Friday, May 7, 2010

Palabra Publications, Inc

Ruhi and Ruhi Institute are both brands owned by Palabra Publications, Inc, a non-profit corporation registered in the state of Florida, USA. Thus, Palabra would seem to have the right to charge a fee or royalty for everybody, including Baha'i individuals and institutions, using those brands, for as long into the future as Palabra owns these brands.

Palabra's "Brands Owned"
According to filings by Palabra Publications, their Ruhi and Ruhi Institute brands are both
Educational services of a social and economic development nature, namely, organizing and presenting courses to promote spiritual well-being
which would seem to apply to all Ruhi efforts in Baha'i communities anywhere in the world.

A Coke or Pepsi beverage bottler in Columbia pays fees to the corporations owning the Coke and Pepsi brands respectively. Likewise, it could be that a Baha'i community might have to pay a fee to Palabra Publications, Inc, if not now but in the future, in order to conduct a "Ruhi Institute" or even talk about it, say, in public advertising.

At present, there are no reports that Palabra charges for use of its brands, but it does sell "Ruhi Institute" books and educational materials.

In the original investigative report In Search of Ruhi, it was assumed that some entity -- a "Ruhi Institute" -- was producing educational materials and activities and that Palabra Publications was merely a printing house selling the "Ruhi" books produced and used. Now it appears that Palabra is more at the center of these activities and Ruhi and Ruhi Institute are merely brand names owned by Palabra. If anybody uses either brand name, Palabra is technically in control to some definite degree.

Further, The Ruhi Institute domain is owned by Palabra Publications:
Domain ID:D686225-LROR
Domain Name:RUHI.ORG
Created On:15-Dec-1997 05:00:00 UTC
Last Updated On:13-Feb-2009 17:59:27 UTC
Expiration Date:14-Dec-2010 05:00:00 UTC
Sponsoring Registrar:Network Solutions LLC (R63-LROR)
Status:CLIENT TRANSFER PROHIBITED
Registrant ID:27836515-NSI
Registrant Name:Palabra Publications
Registrant Organization:Palabra Publications
Therefore, Palabra controls all the content on the Ruhi Institute web site. It is pure mechanics -- nobody would have access to upload or modify the site's content without a user ID and password provided by Palabra Publications, Inc. On the other hand, visitors to www.ruhi.org may get the impression that this is an official Baha'i web site.

What is Palabra Publications, Inc?
According to Wiki (emphasis mine),
A non-profit organization (abbreviated as NPO, also known as a not-for-profit organization) is an organization that does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals...

While they are able to earn a profit, more accurately called a surplus, such earnings must be retained by the organization for its self-preservation, expansion and future plans. Earnings may not benefit individuals or stake-holders... ...some nonprofit organizations put substantial funds into hiring and rewarding their internal corporate leadership, middle-management personnel and workers...

NPOs are often charities or service organizations; they may be organized as a not-for-profit corporation...
Indeed, Palabra Publications, Inc, is registered as a Florida, USA, non-profit corporation.

Any indication that Palabra is part of the Baha'i Administration has not been found; and at present, this writer assumes it is not and cannot be. For example, many charities web sites list Palabra Publications as a charity to which anybody in the general public may make financial contributions. Without a breakdown of Palabra's income, however, it is not yet known how much, if any, funds have come from such charity contributions from the public. On the other hand, only Baha'i members may contribute to Baha'i funds as part of the Baha'i Administration.

Wiki continues: "The act of incorporating creates a legal entity enabling the organization to be treated as a corporation under law and to enter into business dealings, form contracts, and own property as any other individual or for-profit corporation may do." An obvious question, then, is what, if any, contracts Palabra may have with Baha'i individuals and/or with the Baha'i Administration, such as the National Spiritual Assembly of the Baha'is of the United States, under whose Baha'i jurisdiction Palabra operates.

There is no limitation to Baha'is or their Administration from also donating funds to Palabra. A number of issues might be explored concerning such relationships, whether donations or contracts, since the Baha'i Administration prizes its independence and Palabra owns brands which that Administration may be, to some extent, committed to use. To mention one such possibility, what if Palabra experienced severe financial difficulties? In such a case, would Palabra have the leverage to ask for, and obtain, a "bailout" from the Baha'i Administration?

Since some or all board members of Palabra are Baha'is, what would be the implications of any dispute between Palabra or any of its board members and any unit of the Baha'i Administration? Could Palabra's operators be sanctioned, disenrolled, etc?

Who is Palabra Publications, Inc?
According to CorporationWiki,
Incorporated by Charles C Cornwell, Dorothy Cornwell, Fares Behmardi, Green Eric and James Beckmon, Palabra Publications, Inc. is located at 7369 Westport Pl West Palm Beach, FL 33413. Palabra Publications, Inc. was incorporated on Friday, October 20, 2000 in the State of FL and is currently active. Charles C Cornwell represents Palabra Publications, Inc. as their registered agent. Source: Public Record data - Department of State - Division of Corporations.
EIN: 650270992
Available information records that Charles Cornwell and Fares Behmardi are connected to a variety of activities, some within the Baha'i community, including real estate, investment endeavors and other web sites. These two quite energetic people, indeed, may be seen as "central nodes" connecting a wide range of other persons and entities in a web of related activities, which may further flesh out the question: who is Palabra Publications, Inc?

Indeed, a further more detailed report could feature a rather impressive and perhaps somewhat surprising web, including many entities both within and outside the Baha'i community where it is safe to say, "The plot thickens".

The primary source information above lists various persons as presently formally involved in Palabra Publications as a corporation, although other names have been mentioned by secondary sources. For example, a Sourcewatch article for "Ruhi Institute" lists as "related" the Baha'i Faith, Haleh Arbab, Farzam Arbab and the Baha'i Universal House of Justice (UHJ).

Indeed, www.ruhiresorces.org features a number of talks by Dr. Farzam Arbab. This internet domain is owned by
Registrant: Jennifer Chingwe
Registrant Organization:Chingwe Resources Inc.
Registrant Street1:8 Matawan Green Lane
Registrant City:Matawan
Registrant State/Province:New Jersey
not by the Baha'i Administration. Since Ruhi and Ruhi Institutes are Palabra-owned brands, one might suppose that there is some agreement or formal contract between Palabra and Chingwe.

BahaiRants has stated that
Lample is behind Palabra Publications... which just happens to be the organization which publishes his book as well as other books. Some of them go by a name you may know: the Ruhi books...

...this innocent coincidence means that Lample and Arbab are two peas in a pod. One is the creative force behind Ruhi and the other is the publisher. Its pretty safe to predict an intensification of the campaign to Ruhify the Baha’i Faith. In fact they both go way back to FUNDAEC, the foundation started by Arbab in the 70’s in Columbia..

The result of the election of Lample to the UHJ is that we have now one more person at the top who has a personal stake in Ruhi...
Elsewhere on the internet, one finds
Paul Lample is the founder of Palabra which publishes the Ruhi books. So that now we have the editor/creator of the Ruhi series (Arbab) and it's publisher (Lample) on the UHJ.
In sum, Mr. Lample is said to be a "founder", "publisher" or "behind" Palabra, but the incorporation documents do not support this contention. Perhaps some informal, facilitating role is more accurate, or if Mr. Lample was a founder, perhaps he was replaced at Palabra in its filings with the state of Florida when he was elected to the Baha'i UHJ.

While Dr. Farzam Arbab may have been "editor/creator" of the Ruhi series, there may be a gap in the story, since Dr. Arbab may no longer own what he created. It may be that Palabra does. Perhaps he sold or gave this intellectural property to Palabra. In any case, as reported, the Ruhi Institute books published by Palabra, seen thus far by this writer, mysteriously do not reveal who may have been either editor, author or indeed anything else. The observer might conclude the text of the books just magically materialized in printable form.

Guidestar reports:
PALABRA PUBLICATIONS INC
NTEE Code
* X83 - Religious Printing, Publishing

Basic Information
* This organization is a 501(c)(3) Public Charity .
* This organization is required to file an IRS Form 990 or 990-EZ.
* Contributions are deductible, as provided by law.

EIN 65-0270992

Assets
$239,585 (from IRS BMF on Dec 2008)

Income
$198,964 (from IRS BMF on Dec 2008)

Ruling Year
2008
where Income is defined as
Money that the organization has received from contributions, grants, the performance of services, etc. GuideStar takes this figure from line 12 of IRS Form 990. These are net figures from which rental expenses, costs, sales expenses, direct expenses, and costs of good sold (lines 6b, 8b, 9b, and 10b on Form 990) have been deducted. If GuideStar currently has no Form 990 information, the figure is taken from the IRS Business Master File. Income listed on the Business Master File is a gross figure that includes the expenses listed above. For Form 990-EZ, the BMF income figure is generated by using line 9 of Part I and adding in the expense items, i.e. line 5b (Cost or Other Basis and Sales Expenses). The BMF income amount for the Form 990-PF is generated by using Part I, line 10b (Cost of Goods) and adding line 12, Column a (Total Revenue) and Part IV, line 1, column g (Cost or Other Basis plus Expense of Sale).
Since Guidestar notes the data source as the IRS BMF, it is not yet certain if Form 990 was filed or not.

Follow the Money
As of 2008 above, Palabra reports $239,585, about one quarter million dollars, in assets. The breakdown is not known; it may consist of inventory, real estate, cash or whatever. The 2008 income of $198,964 almost doubles the assets accrued from all previous years. Note the income figure is actually gross income minus expenses, and is thus an equivalent of "profit" had the corporation been for-profit. If 2009-2010 income is comparable, then assets might well be over one half million dollars by now.

If fact, Palabra may be doing very well indeed. If we assume the net income was only from book sales (and not, say, charitable contributions) and if 100,000 books were sold in 2008, that suggests a profit or "surplus" of almost $2 ($1.98) per book. Twice that average profit per book if only 50,000 books were sold.

Aside from costs related to publishing and distribution, what are other expenses? Well, we don't know without more disclosure. Some obvious categories might be salaries for officers or managers, travel, entertainment, consultant costs, etc. In other words, while individuals may receive income from for-profit corporations as officers, executives and/or shareholders, the situation is not that much different in non-profits such as Palabra, where individuals, both inside and outside, can also receive income simply because Palabra management deems the payments necessary to its mission.

Should there be payments of any kind for services to persons serving in the Baha'i Administration, the question of conflict of interest might arise. This is mentioned only because secondary sources have cited names of such persons as being previously connected to Palabra-owned Ruhi activities. The author assumes that all formal relations between these persons (e.g., UHJ members, their spouses, etc) have all been terminated upon election to Baha'i office.

With only the net income ("profit") figure, one does not know what the real figure is for expenses, including payments to individuals as salaries, consulting fees or whatever. An outsider may only be able to estimate these amounts, say, by guessing at gross income (e.g., how many books sold at what prices) and then subtracting the net income to guess at total expenses. Then, in theory, one could subtract out estimated publishing costs for sold books, leaving an "other expenses" estimate, which would include payments to individuals.

In short, individuals can benefit financially from Palabra Publications in a way quite similar to what happens in for-profit corporations. Given Wiki's statement above that "Earnings may not benefit individuals or stake-holders", this is a potentially murky area for Palabra and all other non-profits. That is just the way it is, as they say.

In particular, the net income (profit) figure does not provide any firm idea of true cash flow. The same figure could be the net of $200 thousand or $2 million or more. As a very gross preview, one estimate was 200,000 Ruhi participants. At $5 each, we have $1,000,000 gross, not counting processing and handling charges. In sum, Palabra may be processing some significant money flows if Ruhi Institute activity increases in coming years. And Palabra seems to be in position to control book content. Could be some interesting situations might develop.

Summary
Many Palabra customers may think of "who is Palabra" in terms of the person answering the phone or exchanging emails in the process of placing book orders. This article begins to explore what and who Palabra Publications is, leading to some interesting questions concerning its relations to other entities and activities inside and outside the Baha'i community and what dynamics might apply in those relationships going forward.
© 2010 James J Keene

5 comments:

  1. Thanks for this; the workings of Ruhi are surprisingly obscure, for a system that is spread throughout the Bahai community. Both the Ruhi system itself and the community would benefit from greater transparency.

    I don't think a "follow the money" approach will help understanding much. The Ruhi materials are provided free by internet, except for the major languages where one has to buy the books from Palabra, and the books are not expensive. That's consistent with people who are intent on covering their costs, not with a get-rich scheme.

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  2. I like your analogy with coke cola, which is my main objection to Ruhi, that Bahais around the world are pressured to drink pepsi instead having the freedom to choose their own beverage.
    The Ruhi system fits the practices for commercial branding: that the books may not be changed; there is a clear order and method for how they are to be used, and many communities are rated according to how many have done and at which level of Ruhi book training.

    It is called 'training' but the reality is a person just has to attend. There is no grading or testing done, not that I think there should be, but then some one who says they have done up to book 4, only means they have conformed to the form (the trademark).

    It strikes me as not only going against the principle of independent investigation but also the principle of unity in diversity. Here there is just Ruhi or Ruhi or Ruhi or Ruhi or Ruhi as a valued element of Bahai community learning and development. And I haven't even gotten to saying what I think of the content :)

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  3. Re Sen's comment, "follow the money" is just an investigative method and as such "may increase understanding" much as your fine "All the forces of the universe..." post explored the Master's economic activites in Palestine. That "The Ruhi materials are provided free..." is consistent with a non-profit organization such as Palabra. However, that fact (new for me, thank you) would decrease Palabra's gross income, making the 2008 figures I cited even more inconsistent with reasonable estimates of book sales (if one reads between the lines in my article). This gap could be filled, say, by contributions to Palabra by non-Baha'is (it is a charity) or even by Baha'i institutions, to make up for what might otherwise be a short-fall.

    Any payments by Palabra to Baha'is for services rendered may go to further transparency on the "who is Palabra" question and what conflicts of interest might exist, rather than establish a "get-rich scheme", much less anything clearly improper.

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  4. Thanks James. Just wanted to point out that "not-for-profit" does not mean no profit. And that "Earnings may not benefit individuals or stake-holders" does not mean that those stakeholders are not reimbursed expenses, nor that they can not receive compensation. Theoretically, a "not-for-profit" can be a very lucrative enterprise.

    The most extreme example is IKEA.

    However, I do not think that this is what is happening with Palabra/Ruhi. I'm much more concerned with the conflict of interest when the same people that created Ruhi are now pressuring everyone else to adopt it.

    Whatever pet project a person has, of course they are going to love it! That is their baby. But forcing others to adopt your pet project steps over the line.

    I believe that Lample, Arbab, et al. should recuse themselves from anything which has to do with Ruhi. But then again, they would never had been raised to the membership of the UHJ if they weren't involved with it in the first place.

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  5. Do you drink Pepsi or Coke?
    ANSWER THE POLL and you could get a prepaid VISA gift card!

    ReplyDelete