Tuesday, May 29, 2007

Disparity of Hundreds of Thousands of Dollars in AFM Annual Reports

The AFM's Department of Labor filings are at odds with the Annual Report recently delivered to members, and the conflict amounts to hundreds of thousands of dollars.

The AFM charges "visa processing fees," usually $200 to $250, to booking agents and promoters of foreign, overseas orchestras. In exchange, the AFM provides a "no-objection letter" so that the overseas orchestras can get visas to perform throughout the United States.

Though the AFM has been processing no-objection letters for a decade or more, the process has been kept secret. Finally, after years of inquiries, in the belated 2006 Annual Report recently delivered, the AFM began identifying this income for the first time.

In the 2006 Annual Report, the AFM identifies income from "Processing Fees" of $200,703 for the year 2005. (See AFM 2006 Annual Report, p. 34, "Combined Statements of Activities, Years Ended Dec. 31, 2006 and 2005.") This figure was not in the 2005 Annual Report, where processing fees were lumped in with "Royalties and other." (See AFM 2005 Annual Report, p. 36; compare with AFM 2006 Annual Report, p. 34.)

However, the AFM's filing with the Department of Labor shows no income from processing fees for the year 2005. In fact, the AFM's Department of Labor filing for 2005 makes no mention of processing fees, or any equivalent category, at all. (See Form LM-2 Labor Organization Report for 2005.)

In 2006, there is an even greater conflict. The Annual Report shows income from processing fees in 2006 as $653,226. The Department of Labor filing for 2006 shows income from processing fees as $211,500. (See Form LM-2 for 2006, Schedule 14, pp. 21-28.)

These reports cover the same time period, and refer to the same visa processing fees. Why is there a disparity of hundreds of thousands of dollars?

Lee and Folio are either misrepresenting to the government, misrepresenting to the members, or both.

These processing fees have been criticized on other grounds. With the "no-objection letter," the AFM encourages the displacement of its own members by overseas orchestras. The AFM profits handily—even with the conflicts discussed above, the yearly income is in the hundreds of thousands—while Local musicians go without work.

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