Tuesday, December 24, 2002

"IT JUST DIDN'T SEEM NECESSARY TO SAY, 'GEE, WE'D LIKE TO RECONCILE YOUR CHECKBOOK.' " Accounting fraud and financial shenanigans: it's not just for global megacorps anymore.

We've got a growing scandal at Philadelphia's Weaver's Way co-op grocery, currently undergoing a financial crisis after officials showed up at a construction loan closing only to find out that the money for the closing wasn't in the co-op's bank accounts. About $100,000 was believed missing.

Did an unscrupulous executive abscond simply with the money? Not exactly. It's worse.

As a recent Philadelphia Inquirer article put it, "The store operated essentially under a belief in the inherent goodness of mankind since it opened in 1973." Such belief, apparently, foreclosed the need for anyone to oversee or even question the co-op's finance director of the past fifteen years, Andrea "Andi" Sheaffer, while dealing with the co-op's $5,000,000 in annual sales.

Weavers Way's own investigation has determined that the co-op presently owes about $215,000 to vendors that is 30 or more days overdue, and that they have somehow accrued bank overdraft charges of $91,000, going back to April 2000. In other words, it looks to this untrained eye like this place has been bailing water from a leaking vessel for years, and no one might have realized the ship was sinking had the construction loan closing gone as planned. The co-op is now seeking $300,000 in member donations to replace missing funds and pay the co-op's debts.

Keep track of this story here via Weavers Way's Financial Crisis updates. In the meantime, be mindful of Lenin's old creed: Doveryay, no proveryay. Or, as President Reagan translated it at the 1987 INF Treaty signing -- trust, but verify.

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