BV Membership Status, June 2013

UPDATE:  Campaign to bring the Bay View membership policies into compliance with Chautauqua traditions, federal and state Fair Housing laws and the policies of the United Methodist Church:

Summer 2012 to Spring 2013

  • Summer 2012:  a BOT-appointed committee reaches consensus on a more inclusive two-prong membership track;  24 hours later, Heritage Alliance supporters withdraw from the agreement (see Special Committee on Membership Report 2012)
  • December 2012: Heritage Alliance proposes a “Legacy Only” solution
  • February 2013: BOT approves “Legacy Only” compromise, 6 to 3; sends to Bylaw Committee to draft an amendment for submission to members at the 2013 annual meeting
  • May 2013: Committee presents proposed Legacy Amendment at BOT meeting; Heritage Alliance supporters withdraw their support. BOT votes 5 to 4 to send the bylaw amendment forward for membership action, but the margin falls one vote short of the 2/3 required (6 to 3). The matter is tabled, with no action taken.

After a full year of effort, no positive steps have been taken to bring the community’s membership policies into compliance. Where next? See  AN OPEN LETTER TO FRIENDS OF THE BAY VIEW CHAUTAUQUA

—BV TAX EXEMPT STATUS:  A Heritage Alliance brochure on Tax issues has been distributed to members, claiming that adoption of more inclusive membership policies will jeopardize BV’s tax exempt status. The claims are without merit and are directly contradicted by United Methodist Church officials. According to Board President Larry Ternan, neither that brochure nor its conclusions are sanctioned by the BOT. For a formal statement of UMC tax exempt policy see: Bay View’s Tax Exemption is not Dependent on Membership Requirements,   [The author served as Annual Conference Treasurer for nearly 30 years, was elected to GCFA for 8 years and chaired the denomination’s Audit Committee for 4 years.]

-BOT FIDUCIARY RESPONSIBILITIES and LEGAL RISKS: A position paper by Arthur I. Anderson, 35-year corporate attorney and Harvard Law School graduate, clarifies the risks to the community and BOT members of a ‘do nothing’ policy.  Though the Becket opinion asserts that BV is not violating Fair Housing laws, long-time Bay View member Anderson’s compelling piece concludes that the opinion is worthless to the BV Board and membership because of the legalese and disclaimers included in the opinion. It is important to put the Becket opinion and the BOT’s failure to act to remedy the community’s situation in the context of Anderson’s sobering arguments. Click here to access: Thoughts on Inclusiveness by Arthur I. Anderson

AN OPEN LETTER TO FRIENDS OF THE BAY VIEW CHAUTAUQUA Dear Friends: Here is a brief summary of membership developments over the winter and some ideas for going forward this summer. Unfortunately the efforts of some members of our Board of Trustees to bring the membership issue to a conclusion were rebuffed. Despite serious efforts by some trustees to find a resolution or a compromise, the group known as the BV Heritage Alliance, successfully stymied any movement. Larry Ternan deserves thanks for staying with the issue despite facing very serious health challenges himself, now happily resolved.

When we were last together on the BV grounds the Special Committee on Membership had come to a clear and unanimous recommendation to the trustees. The BV Heritage representatives reneged on that agreement.  The trustees set about trying to find a compromise position. Over the winter many of you signed a petition to the trustees that urged the Board to: … undertake changes to our membership requirements that preserve our Christian and Chautauqua traditions, protect the Association’s IRS tax status, uphold our relationship with the Methodist conference, and honor Federal and state fair housing laws.

In December the Heritage Alliance suggested a legacy track to membership that would preserve cottage succession. A BOT subcommittee worked to develop a “legacy-only” compromise that was adopted by the trustees on a 6-3 vote over the winter. Many of you had serious difficulties with the compromise. Some were unwilling to support it, but most of us were willing to support it in the interest of compromise, for the good of our shared community, and to just get this difficult issue behind us. The Heritage Alliance, after themselves proposing the “legacy” path in December, rejected the compromise and urged the trustees to do the same.  On May 24 the trustees voted only 5-4 in favor of a By-law amendment to implement a legacy track to membership. Since it takes 2/3, or 6 trustee votes, to get a By-law amendment on the ballot, it appears the BOT will not be proposing a By-law amendment this summer.

So it seems that our hopes for collective BOT leadership in resolving this issue are in vain. We must look to other avenues to making Bay View the open and welcoming Christian community that it was in its beginning.

We could propose another By-law amendment this summer. Some within our coalition would urge that we NOT propose a By-law but rather continue to focus on steady persuasion of our friends and neighbors – and electing new trustees.  This is an important decision that we should make in the next several weeks and we invite your opinion.  We hate to lose momentum by backing off.  On the other hand, patience often yields fruit.

There is clear consensus within our group, however, about addressing the misinformation generated by the Heritage Alliance.  When a membership By-law was proposed two years ago there were serious factual errors circulated alleging that Bay View could lose its connection with the United Methodist Church and its tax-exempt status. The Heritage group is now circulating a pamphlet by K.C McAlpin that asserts the same.  This is clearly not true.  Included in this message is a statement by Stan Sutton, which pretty soundly puts these concerns to rest:  [Bay View’s Tax Exemption Is In No Way Dependent on Membership Requirements].  Bay View’s relationship to the UMC and its tax exemption, which it gets from the UMC, is in no way at risk because of our membership rules.

The trustees have a legal opinion from Bay View’s own lawyers that warn about BV continued non-compliance with state and Federal law, particularly the Federal Fair Housing Law. There is also an opinion by Phil Moots, the lawyer for West Ohio Methodist Conference. You can find these on the Bay View Association website.  BV’s own legal opinion (and that of Phil Moots’) say that Bay View is vulnerable to lawsuit for illegal practices and warns of the financial consequences of defending and settling such suits. The current membership By-laws are also inconsistent with our Articles of Association.

At the insistence of the Heritage Alliance, an opinion from the Becket Fund—an outside political advocacy group—was included on the BV website as well. Though the Becket opinion asserts that BV is not violating Fair Housing law, long-time Bay View member Arthur Anderson has written a compelling piece concluding that the opinion is worthless to the Bay View Board and membership because of the legalese and disclaimers included in the opinion. Anderson’s position paper also addresses the fiduciary responsibility of the trustees to operate Bay View in compliance with applicable law including the Federal Fair Housing Act. (Arthur is a Harvard Law graduate who has practiced corporate law for 35 years and regularly advises corporate boards as part of his law practice in Boston.) It is important to put the Becket opinion and the BOT’s failure to act to remedy the community’s situation in the context of Anderson’s sobering arguments.  Arthur’s paper is attached:  Thoughts on Inclusiveness by Arthur I. Anderson

Persuasion takes time. Remember how long it took for women to get the vote and for blacks to get their civil rights. We may prevail this summer, but if not, we try again. The arc of history is on our side. As Martin Luther King, Jr. famously stated: “The arc of the moral universe is long but it bends toward justice.” [AIA suggestion]
Thank you.
Don Duquette

Bay view membership policies remain seriously at odds with Christian values, Chautauqua tradition and civil law. Consistent with the intent and vision of our Methodist founders, efforts to remedy this situation will continue. Check this site often for ongoing updates and information. Following is Stan Sutton’s must-read memo regarding Bay View and its affiliation with the United Methodist Church and its policies.

_______________________________

Bay View’s Tax Exemption Is Not Dependent on Membership Requirementsby Reverend Stan Sutton, a United Methodist Pastor who served as an Annual Conference Treasurer for almost 30 years.  He was elected to GCFA for 8 years and chaired the Audit Committee for the denomination for four years.

Tax exemptions for churches and their affiliated organizations are complex; it is not surprising that even CPAs and other experts draw wrong conclusions.

To understand Bay View’s unique position one must go back 45 years to the creation of the United Methodist Church (UMC) by the merger of the Evangelical United Brethren Church and the Methodist Episcopal Church.  Although each former denomination had their own 501(c)(3) church exemption, the new United Methodist Church had to apply for its own.  The request took six years to wend through the IRS, but in October 1974 the General Council on Finance and Administration (GCFA) of the UMC received a “letter ruling exemption”.  That letter says in part:

For the purposes of this group ruling, your affiliated religious organizations include The General Conference, Judicial Council; General Agencies, Commissions, Committees, their divisions and departments thereof, and, other related organizations; Jurisdictional Conferences and Affiliated Agencies, Commissions, and other organizations; Annual Conferences and divisions and departments thereof; Annual Conference Agencies, Commissions, Committees, and affiliated organizations; Local Churches and Local Church Agencies, Commissions, Committees, and other affiliated organizations;

Based on the information supplied, we rule that you and your affiliated religious organizations, on the list you submitted, are exempt from Federal income tax under section 5o1(c)(3) of the Code.

We have further determined that you and the affiliated religious organizations you operate, supervise, or control, and which are covered by your notification to us, are not private foundations . . .

Later in the four-page letter the IRS requires GCFA to submit an annual list of all its affiliated organizations.  Each year they send the name, address, and Employer Identification Number (EIN) of every affiliated organization.  Each local UMC and groups like Bay View are on that list.

GCFA is the gatekeeper of the tax exemption for the UMC; it’s difficult to get on the list.  You can see the application at http://www.gcfa.org/sites/default/files/u3/Group%20Ruling%20Request%20Form%20%28Group%20I%29%2012-9-10_2.pdf

When Bay View negotiated with the Legal Department of GCFA to be included in the letter ruling, they required us to keep in our by-laws statements that should Bay View go out of existence, all assets would revert to the Detroit Annual Conference and the West Michigan Annual Conference; that the two annual conferences affirm the election of the Board of Trustees, the majority of whom must be United Methodists; and that these provisions could not be changed without the approval of both annual conferences.  With these safeguards in place, Bay View came under the UMC letter ruling.Technically, Bay View is not tax exempt – the United Methodist Church, of which we are a part, is the exempt organization.  We come under their umbrella.  This is also true of all 35,000 United Methodist Churches in the U.S.  The IRS maintains a list of all tax-exempt charitable organizations which is available at http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check

You won’t find The Bay View Association on that list, even if you know our EIN.  You won’t find your local UMC on the list. You won’t find any group that comes under the UMC letter ruling on this IRS database. The IRS sees the UMC as one tax-exempt group with GCFA being the sole referee as to who’s in and who’s out.

As long as we abide by our by-laws 2, 75-B, and 77-B we come under the letter ruling.  Dan Gary, the attorney who handles tax issues for GCFA and who negotiated our coming under the ruling, wrote in 2011:

“In short, Bay View’s inclusion in the UMC group ruling does not turn on whether the provision in the bylaws requiring that every member be a Christian is interpreted literally or is interpreted to mean that every member is “upholding Christian values.”  That is (“merely”) an internal political dispute that you folks will need to work out.”

Many issues are debatable when considering membership in Bay View; its tax status is not one.  Grace and Peace, Stan Sutton — May 2013


Thoughts on Inclusiveness

By Arthur I. Anderson

Xenophobia

My earliest memories of Bay View are from the 1950s. Bay View was then, and to this day continues to be, a magical place for me. In retrospect, I now realize that Bay View in the 1950s was still recovering from the financial hard times of the 30s and 40s. There were any number of cottages in various stages of disrepair and a few had even been boarded up and left unoccupied for years.

 

Hard times bring out the best and the worst in people. All too often economic stress can foster xenophobia as it did in the events leading up to the Nazi takeover in Germany before the outbreak of World War II. In 1947 in a truly dark hour in Bay View history, xenophobia carried the day when the historical evidence suggests that someone in the Bay View leadership revised the Bay View Bylaws to restrict membership to Caucasians and Christians, thereby excluding Blacks and Jews, without bothering to obtain a vote of the Bay View members or Board. Racial and religious bigotry appear to have been officially implemented in Bay View in violation of the Bay View charter, the Bay View Bylaws and Michigan law. The religious bigotry extended to  Catholics whose cottage  ownership  at least as recently as the mid 1970s was capped at 10%. One very unfortunate outcome of the 1947 Bylaw alteration   is that religious bigotry continues to haunt Bay View in 2013 –albeit with much greater stakes for Bay View as the result of legal developments over the last two-thirds of a century. Although subsequent membership votes ratified the Christian persuasion requirement and deleted references to the Caucasian race, 1947 lives on in infamy as the year in which the original inclusive membership vision of the Bay View founders was sabotaged and subverted by a highly suspicious alteration of the Bay View Bylaws.

 

I am a practicing corporate lawyer and received my J.D. from Harvard Law School in 1978. I have been practicing corporate law for almost 35 years and have regularly advised boards of directors with respect to their fiduciary duties. I am not an expert on Michigan law or the Federal Fair Housing Act so the following analysis is not a formal legal opinion. It does, however, represent my best “educated” judgment on what I consider to be a serious breach of fiduciary duties by the Bay View Board.

 

Bay View’s Chautauqua Heritage and Religious Inclusiveness

 

Chautauqua NY and Inclusiveness.


According to the Chautauqua Archivist and Historian (with whom I had a recent telephone conversation), the Chautauqua Institution, the largest and most influential chautauqua, has maintained a policy of religious diversity and inclusiveness since its founding in 1874. Chautauqua continues to thrive in the 21st century.  Chautauqua celebrates its Christian heritage while maintaining a policy of religious inclusiveness. The mission statement for Chautauqua as reported on IRS Form 990 (highlighting added) reads:

 

A PROGRAM THAT STIMULATES PROVOCATIVE, THOUGHTFUL ENGAGEMENT OF INDIVIDUALS AND FAMILIES IN CREATIVE RESPONSE TO THE IMPORTANT RELIGIOUS, SOCIAL AND POLITICAL ISSUES OF OUR TIMES AND PROMOTES EXCELLENCE AND CREATIVITY IN THE APPRECIATION, PERFORMANCE AND TEACHING OF THE ARTS A COMMUNITY IN WHICH RELIGIOUS FAITH IS PERCEIVED, INTERPRETED AND EXPERIENCED AS CENTRAL TO THE UNDERSTANDING AND EXPRESSION OF OUR SOCIAL AND CULTURAL VALUES A COMMUNITY WHICH IS OPEN TO ALL WITH PROGRAMS THAT EXPRESS THE INSTITUTION’S CHRISTIAN HERITAGE AND ITS INTERFAITH COMMITMENT A RESOURCE FOR THE ENRICHED UNDERSTANDING OF THE OPPORTUNITIES AND OBLIGATIONS OF COMMUNITY, FAMILY AND PERSONAL LIFE BY FOSTERING THE SHARING OF VARIED CULTURAL, EDUCATIONAL, RELIGIOUS AND RECREATIONAL EXPERIENCE IN AN ATMOSPHERE OF PARTICIPATION BY PERSONS OF ALL AGES AND BACKGROUNDS

 

Chautauqua is organized as a nonprofit eligible for Section 501(c)(3) tax exempt status under the Internal Revenue Code. GuideStar, the influential information service reporting on nonprofits, has awarded Chautauqua its seal of approval for transparency. Chautauqua’s approach to Section 501(c)(3) status may be worthy of consideration by Bay View as a way to allow Bay View to control its own tax exemption without having to piggy back on the Methodist church. The Method church has made it clear, however, that there is no need to maintain the Christian persuasion requirement in the Bylaws for Bay View to continue to rely on its tax exemption.

 

Bay View Inclusiveness prior to 1947.

 

 Bay View also maintained a policy of religious diversity and inclusiveness from its founding in 1875 until the apparently illegal alteration of the Bay View Bylaws in 1947. The purposes and membership clauses in the Bay View charter demonstrate the commitment of Bay View’s founders to religious diversity and inclusiveness as well as an expansive mission for Bay View with an important humanist focus on scientific and intellectual culture.

 

The relevant language from the membership and purposes articles of the Bay View charter (highlighting added) reads:

 

Article IX (Bay View Membership)

Any person of good moral character twenty-one years of age may become a member of this association……, provided always that no person shall become a member without the approval of the board of trustees……”

The language says nothing about Christian persuasion being a requirement for membership. That requirement was only added to the Bylaws in 1947 without, apparently, proper authorization by the Bay View Board or membership. Almost all Christians, I believe, will acknowledge that Christian faith is not a prerequisite for the possession of good moral character and that there are, in fact, faithful Muslims, Jews, Buddhists and Hindus as well as secular humanists and atheists in the United States and around the globe who possess “good moral character”.

Article III (Bay View Purposes)

“To purchase and improve lands to be occupied for summer homes, for meetings and assemblies of associations and societies organized for scientific and intellectual culture, and for the promotion of the Christian religion and morality. The corporators purpose to erect buildings and make improvements on said lands, to lease portions thereof to hold meetings and moral and religious services thereon for moral and religious purposes, and for scientific and intellectual culture.”

It is interesting that the “promotion of the Christian religion and morality” appears at the end of the first sentence following “purchase and improve lands to be occupied for summer homes, for meetings and assemblies of associations and societies organized for scientific and intellectual culture.”  The primacy given to real estate activities and scientific and intellectual culture makes it hard to argue that Bay View was exclusively organized for Christian religious purposes.

The 25th Bay View anniversary booklet of 1900 states: “Bay View is not a church or a denominational establishment, but a Christian Institution of the broadest catholicity, welcoming to full membership all men and women of any or no denomination who have a desire to be  part of a community such as this, and are willing to assist in perpetuating it according to the principles and purposes of the founders.”

The Federal Fair Housing Act

The Federal Fair Housing Act was passed by Congress after the assassination of Martin Luther King, Jr. in 1968. Congress adopted the Act to allow the Federal government to take a more active role in protecting the fundamental property rights of Americans against racial, ethnic and religious bigotry . Sadly, such bigotry had become widespread after the Civil War in response to the migration of emancipated blacks away from the South and an influx of new immigrants from Ireland, Southern and Eastern Europe and Asia. Restrictive covenants on real property like the 1947 Bay View  Bylaw alteration were developed as a technique to legally enforce such bigotry.

 

Legal Opinions.

 

Bay View has posted two legal opinions on the Bay View website (which were received over a year ago) that conclude that there is a strong possibility that Bay View is violating the Federal Fair Housing Act. One of the opinions also concludes that there is a strong possibility that Bay View is violating the Elliot-Larsen Civil Rights Act, the Michigan equivalent of the Federal Fair Housing Act. When I informally asked a Bay View Board member last summer what the Board planned to do about the two opinions, he suggested that the opinion from the Beckett fund (also posted on the Bay View website) effectively offsets the other two opinions so that the Board need not be concerned about possible violations of the Federal Fair Housing Act.

Fundamental Problem with Beckett Fund Opinion.

 One fundamental problem with the reasoning of the Board member becomes readily apparent from a close reading of the “Assumptions and Qualifications” paragraph in the Beckett fund opinion (highlighting added).

“Assumptions and Qualifications

This memorandum is for the exclusive use of the Bay View Heritage Alliance and should not be relied upon by any organization or individual who is not a part(y) (sic) to the attorney-client relationship between the Becket Fund for Religious Liberty and the Bay View Heritage Alliance. This memorandum is based exclusively on the facts as the Bay View Heritage Alliance has provided them to the Becket Fund, and the Becket Fund does not purport to have full knowledge of every potentially relevant fact. Additional facts might change the relevant legal conclusions. Moreover, this memorandum addresses only questions of federal law, not Michigan state law. We recommend that the Bay View Heritage Alliance consult an attorney admitted to practice in Michigan regarding questions of Michigan law, including the Michigan Elliott-Larsen Civil Rights Act.”

The Bay View Board, in short, explicitly cannot rely on the Beckett fund opinion and the Beckett fund goes on to acknowledge that if they had access to all of the facts the conclusions reached might be different. I do wonder what the opinion of the Becket fund would be if someone informed them that Bay View had an inclusive membership policy for the first 73 years of Bay View’s existence and that Christian persuasion was apparently illegally inserted into the Bay View Bylaws in 1947.  It would seem prudent for the Board to remove the opinion from the Bay View website since neither the Board nor the Bay View membership can rely on it and the opinion continues to be cited to influence public opinion. I would like to think that the continuing references to the opinion and its continuing presence on the Bay View website are a function of a well meaning but misguided legal naiveté rather than an intentional program to confuse and mislead the Bay View membership.

Brief Overview of the Federal Fair Housing Act.

I highly recommend that members carefully review for themselves the two legal opinions that conclude that there is a strong possibility that Bay View is violating the Federal Fair Housing Act. Those opinions include comprehensive analyses of both the law  and the legal risks to Bay View. Even a “common sense” review of the language of the Federal Fair Housing Act suggests that Bay View could easily be violating the law. The Act prohibits religious discrimination in housing. The restrictions on religious discrimination in the Act explicitly do not, however, prohibit a religious organization … or a nonprofit…organization operated, supervised, or controlled by or in conjunction with a religious organization ….from limiting the sale, rental, or occupancy of dwellings that it owns or operates for other than a commercial purpose to persons of the same religion….” (highlighting added)

 

The “non commercial purpose” use of real estate seems particularly challenging for Bay View to satisfy. Typical non commercial purposes described by one commentator include restrictions on who occupies a rectory or manse or only allowing nuns or monks to reside in a convent or monastery. However, once a religious organization decides to sell or rent homes to lay persons, the commentator concludes that the Federal Fair Housing Act prohibitions on religious discrimination become applicable. Bay View members are allowed to buy, sell and rent cottages for their own personal and commercial benefit, including selling and renting cottages through commercial real estate brokers just like ordinary residential real estate.

 

Although Bay View does have a religious affiliation with the Methodist Church, ownership of Bay View cottages is not restricted to Methodists. Owners come from a diverse array of religious organizations that includes a number of Protestant denominations and the Roman Catholic Church. It’s easy to see how a court could conclude that the ownership of Bay View cottages is not being restricted by a “religious organization” to “persons of the same religion” . 


Indemnification and Personal Liability of Bay View Board

Federal and state laws and regulations, including the Federal Sentencing Guidelines and the Sarbanes Oxley Act, contain strong incentives for profit and nonprofit corporations to address possible violations of applicable law. Numerous articles have been written on “best corporate governance practices” that include promptly addressing possible violations of law. Given the two legal opinions that conclude that there is a strong possibility that Bay View is violating the Federal Fair Housing Act, the Bay View Board may be exposed to personal liability and not entitled to indemnification in connections with violations of the Federal Fair Housing Act.

Article XI of the Bay View Charter.

Article XI of the Bay View charter provides for the indemnification of the Bay View Board and limits their personal liability to Bay View. Such indemnification is, however, limited to what is permitted under the Michigan Nonprofit Corporation Act and the Bay View Board can be held personally liable for actions taken other than in “good faith” and for “knowing violation of law”.

Because Bay View has received two legal opinions that conclude that there is a strong possibility that Bay View’s membership policies violate the Federal Fair Housing Act, it may prove difficult to argue successfully that “acting in good faith” includes delaying taking action for over a year on likely violations of the Federal Fair Housing Act. It also seems possible that any violation relating to events occurring after the receipt of the two legal opinions might be determined to be “knowing”.

The relevant language of Article XI (highlighting added) reads:

“The Association shall indemnify officers, directors, trustees,… of the Association to the full extent allowed by the Michigan Non Profit Corporation Act, ……

No member of the Board of Trustees of the Association ….shall be personally liable to this Association or to its members, if any, for monetary damages for a breach of the trustee’s ..fiduciary duty; provided, however, that this provision shall not eliminate or limit the liability of a trustee…for any of the following:…..

2. Acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; ….

.

 

The provisions of Article XI of the Bay View charter are consistent with Sections 450.2209 and 450.2561 of the Michigan Nonprofit Corporation Act.

 

Section 450.2209 of the Michigan Nonprofit Corporation Act.

 

“Sec. 209. The articles of incorporation may contain any provision consistent with any of the following:……

 

(c) A provision that eliminates the personal liability of a volunteer director or volunteer officer ….. for a breach of the director’s or officer’s fiduciary duty. The provision does not eliminate or limit the liability of a director or officer for any of the following:….

 

(ii) Acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law…..”

 

Section 450.2561 of the Michigan Nonprofit Corporation Act.

 

Section 450.2561 allows Bay View to indemnify the Bay View Board  in connection with legal actions brought against them but only if they have acted in “good faith”. 

“Sec.561. Unless otherwise provided by law or its articles of incorporation or bylaws, a corporation has the power to indemnify a person who was or is a party or is threatened to be made a party to any ….action …by reason of the fact that the person is or was a director, officer, employee….. of the corporation ….against expenses including attorneys’ fees, judgments, penalties, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with the action ….if the person acted in good faith…..”

The Federal Fair Housing Act and the Board’s Fiduciary Duties

I think the Bay View Board clearly has a duty to resolve the issue of whether Bay View’s membership policies violate the Federal Fair Housing Act and that they should seek expert legal advice on how to proceed expeditiously to resolve the issue. Continuing to ignore the opinions seems to be a clear breach of their fiduciary duties and inconsistent with the most basic good corporate governance practices. In the meantime, one option which could mitigate the exposure of Bay View and the Board is to simply stop enforcing the Christian persuasion requirement in the Bylaws. A plaintiff who sought to compel the Board to enforce the Christian persuasion requirement might find it difficult to prevail in court. In a landmark decision, Shelley v. Kraemer (1948), the United States Supreme Court held that judicial enforcement of racially based restrictive covenants constituted discriminatory state action prohibited by the Fourteenth Amendment. The decision is precedent for barring the enforcement of religiously and ethnically based restrictive covenants.  The final blow to such restrictive covenants came in Barrows v. Jackson (1953), in which the Court prohibited the granting of damages for the breach of a restrictive covenant. Thus, by 1953 the Court had removed the legal enforceability of restrictive covenants.

“The City upon a Hill” and Christian Values

The image of the “City upon a Hill” has been an inspiration to Americans throughout our history. Ronald Reagan eloquently used the image in his famous farewell address. I think many Bay View members like to think of Bay View as a “City upon a Hill” in its own right. I certainly do. Here are the concluding remarks of Reagan’s address: [City on a Hill: Reagan Farewell AddressVIDEO]

“The past few days when I’ve been at that window upstairs, I’ve thought a bit of the shining “city upon a hill.” The phrase comes from John Winthrop, who wrote it to describe the America he imagined. What he imagined was important, because he was an early Pilgrim, an early “Freedom Man.” He journeyed here on what today we’d call a little wooden boat, and, like the other pilgrims, he was looking for a home that would be free.

I’ve spoken of the shining city all my political life, but I don’t know if I ever quite communicated what I saw when I said it. But in my mind, it was a tall proud city built on rocks stronger than oceans, windswept, God blessed, and teeming with people of all kinds living in harmony and peace – a city with free ports that hummed with commerce and creativity, and if there had to be city walls, the walls had doors, and the doors were open to anyone with the will and the heart to get here. That’s how I saw it, and see it still. How Stands the City?

And how stands the city on this winter night? More prosperous, more secure and happier than it was eight years ago. But more than that: after 200 years, two centuries, she still stands strong and true on the granite ridge, and her glow has held steady no matter what storm. And she’s still a beacon, still a magnet for all who must have freedom, for all the Pilgrims from all the lost places who are hurtling through the darkness, toward home.

We’ve done our part. And as I “walk off into the city streets,” a final word to the men and women of the Reagan Revolution – the men and women across America who for eight years did the work that brought America back: My friends, we did it. We weren’t just marking time, we made a difference. We made the city stronger – we made the city freer – and we left her in good hands.

All in all, not bad. Not bad at all. And so, goodbye. God bless you. And God bless the United States of America.”

Not many people realize it, but John Winthrop’s “City upon a Hill” can also be used as a cautionary tale about what can go wrong with Christian values. Unfortunately bigotry and intolerance ended up carrying the day in Puritan Massachusetts. In 1659, 1660 and 1661, three Quakers were condemned to death and executed by public hanging for their religious beliefs. Several other Quakers were sentenced to death, but had their punishments commuted to being whipped and banished. The hanging of the Quakers marked the beginning of the end of the theocracy of the Puritans and their independence from English rule. In 1661, the English explicitly forbade Massachusetts from executing anyone for professing Quakerism and in the 1680s England revoked the Massachusetts Bay Colony charter and sent over a royal governor to enforce English law.

We should all strive to achieve Reagan’s vision of a City upon a Hill for Bay View and to resist the religious bigotry and intolerance that ultimately carried the day in Winthrop’s theocracy. Reagan’s vision encompasses the vision of the founders of Bay View and the Chautauqua Institution. His language echoes the language from Bay View’s 1900 25th anniversary booklet and celebrates the possibility of “people of all kinds living in harmony and peace” in a “city upon a hill” with “doors open to anyone”. Chautauqua’s vision has remained intact for 139 years. Unfortunately in 1947, the vision of Bay View’s founders was hijacked by religious and racial bigotry. Bay View managed to overcome the racial bigotry. It’s now time for us to do the same with religious bigotry and to restore the original vision of Bay View’s founders. It is legally, and more importantly, morally the right thing to do.

I would be pleased to work with the Board, expert outside counsel and other members of the Bay View community to develop a plan that (i) restores the vision of the Bay View founders for an inclusive Bay View membership, (ii) eliminates any uncertainty about compliance with the Federal Fair Housing Act and the Elliott Larsen Civil Rights Act, and (iii) preserves Bay View’s Section 501(c)(3) tax exempt status. I have worked on many corporate restructurings over the course of my career and would be more than happy to lend a hand and my legal savvy to get inclusiveness back on track in the Bay View Bylaws after a 66-year-long derailment. 66 years is a long time but not as long the 73 year era of religious inclusiveness that the Bay View founders trumpeted and inaugurated. That golden era is Bay View’s true heritage. It is the Bay View heritage that we should celebrate, cherish and revive.

__________________________________

Notes by Section

Xenophobia

1.      For the history of the 1947 addition of the Caucasian race and Christian religion membership requirements to the Bay View Bylaws and the Catholic quota, see unpublished research done by David Krause.

Chautauqua, NY and Inclusiveness

2.      Information about the Chautauqua Institution, including the GuideStar seal of approval and the Chautauqua IRS Form 990s are available at http://www.guidestar.org/

3.      For a summary of the Methodist church’s conclusion that the elimination of the Christian persuasion membership requirement in the Bay View Bylaws will have no impact on Bay View’s tax exempt status, see unpublished memorandum by R. Stanley Sutton, Methodist Minister and Bay View Trustee.

Bay View Inclusiveness prior to 1947

4.      The quote from the 25th Bay View anniversary booklet of 1900 is taken from the unpublished Krause research referenced in Note 1.

Legal Opinions

5.      The three legal opinions referenced are available in the password protected Members section of the Bay View website at http://www.bayviewassociation.org/

Brief Overview of the Federal Fair Housing Act.

6.      See The Fair Housing Act and Religious Freedom by Michael P. Seng at http://www.jmls.edu/fairhousing/pdf/commentary/fha-religious-freedom.pdf

 “The City upon a Hill” and Christian Values

 

7.      My personal commitment to realizing Bay View’s potential as a “City upon a Hill” is reflected in the “Beacons of Culture” initiative which I lead and over the past eight years has been instrumental in arranging Bay View performances by a number of virtuoso artists including Chick Corea, John Jorgenson, Blind Pilot, the Punch Brothers, the Peter Sparling dance company and two Berklee College of Music groups.

 

8.      Reagan farewell address: See

http://www.youtube.com/watch?v=332QeTNmfh8

and

http://www.nytimes.com/1989/01/12/news/transcript-of-reagan-s-farewell-address-to-american-people.html?pagewanted=all&src=pm

9.      Puritan history:  Paraphrasing Wikipedia article at http://en.wikipedia.org/wiki/Boston_martyrs

 

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