Update on directors' inspection of
documents at WBAI, 4-21-05
Two Pacifica directors, Patty Heffley (WBAI) and LaVarn Williams (KPFA) requested to inspect documents at WBAI, which is their legal right, in late March 2005. Their request was denied by Dan Coughlin, Pacifica Executive Director. As of 4/22/05, they still have not been able to proceed with the inspection. Here are documents of further developments:
1. A letter from Richard Phelps to Dan Coughlin and Lonnie Hicks (Pacifica CFO) of 4/11/05, asking Coughlin to allow inspection ASAP. Phelps is acting as attorney for Heffley and Williams.
Initial documents are posted at pnb_directors_inspect4-5-05.html
Phelps letter to Coughlin and Hicks requesting permission to inspect WBAI documents
[In the spirit of transparency my clients, La Varn Williams and Patty Heffley have asked me to share the letter I hand delivered to Dan Coughlin on April 11, 2005 -- Richard Phelps]
Dan Coughlin, Executive Director
Re: Directors' Request to Inspect Foundation Records and Documents
Dear Mr. Coughlin and Mr. Hicks:
Please be advised that La Varn Williams and Patty Heffley have asked me to represent them in their attempt to exercise their rights and responsibilities as Directors. It is my understanding that you were notified by a communication dated March 24, 2005, that Ms. Williams and Ms. Heffley intended to inspect a short list of documents and financial records at WBAI on March 31, 2005. They chose this day since Ms. Williams was in New York at that time on other Foundation business. This notice was also given to Don Rojas, the station manager.
When they arrived they were denied access based on your authority. Your position was that you were waiting for a legal and policy review from the PNB. It is my understanding that such legal and policy reviews have been going on between you and the PNB and your lawyers for over one year. By now you must know the law. This does not appear to be a good faith reason for denying these Directors the right to inspect.
In a communication dated April 2, 2005 my clients advised you that they intended to make their inspection at WBAI again on April 4, 2005 at 9:00 am. They went to the station that morning and again were denied access to the records and documents they sought to inspect. The day before their second attempt, the PNB, with your encouragement, voted by a very close margin to ask my clients to wait until the Coordinating Committee (CC) could meet to make a decision on their inspection request. As I understand it, all members of the CC, except for one, were present and together the entire weekend and could have addressed this issue before Ms. Williams had to return to the Bay Area but chose not to do so. Again, this does not support a good faith argument for delaying the inspection.
As you know the bylaws and California law allows Directors the "absolute right to inspection". You have pointed out in your writings and verbal statements that the Director's right is not absolute if Directors have some adverse interest, conflict of interest or their request is unnecessarily burdensome. Your general statement may be true under certain circumstances, however, in all the discussions of this issue you have identified no facts or evidence of any kind to support a denial of their "absolute right to inspect". Without any facts or evidence your refusal to allow them to inspect is at odds with your bylaws and California law. Your refusal to allow the inspection puts you and the Directors that supported your refusal to allow the inspection in an adversarial position with the Foundation and the bylaws. It would be appropriate to hold you and those Directors responsible for any costs incurred by the Foundation given your denial of my clients' right to inspect with no factual basis whatsoever for your denial.
My clients undertook this inspection based on their concern for the Foundation and their awareness of their responsibilities as Directors. Based on your naked refusal to allow them to inspect they would be within their rights, both legally and morally, to have me file in Alameda County Superior Court for an Order requiring you to allow their inspection. In such an action the court will award fees and costs to my clients. My clients appear to be more concerned about expenses to the Foundation than you or the Directors that voted against allowing the inspection at your encouragement. One can only wonder why you and those Directors are against this exercise of fundamental Directors rights?
The appropriate thing to do, given that you have no factual basis for your opposition, would be to acknowledge my clients' rights and schedule the inspection ASAP. Your refusal to do so may subject you and the Foundation to unnecessary costs and/or embarrassment.
To avoid the legal expenses to the Foundation my clients are willing to wait a very short time for the CC to meet and approve the requested inspection. As of the writing of this letter it doesn't appear that a CC meeting has been formally and properly noticed. Please let me know if I am wrong on this fact and advise me of the date of the CC meeting. Ms. Williams and Ms Heffley want to make it clear that they do not acknowledge your right to make them wait and in the future they will not do so. Should the CC not meet promptly and approve their entire inspection at a time acceptable to my clients, a court order will be sought immediately. I also expect that you will pay for Ms. Williams' travel expenses since your illegal denials will require her to incur that additional expense, which would not have been necessary had you allowed the inspection on 3-31 or 4-4, 2005 as required by law. Should it appear that any records appear to have been altered, destroyed or hidden while you have delayed this inspection my clients will request the court to order a full forensic audit at your expense.
Please contact me immediately to resolve this situation before it gets any worse.
Very truly yours,
Discussion of Directors' Inspection on Pacifica National Coordinating Committee Conference call
The Coordinating Committee was established in early 2004 to deal with information requests from directors to management. According to the Phelps letter (above) the PNB voted to allow the Coordinating Committee to decide on the request to inspect documents at WBAI by directors Heffley and Williams.
Thanks to Myla Reson for transcribing.
The audio is available at http://www.kpftx.org/archive.htm#coordinating050419
April 19, 2005
Julie Chavez Rodriguez (PNB, KPFK) chair
Mark Roberts: Julie, can I get on the stack on that?
Mark Roberts: That would help.
Dan Coughlin: …yeah –
*Reimbursable expenses including petty cash vouchers
for the past year.
Those are the items.
Dave: It just says cash receipts.
Dan Coughlin: Yeah.
Fadi Saba: Since the New York PNB meeting, you have not checked with counsel? Is that what I’m understanding? That you still want to check with counsel?
Fadi Saba: So that was the third of April. Now it’s the twentieth of April. Seventeen calendar days. You have not checked during that period? I mean why are we having this meeting? I apologize for being so crude, Dan – but, none of us want to be part of this meeting when we don’t have information that we need to vote on.
Dan Coughlin: Yeah
Fadi: I really had expected to get that information if you’re going to bring that up. If you would have that information with you to bring forward.
Dan Coughlin: What information are you looking at – do you want, Fadi?
Fadi Saba: The questions that you bring up – which is counsel’s position.
Dan Coughlin: And what’s your concern? I’m sorry – I didn’t understand.
Fadi: Well, the concern is that this seems like a delay tactic – and I’m not really happy with that ..It’s quite simple
Dan: Yeah – I think – be careful Fadi – of rushing to wrong conclusions and ascribing motive and intent.
Fadi: I’m not done with my comments. Please, Dan – I don’t need to be interrupted. It’s been seventeen days. Counsel should have gotten back to you by now. If they haven’t there’s a problem with counsel. Now if you haven’t asked counsel – there’s an issue there – we have a meeting - so we need to make decisions – and decisions that are informed – or recommendations (I should say) to the PNB – so I think at the very least – that we are informed – I don’t think that there’s an issue of motive here – at all, Dan. So I reject your claim that there’s a motive here – it’s quite simple – I think that all of us would like to hear – if you bring up the issue of counsel – I think we’d like to hear what counsel has to say – I mean I think that’s logical.
Mark: Julie, can I get in on that?
Dave: I asked to be on the stack as well
Mark: Oh yeah, that’s right.
Julie: Mark and then Dave. Mark
Mark: I think Dave asked before me
Dave: And is this one of the options that was presented to us, or is this a different firm?
Dan: This is a totally different firm – totally different issue. The intent here is not to hire corporate counsel – the intent is merely to ask counsel to represent the foundation on this particular issue of law.
Mark Roberts: Dan, I’m sorry – Dave, were you…?
Screaming Baby: Whaaaa!!!! Whaaaa!!!!
Dave: That’s not me crying
Screaming Baby: Whaaaa!!!! Whaaaa!!!! Whaaaa!!!!Whaaaa!!!! Whaaaa!!!! Whaaaa!!!!
Dave: You know I can relate - if I really expressed how I feel...
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