Steve Mills of MRINetwork denies responsibility

Read how Steve Mills of Management Recruiters International sidesteps responsibility in this mails to Roger H Ballou, CEO of CDI Corporation and owners of MRINetwork.

In this letter to Roger H Ballou, I detail the events that followed the years of misrepresentation by MRINetwork and start to show how, the then Managing Director handled the problems that followed. Specifically the sidestepping of responsibility by Steve Mills and ask Roger H Ballou if he shares the lack of responsibility for the events that followed. Specifically, the years of misrepresentation by MRI Network, a wholly owned subsidiary of CDI Corporation. Read the correspondence below and form your own opinions on their approach and franchise ethics of MRINetwork and CDI Corporation.


---------------------- Start of 8th email described above sent to Roger H Ballou ---------------------

21st July 2008

Mr Roger H Ballou
President and CEO
CDI Corporation

Mr Roger H Ballou,

Steve Mills of MRINetwork denies responsibility!

I would now like to start to detail the facts around what Mr Steve Mills of MRINetwork did next and discuss the issues and implications relating to the franchise ethics and franchisor responsibility both of MRINetwork and CDI Corporation. In particular the denial of responsibility from Steve Mills, your then Managing Director of MRI WorldWide.

You will recall, Mr Roger H Ballou, that in my last letter to you I detailed the years of misrepresentation by MRINetwork. I detailed the way in which real MRI Network franchisees were mislead for years into believing that Mr JW was just another genuine MRINetwork franchisee by your management in MRINetwork. However, Mr Roger H Ballou, you know that his franchise agreement had long expired years earlier whilst his debts to you rose and rose each year to an astonishing amount of more than 170,000 UK Pounds (approximately $316,000 USD), and yet Steve Mills your then Managing Director of MRI Worldwide maintained and reinforced your years of misrepresentation of who was a real franchisee and who was not. Steve Mills of MRINetwork then compounded this position by actually congratulating me on winning work with Mr JW, in the full knowledge that I, like all other MRI Network franchisee's, was still under the false representation that MRINetwork created and reinforced, that Mr JW was a genuine and regular fellow franchisee. I also cited the correspondence that showed that CDI Corporation were aware of Mr JW's debt as far back as 2000. So CDI Corporation were certainly aware of the JW alarming and growing debt to MRI Network and of course to CDI Corporations bottom line profits. I will also be showing that CDI Corporation were involved in some of the key decisions around the whole Mr JW saga in subsequent letters.

Now to the point of this letter Mr Roger H Ballou. In this letter I will detail the side stepping of responsibility by Steve Mills of MRINetwork. In my opinion, this will raise the question of your ethics as a franchisor. That is to say the ethics both of MRINetwork and the ethics of CDI Corporation as the owner of MRI Network. CDI Corporation were involved in many of the issues surrounding the years of misrepresentation by MRINetwork.

You must appreciate Mr Roger H Ballou that at that time, I, like all other MRI Network franchisees was still under the false impression that Mr JW was a regular MRINetwork franchisee. As you know, that misinformation was created by MRINetwork's years of misrepresentation.

When I first had a problem in 2003 with payments from Mr JW for shared work, known as inter-office-referral or IOR, I contacted MRINetwork's Corporate office to discuss the issue. Shortly after, Steve Mills of MRI Network rang me from your Cleveland Ohio Office to discuss it. In that first conversation Steve Mills revealed to me that Mr JW owed MRINetwork a substantial sum of money.

The fact that a fellow MRINetwork franchisee could get into serious debt with a you as franchisee was alarming news. How could this be so as we all work to the same franchisor and there are clear contractual obligations in all franchise agreements that disallow such possibilities? Perhaps more importantly, there is a contractual responsibility on the franchisor in maintaining the network integrity. Surely you will agree with me Mr Roger H Ballou that any ethical and responsible franchisor would not have allowed this to happen. Surely, you will agree with me Mr Roger H Ballou that failure to maintain this part of your contractual agreement is a breach of the franchise agreement, not just for me but for all MRI Network franchisees.

Shortly after that call from Steve Mills of MRINetwork from Ohio, I wrote to him to provide him with some further detail on what was then owed to our office by Mr JW plus some other information that he requested. In that letter, I also expressed my alarm at the news that a fellow MRI Network franchisee could get into this situation and pointed to the fact that MRINetwork had known of my inter-working with Mr JW for a long time. Remember that MRI Network's years of misrepresentation was still intact at that time.

The words I used in that letter to Steve Mills of MRINetwork were: (27th Jan 2003)

"Whilst the current situation is down to Mr JW's actions, Corporate have known for almost a year that I have been working with Mr JW on this account. I have even had discussions with people at Corporate explaining that the Global Consultancy are poor payers. I do feel that someone might have warned us that Mr JW had a serious financial problem. I would then have taken steps sooner to safeguard our position that we now face."

Mr Roger H Ballou, I believe that the above comments were valid and reasonable. But of course, you must bear in mind that I still did not know the full extent of the deception created by MRINetwork about Mr JW, and the misrepresentation was still largely intact. It was merely an expression of alarm at a situation that should not have been allowed to have existed in a franchise that was being run professionally and ethically. That was based on my reasonable assumption that the franchisor was ethically controlling the franchisees and demonstrating adequate duty of care towards its real franchisees, as well as with honesty and integrity and, in my opinion, a sensible long-term growth strategy for the franchise. Of course at that time I had no reason to suspect that you had also breached your contractual duties as a franchisor by misrepresenting the truth for years.

However, the response that this comment produced from Steve Mills of MRINetwork was unexpected. Of course, at that time, I did not then know of the facts of your years on misrepresentation by MRI Network, or the full extent of Mr JW's growing debts, or the fact that Mr JW's franchise agreement that had expired years earlier. Nor did I have the additional information that you were forced to release through discovery now enable me to see CDI Corporations involvement some key decisions. But more of CDI Corporation's involvement in subsequent letters.

In Steve Mills reply he wrote: (29th Jan 2003)

"As indicated above, I need to correct your assertion to the effect that we have been negligent in not advising you sooner of JW's indebtedness to us. You are correct that we knew that you and Mr JW were negotiating with (a major Global Consultancy). We had no knowledge that you had won business from (Global Consultancy) and were making placements because you have not reported either sales or cash collected and the reports from Mr JW do not identify the client. Ultimately, it was your choice to do business with Mr JW and we cannot be blamed if you did not undertake the necessary due diligence."

Let me take each of these bizarre statements and contrast them against the facts and let people draw their own conclusions about the honesty, ethics, and business practices of MRI Network owned by CDI Corporation as demonstrated by one of its senior MRINetwork Corporate executives.

Looking at Steve Mills of MRINetwork first sentence:

"We had no knowledge that you had won business from (Global Consultancy) and were making placements because you have not reported either sales or cash collected and the reports from Mr JW do not identify the client."

When we won the work (i.e. finished the negotiations), Mr JW and I sent out a MRINetwork wide email announcing the fact that the work had been won and inviting other UK offices to joint in the fulfillment for roles that we already had. That is the email that Steve Mills of MRINetwork replied to and congratulated me. Extracts from that mail stated:

"Hello Everyone Mr JW and Bob Stewart from the MRI Worldwide offices in Basingstoke & Macclesfield have recently successfully completed extensive contract negotiations with (Global Consultancy) to become a 'top-tier' preferred supplier for their technology consulting organisation."

You will note Mr Roger H Ballou, that this email clearly states that we have completed extensive negotiations to become 'top tier' preferred supplier. So Steve Mills of MRINetwork comment that he did not know we had won the work is factually incorrect.

In that same email Mr Roger H Ballou, Mr JW and I went on to say:

"we are now managing a number of assignments"

You will note again Mr Roger H Ballou that here we clearly state that we are handling assignments and we invited other MRINetwork franchisees to join in the fulfillment. So it follows once again Mr Roger H Ballou that Steve Mills' comment that he did not know we had won the work is factually incorrect.

There is a more important point here too. This mail from JW and me, prompted the congratulatory email from Steve Mills. The email from Mr JW and me clearly states we are both MRI Network offices. For me that was true, but as you know Mr Roger H Ballou, this was not so for Mr JW. As you know the years of misrepresentation by MRINetwork was still intact and I like other real MRI Network franchisees was misled by the misinformation repeatedly supplied by MRINetwork. But here we see Mr Steve Mills congratulatory email to me once again reinforce the years of misrepresentation by reinforcing the masquerade of Mr JW as a regular MRI Network franchisee. How bad is that Mr Roger H Ballou? Steve Mills of MRINetwork at this point had absolute personal knowledge that I was inter-working with Mr JW with all the problems that your organisation knew about for years but chose to conceal. I was at this point at serious risk. Of course I did not know it at that time because of the continued misrepresentation that MRINetwork had created, maintained and reinforced for years. Here Steve Mills simply reinforced that misrepresentation once again! What do you think that says about the ethics of MRI Network franchise Mr Roger H Ballou?

What is irrelevant is Steve Mills' comment about the monthly reports not showing the client. The client was not the problem, but your years of MRINetwork misrepresentation were. What is wholly relevant on that point, is the fact that the monthly reports do show who Inter-Office-Referrals or IOR's are with. It is a fact that on my monthly return for July 2002 and for August 2002, Mr JW is clearly named as our IOR partner. I know that MRI Network received this Mr Roger H Ballou because you were forced to release these and other documents to me during discovery. The point being Mr Ballou, that Steve Mills of MRINetwork unquestionably had total personal knowledge that I, as a real MRI Network franchisee was inter-working with Mr JW, i.e. the person who your company chose to misrepresent to the rest of the MRINetwork for years as a regular franchisee when he clearly was nothing of the sort.

So Mr Roger H Ballou, what we can conclude from this is that Mr Steve Mills MRINetwork did know that I was working with Mr JW in the false belief that he was just another regular MRI Network franchisee. As you know Mr Roger H Ballou, that misrepresentation was perpetuated over several years by MRINetwork and was still intact at that time.

Mr Steve Mills of MRINetwork then went on to say:

"Ultimately, it was your choice to do business with Mr JW and we cannot be blamed if you did not undertake the necessary due diligence."

That statement Mr Roger H Ballou is in my opinion astonishing. Look at the facts. The MRINetwork training encourages MRI Network franchisee to inter-work, i.e. inter-office referrals or IOR. This practice is repeatedly raised and encouraged at most, if not all, of your national and international gatherings of MRI Network franchisees. I still recall my initial training where Inter-Office-Referrals, was pushed hard as a safe bet. It was a reasonable argument as it was backed by the fact that all MRINetwork franchisees share the same training, ethos, ethics and most importantly the same contractual control via the franchisor. The problem we have here Mr Roger H Ballou is that Mr JW was not a regular MRI Network franchisee. He was far from it. As you know Mr Roger H Ballou, your company represented him as a regular MRINetwork franchisee for years when this was not the case. As you know Mr Roger H Ballou, his franchise agreement had long expired (way back in 1999) and he was not paying you royalties, and his debts were growing year on year to an astonishing amount of more than 170,000 UK Pounds (approximately $316,000 USD).

However, you must appreciate that you chose to conceal that information and the truth about Mr JW and continue with the misrepresentation of Mr JW for years and misled all real MRINetwork franchisees, as well as clients too.

So when Steve Mills of MRI Network claimed that no blame could fall at his door, because I did not do the 'due diligence', what do you think he meant? Let us consider the 'due diligence' that could have been done.

As an MRI franchisee, MRINetwork's Corporate Office under the 'control' of Steve Mills introduced me to all other MRI franchisee and Mr JW was within that set. This was not a one-off update Mr Roger H Ballou, this was a regular and ongoing update from your MRI Network Corporate office. Why would any real MRINetwork franchisee suspect that this information supplied by the franchisor was false and misrepresenting the truth?

When Mr JW and I won the work and announced it the UK MRINetwork, Mr Steve Mills took the unusual step of congratulating me in writing, in the full knowledge that I was inter-working with someone that MRI Network Corporate office chose to misrepresent for years as a regular franchisee.

Again Mr Roger H Ballou, I hope you can perceive that Steve Mills congratulatory email reinforced the deceit of the years of misrepresentation by MRINetwork.

Ask yourself these questions Mr Roger H Ballou:

  • How could I as a real MRINetwork Franchisee know that Mr JW had no current MRI franchise agreement?
  • How could I as a real MRI Network Franchisee know that his franchise agreement had expired years earlier?
  • How could I as a real MRI Franchisee know that Mr JW had not been paying you royalties for years?
  • How could I as a real MRINetwork Franchisee know that the magnitude of Mr JW's debt to you was huge and growing year on years to more than 170,000 UK Pounds (approximately $316,000 USD)?

The answer Mr Roger H Ballou is simple. I could not have known those facts because those facts were known only to the management of the MRI Network Franchise Corporate Office and some of it was clearly known to senior members of CDI Corporation for years too. As you know Mr Roger H Ballou, MRINetwork chose to keep those facts secret whilst also choosing to continue with the years of misrepresentation of Mr JW as a regular MRI Network Franchisee whilst encouraging real franchisee towards that peril.

Do you think that Steve Mills of MRINetwork was reasonable to say?

"we cannot be blamed if you did not undertake the necessary due diligence"

Before you answer this point Mr Roger H Ballou, remember:

  • The years of misrepresentation by MRINetwork
  • The MRINetwork training to inter-work with other MRI Network franchisees
  • The regular and repeated encouragement by MRINetwork Corporate office to inter-work with other MRI Network franchisees
  • The fact that Steve Mills had explicit personal knowledge that I was working with Mr JW in the false belief that he was a regular MRINetwork franchisee
  • The congratulatory email from Steve Mills of MRI Network on me winning work with Mr JW, reinforcing the deception that Mr JW was a regular MRINetwork franchisee
  • The fact that the truth about Mr JW was known only to MRINetwork Corporate personnel plus senior people at CDI Corporation.

Who then do you think is to blame for this Mr Roger H Ballou? Your answer on this question will be of interest to many people.

I have to say Mr Roger H Ballou that I believe that this behaviour is very unethical for a franchisor and very damaging to CDI Corporation's long-term bottom line profits as well as damaging to MRINetwork and all the MRI Network franchisees. In short Mr Roger H Ballou, I believe that MRINetwork and CDI Corporation are wholly responsible for the years of misrepresentation. I believe that MRI Network and CDI Corporation are wholly responsible for encouraging real MRINetwork franchisees for inter-working with Mr JW who had no valid franchise agreement, who was not paying you royalties, and who's debts to MRI Network and CDI Corporation was growing year on year to an astonishing amount of more than 170,000 UK Pounds (approximately $316,000 USD)

Against all of these facts Mr Roger H Ballou, how do you justify Steve Mills' statement:

"we cannot be blamed if you did not undertake the necessary due diligence"

The MRINetwork problems that followed would not have happened if you had not misrepresented the truth about Mr JW for years. The MRI Network problems would not have happened if Steve Mills took some management action when he had personal explicit knowledge that I as a real MRINetwork franchisee was inter-working with Mr JW.

Who do you think is to blame Mr Roger H Ballou? That is not a rhetoric question Mr Roger H Ballou, who do you think is to blame? Steve Mill's was quick to side-step any blame, what about you Mr Roger H Ballou, are you going to side-step the responsibility too?

Do you think that this is reasonable behaviour of a franchisor Mr Roger H Ballou? Do you think that this behaviour by MRINetwork is fair behaviour of a franchisor? Do you think that this is consistent with the long-term growth of the MRI Network and CDI Corporation's revenue stream? Do you think that this demonstrates fair and reasonable 'Duty of Care' towards your MRINetwork franchisees? Do you agree that you have breached your contractual responsibilities to all MRI Network franchisees by your years of misrepresenting the truth? Do you think that this behaviour by MRINetwork and CDI Corporation is ethical behaviour of a franchisor?

These are not rhetoric questions Mr Roger H Ballou, what do you think? Your silence on these issues and my earlier letters makes me wonder if, in fact, you and CDI Corporation are simply quite comfortable with these business practices as demonstrated by MRINetwork over years. In the same way that you have never commented on Joseph R Seiders statement made under oath to the Ohio Courts that I believe are not consistent with the truth. Are you comfortable with these too? Do you think that Joseph R Seiders' comments are truthful and ethical? These are senior people holding senior positions within CDI Corporation and MRINetwork. Do you think that their behaviour is ethical Mr Roger H Ballou? Similarly, do you agree that you personally gave factually incorrect information and thereby misled CDI Corporation shareholders in your statements made on 26th July 2007 at your quarterly review. Are you comfortable with all of these practices Mr Roger H Ballou? Do you think that they are ethical?

I look forward to your reply with interest. As before this mail will be published on my web site soon.

Sincerely
Bob Stewart
CDI Corporation shareholder



--------------------- End of 8th email described above sent to Roger H Ballou -----------------------

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