ordered “printed and distributed” to the field. (#19) A notation followed which provided, “As changes may be made from time to time in the rules and regulations for the government of all associations, each association will be promptly notified . . .” Clearly the rule-making power vested with the Executive Committee. Thereafter the President or the Executive Committee appointed a Compendium Committee which periodically reviewed all state laws, the Constitution and By-Laws, and any regulations. The Compendium Committee made changes as necessary, and referred the same to the Executive Committee for approval. The latest Compendium was approved by the Executive Committee in 2005 and distributed and is now in use. (#20) It followed this same procedure.

It should be noted that President Spencer was unable to attend this Convention in 1930 and Vice President Hasselhuhn presided. President Spencer passed away on July 28, 1931 and Chris H. Hasselhuhn became President. During his first few years as the new President he appeared to have some governing problems and several delegates to the Conventions in 1932 through 1934 made challenges to his power, the power of the officers, and power of the Executive Committee. A Resolution was passed in 1932 calling for a review of all the laws and operations, and President Hasselhuhn appointed a committee to review the laws and Constitution and By-Laws, apparently those just passed in 1930. (#21) At this same Convention a challenge was also made to the powers of the Executive Committee to set salaries. A Special Committee made a report to the Executive Committee and the Executive Committee approved the report on June 24, 1933. The report was sent to all the Local Associations and this was reported to the Convention which concurred. (#22) Disgruntled delegates challenged President Hasselhuhn again at the Fifth-Seventh (57th) Annual Convention in 1934. He seemed to concede that only the Convention could change the Constitution and By-Laws, as opposed to the Executive Committee. A question was asked from the floor, “. . . is it not a fact that the unanimous action of this assembly is binding on the Executive Committee up to the point of non-violation of the statute law.” Counsel Schenck then made a ruling which cleared the issue and the Executive Committee still follows it today. (#23) The issue at hand was a vote on the report of the Resolutions Committee and its recommendation to refer amendments to the Constitution, By-Laws and rules and regulations, mainly General Relief Fund rules, to the Executive Committee for action and approval. Counsel Schenck ruled as follows: “So, as I say, I have advised that these matters are properly within the province of the Executive Committee, and in support of that, all any of you men have to do, if you have not done it, is to read your ‘Book of Information’, and the law of 1922, which says: That the Burial Benefit shall be established and the benefit paid in accordance with such reasonable rules and regulations in regard thereto that the Executive Committee of the New Jersey State Firemen’s Association may from time to time establish, alter, amend and supplement. And the Executive Committee is further given power and authority to employ, put into effect and alter from time to time, such methods of administration as may accomplish these results.” He followed this statement with the following: “So that while there appears from time to time to be disagreement among the firemen of the State of New Jersey and the members of the Executive Committee, yet, at the same time, as has been the case with the resolutions that are now before you, your Resolutions Committee has said that we are passing these resolutions on to be incorporated in principle by the Executive Committee, in accordance with the statute.” Counsel Schenck then concluded, “But, I am bound to tell the Executive Committee, in the words of the statute, that in the last analysis, as the statute says, the Executive Committee – your Executive Committee – (it isn’t some foreign body) your Executive Committee makes the rules and regulations.”

Obviously, the Constitution may be amended in accordance with Article X, Section 1, of the Compendium, Constitution and By-Laws by a two-thirds (2/3rds) affirmative vote of those present for a resolution properly presented to the Convention assembled. No like power is provided for amendments to the General Relief Fund rules or the Local Relief Fund rules.

A similar issue arose in 1946 when a Resolution was passed “authorized, ordered and directed” to make a complete study of the Constitution and By-Laws.

(#24) A Special Committee of the Executive Committee was appointed and this Committee made recommendations to the Executive Committee and the recommendations were reported and discussed during several Conventions. They also had been mailed to the local associations and the County Caucuses but not fully and finally resolved until several propositions were submitted to the delegates in writing at the Seventy-Second (72nd) Annual Convention, on September 10, 1949. (#25) The propositions, six (6) in total, did not receive two-thirds (2/3rds) votes and all proposals to amend the Constitution and By-Laws lost. (#26) It is interesting that Counsel Schenck, President Hasselhuhn and others reiterated their opinions and comments explaining that the Executive Committee only possessed the powers to make the rules and regulations. (#27) They did seem to differentiate the Constitution and By-Laws from all the other rules and regulations, at that time. This distinction apparently did not occur in 1940 when the Executive Committee adopted the 1940 Compendium. (#28) The next Compendium was not adopted until 1980.

The powers of the Executive Committee also included the oversight and governance over the State Officers and the officers, trustees and representatives of all the locals. It also oversees all Local and State Association funds and assets. (#29) Apparently, during the Depression some of the Locals, especially those with few assets, were undergoing financial defaults. The collection of the two percent (2%) tax was lacking, officers were not filing reports, and some Locals were not following the rules. President Hasselhuhn, and apparently the Executive Committee, suspended several local associations (put them out of accord). (#30) This appears to have been the first mention of such action by the Executive Committee, but this action has become the practice for dereliction of the duties or violation of the Compendium by the Local Associations. Following this lead the Executive Committee has commonly declared a Local “out of accord”, seized their assets and assumed control of the Local. The State Association then operated and controlled the same from the State Office. (#31) The local association could not reassume control again unless and until it reorganized and corrected all defalcations, and then the Executive Committee would place it back in accord.

The Executive Committee has also exercised the powers to seize the assets, accounts, books and records of derelict State officers and take action to suspend them from their duties. This occurred in 1984 when the office coordinator and the State Treasurer misappropriated substantial funds and monies of the State Office. The Executive Committee and new President Greenwald, upon taking office, suspended the Office Coordinator and the State Treasurer took a leave of absence. The officers then seized all the records, and the Executive Committee appointed a Committee to audit all the records. This resulted in notice to the County Prosecutor, the Banks in question, and other parties in interest, and ultimately ended in criminal action, indictment, and incarceration of the officers involved. Action also proceeded against the bonding companies, banks and parties involved to recapture the lost or misappropriated funds. A large portion of the funds were recovered over a period of years. (#32)

The Executive Committee has also taken lesser action in situations where a State Officer has exceeded his or her authority, and such action has resulted in a notice of charges to the officer, request for information and responses, appointment of an investigating committee of the Executive Committee, findings, and personnel action taken. (#33 ) All personnel action is taken in executive session and not made public unless disciplinary action is required and then only the action so taken by the Executive Committee is made public.

The Executive Committee hears all appeals or grievances from the actions of the State Officers against any particular person or against any local association, its officers, trustees or representatives. (#34) It also hears appeals from adverse rulings or decisions by the Advisory Committee concerning the General Relief Fund or the denial of payment of death benefits for any deceased member. (#35) The appeal generally is informal in nature and the parties appealing may present witnesses, introduce documents, and present information they feel may be useful to their cause. They may also be questioned by members of the Executive Committee. The decision of the Executive Committee is final.

One of the more important powers and duties of the Executive Committee is the oversight of the finances of the State Association. This includes auditing, examining, budgeting, and overseeing revenues, expenses, contracts, salaries and the like. This oversight covers the officers, delegates and life members of the State Association, and the Executive Committee itself. The Executive Committee also appoints a Compensation Committee, from its members, which reviews all salaries, benefits and expenses paid or incurred annually and recommends any changes. The Compensation Committee usually is appointed and assumes its duties at the February meeting and makes its report to the May meeting of the Executive Committee. A vote is taken, and if approved, the salaries are set and notice sent to the field via the Executive Committee minutes distributed to each Local Association. (#36) This procedure has been followed since the 1998 Convention when the Executive Committee, after compensation studies by professionals, changed the “Compendium”, to obviate the Convention vote on salaries. Now the salary committee of the Executive Committee controls all salaries. The expenses of life members were not approved until the Executive Committee voted to approve the same at its February meeting in 1984. (#37) The expenses for Life Members had been a source of continuing agitation as far back as 1896, (#38) but Legislative authority was not granted until 1996, which validated the Executive Committee’s action previously adopted in 1984.

Prior to 1998 the officers salaries and expenses, and the delegates expenses, were voted upon at the Convention. (#39) It appears the first salaries were established and voted upon in 1887, (#40) but President Spencer did not take any salary then or during his tenure. The President’s salary was not included until 1931 when Chris Hasselhuhn became President. (#41) This procedure was followed during this early period by introducing a Resolution at the Convention and referring the same to the Resolutions Committee for its recommendation and then voting on the Resolutions Committee recommendation. (#42) Sometimes several salary resolutions would be presented and also many times each officer’s salary would be voted upon separately. (#43) Later the Executive Committee would introduce the resolution which would then be presented and voted upon. (#44) Presently the Executive Committee, upon recommendation of the salary subcommittee, approves the salaries of all officers, delegates and life members as stated above.

The Executive Committee duties also include the power of appointment of the counsel for the State Association and the Field Examiner. (#45) They also have concurring powers over the President’s powers to fill vacancies in certain State Offices, the Executive Committee and the Board of Managers for the Firemen’s Home. (#46)

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