[Kzyxtalk] Demand for Inspection - Reply to Campbell's Response

[Dennis OBrien]

Here is board president Campbell's response to the recent demand to inspect documents, along with the reply of those demanding inspection, in reverse order.
The proposals mentioned in the reply concern the use of the website to improve member communication and an increase in member participation in elections.  They were recently posted to this list.
We hope that the full board will consider our reply, acknowledge the right to inspect, and begin working on the underlying issues.
Dennis O'Brien
    ----- Forwarded Message -----
  From: Dennis OBrien <dennisobrien at sharejerusalem.com>
 To: Stuart Campbell <thales1104 at comcast.net>; MCPB Board <bod at kzyx.org>; "board at kzyx.org" <board at kzyx.org>
 Sent: Friday, June 26, 2015 1:20 PM
 Subject: Re: June 9, 2015 Demand for Inspection
   
Mr. Campbell:

Thank you for your email of June 23, 2015, responding to our written demand of June 9 for the inspection of documents.  We disagree with your analysis.

1.  The right of a member to inspect and copy records is not based solely on California Corporations Code Section 6330, which authorizes the inspection of membership records.  There is also Section 6333, which states:

"6333.  The accounting books and records and minutes of proceedings of the members and the board and committees of the board shall be open to inspection upon the written demand on the corporation of any member at any reasonable time, for a purpose reasonably related to such person's interests as a member."

In addition, the Bylaws of Mendocino County Public Broadcasting grant members the right to inspect any records that are not personnel records or otherwise protected by law:

"Member Inspection Rights:
Members shall have the right at all reasonable times to inspect all of MCPB’s records which are or should be maintained at the principal office except personnel records and other items that would violate the privacy of a specific individual or are otherwise protected under Federal or California law."

Thus the members' right to inspect does indeed extend to the categories of documents enumerated in the demand.

Please note that the Board of Directors does not have the power to amend the Bylaws to diminish any rights granted to members.  Only a vote of the membership can do that.  If you wish to oppose the demand, Corporations Code Section 6331 requires you to file a petition in Mendocino County Superior Court.  Under Section 6336, any director or officer who does not comply with the demand can be punished for contempt of court.  Under Section 6337, the organization can be held liable for members' reasonable costs and expenses, including attorneys' fees, in connection with any related legal proceedings.

2.  Thank you for acknowledging a director's absolute right to inspect any document under Corporations Code Section 6334.  Because the volume of documents may be too great for any one person to inspect, Mr. Sakowicz may be accompanied by an agent or attorney to assist him.  Since any given record will be inspected by the director or his attorney/agent, he will be in compliance with Section 6311 regarding such assistance.  Further, any non-disclosure agreement must be limited to records that cannot otherwise be inspected by members, i.e., "personnel records and other items that would violate the privacy of a specific individual or are otherwise protected under Federal or California law."  The Code does not require anyone to sign a blanket non-disclosure agreement as a condition for inspecting records, nor will they.

3.  Your objection concerning a need to create records is misplaced.  As stated in the Demand Letter:

"Please also note that a failure to present any of the requested items does not relieve you of the duty to make any and all of the other requested items available for inspection and/or copying.  We are not asking you to create any summaries.  But we do want access to all of the documents that are related to the above list, including any existing summaries, as part of the inspection of all records from 2007 to the date of inspection."

See also #6 below concerning your request for a delay.

4.  To the extent you have already produced specific documents to Mr. Sakowicz in response to a prior demand, you do not need to provide duplicates.  This exception does not apply if any member has demanded the same information.

5.  The alternatives you have offered to Messrs. Collins and O'Brien concerning their prior demands to inspect the membership rolls are unreasonable and too expensive.  They are based on an incorrect reading of a statute that bars releasing such information to third parties.  Members are not third parties.  In any event, prior efforts and negotiations are not a waiver of a member's right to inspect.

The efforts of Messrs. Sakowicz, Collins, and O'Brien to try to resolve the current crisis at MCPB/KZYX through negotiation with the board and discussion with the membership are not signs of bad faith but rather an attempt to avoid litigation.  Do not confuse patience and reason with weakness and ill-will.

6.  We see no need at this time to delay the inspection.  As noted above, the failure to have all records available by July 11 does not relieve you of the duty to allow inspection of those records that are available at that time.  If for any reason certain records are not available that the director or members believe are essential, then arrangements can be made to inspect them at a later time.  Asking us to wait until four weeks after some unspecified date is too uncertain.  However, we will consider a later date once the full board has met and considered this reply.

7.  As noted above, you do not need to produce the same documents to Mr. Sakowicz twice.  But the Demand Letter is more comprehensive and includes demands for inspection by members, demands which stand alone.  There is no "condition precedent" that must be met before MCPB complies with the current demand.

8.  Because Mr. Sakowicz has an absolute right of inspection as a director, his intentions are not an issue.  The only time intent is an issue is if you believe that the members' demand for access to membership information under Sections 6330 is for reasons not related to their interests as members.  If you believe so, then your remedy, as noted above, is to file a petition with the Superior Court to have that particular demand set aside.  But the members do have a legitimate reason for their demand, as stated in the Demand Letter:

"The purpose of the demand by the members is to review all financial transactions and data, and all membership and voting records and data, from the year prior to the employment of the current general manager, Mr. John Coate, up to and including the date of inspection, as there has been inadequate oversight by the board of directors concerning finances, memberships, and elections during his tenure.  The membership has a legitimate interest in the financial affairs of the corporation and the integrity of the voting rolls and election process."

9.  Thank you for your willingness to consider the proposals set forth by Mr. O'Brien, one of the Demand Letter signers.  If you adopt those specific proposals before July 10, he will drop his demand for inspection of the membership rolls, and will encourage the other signers to do likewise.  However, this will have no effect on the demand to inspect and possibly copy all other records, including financial.  Mr. O'Brien looks forward to working with the new Committee on Bylaws and Policies.  MCPB policies authorize the Board of Directors to name volunteer members to board committees.  The Board should consider naming some of the signers to certain committees - e.g., Mr. McKenty to the Finance Committee - as a way of engaging with the membership, promoting transparency of governance, and avoiding the need for future inspection demands.

Thank you again for you detailed response.  Please make sure that the full board has time to consider this reply before it meets next Monday.  We hope that the full board will acknowledge our right of inspection and take positive steps to address the underlying concerns.  If it does, we will consider a delay.  If not, then we will be at the main office on July 11 to proceed with the inspection.  Please do not remove any records or take any other action that might hinder the process.

Sincerely,

John Sakowicz
Doug McKenty
King Collins
Norm de Valle
Dennis O'Brien
 

     From: Stuart Campbell <thales1104 at comcast.net>
 To: Sakowicz <sako4 at comcast.net>; Doug McKenty <dougmck at gmail.com>; King Collins <king at greenmac.com>; Norman de Vall <ndevall at mcn.org>; Dennis OBrien <dennisobrien at sharejerusalem.com> 
 Sent: Tuesday, June 23, 2015 6:05 PM
 Subject: June 9, 2015 Demand for Inspection
   
  June 23, 2015       John Sakowicz Doug McKenty King Collins Norman deVall Dennis O’Brien    Gentlemen:    We are in receipt of your letter of June 9, demanding inspection of various records and asking various questions.  We reply as follows:    1.         The right of a member to inspect and copy records is limited to a narrow set of documents under Section 6330 of the California Corporations Code.  Most of the 30 categories of records listed in the letter are not ones that the Corporations Code gives a member the right to copy and inspect.    2.         Under Section 6334 of the Corporations Code, the right of a Director to inspect and copy records extends to all books, records and documents of every kind.  Mr. Sakowicz is a Director.  None of the other signatories to the letter is a Director.  Accordingly, Mr. Sakowicz, and only he, has the right to demand inspection of the documents in most of the listed categories.  We are aware that a Director may make an inspection personally, or he may send an agent or attorney to make the inspection and copy the documents if he chooses not to make the inspection himself. Corp. Code § 6311.  If Mr. Sakowicz chooses to send an agent or attorney in his stead, that agent or attorney may inspect and copy records instead of Mr. Sakowicz. We will require the agent or attorney to sign a non-disclosure agreement promising not to reveal confidential information except to a person who has also signed a  non-disclosure agreement.    3.         Nothing in the Corporations Code requires managers or Directors to create records that the corporation does not maintain.  The Corporations Code provides for inspection and copying of existing records.     4.         This is not the first request from Director Sakowicz to inspect and copy KZYX records.  In October 2014 Mr. Sakowicz sent then Board President Eliane Herring an e-mail requesting to inspect and copy records that pertained to nine separate questions.  In response to that e-mail, KZYX spent considerable time and resources to (1) determine if it had documents responsive to Mr. Sakowicz’ s questions; (2)  assemble the requested categories of documents; and (3) respond to Mr. Sakowicz outlining the documents in KZYX’s files that would be responsive and offering  them up for copying and inspection.  Copies of that correspondence are attached.  Mr. Sakowicz has not yet followed up on his demand and has not yet reviewed the documents gathered by KZYX.  This leads KZYX to question whether his request was made in good faith.    5.         This is also not the first request from Mr. Collins and Mr. O’Brien to KZYX based on alleged rights of inspection pursuant to the Corporations Code.  In July 2013 Mr. Collins sent a request for access to the members list.  KZYX responded to that request with a detailed letter on July 19, 2013, outlining a process by which that access could be obtained.  Formulating a careful response took KZYX considerable time and effort – time and effort that it could not spend on fundraising, attention to station infrastructure, or recruiting new programmers.  A copy of that letter is attached.   On January 19, 2015 Mr. O’Brien made a request for access to the members list.  KZYX sent a response to that request on February 1, 2015 and distributed a copy of the response at the Board meeting on February 2, 2015.  A copy of that response is attached.  Because of the complex interplay between the Corporation for Public Broadcasting rules and the Corporations Code, it took KZYX considerable time and effort, including engaging an outside attorney, to formulate a legally correct response to Mr. O’Brien’s request.  Again, that was time KZYX could not spend on fundraising and other productive activities.  Neither Mr. Collins nor Mr. O’Brien has ever followed up to take advantage of the process offered by KZYX.  This leads KZYX to question whether these requests were made in good faith.    6.         As you know, John Coate has resigned his position as Executive Director and General Manager effective July 1, 2015.  The station will need to rely heavily on him to assist in the transition before his last day.  Due to his impending departure, and the fact that he is the person with the best understanding of where and how KZYX records are maintained, it will be physically impossible for KZYX to deal with the extraordinary and burdensome demands in your June 9 letter in the near term.  We must recruit and train a new ED/GM and, at the same time, keep the station running.  As such, we are forced to put your request aside until we have hired a new ED/GM, and that person has had a reasonable amount of time on the job, at least 4 weeks, to get up to speed.  Then we will substantively respond to your requests, and provide access to records as appropriate. At such time as we have the resources to respond to this most recent request and its 30 categories of documents/information, we anticipate that it will again take us considerable time and effort to make a proper response and to gather the records.      7.         In the meantime, we stand by the offer made to Mr. Sakowicz on December 10, 2014 to inspect and copy certain documents responsive to his October 2014 request.  Once Mr. Sakowicz reviews the records he has already requested and that KZYX has already spent considerable time gathering, then he can assess what records, if any, he still wants to see.  In other words, the results of his first document request may inform any subsequent document requests.      8.         We think it not insignificant that Mr. Sakowicz has openly stated that his goal is to bring the station down.  He openly undercuts that station’s fundraising efforts (with his slogan “Starve the Beast”), and he has written numerous letters to local newspapers attacking the station.  Based on Mr. Sakowicz’ lack of follow-through on his document request last fall, we have a strong concern that the current request may just be another exercise in harassment and intimidation, intended to distract and demoralize KZYX.  We hope that is not the case.    9.         Finally, we note that one of the signatories to the June 9th letter, Dennis O’Brien, has offered to drop his demand to inspect and copy if the board/management adopts certain proposals he has put forth.  While we cannot promise to adopt Mr. O’Brien’s proposals immediately, we are open to considering them as part of the Board’s Committee on Bylaws and Policies.  That Committee will evaluate them and potentially present them, as refined by the Committee, to the full Board for further consideration and possible adoption.  The Committee will communicate directly with Mr. O’Brien as part of its process.                                                                            Very truly yours,                                                                               Stuart Campbell                                                                           President, MCPB Board of Directors    #yiv4884082237 #yiv4884082237 -- filtered {panose-1:2 4 5 3 5 4 6 3 2 4;}#yiv4884082237 p.yiv4884082237MsoNormal, #yiv4884082237 li.yiv4884082237MsoNormal, #yiv4884082237 div.yiv4884082237MsoNormal {margin:0in;margin-bottom:.0001pt;font-size:12.0pt;}#yiv4884082237 p.yiv4884082237MsoFooter, #yiv4884082237 li.yiv4884082237MsoFooter, #yiv4884082237 div.yiv4884082237MsoFooter {margin:0in;margin-bottom:.0001pt;font-size:12.0pt;}#yiv4884082237 span.yiv4884082237FooterChar {}#yiv4884082237 p.yiv4884082237DocId, #yiv4884082237 li.yiv4884082237DocId, #yiv4884082237 div.yiv4884082237DocId {margin:0in;margin-bottom:.0001pt;font-size:8.0pt;}#yiv4884082237 .yiv4884082237MsoChpDefault {font-size:12.0pt;}#yiv4884082237 .yiv4884082237MsoPapDefault {margin-bottom:6.0pt;}#yiv4884082237 filtered {margin:1.0in 1.0in 1.0in 1.0in;}#yiv4884082237 div.yiv4884082237WordSection1 {}#yiv4884082237  

   

  
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