To cover this complex story I need several postings and I will start with this introductory posting, defining the elements and nature of the problem at hand.
American Islamic Waqf
American Islamic Waqf (AIW) is a nonprofit 501 - (c) -3 organization incorporated on April 27, 1998.
The word “Waqf” is the Arabic equivalent of "Trust". The four original trustees, according to the Article of Incorporation filed with the Ohio Secretary of State, are Khaled Farag, Hany Saqr, Amjad Saleh and Ali AlRubaian. Soon after that Ali AlRubaian left the USA and went back home.
The following excerpts of AIW's Bylaws are important to keep in mind to understand the subsequent events:
1. "AIW is an Islamic “Trust” established for the benefit of the Muslim Community in Columbus Ohio"
2. "AIW will be primary administered by a Board of Directors (BOD)"
- "Additional members of the BOD are invited by the current members of BOD. The invited member to the BOD has to be unanimously approved by the current members of the BOD".
- "Any member of the BOD may be removed by a vote of no confidence of at least 75% of the other BOD members".
- "All BOD decisions are taken by a unanimous decision of all BOD members"
Furthermore the Bylaws talks about establishing an "Advisory Board" which never happened.
Soon after the inception of the organization, Hany Saqr assumed the position of Chairman of the BOD and Khaled Farag assumed the two positions of Secretary and Treasurer of the BOD. Around the year 2000 Amjad Saleh left Ohio to Chicago and remained on the Waqf board.
Noor Islamic Cultural Center
Noor Islamic Cultural Center (NICC) is the name given to the multipurpose facility on 5001 Wilcox Rd. and sometimes interchangeably called Masjed Alnoor. Neither Noor Islamic Cultural Center nor Masjed Alnoor names were registered by AIW for legal use for the facility with the Secretary of State. Knowing this, on 8/27/2009 Hany Saqr registered Noor Islamic Cultural Center as the name for a separate new non-profit organization, completely independent of AIW, and he is the only director on record for this new organization. When NICC is refered to below, it will mean the AIW facility, not Saqr's new organization.
NICC was built by Silver Development & Construction LTD (SDC), an Ohio real estate development and construction company, registered on May 19, 2000. Khaled Farag is the President and CEO of this company.
Donations and Loans
The 8 acres of land on which NICC is situated, appraised by Franklin County at $566,500, was donated by AI Limited (Abbasi Invesments) an Ohio Limited Liability company owned by the Abbasi family, (registered on March 30, 1995). Khaled Farag is also the President and CEO of this company. The center was under construction from July 2001. Although the community was donating funds to the NICC project, the ownership of the property remained in the name of AI Limited, a for-profit entity. The parcel of land was not separated legally from the larger tract of land owned by AI Limited until April 2003. Finally in June of 2005 ownership was transferred to the Waqf. The center grand opening was on Friday, September 29, 2006.
In addition to the land, AI Limited, sometimes referred to as "Major Donor" donated about one million dollars that helped get the project started. Later during the construction, that lasted over 5 years, AI Limited loaned AIW (The Islamic Waqf) $1,580,000 dollars in small amounts, on an as-needed basis, spread over the five years of construction. The existence of this loan was just recently revealed to the community, in a financial report distributed to the community on January 10, 2010 by Khaled Farag. The report shows a long term liability to AI Limited in the amount of $1,380,000. The difference of $200,000 is an amount AI Limited forgave from the total loan amount at the end of 2009. Khaled Farag explained to the community that this loan is to be forgiven over the following several years, (possibly at a rate of $200,000 per year). After the release of this financial report, Hany Saqr denied ever agreeing to any loan from AI Limited or signing, as Chairman, any note related to it and binding on the Waqf. However, in their capacity, Hany Saqr as Chairman and Amjad Saleh as Board member should have been overseeing all financial transactions and proper documentation.
Total cost of the construction was about $5.8 million dollars paid by the Waqf to Silver Development. The county appraisal of the building and improvements (without the land) is $2,990,100. It is important to note that, just for the last year AI Limited, the "Major donor", donated $200,000.00 (loan forgiveness) while the Muslim community donated $470,265.67. The community's donation amounts to 70% of the total donations, $670,265.67 for 2009, according to the released financial report. In fact, since the start of this project, the community has contributed more than 80% of the monetary donations to the project.
To obtain the money to pay a balance of about one million dollars owed to Silver Development, the Waqf, in March 2007, purchased a gold certificate for $1,660,156.00, (using the property as collateral). It agreed to pay for this in installments over a period of 4.5 years. It sold the certificate the same day for $1,250,000.00 cash. All BOD members –Hany Saqr, Khaled Farag and Amjad Saleh—approved this transaction. In addition, Hassan Ayoub, Mufakerul Islam and Ashraf Mandourah, as the three additional 'board members' (see below), have also approved it.
Leadership issues
After the center opened in 2006, a Noor Islamic Cultural Center Board of Directors (title used in literature and communications) surfaced to run the day-to-day operations of the center (See NICC Bylaws). Three additional names, given the title ‘board member’, started to be known to the community; Hassan Ayoub, Mufakerul Islam and Ashraf Mandourah. (It is important to note that NICC Bylaws have never been adopted and some board members including Farag and Ayoub, said that they never saw any bylaws before their appearance around last October, 2009.) The three additional members assert that they are members of AIW since NICC has only officially existed in August 2009 after Hany Saqr registered the name.
Over the years a few people , including Hassan Ayoub, raised concerns and questions about the obvious conflict of interest of Khaled Farag being the President and CEO of the donating and loaning company, AI Limited, the President and CEO of the builder, Silver Development, and being both the Secretary and Treasurer of the Islamic Waqf, and the way the project was managed by only two people, Khaled Farag and Hany Saqr, but their concerns were ignored. The issue of conflict of interest becomes even more problematic when it became known that the Abassi family is also part owner of Silver Development. Generally the community accepted everything without question. After many failed projects, the community was understandably happy to see and be able to congregate in a great environment.
The problems between AIW Chairman Hany Saqr and its Secretary and Treasurer, Khaled Farag started in 2006, around when the center opened, but were kept away from public knowledge until October of 2009. Hany Saqr, by his own account, questioned the financial practices of his Treasurer, challenging and undermining the authority of the Treasurer on many occasions. However, as a Chairman, Hany Saqr and Amjad Saleh, being majority of the Board should have resolved these issues in a timely manner, a main element of their fiduciary responsibility towards the organization. The other 'board members' who witnessed these issues, also had a responsibility to speak up and work to solve the problems.
In a meeting near the end of 2006 some community members met with Saqr and the others and raised concerns both about the way the center was run and that the board was limited to only 3 people. Saqr, to the surprise of at least Hassan Ayoub, introduced them (Ayoub, Islam, and Mandourah) as board members. Since then they participated, according to their account, in meetings and participated in decisions that can only be taken by the AIW board.
From the perspective of Ayoub, Islam, and Mandourah , NICC and AIW board were names used interchangeably, and therefore they are the same, while in Saqr's mind these are two separate boards.
Around the time that the center opened, Hany Saqr was hired by the board to be Executive Director on a part time basis. In July of 2009, Khaled Farag, Hassan Ayoub, Mufakerul Islam, and Ashraf Mandourah wanted to hire Alauddin Alauddin for the position of Executive Director (ED) of NICC to replace Hany Saqr. According to Ayoub, Saqr expressed his interest in continuing his position as ED. Although Saqr was visionary and good in strategic planning, he lacked, according to some board members, administrative, communication, and accounting skills. Ayoub has explained that the Board wanted new blood and wanted to take the center to a higher level by restructuring the staffing of the center. In addition, there is always the concern about conflict of interest when a member of a board that oversees staff is also a paid staff member.
During the month of August 2009 three meetings were held to hire the new ED. Saqr attended the first meeting when Alauddin was interviewed. The Board approved a proposal to hire Alauddin. For the following meeting Saqr was excluded from the discussion by the others, who invoked conflict of interest as the reason for exclusion. (Amjad was not involved in any of these discussions.) A decision was made to hire Alauddin starting September 1, 2009.
This was communicated to Saqr in writing. He was asked to keep his position for three months to help in the transition. A third meeting was held, without Saqr, to discuss the offer to be made to Alauddin. Two numbers were suggested, $20,000 or $25,000 for a part time job, mainly during evenings and weekends since Alauddin has a full time weekday job. The board had the intention to combine all other existing part time staff positions to create a job for an administrator, in addition to Alauddin,(for up to $55k) to run the day-to-day affair of the center. This added up to around $80,000.
Saqr categorically refused these plans. According to him, he believed that hiring must be unanimously approved by AIW BOD and not by NICC BOD, the position must be advertised to get the best candidate, and, as he himself had been handling this position for a much lower salary ($2,500/month), he felt the salary being offered was very high. He understood that they were offering $80,000/year for the ED and one assistant. The NICC BOD could not go ahead with the hiring and the conflict escalated.
On August 26, 2009, Hany Saqr wrote letters to Ayoub, Islam, and Mandourah terminating them as NICC board members, because they started publicly calling themselves the AIW Board and started discussing changes to the AIW constitution. This was followed by similar letters send to them by an attorney that Saqr retained.
Hassan Ayoub, Mufakerul Islam,and Ashraf Mandourah challenged the suggestion that they were not AIW board members and Khaled Farag agreed with them.
On October 28, 2009 Farag, Ayoub, Islam and Mandourah assuming themselves to be the legitimate AIW board, voted and removed Saqr from the Board of Directors of AIW.
Later, on the same day Hany Saqr and Amjad Saleh, assuming Ayoub, Islam, and Mandourah were not AIW board, removed Khaled Farag from the Board of Directors of AIW.
Farag and the others wanted to mediate the issue with Saqr and tried involving a few people quietly for this effort. This did not work. Then, on advice from their attorney, they called for a meeting in October, 2009 of about 35 people of the Noor community, including many respected elders, and asked them to choose an arbitration committee. Saqr did not agree to commit to it and this effort failed and will be covered in a future posting.
Now the center has two disputing boards and before long the center ended up with a third Board. Other major events took place, including a sudden change of the Islamic Waqf constitution, transforming the organization from a "trust" to a "private foundation", and a law suit and restraining order filed in Franklin County Common Pleas Court against Hany Saqr. All this and more will be covered in future postings Inshallah.
