X-Message-Number: 8992
Date: Mon, 12 Jan 1998 23:29:02 -0800
From: Paul Wakfer <>
Subject: Re: CryoNet #8977: Prometheus Project
In CryoNet #8977, Bob Ettinger wrote:
> Paul Wakfer's message #8975, intended to clarify the status and goals
of the
> Prometheus Project, leaves me puzzled.
> I don't fault Paul for changing his mind or plans from time to time,
as
> realism may dictate, and I admire his zeal and determination. But I
think it
> will help his efforts, in the end, if certain questions are clearly
> resolved--in particular, the for-profit question and that of
relations with
> 21st Century Medicine.
> Paul says the for-profit approach has not been abandoned, yet money
is being
> collected for which IRS tax deductibility is expected. The money is
being
> collected by a "charitable trust," the Full Length Life Society
(FLLS), and
> will be disbursed to an unincorporated business trust, the Life On
Hold Trust
> (LOHT). Eventually, if distribution of assets of LOHT is ever made,
the people
> who support the project will receive this distribution. All of this
seems to
> raise the possibility that the IRS may eventually regard the FLLS
merely as a
> front for the LOHT. You cannot, in principle, achieve tax exemption
or tax
> deductibility just by shufflling paper or interposing a dummy between
the
> donors/investors and the profit-making entity. The money supplied
must be a
> genuine donation and not a disguised or indirect investment.
It is my understanding that IRA's and other tax shelter and deferment
vehicles do just this sort of thing while actually making profits on the
money that is "at arm's length" in the tax shelter. The arrangement for
Prometheus contributions and funding is much less flagrant a dodge than
those perfectly legal vehicles. Money donated to FLLS *will* be a
genuine donation, in the sense that it is being put into universally
beneficial research without any expectation of return. If anyone
*expects* any return then they should *not* make a donation. This
"intent", this viewing of the contribution as a pure donation, is quite
critical to the whole matter. In fact, each donor must fill out and sign
a "Membership Application and Contribution Form" which includes the
following statements:
Except as I have indicated above by choosing the amount
to be applied to various purposes, my contribution to the Full
Length Life Society is an unattached or unconditioned, pure
donation.
I am convinced that the research goals which I am contributing
towards are attainable and that the changes which will be
enabled by their achievement will be beneficial for society.
FLLS will contract with LOHT for the research needed to perfect
suspended animation. It is planned that LOHT will soon become a
completely independent organization. If other organizations produce
plans for research leading to perfected suspended animation, FLLS may
also contract with them. FLLS will eventually have a research advisory
committee which will help with decisions concerning the worthiness of
proposals to further its purposes.
As a trust, LOHT can have beneficiaries, to which distributions of
assets are made if/when there ever are any. Those receiving such
distributions will, of course, be responsible for any taxes which may be
payable at that time.
Think of it like cryonics, Bob. At the time of the contribution, we
don't know if it is a donation or an investment (just as we don't know
if a currently cryopreserved patient is alive or dead). If no monetary
return ever comes from it, then it was a pure donation all the time and
its deductibility from taxable income was perfectly correct (just like
the legal declaration of death will have been correct all the time if
the patient can't be revived). On the other hand, if the contribution
should happen to produce a profit, then possibly it will be viewed as
never having been a donation in the first place, but contributors will
be happy to pay any back taxes owed out of the profits made (the patient
was alive all the time and after being revived won't care that he had
been pronounced dead, but will just be happy to be animate again).
> Paul, has all this been cleared with a reputable tax attorney? Is
his/her
> opinion available?
Over many decades, the various elements regarding unincorporated trusts
have been settled in the courts and become case law. For the indefinite
future, any income will be put back into research and no taxes will need
to paid because there will be no net income. This would be true even if
we had used a for-profit corporate structure. FLLS can be a pure
charitable organization since the research that it is financing and the
number and independence of people who will be donating qualifies it as
such. I have not specifically "cleared" the current organizational
structure and inter-relationships with any tax attorney and I don't
intend to. I have offered to the pledgers, that if any one or group of
people wishes to put up sufficient funds for what I consider to be this
wasteful purpose, then I will get such an opinion. Otherwise, I do not
have the money to afford it on my own (nor would I wish to spend my own
money in that manner), and I certainly cannot, in good conscience, use
the money of others for that purpose without their express permission.
The purpose of our monetary contributions is to do research on suspended
animation not to pay lawyers.
> As far as I can see, the possible eventual money profit for
supporters is so
> distant in time--20 years or more--that no one is going to be
motivated by
> money anyway. If that is the case, why not forget the for-profit
approach
> altogether and keep it clean and simple?
This is essentially what I have done. I saw exactly that. Everyone was
essentially giving a donation and writing off the money. Therefore, it
made more sense to acknowledge this and to change to a charitable,
donation/receipt format. However, there was still the question: If money
*should* happen to be eventually forthcoming from all the research, who
is going to receive the rewards? If I had chosen a not-for-profit
corporate vehicle as my organizational structure, this organization
might have ended up as the owner of intellectual property of great
wealth without any method of returning that wealth to those who helped
generate it, and, in all fairness, deserve it. Even the beneficiaries of
a charitable trust must be themselves charitable organizations and so
this would still not accomplish my ethical purpose. The business trust
structure of LOHT and its non-charitable, private beneficiaries does
allow this remote and distant potential to be accomplished.
> The second question concerns the relation between Paul's
organizations and
> 21st Century Medicine (21CM) and related companies and individuals.
Paul says
> the research of his organizations will not be integrated with that of
21CM
> "except to cooperate to make sure that results are shared and
unnecessary
> duplication does not occur."
>
> What does this mean?
It means exactly what it says! I really don't know what your problem is
here.
I get a bit tired of everyone assuming that I am somehow, "in bed with"
21CM.
If you only knew the details of the *disharmony* which has been going on
for several years between Mike Darwin and I, you couldn't possibly think
that.
Furthermore, I will say the same for the relationship of Prometheus
research with the research of any other organization. We would
cooperatively share results (upon signing of non-disclosure agreements)
and prevent unnecessary duplication with any other organization which
wishes to similarly cooperate. Once again, our goal is to achieve
perfected suspended animation. Staying alive is primary, making money
and gaining glory is secondary. If sharing information and cooperating
with the "devil" is what is necessary, that is what we will do.
> Will LOHT share the proprietary information generated by
> 21CM, and keep that info confidential?
Yes, that is the intent and vice versa. Don't forget, proprietary
information generated by anyone is usable for research by others after
it is patented or even beforehand by signing certain agreements. LOHT
and 21CM will have such agreements between them. I think that 21CM is
quite open to such sharing with all other cryonics organizations, so
this does not really give LOHT any privileged position. And as restated
below LOHT has always intended to share its results with all cryonics
organizations under non-disclosure agreements, free of charge, while
major research and development is unfinished. In other words, we do not
wish to hold back any information which might make the difference
between life and death for any cryonicist.
> Will 21CM pursue profits possibly
> resulting from research results generated by LOHT?
If this happened and 21CM were to develop something profitable based on
some LOHT research results, then 21CM would, of course, pay royalties to
LOHT for those research results. LOHT would in turn use this money to
expand its research. It is my understanding, however, that 21CM also is
not interested in making profits to immediately dispense to its
shareholders, but would put any money which it makes back into research
at least until suspended animation or other methods to achieve an open
ended lifespan are achieved.
> Will LOHT share results, on
> a timely basis, with people or organizations outside of 21CM?
I made this promise long ago and it has not been changed. This goes for
results which are proprietary to LOHT only. I cannot speak for the
policy of 21CM regarding this.
But this is all premature and a big waste of time and mental energy!
Let's get some major results first instead of spending all our time
worrying about how, or how not we are going to share them!
> Who will pursue
> the most promising and potentially most profitable leads?
Based on the nature of the people who will be deciding what projects to
do and what order to do them in (Greg Fahy, I and several others
completely outside of 21CM for the Prometheus Project), I think that it
is very unlikely there will be any major problems or confrontations with
one group deciding to do exactly the same thing as another group. If
such a thing should happen, then it will be resolved by a committee of
four people, two from each group (Greg Fahy, Brian Wowk, Saul Kent and
myself).
Greg Fahy is solidly "on the side of" the Prometheus Project. That is
what first attracted him to come out to SoCal, and that is what he
fervently hopes will get funded strongly enough to provide him with
full-time work. He is only consulting for 21CM in the interim, as
necessary and useful. Those who wish to see Greg as the full-time
science director of a strong research program to perfect suspended
animation quite independent of 21CM should contribute as much as they
possibly can to the Full Length Life Society. Those donations are what
will make it happen.
> What criteria will be used to decide who pursues what
Mainly, whoever thinks of it, wants to do it, and is ready to do it
first.
> and who pays for what
Each group will pay for whatever it works on. Some trading, renting,
cooperative use of equipment will likely take place to avoid unnecessary
duplication of expensive equipment.
> and who gains title to what? Etc.
Each group will gain title to the results which come from its own
project. How else would it be? If the origin of some idea or result is
not clear, the above mentioned committee will resolve the issue.
> As I recall, Paul asks that these questions be left to the good
judgment and
> good will of the people involved (and presumably their successors).
But it is
> no reflection on these people to note that due diligence excludes
that kind of
> relaxed approach.
I agree with the last sentence, but not your paraphrasal of me in the
first sentence. I have already answered your questions (or very similar
ones) on the Prometheus pledger's forum. There are still many details to
be worked out and what I *have* asked for is a little patience. I can
only do so much so fast, especially when having to work with others.
> Of course the achievement of the research goals is more important
than any of
> the questions raised above.
Exactly! That is why I said above, let's get on with it. If someone's
contribution of, say, $50,000 over the next 20 years, results in his/her
life being saved when it otherwise would not, does it really matter if
s/he doesn't get rich in the process, or even if someone else does
instead? The best that I can do is to make it as easy as possible to
support the project and at the same time pledge to see that any
"profits" are fairly distributed. With my current health and expected
longevity I plan to still be very active in 20 years and to see that
this happens.
> Any of us would rather have the research succeed
> than not, regardless of who profits financially or how benefits are
formally
> shared.
Just as I stated above.
> But unless the formal and legal status is clear and reasonable,
> obscurity and friction will interfere with the fund raising.
I believe that status will be patently clear, once FLLS has received its
IRS approval as a Charitable Trust. And I hope we can
then get on with the job of perfecting suspended animation.
-- Paul --
Voice/Fax: 909-481-9620 Page: 800-805-2870
The Prometheus Project -- http://prometheus.morelife.org
Perfected Suspended Animation for Patient Stabilization
until Cures for Their Terminal Diseases are Available
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