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W&H’s control over petitioner’s fundraising campaign is
further manifested by petitioner’s unsuccessful efforts to obtain
a copy of its own housefile in July 1988, about 11 months before
the contract ended. W&H refused to provide to petitioner a copy
of its housefile until the contract was over. It instructed
Wiland, the computer company W&H selected to maintain
petitioner’s housefile, not to comply with petitioner’s July 1988
request. Despite the extensive efforts of its attorney,
petitioner was unable to obtain its complete housefile until
after the Contract ended.
From a practical standpoint, W&H exercised substantial
control over petitioner’s finances and direct mail fundraising
campaigns during the period from 1984 through 1989. In light of
W&H’s extensive control over petitioner and petitioner’s near-
insolvent financial condition when the fundraising arrangement
was entered into in June 1984, we conclude that W&H was an
“insider” with respect to petitioner.
Petitioner and Mailers contend that one cannot become an
insider merely by entering into an arm’s-length negotiated
contract. We are not aware of any such “one-free-bite” principle
in this part of the law. Whether the control thus transferred,
or shared, makes the transferee an insider depends on the
circumstances. The arrangement authorized by the Contract in the
instant case was not a “one-shot deal”, but a 5-year
relationship, involving many transactions during its term. The
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