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.
2. a partial transcript of the national Coordinating Committee meeting of 4/19/05 dealing with this issue.

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
Lonnie Hicks, Chief Financial Officer
Pacifica Foundation
1925 Martin Luther King Jr. Way
Berkeley, Ca. 94704

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,

Richard Phelps

*****

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
Pacifica National Board
Coordinating Committee
Conference Call

cast: Julie Chavez Rodriguez (PNB, KPFK) chair
Dan Coughlin (ED)
Mark Roberts (PNB, WPFW)
Dave Adelson (PNB, KPFK)
Fadi Saba (PNB, KPFA)
Screaming Baby

8:03
Dan Coughlin: Thanks. The other issue is the request from two directors for access to information at WBAI. The Board referred the matter (as best as I can recall) to the Coordinating Committee to reaffirm the existing policy and procedure. Their request as such is being referred to counsel who’s gonna look through that request. As an initial matter, I would say that we’re looking to resolve this situation as quickly as possible and hopefully within the next couple of weeks – it is my intention, at any rate, to give them – once counsel has looked at this request that we should move forward as expeditiously as possible to provide that information to the Directors – so that’s where that issue stands. The timeframe’s two weeks to wrap this up, and hopefully within the next couple of days we’ll have a – counsel will have looked at the request and made a recommendation. But again, my intention is to wrap this situation up as quickly as possible - follow the proper procedure as the board has asked and move forward as quickly as possible.

Mark Roberts: Julie, can I get on the stack on that?

Dave: Ditto

9:27
Mark Roberts: Yeah, I’ll just go ahead. I’m confused, Dan – to be honest with you. In New York, obviously, one of the things that I did believe is that that request should have gone through the process that we established – going through the coordinating committee and establishing – and as Dave said not ruling on it one way or the other but going forward with the right of the director to inspect and looking at the information that was requested: petty cash receipts and whatever. I know in New York - you had mentioned – that there was a problem with the time to generate the material or at least to have the material ready – because the directors are going to be copying it themselves - that was a concern, and you said that the business manager said that it would take seven days to do so. I still don’t understand why counsel is necessary to rule on the fact that these directors have the right to look at the petty cash receipts. What’s the problem? What in their information request requires the intervention or the opinion of counsel – and the related expense?

10:38
Dan Coughlin: Well, I just want to make sure that the best interests of the foundation are protected from all eventualities. I did note in the request that there was a request for access to personnel records – if I recollect correctly – around personal timesheets – so, I think it’s just prudent – in the best interests of the institution to make sure that we wouldn’t be violating any other laws or privacy rights or constitutional rights of anybody in providing this request.

11:12
Dave Adelson: Mark would it be helpful if I read – I have the specific request – I can read the items. Would that clarify?

Mark Roberts: That would help.

Dan Coughlin: …yeah –

11:18
Dave Adelson:

*Reimbursable expenses including petty cash vouchers for the past year.
*Cash receipts.
*Consultant contracts and related invoices for the year February 2004 through February 2005.
*Payroll sheets – bi-monthly, and contractor payments for the past year February 2004 through February 2005.
*Check ledger for FY ’04 to present
*Signed conflict of interest statements and disclosures.

Those are the items.

11:48
Mark: Cash receipts is just cash receipts? No time – just cash receipts?

Dave: It just says cash receipts.

11:53
Dan: Yeah, and I think that the business manager indicated in a communication that I saw to the general manager (forwarded to me) that they wanted seven business days to get all that material together – but yeah – the issue – I think that there are one or two items that you mentioned, Dave that it would probably just be appropriate to get legal counsel to look at and then – as I said earlier to try to move as expeditiously as possible in meeting this request.

12:20
Fadi Saba: So – Can I ask a question, Dan?

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?

12:40
Dan Coughlin: Yeah. And we’re checking it with counsel as quickly as we can. So counsel is reviewing it and…

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

15:09
Dave: Who’s our counsel? ‘Cause the last I remember you had talked about several different options at the PNB in NY – we had been supposed to consider that question, and we were not able to get to it. So, what’s the status of our counsel? Is this somebody we’ve retained? Are they temporary? Is this - - Are we - Who are they? And what’s the status of counsel?

15:30
Dan Coughlin: Yeah. We’re um – we don’t have a corporate counsel – you know we have a number of different attorneys who advise us on a range of matters from FCC to labor. In this particular case – since it’s such a specialized area of law – we have had to go out to find counsel who can handle this issue, and obviously – as you know – there is potential adverse legal action in this matter - so we felt that it was in the best interest of the institution to retain legal counsel with some expertise in this matter and so that is what we’ve done – um – today – and uh

16:05
Dave: So this is somebody we’ve retained just for the purpose of dealing with questions of this sort for the time being until we get corporate counsel?

16:13
Dan Coughlin: That’s right – so this is counsel for the foundation with the approval of the board chair – I’m sure that the board chair will report out to you on this issue.

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

17:25
Mark: I had a couple of things. First of all – I understand about the seventeen days – given the fact that we are getting special counsel – given the fact that the directors did appear at the station with counsel...

Screaming Baby: Whaaaa!!!! Whaaaa!!!! Whaaaa!!!!Whaaaa!!!! Whaaaa!!!! Whaaaa!!!!

Dave: You know I can relate - if I really expressed how I feel...