FIRST PERSON/OPINION By Michael Gougis On one level, the American Historic Racing Motorcycle Association’s had the kind of year that many, many organizations wish they’d had. In an economy so battered that financial analysts discuss the end of the U.S. auto industry as a real possibility, AHRMA not only survived a bout with bankruptcy, but emerged from Chapter 11 protection. And the organization’s actually got money in the bank, and may wind up in even better financial shape; some money that was written off years ago may actually be on its way to the group’s coffers. On the other hand, the group recently fired its communications director, went through an ugly public debate over its executive director, and is facing a petition drive from within its membership to remove a controversial political figure–Jeff Smith–from its board of trustees. And its former communications director now is running for the board on a “reform” platform. “Motorcycle racing is a very passionate sport, and our members are passionate people,” says David Janiec, AHRMA Chairman. “You get the Internet involved, and those passions are inflamed further, and people will have very strong opinions.” ***** AHRMA has made headlines for the past several years mostly in connection with its litigation with Team Obsolete involving a range of issues, including banning race participation by Team Obsolete owner (and AHRMA founder) Rob Iannucci or any rider who listed Team Obsolete as a sponsor or ran a Team Obsolete sticker. That litigation cost hundreds of thousands of dollars and so depleted AHRMA’s finances that in 2006, it sought Chapter 11 bankruptcy protection. It didn’t help AHRMA that it had to fight the litigation from its own revenues; its insurer, Reliance, went belly-up about the time that AHRMA needed it to step forward. In April of 2008, with the litigation settled, a court approved AHRMA’s exit from bankruptcy protection. Since then, AHRMA has been paying down its debts, which exceeded $200,000, and rebuilding its cash reserves. In a sour economic environment, the group’s financial performance has been remarkable. “Right now, we’re on track,” Janiec says. “We’re out of (Chapter) 11, we’re paying our bills, and we expect to end the year with an increase of revenue against expenses. And we’ve done that with paying off our debt and with gas prices being so high. And the payments out of the benevolent fund–we never stopped those.” In addition, AHRMA has received word that its former insurance company, Reliance, may begin paying off claims that were pending when the insurer went bust, Janiec says. Tentatively, AHRMA is scheduled to receive a payment next year that could add significantly to its cash reserves. “We’re roughly $100,000 in the black, but that’s not much,” Janiec says. “You need a little bit of headroom. AHRMA’s a nonprofit corporation, and we operate as a 501(c)4 corporation. That means we don’t make a profit, but we have to have money in the bank. We need to rebuild our coffers, our benevolent fund, and to be able to weather things like the financial downturn and the wild swings that you can see as a sanctioning body. For example, a couple of rained-out road racing events, two or three in a row–that could threaten us. You know how much those events cost to put on.” Financially, the organization may not have the money it had on hand in years past, but it does not have the potential financial exposure to loss it had during the litigation era (it lasted long enough that the word ‘era’ is appropriate). So AHRMA’s financial operations continue to strengthen, and may be stronger than they’ve been in years. That’s the good news. ***** Much of the bad blood currently centers around events that swirled around Jeff Smith, the former 500cc Motocross World Champion who was instrumental in the foundation of AHRMA (“He’s got like membership number ‘2’,” one of his critics says) and a central figure in the Team Obsolete litigation. In short, Smith (who did not return phone calls seeking comment for this story) resigned from the AMA Board of Directors in February 2008 after the board announced that it was looking into “unsubstantiated expense reimbursements” to former board Chairman Dal Smilie. Smilie’s expense reports were signed (in a box labeled “Approved By”) by Smith before they were submitted to AMA staff for payment. Smilie later would resign his job as chief legal counsel for the Montana Department of Administration. Smith then resigned his post as AHRMA’s treasurer, saying in a statement: ” “¦ I feel some responsibility for the alleged fraudulent actions of a fellow (AMA) Director. I was an unwitting accomplice to his activities by signing expenses which I believed to be true and accurate. Although I had no knowledge of the acts and trusted and signed this individual’s expense reports, just as prior AMA Treasurers have, more prudent scrutiny of the documents may have changed the situation. “¦In order to allay concerns on the part of members of the American Historic Racing Motorcycle Association at this delicate period in its reconstruction, I have resigned from my position as Treasurer.” His resignation did not last long. At a meeting held on the Monday after an AHRMA race weekend at Willow Springs International Raceway in April 2008, trustees voted Smith back into the treasurer’s post. It was not an easy decision. “There was a very, very very long discussion. It was not a unanimous vote,” Janiec says. “There are perception concerns. We knew there would be some public relations issues with it. But there’s also the recognition that he might be the best person to ensure the finances as we go forward. Jeff Smith’s been involved with AHRMA since the inception, and he’s one of the guys who made it successful. Jeff’s helped build it into a very successful organization. It takes a strong leader to do something like that.” The reversal, however, was controversial. The board of trustees split its vote on whether to put Smith back into the treasurer’s spot. (The vote itself was confidential, as per the organization’s bylaws.) And some AHRMA members started a move to undo the board’s decision. “Recently, when the AMA controversy became public, and he resigned, I’m thinking, ‘Thank God. He doesn’t need to be in this organization at that level. It’s time for a positive change.’ And then eight weeks later, we find that he’s been voted back in,” says Buff Harsh, a 10-year AHRMA racer from Atlanta. Harsh is gathering signatures to petition trustees to reverse its vote on Smith. Harsh contends that Smith’s leadership style is uncompromising and vindictive, and that his presence casts a shadow over AHRMA. “It casts the whole club in a negative light for those who do understand his history,” Harsh says. “It’s his way or the highway. And if you disagree, there are consequences. I get e-mails every day. His time is long gone. There are people who won’t race, who won’t renew their membership until he’s gone.” ***** At the AHRMA race at Barber Motorsport Park, other management changes were in the air. For months, there has been criticism of the way the membership rolls have been managed. Renewals were not processed, licenses didn’t go out. Blame went to either AHRMA Executive Director (and road racing director, race controller, worker coordination and merchandise sales manager) Cindy Cowell or the Smith family members who created and managed the membership database. In October 2008, AHRMA road racers at the Barber round had heard that the trustees were considering a vote of “no confidence” in Cowell–a vote that would have resulted in her removal from the executive director position. At a ‘town hall’ meeting in the pits during lunch on Saturday, the road racing community made it clear that it wanted Cindy to remain. “It was like a lynch mob,” says Alice Sexton, former director of communications for AHRMA (more on her firing later). AHRMA Dirt Track Director Rob McLendon III stood up at that meeting for Cowell; “I said that if she was fired, I was leaving, too,” McLendon told Roadracing World in a telephone interview. For him, it came down to having Smith on the board. “I’ve never met him, but I’ve heard enough. If there’s enough sh-t smell, there’s some sh-t nearby,” he said. “If I wasn’t working for Cindy, I didn’t want to do it anymore.” Smith had a stroke that weekend and crashed. The board never took a no-confidence vote on Cowell. But a few short weeks later, Sexton was gone. “At the town hall meeting, when I learned that there was a movement by Jeff Smith to not renew Cindy’s contract as executive director, I sent a personal e-mail to my friends to say that if you want to keep Cindy as executive director, contact your trustee. Apparently, that was considered to be sabotage–their word, not mine. And they voted me out,” Sexton says. According to Sexton, Cowell called her and told her that Janiec had called and said the board had voted to remove Sexton as director of communications. Janiec would not confirm or deny that, saying that personnel decisions were confidential. For people like Harsh and McLendon, it was more proof that the trustees were making the wrong calls. “Go find anyone out there who says Alice was not doing a terrific job,” Harsh says. “She single-handedly turned that newsletter (‘Vintage Views,” the organization’s publication) around,” McLendon says. For her part, Sexton says she has also been blamed–inappropriately–for the publication of a letter in Vintage Views criticizing the trustee’s move to put Smith back into the treasurer’s position. “The letter was sent directly to our editorial review board, and I was asked for my input, and I said there was the look of impropriety about Jeff Smith’s re-election,” Sexton says. “I thought it was best to air the concerns and face it head-on, rather than look like we were trying to sweep it under the rug. It wasn’t my decision to print the letter, but a lot of people think it was my decision. “Because he was forced out of the AMA, most of the membership thought, what made him qualified to be AHRMA’s treasurer? And the reason the board voted him in again was that the only time AHRMA was solvent was when Jeff was at the helm. He did lead the organization into solvency,” Sexton says. “That’s why the board re-elected him. But I think the membership attributes the (Team Obsolete) litigation (and its related financial troubles) to Jeff.” The organization is going through another election, with four of its 12 trustees seats up. One of those seeking one of those spots is Sexton, who says the organization’s leadership needs reform. “Some people want to turn AHRMA into a political organization that occasionally holds racing events. This is emblematic of AHRMA’s current leadership. I want to put this infighting behind us and concentrate on improving AHRMA for our members,” Sexton said in her nomination statement. Whatever happens, Janeic says he’s committed to a more transparent, open organization. He moderates, for example, the town hall meetings, which are a way to gather input from racers who can’t stay for an additional day after the race events conclude, which is when the AHRMA board meetings are held. “My plan is to be as transparent as possible,” Janiec says. “I’m really focused on the future, on creating better events for our members, to stabilizing our finances.” Harsh says for the longest time, he wanted to stay out of the AHRMA controversies. “It’s been easy for racers to turn a blind eye, to say, “I just want to bring my bike to the track, get on the grid and race,'” Harsh says. “But we want a fair organization. We want an organization that is member owned, where we can voice our opinions.”