Possible Election Fraud

[ScotchW]

I'm a director at an Agricultural Society in Minnesota - we are responsible for putting on our county fair each year. Our orgranization was created in 1900 as a for profit corporation with stock. Our organization was transferred to a non-profit status back in the 50's or 60's. In 2006, we amended our Articles to recognized the non-profit act and we became a 501 (c) 3 in 2006, which was back dated by the IRS to 1900. We also restated our ByLaws. (Previous Boards didn't understand that was needed. After obtaining a legal opinion, we went to work fixing our documents.) Also, we receive certain govermental benefits and must file annually with the Dept of Ag.

Our revised bylaws removed the "stock" membership and made it a certificate. Since the old ByLaws allowed for stock transfers, in our revised by laws, we allowed for all members to do one more transfer to the certificate. Our revised ByLaws stated the following:
1) All current Regular Class members holding a stock certificate will be allowed to transfer their stock one time after the approval of these Revised Bylaws. Effective April 19, 2006 all stock certificates will be called membership certificates based on the vote of members at the Special Meeting.
2) New Regular Class members must purchase their membership thirty (30) days prior to any Annual or Special meetings to receive voting privileges.
3) Only Regular Class members shall be able to hold a director’s and/or officer’s position.

Last week, we had our Annual Meeting, and a director brought in a new member. When we tried to obtain his membership, the current seating director pushed him through stating he didn't have to do that because he was a member under his deceased father's stock. When asked for the certificate, we were told it was a transfer and to leave him alone. This "new" member, was nominated for a directors position and won. After the annual meeting of the members, all directors went into another room to elect the officers and this "new" member participated in the voting of the officers. The election of the officers was rather "heated" and had to have recounts due to ties.

Since the stock was never "transferred" in the organization's books, was this election legal? There are a few of us other director's that are very concerned about the activities and looking for some direction as to what we should do. The other director's are "old school buddies" and lifelong friends with this new member and if we bring this up, we will be shut down immediately. Our concern is, our organization is currently sitting on 42 acres of prime real estate worth a few million and we are in the process of purchasing another 72 acres. We are concerned because these other director's appear to be "stacking" the board to get future votes to go their way which would be in conflict to our mission.

Thank you!