DISTORTIONS REGARDING LOAN PAYMENTS, INCLUDING THE REQUESTS SUBMITTED TO DR. MEREDITH

Loan payments at Global have NEVER been on a "strict" schedule and I have never "insisted" that they be on a "strict" payment schedule. The primary reason I wanted them scheduled was simply to be able to categorize the debt on an annual basis and thus fulfill accounting reporting requirements in the notes to the financial statements. For those that understand, such disclosures are stated as of December 31, and by themselves are not binding. Indeed, they can be subject to change and are required to be restated at the end of each year.

The ESTABLISHED practice and procedure FOR OVER TWO YEARS, was that those who insisted on payment in full, were ALWAYS paid in full, sometimes years in advance of the schedule, unless we could convince them to change their mind. I know of NO exceptions. This has happened many times since 1996. In the last few months alone, we have changed the schedule for about SIX lenders! The audit confirmations sent out earlier this year bear this out. In other words, these six lenders were most recently NOT paid according to the schedule we had established! Mr. Pope had changed ALL of these payment schedules and I had not been instructed that he did not have the authority to do so!

For example, before the Feast of this year, Mr. Pope told me that a lender called him to ask that his loan be paid in full because he wanted to help his mother buy a house. It was a very sizeable loan. Mr. Pope verbally asked me to pay it off although it was not due to be paid until a year or two later. It was paid off. As before, I presumed he had the authority to make that decision. More recently, Mr. Pope verbally asked me, that an even more sizeable loan—well into six digits—be paid in full. The schedule called for it to be paid off in three equal installments, one in 1998, one in 1999 and one in 2000. Breaking the schedule was not deemed a problem.

When Dr. Meredith, as CEO, presented three demand letters given to him from three lenders for loans to be paid off, paying them off was NOT inconsistent with the established practice and procedure that had been followed for more than two years. It is true, although I did not remember it at the time, that Norbert Link had some months prior, sent me an e-mail (not a memo), as I now recall, SUGGESTING that the executive committee approve loan payoffs. However, Mr. Pope or ANY superior of mine had NEVER instructed me, either verbally or in writing, that this should now be the new procedure! Since I did not report to Mr. Link, it did not register as a new policy, with me, and was forgotten.

What I remembered was the procedure Mr. Pope had followed many times before. It is also not true that paying these loans would have propelled Global into bankruptcy. The fall Holy Day offerings came in at well over 8% above the year before. Income for November was also about 8% higher than the previous year. Bank balances were well ahead of earlier projections. There was over $650,000 in the bank, at the time the checks were written. The checks were NOT prepared with a disregard for following proper controls! There were five people involved in the transaction. Authorization, custody of checks and execution of the transaction were distinctly separate.

I did not have access to the checks but asked that the backup person to the regular person access the checks. As the backup person, she had her own key to the checks. These three checks were recorded promptly in the check log and the remaining check stock was immediately locked up again. I did NOT "contact a certified public accountant and an attorney to determine if such actions were illegal". If I even had doubts that it was "illegal," I would not have participated.

Norbert Link, in open office space, in front of many witnesses and in a most unprofessional manner jumped to conclusions and cried "felony," "embezzlement." It was a day or two later, AFTER his remarks and after being subject to interrogation that I felt I should consult an attorney regarding his accusations, as well as my potential claims for harassment and defamation. It was later determined that Dr. Meredith believed that the removal of Mr. Davis as a signatory on the bank account would not take effect until the day after the demand letters to pay off the loans were presented to him.

Finally, please understand THIS. The bulk of Global’s funds were not kept in the bank account. They were invested in an account with a well-known securities firm, so that Global could earn over 5% interest. As needed, these funds were transferred to the bank account, always with a CHECK, drawn on the investment account. This investment account required only ONE signature, regardless of the amount. The check to transfer funds FROM the investment account TO the bank checking account, to cover the loan payments and payroll, was signed solely by Dr. Meredith.

HE DID NOT NEED MR. DAVIS’ SIGNATURE TO DO THIS. The point is very simple. If Dr. Meredith, or any of us, intended to "embezzle" funds, we could have written checks off the investment account, which required only ONE signature—in this case, his! Instead, we first moved the funds to the checking account—using his signature alone—and then checks were written off the checking account (two signatures required) to PAY OFF THE LOANS.

At what time Mr. Davis was understood to be effectively removed as a signer on the checking account is, completely irrelevant to the charges of attempted "embezzlement" because funds could have been removed from the investment account with only Dr. Meredith’s signature! It should be very clear that there was no attempted "embezzlement"! In fact, I explained this to Messrs. Link, Pope and Salyer the very same day these transactions took place!