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The Diver's Alert Network(DAN) has announced the resignationof Dr. Peter B. Bennett,founder, president, and chiefexecutive officer. Bennett age 71,has made an enormous contributionto diving medicine, yet in thepast few years his tenure at DANhas been controversial and 20months ago resulted in legalaction.Undercurrent has called ore-mailed severalof DAN'scurrent and pastboard members-- as well asBennett -- toinquire aboutthe legal actions,but few havebeen willing to talk and then onlyoff the record. We believe discussingthe issue is importantbecause divers support DAN notonly through purchasing insurancebut also by making voluntarycontributions. Yet divers have noauthority in DAN matters and theDAN board is appointed fromwithin, so there is no outsideaccountability. With that in mind,we decided to pull together this story, based on the public recordswe have obtained.

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Since 1980, DAN has grown from a single telephone on Bennett's desk at Duke University Medical Center's Hyperbaric Center to become the second largest dive-related organization in the world. Bennett has been DAN's only president and chief executive officer since its incorporation.As a tenured professorand senior director of Duke'sHyperbaric Center, he's beenlargely responsible for DAN'sclose ties to the university. Manyof DAN's personnel, includingthe staff of DAN's famous 24-hourhotline, are Duke employees.According to DAN's 2001 taxreturn, Bennett was paid $213,750 that year, with another $34,119 inemployee benefit plan contributions.DAN claimed that Bennettaveraged 50 hours a week in hisresponsibilities there, but at thesame time he was employed as aprofessor of anesthesiology atDuke, with teaching responsibilities.

DAN's board should operate in good faith
with its members and donors and disclose the
terms of Peter Bennett's "Golden Parachute."

As we learned from court documents and off-the-record interviews, there has been a longsmoldering power struggle between Bennett and some DAN board members. According to one document, at the November 2000 board meeting, certain board members "attacked Dr. Bennett because of his alleged ineffective management of the Corporation." The board also inquired about Bennett's retirement plans and any plans for his succession as president and CEO. In January 2001, Michael Lang assumed the board chairmanship, and two new directors were elected. At that time,Bennett provided the board withendorsements from supportersthroughout the country, and asurvey of DAN's senior managerspurportedly showed "overwhelmingsupport by DAN's managementfor Dr. Bennett, high approval of his management styleand effectiveness, and greatloyalty to him."

When Bennett walked into a DAN board of directors meeting in May 2001, one agenda item was his retirement transition plan -- a plan that had been under discussion,inside and outside DAN'sboardroom, for several months.Instead, five board members calledfor his immediate termination.The dissident directors (ChairmanMichael Lang, William Ziefle,Karen Van Hoesen, and new directorsWolcott Henry and Dick Long)sought to take over day-to-day operationsof the $20-million-a-yearresearch and educational nonprofitcorporation and its two for-profitsubsidiaries. They called for theremoval of director AlessandroMarroni (president of DANEurope) and two ex-officio boardmembers (Chief Operating OfficerDan Orr and Bennett's son,Christopher, then employed asDAN's chief financial officer).

In protest, both Bennetts, Marroni, and Orr walked out of the meeting. Within days they filed a legal complaint accusing the five dissidents of failing to act in good faith, failing to exercise their duties as directors with requisite care, and acting contrary to the best interests of the corporation. They also got a preliminary injunction preventing the Dissident Five from removing them from their positions, as well as from "terminating or substantially modifying any existing programs, services, or activities performed by DAN and its affiliates" or from creating any new ones. The defendants challenged the injunction, but their motion for a stay was denied.

Bennett and his allies contended that their "summary involuntary removal" as officers and directors would cause "immediate and irreparable harm to DAN and its ability to carry out its mission," would likely result in "the loss of additional senior management and staff members," and would "irreparably harm the reputation and credibility of DAN...and impair its ability to provide membership services to its members."

Despite this intense lobbying, the Dissident Five all voted forBennett's immediate terminationas CEO. They also calledfor a forensic financial audit ofDAN's operations, which ChrisBennett later protested on thegrounds that it could jeopardizehis efforts to refinance a $2.4 millionmortgage for the DANheadquarters building, ThePeter B. Bennett Center. That isa curious argument, because aclean audit would be appreciatedby those who were being askedfor refinancing.

Since the case was eventually settled out of court, with prejudice (i.e., both sides agreed to drop all claims and counterclaims and to say nothing defamatory about each other), we may never learn the full story behind this infighting. But we do have clues to a series of rifts between Bennett, some of his staff, and certain factions of the diving community that doubtless contributedto the board's schism.

Initially, DAN offered diver insurance through existing underwriters, but in 1993 went into the business itself by creating a wholly-owned forprofit corporation called Accident and General Insurance Company (AGI). The step proved controversial. Some industry observers believe that the organization's original focus on diving medical research and education has been diluted in the quest for the almighty buck. This concern was amplified in 1998, when DAN set up another for-profit subsidiary, DAN Services, Inc., to market supplementary life insurance to its members. While undertaking these commercial concerns, some critics charged that DAN had lost its vision to be "the most recognized and trusted organization worldwide in the fields of diver safety and emergency services, health, research, and education." Others have said that DANhas failed to establish a uniforminternational diver safety supportsystem, saying that DAN's internationalorganization lacks commongoals and programs. Theysay traveling divers can't rely onDAN to provide uniform emergencysupport worldwide becausethe various branches "squandertheir resources bickering witheach other over various standardsand programs they are notrequired to comply with oradopt." Bennett's early conservativestance on Nitrox ruffledsome feathers, as well.

Apparently some staff, all now ex-employees, complained to board members about DAN's organizational structure, which Bennett crafted over the years. One woman reportedly went so far as to contact Duke University with complaints of an "old boys'network."

Are these firing offenses? Perhaps not. But a counterclaim filed by the Dissident Five in July 2001 raised more serious charges. Bennett's self-drafted retirement plan, according to the document, contained "highly lucrative compensation and retirement provisions" and provided that Bennett would "remain in control of DANthrough 2005."

And then the gloves came off.

Later in the counterclaim, the Dissident Five alleged that Bennett had "engaged in self-dealing by attempting to transfer corporate assets to a company he owned and controlled without revealing his ownership interest to DAN's board ... for his personal benefit and for the benefit of his friends and family." Further, the document claims that Bennett had authorized "unreasonable and extravagant expenses" and had "dissipated the assets of DAN and/or its subsidiaries to his own personal gain." Just for good measure, the complaint also accused Bennett of "engaging in acts of favoritism and nepotism to DAN's detriment." In the court documents we reviewed, there was no substantiationto back up any of these charges.

Bennett and his allies (the plaintiffs in the original complaint) answered the counterclaims a month later, switching criticism back to the Dissident Five by charging that they "have engaged in a pattern of behavior which is detrimental to DAN ... and which has been undertaken solely for their personal benefit." The defendants, according to Bennett and his fellow plaintiffs,also engaged in "a pattern ofconduct which constitutes anabuse of their discretion and/orauthority as members of theboard."

Quite a hissing contest in thisorganization that we divers fund.

After failing to get the injunction against them lifted, the defendants' counterclaims against Bennett and his co-plaintiffs went nowhere. So the paper shuffling stopped and the dispute moved to mediation behind closed doors. On September 7, 2002, both sides agreed to voluntarily dismiss all claims and counterclaims. Bennett agreedto resign, effective June 30, 2003.

Today, Peter Bennett and Alessandro Marroni are still on DAN's board, which is now controlled by the Dissident Five. Dan Orr remains as COO, but Chris Bennett has left to form his own company, Medic First Aid in Tacoma, Wash. DAN's staff had been left in the dark about Bennett's future until just after the November 2002 board meeting, when they met with the directors and were assured that Bennett will stay in the headquarters building that bears his name until his official retirement, squelching rumors that their boss might be ousted sooner thanJune.

The squabble drained DAN's resources, both personal and financial. In 2001, DAN shelled out $95,123 in legal fees for management and general services, compared with $28,775 the previous year, according to their IRS filing. No doubt some of the increase was due to the board'sinternecine warfare.

Furthermore, DAN leadership has refused to disclose Peter Bennett's retirement package, although it is funded in part by voluntary donations from people who expect the money to go for betterservices, not to provide a financialgift for Bennett's retirment.

To see how a nonprofit expert and watchdog would view the Golden Parachute, we contacted Bob Bothwell, the founder of the National Committee for Responsive Philanthropy, and explained DAN's refusal to disclose the deal. He said, "It's reprehensible, unconscionable, possibly illegal, and certainly hugely inappropriate for the board of directors not to deal openly with the organization's membership about this situation. If the deal cannot stand daylight, it probablysmells bad."

Finally, we should note that all the claims we have cited appear in legal documents and we can't be certain whether they are legitimate and supported, or just internalbickering.

Nevertheless, the new board wants to build a better DAN and it is now recruiting a replacement for Dr. Bennett. In doing so, it should keep in mind that DAN has a fiduciary responsibility to its donors. Some of these claims are serious, and ought to be addressed openly. To the extent that they are true, the board needsto assure its donors that it has fullcontrol of the finances and they willbe managed properly.

Furthermore, it should disclose the terms of Peter Bennett's "Golden Parachute." It should explain why they believe it is appropriate -- or necessary -- to make such a payment, recognizing that they have already paid Bennett well for his work and contributed to a retirement plan. Not only will this ensure that the new President doesn't join DAN under a cloud, but also it will ensure donors that the can trust the organization in such a way to continue to support it.

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DAN Founder Retires