International Lama Registry - Facts in the ARI/ILR Dispute

At The International Lama Registry we care about facts.

Most of our days are spent carefully recording and protecting the facts that you send in your registrations and transfers. Facts about the llamas are always first on our minds, but we store other facts as well. We keep names and addresses on almost 25,000 llama owners. We retain all processing and transaction data. We store over 1/4 of a million photographs. The bottom line is that facts are important to us. And it is an undeniable fact that the ILR is only as good as our facts. Careful attention to detail, great care in protecting data and reliable extraction of information from those facts make the ILR useful.

For all ILR members and llama owners, it is of great importance that you can trust the facts you receive from the ILR. Recently there have been a number of rumors and accusations regarding the ILR and its attention to facts. Because we feel strongly that you need to trust your llama registry, we are going to take space in this issue of the ILRe-port to state the facts. We will do so by presenting the accusations as they were formally made, along with the facts and documents to support those facts.

We will not attempt to include the supporting correspondence in this document, but we will include links to those documents on the ILR web site. We hope you will take the time to read through this article and access the supporting documents whenever you have a question. Then you decide, when you have . . . just the facts.

On the following pages you will find copies of two letters. The first, dated 3/3/2004, is from the attorney representing the Alpaca Registry Incorporated (ARI). It states that all charges of the ILR to the ARI for services rendered will be considered in dispute and will not be paid until further notice. The second is a response from the ILR stating the disputed items, one at a time stating the facts involved to set the record straight. In many cases there are specific documents linked to provide support. The ILR has also provided many other documents to support their position. You will find a list of documents at the end of the ILR letter with links, if you wish to read them yourself.

The letter from the ARI and the documentation has been copied into the ILR web site using pdf files from scans so that you know what you read is what was sent. To read the ARI letter click on the link below.

Letter from the ARI Board of Directors to the ILR Board of Directors, March 3, 2004.

The ILR Response

March 31, 2004

Sheri K. Visani, Esq.
Moye/Giles, LLP
1225 17th St., 29th Fl.
Denver, CO 80202-5529

RE: Alpaca Registry, Inc

Dear Ms. Visani:

As you are aware, our office represents the International Lama Registry, Inc. (“ILR”). The purpose of this letter is (1) to make a formal demand for payment of overdue amounts owed by the Alpaca Registry, Inc., (“ARI”) to the ILR and (2) to demand that the ARI retract certain false, disparaging and derogatory statements that the ARI has made concerning the quality of the services provided by the ILR.

Concerning the first issue, the ARI has incurred charges on an open account with the ILR from November 12, 1997, through February 13, 2004. The ARI in the past has generally been diligent in paying its obligations in a timely manner. Recently, however, the ARI has incurred charges totaling $78,093.04 (through March 16, 2004), which remain unpaid. Interest continues to accrue on the outstanding balance until paid in full at the rate of 18% annually ($38.51 per day).

Mr. Jan Wassink, on behalf of the ILR, has previously communicated with representatives of the ARI regarding the necessity for payment of the amount owed. Mr. Wassink reports representatives of the ARI made some inquiries on some outstanding charges, for which he provided a timely and appropriate response. Mr. Wassink explained that the high number of registrations and transfers that were submitted to the ILR during December 2003 necessarily resulted in higher charges to the ARI. Also, certain choices selected by the ARI for genetic identification services provided through Maxxam Analytics,, Inc. resulted in higher charges for the ILR, which the ILR naturally passed through to the ARI.
Your letter of March 3, 2004, indicates that some charges on the January 9, January 13, February 9 and February 11, 2004, invoices are disputed. It does not, however, identify what specific charges are in dispute. Surely, the ARI does not seriously contend that all of the charges are disputed, do they? I have asked Mr. Wassink to address the issues raised in your letter for justifying nonpayment. A copy of his response is enclosed. As the ARI has elected to close its account with the ILR and is now using another service provider, it is imperative that the ARI pay off the remaining balance owed on its account immediately.

The ILR remains dedicated to maintaining its professional relationship with the ARI and does not seek to become embroiled in any dispute or litigation with the ARI. Nevertheless, the ARI should appreciate that the ILR cannot allow this significant outstanding balance to remain unpaid under a pretext that some unidentified charges are “disputed” for reasons that are not supported by the facts. The ILR is, therefore, willing to provide the ARI thirty (30) days from the date of this letter to pay the remaining balance owed on its account with the ILR, or to make other arrangements for payment acceptable to the ILR. (However, interest will continue to accrue on the outstanding balance until payment is received.) Should the ARI fail to do so, the ILR Board of Directors has authorized our office to aggressively pursue collection to recover the outstanding amounts owed to the ILR.

The second issue concerns an equally, if not more, serious matter. The ILR has recently discovered that Ms. Libby Forstner, President of the ARI Board of Directors, and the Board of Directors of the ARI (“ARI Board”) have published in three separate documents (Doc 1, Doc 2, Doc 3) several statements that are false, defamatory and disparaging to the ILR. The statements were posted on an Internet forum that is available to the ARI general membership and possibly other members of the public and were stated in a letter that was sent to all ARI members. The statements are designed to deflect responsibility that should be properly borne by the ARI Board onto the ILR by disparaging the quality of the ILR’s services.

Each of ARI’s statements is listed below, followed by a statement of the true facts. In an effort to mitigate its damages, the ILR has established a website on which this letter and supporting documents have been posted so that they can be viewed by any interested person.

Allegation 1 (Doc 4): At the last minute, our previous vendor refused to give us our DNA information....
FACTS:
• The final ARI data disc was sent to the ARI as scheduled (during the first full week in January) – immediately after the ILR completed the work it received on December 31, 2003.
• The UC Davis DNA data was sent in early December, immediately after the ILR received the letter that the ILR had earlier requested from the ARI releasing the ILR from any responsibility for the contents of the UC Davis DNA file. (The ILR had discovered possible problems with the data while working with Maxxam and did not want to arguably assume any liability for any erroneous or incomplete data.)
• The Maxxam DNA files were ready to be sent as soon as the ARI paid its outstanding invoices. Instead of paying the ILR, the ARI went directly to Maxxam for the files. To date, the ARI still has not paid the ILR.
• Documentation – Doc 34

Allegation 2 (Doc 4): In all honesty, had we received the DNA information we were entitled to on schedule, we’d already be up and running for weeks.
FACTS:
• As outlined above, all transaction data was transmitted on schedule and was received in the AMG office (the new ARI service provider) well before the office files arrived at the new office.
• The UC Davis DNA data was sent in mid-December, again, well before the office files arrived at the new office.
• The Maxxam DNA data was held only because the ARI refused to pay the January processing bill when presented. Had the ARI paid the bill when presented, ALL data would have arrived at the new office well before the office files arrived at the new office.
• Documentation – Doc 31 and Doc 36

Allegation 3 (Doc 4): We did not have access to the old website (another snag) so we started from scratch….
FACTS:
• The ARI has always owned and been totally responsible for the content of their website. The ILR was only responsible to implement changes to the website as directed by the ARI Board.
• Because the ARI has always owned the website, the ARI obviously had access to its old website anytime it wanted access.
• In early December, the ILR suggested in an email to AMG that they download the website to their server and assume responsibility for it as soon as possible. AMG agreed, and the ILR immediately provided the necessary authorizations. Each “authorization” lasts a week before it expires. The ILR had to provide THREE week-long “windows” before the website was finally transferred on January 14, 2004.
• Documentation – Docs 35, 36, 45, 47

Allegation 4 (Doc 4): AMG is fixing long-standing problems with the database that even we didn’t anticipate and that has taken time but progress has been awesome.
FACT:
• “Backup” data discs were sent to Floyd Romanik on an almost monthly basis for approximately the last two years. The ILR is not aware of any problems with the database, and the ARI never brought any “problems” to the ILR’s attention. If there were problems with the data as indicated (which the ILR doubts because the ILR would have discovered them), they were never brought to the ILR’s attention so the ILR could fix them.

Allegation 5 (Doc 4): We truly did not believe we would have the problems we had with our last vendor but we did….
FACT:
• Other than refusing to provide the ARI proprietary ILR software codes; requesting a release of liability before the ILR forwarded the UC Davis DNA data to Maxxam; and requesting assurance of payment before the ILR sent the final Maxxam DNA data, the ILR is not aware of any delays caused by the ILR or any reason the ILR could be blamed for causing “problems.”
• Documentation – Doc 36

From a more recent posting:

Allegation 6 (Doc 2): The old systems were mostly manual/batch, from sending in registration forms to DNA testing. It was old software and it was “dying.” Many problems were materializing and programs were patchworked….

FACTS:
• The ARI Board had no access to the program or the code and so would have no knowledge of the program other than what they saw while looking over the shoulder of an operator for a couple minutes a couple years ago.
• In 2000, the ARI hired Rob Schrull, a Registry consultant who has been involved in setting up several other large national registries, to do an independent evaluation of the ILR registration system and the existing contract between the ARI and the ILR. His report described the ILR software as “efficient” and “robust.”
• In 2003, the ILR hired Mr. Schrull to reassess and re-review its system. Mr. Schrull’s report was again favorable. The few minor suggestions that he made were implemented immediately.
• The interests of the ILR (keeping members happy by registering animals as efficiently and inexpensively as possible) are identical to the interests of the ARI. What was good for the ILR was good for the ARI, and vice versa.
• The ILR system is almost totally automated other than the initial data entry by the operator.
• The ILR DNA data exchange with Maxxam is “state of the art.”
• The ILR is not aware of any problems that were “materializing.” If the ARI Board was aware of problems, they did not inform the ILR of those problems so the ILR could address them.
• The ILR is still working with the programmers who wrote the original software. Because the overall structure of the system is solid, all necessary modifications to the system have been accomplished while remaining within the original design.

Allegation 7 (Doc 2): The old systems were expensive and getting even MORESO….
FACTS:
• While negotiating the last contract in 2000, the ARI was offered two alternatives: 1) renegotiate the price each year based on ILR processing expenses from the previous year; or 2) an automatic 4% increase each year. The ARI Board decided on the automatic 4% increase.
• Because ILR expenses continued to go down each year, the ILR approached the ARI Board several times over the last couple of years (the last time was in December of 2002) and suggested immediate and significant price reductions to the ARI in exchange for an extension on the contract. Those offers were all ignored.
• The proposal sent in by the ILR for the most recent contract contains very significant price reductions and included a clause to reduce fees even more if changes in rules were implemented, which would have resulted in cost savings in the processing.
• Documentation – Doc 7 and Doc 10

Allegation 8 (Doc 2): The old data processing system was old and not integrated. We had to manually send in registrations via snail mail. Then….
FACTS:
• Over the last two years, the ILR offered website improvements to the ARI Board as the ILR developed them for the ILR’s use. All offers to provide additional services to the ARI members via the website were ignored.
• In December of 2002, the ILR wrote a letter to the ARI Board offering to provide ARI members with on-line registrations within six months. That offer was also ignored.
• Last December, the ILR began providing on-line registration for llama registrations. The ARI could have had that system as well.
• While the details would most certainly be different from what the ARI website will be when complete, all functions described by RFP sent out in August by the ARI Board were either already in place for llama owners on the ILR website or were scheduled to be up and running by the end of 2003.
• All of the services described in the ARI RFP are now available to llama owners. Many of those services have been available to llama owners for over a year.
• Documentation – Doc 42

Allegation 9 (Doc 2): Then the office affixed bar codes to them, entered….
FACTS:
• The DNA system in place since September of 2003 was put in place almost overnight as a result of the ARI Board terminating the contract with UC Davis before having a contract in place with another DNA lab.
• Rather than leaving ARI members unable to get any DNA testing done until a new contract was in place and a new lab was up and running, the ILR offered to allow the ARI to “piggyback” on the ILR contract with Maxxam.
• The length of time the lab was taking to process ARI samples was a direct result of Maxxam doing the testing strictly on an interim basis. (The ILR understands that Maxxam had already picked up indications that they would not be the lab of choice for the ARI for a long term contract.)
• That Maxxam did the work at all on an “interim” basis is a testament to Maxxam’s concern for ARI members and a result of Maxxam’s relationship with the ILR.
• Without the offer from the ILR and generosity of Maxxam, it is unlikely that ARI members would have had access to any DNA testing since September 1, 2003.
• Llama owners have been using FTA cards for DNA testing for well over a year now. FTA cards have been in use by other registries for several years now. This “new” process was not invented by the ARI Board.

Allegation 10 (Doc 2): The old vendor updated the website once a week (or so).
FACT:
• The ARI website was automatically updated nightly.
• Documentation – Doc 43

Allegation 11 (Doc 2): … Re: data processing: when I joined the Board, the previous vendor made it clear that the last time the contract was negotiated (5 years ago), ARI had not gone out for bids and had no alternatives. So, the vendor simply told ARI what our fees would be and what the services would be.
FACTS:
• Contracts must be agreed to by both parties so the ILR can hardly be blamed if the ARI had no other alternatives.
• The ILR Board has set a policy for ALL outside registration work of “ILR cost plus 15%.” Although the ARI had no alternative providers at the beginning of the last contract, the fees were still based on “ILR cost plus 15%.” The ILR did not take advantage of the ARI.
• All transaction costs were reviewed and agreed to by the ARI Board before they were implemented - as required by the contract.
• “. . . what the services would be” has always been determined by the ARI Board. The ILR provided the ARI with all services requested by the ARI Board.

Allegation 12 (Doc 2): . . . the website is extra but we own it, are in control of it, and we’ve already been able to make more changes in two months than in the full 2 1/2 years I’ve been on the Board!
FACTS:
• The ARI has always had a separate website, has always owned it and was always in control of it.
• The ILR was responsible for implementing changes as requested by the ARI Board. On the rare occasions over the last 2 1/2 years that the ARI Board initiated changes on the website, the ILR implemented those changes immediately, as requested.
• In addition, although it was not the ILR’s responsibility, the ILR has suggested many other changes to the website over the last two years. Almost all suggestions were ignored by the ARI Board.
• Documentation – Doc 42

Allegation 13 (Doc 2): Service should be faster and less expensive. Programs can be updated. We are in control.
FACTS:
• The ILR provided one-day turnaround time in the office.
• The delays in the process the last months of 2003 were caused delays in DNA testing, which was “set-up” by the ARI Board’s decision to terminate the existing DNA processing contract before another contract was in place. The ILR had no control over that situation.
• The ARI Board has always been in control of the services provided to ARI members.
• ILR programs have been regularly updated and upgraded as necessary.
• Over the eight years that the ILR was the service provider for the ARI, the only complaints the ILR remembers receiving from the ARI Board concerned turnaround time in the office. The ILR responded to that complaint by instituting the one-day turnaround in the office, which the ILR maintained until the last couple months of the contract when the volume of registrations simply was too high and the turnaround lengthened to three or four days in the office.
• If there were other problems, the ILR was not informed of them.

For whatever reason, Ms. Forstner and the ARI Board found it necessary to misrepresent to the ARI membership the quality of the services provided by the ILR, possibly to justify questionable decisions made by the ARI Board, which apparently have not been well received by the ARI membership. While the ILR recognizes the ARI’s right to change service providers and the ARI Board’s right to decide what is in the best interests of its members, those rights do not afford to Ms. Forstner, nor any other member of the ARI Board, a privilege or justification to make false, defamatory and disparaging statements concerning the services provided by the ILR. It would be different if the statements had been made only to the ARI Board, but they were not. Instead, they were disseminated to the ARI general membership, who may foreseeably re-publish and circulate the false statements to the general public and, most importantly, the potential customers of the ILR’s services. Given the known networking that occurs among members of the industry organizations, it is not an overstatement that the false statements have now been publicized to every potential customer of the ILR, or soon will be. Such statements obviously impact the financial viability of the services provided by the ILR and the good name and reputation of the ILR in the industry, resulting in serious harm to the ILR’s ability to continue to compete and participate in the industry marketplace.

The ILR is hopeful that the ARI will recognize and acknowledge that Ms. Forstner and the ARI Board used poor judgment in making the statements and will cooperate with the ILR to mitigate the harm caused by the statements by agreeing to publish to the ARI and ILR members and the general public a joint statement with the ILR in a form and forum that is acceptable to the ILR Board of Directors disavowing and retracting the statements. While the ILR realizes that the publication of a retraction is somewhat of a Band-Aid solution, the ILR is hopeful that it might at least alleviate some of the damage that has been done.

Sincerely,
TIMOTHY L. GODDARD - Attorney At Law

Click on the link for full access to all documentation: Document List