X-Message-Number: 29198
Date: Tue, 27 Feb 2007 05:56:03 -0500
Subject: Response to Michael Riskin's CryoMessage 29188

   I would rather avoid "Alcor versus Cryonics Institute (CI)"
exchanges, but Michael Riskin's posting in CryoMessage 29188
( http://www.cryonet.org/cgi-bin/dsp.cgi?msg=29188 ) contained
inaccuracies that need to be addressed. CI policies are printed
regularly in THE IMMORTALIST/LONG LIFE (available free on the
web at http://www.cryonics.org/immortalist/index.htm ). I explained
many CI policies when I spoke at the October 2006 Alcor Conference,
but Michael Riskin was ill and he missed hearing my presentation.

   One fact about which Michael Riskin is correct is that CI's financial
statements are not compiled by an independent CPA firm. Our financial
statements are compiled by CI Treasurer Pat Heller, who is a CPA. Another
CI Director, a man with considerable corporate financial experience, acts
as auditor. We have not seen convincing evidence that the expense of
an independent auditor is justified at present, in part because of
the honesty of our Directors, Officers and staff.

   Michael Riskin said that CI's pre-paid cryopreservation funding is
treated as equity rather than as liability and is therefore in
violation of GAAP (Generally Accepted Accounting Principles). All
prepaid funding received since March 31, 2004 has been treated as
liability rather than as equity. At present CI has $411,348 in pre-paid
funds treated as equity and $426,006 treated as liability. With the
passage of time the equity portion will be consumed and all pre-paid
funds will be treated as liability. Much more important, however, is
the fact that ALL of the pre-paid funds are sequestered from other
revenue -- held at a separate bank where a withdrawal can only be made
with the signature of two of our Officers. All pre-paid funds are
invested through this bank account in T-Bills or short-term CDs. If
there was a "run on the bank" of CI Members demanding a refund of their
pre-paid funds we could refund all of the $837,354 on short notice.

   Michael Riskin also said that CI does not have a patient care trust.
Since early 2004 CI has had an independently administered trust
containing money for patient care. The amount of money in this
trust is currently about $4,800 per patient. CI also has over
a million dollars in financial assets and CI owns its building
free-and-clear. The fact that the million dollars is outside the
patient care trust is not a matter of great concern to us at present.
All CI Officers are chosen from Directors and by Directors -- who are
elected by funded Members. It would be difficult to become a CI Officer
without having a track record of honesty and commitment to cryonics
and the Cryonics Institute. Ultimately those responsible for money
must be trustworthy, whether they be Directors, Officers, Trustees
or employees. CI has an exemplary record of both integrity and
organizational stability. In the over 30 years of Cryonics Institute
history there has not been one single instance of someone absconding
with funds. We are not complacent, however, and will continue to
think about ways to improve financial controls.

   Michael Riskin said that the Alcor Patient Care Trust is
adequate to "maintain the patients indefinitely even if Alcor
never receives another nickel of revenues." By some estimates
I have heard that this would require Alcor to cut its spending
to one-quarter of its current level. How effectively Alcor could
cut expenses in the face of an absence of revenue is a hypothetical
matter. If, for some unexplained reason, the Cryonics Institute
ceased to have revenue we could significantly cut our costs by
ending our research and Membership programs. Considering that
we own our building, income from the $370,000 in the patient care
trust plus the million dollars of financial equity would be more
than enough to pay for liquid nitrogen, taxes and general
maintenance. But a cryonics organization without revenue, Members
or Membership growth would not bode well for the patients -- no
matter how big the nest egg -- and I question the value of
fundamental planning based on such a scenario.

     I hope this clears up any misconceptions about the policies
of the Cryonics Institute. I would encourage everyone from both
Alcor and CI, especially members of the Boards, to be well versed
in facts about the other organization before making harmful
comparisons -- and to avoid making such comparisons unnecessarily.
Partisan acrimony is damaging to both organizations.

     -- Ben Best, President, Cryonics Institute

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