[From: http://savepacifica.net]

STATUS OF LITIGATION AGAINST THE GOVERNING BOARD OF THE PACIFICA FOUNDATION

Prepared by Scott Fleming, National Lawyers' Guild, Jan. 11, 2001

There are currently three lawsuits pending, filed by local advisory board members, listeners appointed by the California attorney general to sue in the public interest, and dissident Directors, which seek to fundamentally restructure the Pacifica Foundation and remove from office some or all of the members of the Board of Directors of the Foundation. Pacifica is represented in all three of these actions by Epstein, Becker, and Green of Washington, DC, one of the most notorious union-busting law firms in the U.S, as well as Wendell Rosen Black & Green of Oakland, CA. Following are brief summaries of the three lawsuits, the parties involved, and the relief requested.

DAVID ADELSON, ET AL. V. PACIFICA FOUNDATION

Plaintiffs: Local Advisory Board members from four of Pacifica's five stations (not KPFT) Court: Alameda County Superior Court, Oakland, California Attorney: Dan Siegel, Siegel & Yee, Oakland, CA Date Filed: June 26, 1999 Contact for more information: David Adelson at dadelson@ucla.edu

Adelson was initiated by Pacifica Local Advisory Board (LAB) members at the height of the KPFA crisis in 1999. The LAB plaintiffs are represented by attorneys Dan Siegel and Hunter Pyle of Oakland. As originally filed, the suit alleged that the Pacifica Foundation violated California law and its own bylaws when, in 1998 and 1999, it purported to amend its bylaws so as to disenfranchise the Local Advisory Boards. The bylaw amendments purported to allow Pacifica's Board of Directors to transform itself into a self-selecting, self-perpetuating body by eliminating the long-held right of the LABs to elect a majority of the members of the Pacifica Governing Board. According to the complaint, the bylaw amendments were enacted in violation of California law because the Board of Directors did not submit them to the LAB members for their consideration and vote. In addition, the Pacifica Foundation failed to give proper notice to the members of the Board of Directors of the text of the amendments under consideration prior to the meetings at which they were voted upon, in violation of the Foundation's own bylaws. Finally, the original Adelson complaint alleged that Pacifica has breached its own bylaws by allowing certain Board members, including Frank Millspaugh and Ken Ford, to serve past the expiration of their terms as Directors.

Adelson also alleges, based chiefly on the actions taken by the Pacifica Foundation during the 1999 KPFA lockout, that the Pacifica Foundation engaged in unfair business practices and false advertising by soliciting funds from its subscribers under false pretenses, in that the Foundation promised the subscribers that their monies would be used in a manner consistent with Pacifica's historical mission and the principles enunciated in its Articles of Incorporation. Instead, listener funds have been utilized to pay for armed guards, the censorship of journalists, the elimination of community-based programming, and the marketing of the Foundation's broadcast licenses.

Adelson seeks both injunctive relief and monetary damages. Most importantly, the suit seeks an injunction (1) ordering the removal of Board members who have committed gross abuses of their authority; (2) barring the Foundation from selling any of its assets, including broadcasting licenses; and (3) invalidating the illegal bylaw changes as well as any actions taken by the illegally-constituted Board of Directors.

The Adelson lawsuit is currently in the discovery phase. Attorneys for the plaintiff LAB members are in the process of deposing Pacifica staff and Board members, including Mary Frances Berry former Executive Director Lynn Chadwick. Pacifica's attorneys are conducting depositions of the plaintiffs as well, including KPFA LAB member Sherry Gendelman.

THE PEOPLE OF THE STATE OF CALIFORNIA EX REL. CAROL SPOONER, ET AL. V. PACIFICA FOUNDATION

Plaintiffs: Listeners from each of Pacifica's listening areas on behalf of the Attorney General of California in his capacity as overseer of charitable trusts.

Court: Alameda County Superior Court, Oakland, California Attorney: Daniel Robert Bartley, Novato, CA Date Filed: September 15, 2000 Contact for more information: Carol Spooner at (707) 526-2867 or
wildrose@pon.net
Web Page: Committee to Remove the Pacifica Board
http://home.pon.net/wildrose/remove.htm

Under California law, the Attorney General is responsible for the supervision of non-profit corporations incorporated under California state law. Pacifica is such a non-profit corporation. The law grants the Attorney General the authority to enforce this right of supervision by appointing private citizens as "relators." A relator is akin to a special prosecutor who is empowered to sue on behalf of the Attorney General and the people of the state. On September 14, 2000, California Attorney General Bill Lockyer, after concluding that Carol Spooner and other listeners from Pacifica's five station areas had raised "substantial questions of law or fact regarding whether there is compliance with the purpose of the Pacifica Foundation charitable trust, whether its articles of incorporation are being adhered to, whether its assets are being properly protected, and whether it is being managed and directed in a manner that is consistent with the requirements of the California Corporations Code," appointed Spooner and her fellow listener-plaintiffs as relators, empowering them to file a lawsuit seeking, among other things, to remove the Pacifica Board of Directors, to revise the Pacifica bylaws and to invalidate many of the illegal actions they have taken over the past several years. The suit was filed the next day. Spooner includes many of the allegations that were earlier raised in Adelson: that the Pacifica Board improperly amended its bylaws in order to disenfranchise the LABs; that certain Board members have been allowed to serve beyond the expiration of their terms; and that the firings and lockout at KPFA, and the expenditures related to them, violated the Foundation's Articles of Incorporation and amount to a gross abuse of authority.

The Spooner complaint contains a detailed recitation of the Pacifica Board's malfeasance; it is good history. The complaint methodically recites the repeated and wide-ranging misconduct in which the Pacifica Board has engaged in recent years. In addition to substantially recapitulating the allegations set forth in Adelson, Spooner alleges that the Board has been responsible for financial irregularities, including requiring WBAI staff to sign blank checks for unexplained reasons; that the Board's Finance Committee has improperly held all of its meetings in secret, including from other Directors, since 1995; that the Board is composed of more members than authorized by the bylaws; and that the Board has refused to honor the actions of several LABs which, consistent with their powers under the Foundation's bylaws prior to their illegal amendment, have elected several new Board members and have voted to recall several others.

Spooner seeks the most comprehensive relief of any of the three lawsuits. The suit asks the court to remove most of the Pacifica Board. It seeks removal of the Executive Committee, which has orchestrated most of the Board's malfeasance, for breach of charitable trust and gross abuse of authority and discretion, specifically much of the Board's misconduct over the past several years. Spooner further asks for the removal of Board members Ken Ford and David Acosta, whose terms have expired yet who remain on the Board, and all of the members of the Board elected illegally since the improper amendment of the bylaws in 1998 and 1999. The suit asks the court to appoint an accountant to conduct an independent audit of Pacifica's finances in order to determine, among other things, how much money Pacifica's Governing Board has spent on armed-guards, union-busting consultants, and so on. Most importantly, Spooner seeks a court order "requiring a Bylaws amendment establishing a fair, reasonable, and democratic mechanism for the definition and selection of a body of voting members, consistent with a modicum of due process, and ensuring listener-sponsors a voice in the management of the Pacifica charitable trust."

Immediately after Spooner was filed in California state court, the defendant Pacifica Foundation removed it to federal court. Removal is a legal mechanism by which defendants sued in state court may transfer the case to federal court under certain limited circumstances, such as when a suit involves questions of federal law or when defendants are sued in the state courts of a state in which they do not reside. When Pacifica's attorneys removed Spooner to federal court, they simultaneously removed the suit filed by dissident Board members Rob Robinson and Aaron Kriegel (see discussion below). Attorneys for the plaintiffs in both suits are confident that Pacifica has no basis for removing the suits and have petitioned the federal court to remand the suits back to state court in Alameda County. A hearing was held on Jan. 9 in San Francisco before U.S. District Judge Jenkins. KPFA supporters were encouraged by the hearing and are optimistic that Judge Jenkins will return the cases to state court. Until the removal issue is resolved, little or no action is likely to take place with either lawsuit; in essence, removing the suits bought Pacifica several months' worth of time and cost the plaintiffs a substantial amount of money in legal fees.

ROBERT ROBINSON AND RABBI AARON KRIEGEL V. PACIFICA FOUNDATION AND ITS EXECUTIVE COMMITTEE

Plaintiffs: Rob Robinson and Rabbi Aaron Kriegel, Pacifica Governing Board members Court: Alameda County Superior Court, Oakland, California Attorney: Kenneth N. Frucht, San Francisco, CA Date Filed: September 19, 2000 Contact for More Information: Robert Robinson at robrobin@erols.com

The Robinson suit was filed by two dissident members of the Pacifica Governing Board, who allege that the Executive Committee of the Governing Board bears responsibility for the illegal actions taken by the Foundation: according to the complaint, "Pacifica has been subverted by a small group of individuals who have acted to destroy any semblance of democratic participation, lawful governance, accountability and fiduciary stewardship in order to consolidate and centralize their own hold on power within Pacifica's national governing body." Robinson and Kriegel allege that the Executive Committee of the Governing Board has ignored their repeated requests to reinstate democratic procedures and to institute procedures to ensure Pacifica's accountability to the communities it serves.

The Robinson lawsuit contains many of the allegations enunciated in Adelson and Spooner, namely that Pacifica improperly disenfranchised the LABs through illegal bylaw amendments and that Pacifica has contravened its founding principles and California law through the gag rule, the KPFA lockout, and the like. In addition, the suit alleges that the Pacifica Foundation has violated federal law, which requires all organizations that receive funding from the Corporation for Public Broadcasting hold meetings that are open to the public except for in certain limited circumstances. Robinson and Kriegel contend that most Executive Committee meetings since 1995 have been illegally closed to the public.

The Robinson and Kriegel suit sets itself apart from the Adelson and Spooner suits because it alleges that the Executive Committee, in addition to disenfranchising the LABs and the community, has illegally excluded the other members of the Governing Board from the Foundation's deliberations and decision-making processes. Robinson and Kriegel contend that the Executive Committee, in violation of California law and the Pacifica bylaws, has "frequently met, conducted business, and made decisions affecting the governance, structure, and direction of Pacifica without reporting to the Board or making minutes of the Executive Committee meetings available to the Board or the public." Importantly, Robinson and Kriegel allege that the Executive Committee orchestrated the 1999 KPFA lockout without consulting and without the authorization of the other members of the Board. According to Robinson and Kriegel, their repeated requests to the Executive Committee for an accounting of the expenditures related to the lockout have been ignored, despite the fact that California law provides corporate directors the absolute right to inspect and copy all "books, records, and documents of any kind."

The Robinson suit includes three causes of action, which allege that by the actions detailed above, the members of the Executive Committee have violated (1) the California Corporations Code; (2) the Pacifica bylaws; and (3) their fiduciary duties as Directors. The suit asks the court to remove the members of the Executive Committee from the Governing Board; invalidate the bylaw amendments that disenfranchised the LABs; and allow Robinson and Kriegel to examine all of Pacifica's books, records, and documents. Shortly after Robinson was filed, Pacifica's attorneys removed it to federal court via the process outlined above in the discussion of the Spooner lawsuit. Robinson and Kriegel's attorneys are seeking to have the case returned to state court.

More on the Listener's Lawsuit

[From: http://home.pon.net/wildrose/remove.htm]

THE COMMITTEE TO REMOVE THE PACIFICA BOARD

This listener organized committee is dedicated to the task of removing the current Board of Directors of The Pacifica Foundation. See more on the Committee below, also join the Committee. We are an ad hoc committee of correspondents, with no formal structure or meetings. All are welcome to join!

Our commitment is to removing this destructive board so that an interim board can be installed that will work with the many interested parties across the country to amend The Pacifica Foundation bylaws to provide a democratic structure. A democratic structure is necessary to prevent a small elite group from ever again commandeering and diverting The Pacifica Foundation from its mission and purpose.

GROUNDS FOR REMOVAL OF THE BOARD:

The legal grounds for removal of directors of a California nonprofit public benefit corporation (such as The Pacifica Foundation) are: "fraudulent or dishonest acts or gross abuse of authority or discretion with reference to the corporation..." (Cal.Corp.Code §5223)

The Purpose of Our Lawsuit

The purpose of this action is to restore Pacifica to conformity with its founding purposes, as set forth in its Articles of Incorporation, to remove directors for breach of charitable trust and gross abuse of authority and discretion, as well as directors who have been unlawfully seated under unlawful bylaws, and to bring a democratic governance structure to Pacifica in conformity with the requirements of law and appropriate to the nature, size and operations of the Pacifica Foundation. We seek to safeguard Pacifica from ever again being subverted from within by a small conspiratorial cabal, and to vest the listener-sponsors with voting rights and legal membership status in the Pacifica Foundation. We believe the listener-sponsors, who have cherished, built and supported Pacifica for more than 50 years, are best-suited to insuring the faithfulness of Pacifica to its founding purposes as Pacifica enters its second half-century and the new "digital broadcasting" age.

REMEDIES WE ARE SEEKING FROM THE COURT

Removal of All Directors on the Executive Committee During the KPFA Lockout -- for breach of trust and gross abuse of authority -- and to assess damages against them in the amount of the extraordinary expenses incurred in the lockout. Those directors are Mary Frances Berry, June Makela, Andrea Cisco, Frank Millspaugh, Ken Ford, Michael Palmer, David Acosta, Robert Farrell. We are also seeking damages against former Executive Director Lynn Chadwick for her role in the lockout. (Because of their wrongdoing, none of these directors would be eligible for election as directors in the future - see below.)

Removal of All Directors Illegally Seated on the Board Since October 1999 -- The Pacifica Articles of Incorporation specify that there shall be 5 directors, only. The bylaws currently provide that the station boards (LABs) from the 5 stations have the right to elect the directors. There are currently 17 or 18 directors on the board, and through an illegal self-selection process the board has placed 8 directors on the board over the past year: Tomas Moran, Karolyn van Putten, Wendell Johns, John Murdock, Bertram Lee, Leslie Cagan, Beth Lyons, and Valrie Chambers. (These directors would be eligible for election as directors in the future - see below.)

Removal of Directors Illegally Seated for Other Reasons (there is some overlap here) -- David Acosta and Ken Ford are acting as directors after the expirations of their terms on 3/99 and 6/00, respectively. Frank Millspaugh, Andrea Cisco & Robert Farrell are acting as directors after having been voted off the board by the LABs that originally elected them.

Accounting -- We are asking for an accounting of all Pacifica funds from 1994 to current, as we believe there have been misappropriations of funds that should be recovered from those responsible.

Amendment of Bylaws & Election of New Directors -- We are asking for Court orders requiring those directors then still remaining in office, Pete Bramson, Rob Robinson and Rabbi Aaron Kriegel, plus two additional "interim directors", to carry out a year-long process of bylaws revisions to bring the bylaws into conformity with California nonprofit corporations law -- meeting with and forming committees in all five station areas including listeners, LABs & staff. The minimum requirements of these bylaws revisions would be that Pacifica station listener-sponsors be given legal "membership" status and voting rights in Pacifica -- the legal right to elect a majority of the LAB members for their station, and, perhaps, some or all of the directors, the right to remove directors and LAB members (by vote, rather than expensive lawsuits), the right to review Pacifica's books and records, the right to Pacifica's membership lists for proper communication with other members. Election of new directors would take place under the new bylaws within 1 year. (All of the Directors removed for Breach of Trust and Gross Abuse would be ineligible for election as directors.)

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THERE ARE CURRENTLY 2 OTHER LAWSUITS PENDING

1) The LAB Suit - filed July 13, 1999: Brought by 21 members of the Local Advisory Boards ("LABs") from 4 of the 5 Pacifica stations (all but KPFT in Houston), this suit requests the court to nullify the unlawful 1997 & 1999 bylaws changes that purported to abolish the LABs' rights to elect directors. This suit also brings a claim for damages for "unfair business practices" & seeks to remove any directors found culpable of wrongdoing.

2) The Directors' Suit - filed September 19, 2000: Brought by Pacifica Directors Rob Robinson (WPFW) and Rabbi Aaron Kriegel (KPFK), this suit seeks to remove the board executive committee and to restore the pre-1997 bylaws and the LABs' right to elect directors, and a court declaration regarding the board's illegal practice of extending directors' terms by appointing them as "officers".

All three suits share the common objectives of overturning the 1997 & 1999 illegal bylaws amendments & removing some of the directors. We believe that each suit amplifies and strengthens the other and that the presence of all three suits in court is a powerful trilogy -- and that it is essential that the listener-sponsors' interests be represented in court to assure that the ultimate solution to Pacifica's autocratic governance problems will involve broad listener-sponsor participation and oversight. Our three attorneys are working cooperatively to coordinate our actions.

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GROUNDS FOR REMOVAL OF THE BOARD:

The legal grounds for removal of directors of a California nonprofit public benefit corporation (such as The Pacifica Foundation) are: "fraudulent or dishonest acts or gross abuse of authority or discretion with reference to the corporation..." (Cal.Corp.Code §5223)

The factual bases for removal of the Board include, but are not limited to, the following well known acts (or ratification by silence):

(1) installing armed guards from IPSA International, a corporate intelligence and security service, at KPFA, where journalists report on international corporate crimes and abuses;

(2) conducting citizens arrests of peaceful demonstrators against the Board's actions;

(3) arresting KPFA Berkeley station personnel for "trespassing", and taking all regular programming off the air;

(4) conducting closed Board meetings and refusing to make Foundation books and records available for reasonable inspection by members;

(5) virtual elimination of local community affairs and news programming at KPFT Houston, contrary to the purposes stated in the Articles of Incorporation;

(6) engaging in "union busting" tactics at WBAI New York, contrary to the purposes stated in the Articles of Incorporation;

(7) purporting to amend the bylaws, by unlawful and dishonest acts, to create a self-perpetuating, self-selecting Board of Directors;

(8) soliciting contributions from the public under false pretenses with intent to use such funds for purposes contrary to those stated in the Articles of Incorporation;

(9) wasting Foundation assets and public contributions to carry out the above abuses and thereby threatening the Foundation with insolvency; and

(10) imposing a "gag rule" on personnel at the five radio stations to prevent them from alerting the class members to these alarming and unlawful acts.