Yes, you are right; it happened in 2003. In a way, it’s sort of a funny story. Here’s a modified version of a 6/5/2004 post I made on rgcp in response to the same question you ask. I have removed some of the names to protect the guilty.
"Basically, the organizer (Mr. X) copied all the
details of the very successful 2002 Senior Open, including the large
guaranteed prize fund, overlooking that the 2002 prize fund was backed
by cash donations from several sponsors. On top of this, he got really
ambitious and planned to hold the U.S. Masters concurrently. Then he
did little or no publicity. The result was a disaster.
The U.S. Masters was cancelled at the last minute; the U.S.
Senior got only about 30 entries and was in line for a huge loss, with
the large prize fund and no sponsors as in 2002. As I understand it,
using some excuse about an error in his TLA, (Mr. X) refused to pay
the U.S. Senior prizes. As it was a national event, the USCF stepped
in and paid the prizes.
Meanwhile, on the basis of his ambitious plans, (Mr. X) was
voted by the EB to receive the “Organizer of the Year” award BEFORE
any of these tournaments took place. When the whole thing crashed and
burned, nobody had the guts to revoke the award. It was quite amusing
at the 2003 U.S. Open awards banquet. After a number of awards had
been given (and acknowledged by speeches from the recipients), (Mr. Y)
slunk to the microphone and hastily read through a list of additional
awards (including Organizer of the Year). (A Prominent Delegate) had been
prepared to boo loudly at the (Mr. X) award but (Mr. Y) rushed past
it so fast he was taken by surprise and didn’t get the chance.
To be fair, it should be noted that at the Crossville, TN EB
meeting where the award was voted, Joe Wagner voted no because of
concerns about the possibility of the very thing which then happened.
Also, Frank Brady was absent from that meeting. Subsequently, at the
September 2003 Executive Board meeting, Don Schultz made a motion
to revoke the award. Schultz and Hanke both voted for the motion, but
nobody else did and it failed."
Postscript: while Mr. X is no longer an officer of the Delaware State Affiliate,
he does maintain a peripheral involvement with them and is listed as a contact on their web site.
– Hal Terrie
[Edit: corrected typo]