Committee to Remove the Pacifica Board  or Listeners' Lawsuit Index



BILL LOCKYER, STATE ATTORNEY GENERAL
TAYLOR S. CAREY, SPECIAL ASSISTANT ATTORNEY GENERAL
POB 944255 1300 I Street, 11th Floor
Tel 916/324-5501 Fax 916/323-2137
Sacramento, CA 94244-2550

DANIEL ROBERT BARTLEY, SBN 79586, for Relators
POB 686 7 Guisela Court Novato, CA 94948-0686
Tel 415/898-4741 Fax 415/898-4841

 
                 ENDORSED
                     FILED
           ALAMEDA COUNTY
                SEP 15 2000
      CLERK OF THE SUPERIOR COURT
      By  R. O. De Jesus          

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF ALAMEDA

 

THE PEOPLE OF THE STATE
OF CALIFORNIA, ex rel. CAROL
SPOONER, JOHN D. BIELLO,
CAROLYN M. BIRDEN, KURT
GUERDRUM, ARTURO
GRIFFITHS, AMBURN R. HAGUE,
LEIGH HAUTER, PATRICIA HEFFLEY,
BARBARA MacQUIDDY, RICK
POTHOFF, CHARLES P. H.
SCURICH, RONALD SWART,
individually and on behalf of
PACIFICA FOUNDATION,

Plaintiffs,

vs.

PACIFICA FOUNDATION, a
California non-profit public benefit
corporation and charitable trust,
MARY FRANCES BERRY, JUNE
MAKELA, FRANK MILLSPAUGH,
ANDREA CISCO, KEN FORD, ROB
ROBINSON, DAVID ACOSTA,
MICHAEL PALMER, ROBERT
FARRELL, AARON KRIEGEL,
PETER BRAMSON, KAROLYN
VAN PUTTEN, TOMAS MORAN,
WENDELL JOHNS, LESLIE
CAGAN, VALRIE CHAMBERS,
BERTRAM LEE, BETH LYONS,
JOHN MURDOCK, LYNN
CHADWICK, and DOES 1-100,
inclusive,

Defendants.
_________________________

 



Case No. 8 3 1 2 5 2 - 3  
VERIFIED COMPLAINT

[Code Civ. P. 803; Corp. C. 5142, 5151(a),
5223, 5250, 5520, 6320(a)(1), 6336, 9505; Govt. C.
12580, 12591, 12596, 12598; 11 Barclay's
Official Cal. Code Regs. 1-11]

1.Breach of Charitable Trust

2.Gross Abuse of Authority and Discretion

3.Usurpation of Office - Refusal to Vacate
Office after Expiration of Term

4.Usurpation of Office - Unlawful Election of
Directors in Excess of NumberPermitted

5.Usurpation of Office - Refusal to Vacate
Office after Removal by Voting Members

6.Accounting

7.Declaratory Relief Compelling Adoption of
Bylaws in Conformity with Law and Defin-
ing Membership

8.Declaratory Relief Compelling Specification
of Number of Directors

9.Declaratory Relief Compelling Adoption
and Implementation of Fair, Reasonable,
and Consistent Mechanisms for Demo-
cratically Nominating and Electing Directors

10.Unfair Competition

 

THE PEOPLE OF THE STATE OF CALIFORNIA, on the Relation of CAROL

SPOONER, JOHN D. BIELLO, CAROLYN M. BIRDEN, KURT GUERDRUM, ARTURO

GRIFFITHS, AMBURN R. HAGUE, LEIGH HAUTER, PATRICIA HEFFLEY, BARBARA

MacQUIDDY, RICK POTHOFF, CHARLES P. H. SCURICH, RONALD SWART,

individually, and on behalf of PACIFICA FOUNDATION, complain of Defendants, and each

of them, and for cause of action allege:

 

INTRODUCTION

1. The Pacifica Foundation was founded in 1946, shortly after World War II, by

conscientious objector, Lewis Hill, and other pacifists and war-resisters, in order to "bring about

a more pacific world." The founders conceived the idea of listener-sponsored radio in order to be

free from commercial control of program content. In his 1951 essay, "The Theory of

Listener-Sponsored Radio", Pacifica Founder Lewis Hill wrote: "Listener sponsorship is an

answer to the practical problem of getting better radio programs and keeping them." ... "[T]he

purpose of commercial radio is to induce mass sales. For mass sales there must be a mass norm,

and the activity must be conducted as nearly as possible without risk of departure from the

norm." Lewis Hill went on to write in his essay:

"The answer of the KPFA project on this point is not necessarily the only good
answer, but it is explicit. It requires that the people who actually do the
broadcasting should also be responsible for what and why they broadcast. In
short, they must control the policy which determines their actions. If I may, I
will emphasize that neither a "Public Be Damned" or a "Down With
Commerce" attitude enters into this formulation. The problem was, you
remember, not whether you as a listener should choose what you like or agree
with - as obviously you should and do - but how to get some genuinely
significant choices before you. Radio which aims to do that must express what
its practitioners believe to be real, good, beautiful, and so forth, and what they
believe is truly at stake in the assertion of such values. [...] Since values and
expressions as fundamental as this are what we must have to improve radio
noticeably, there is no choice but to begin by extending to someone the
privilege of thinking and acting in ways important to him. Whatever else may
happen, we thus assign to the participating individual the responsibility, artistic
integrity, freedom of expression, and the like, which in conventional radio are
normally denied him. KPFA is operated literally on this principle.

"Well, then, who in present-day America might be expected to permit such a
broadcasting group to earn a living at it, and on what terms?

"You already know the answer that KPFA proposes, and you may have
wondered why I choose to present it as a theory, as though there were
alternatives to listener sponsorship. Certainly when we develop the idea of
broadcasting to this point, the listener is the only one discernible who has a real
stake in the outcome. But while that may be an adequate reason for a
subscription plan, I think there is a better and more rewarding one.

"[...] Some self-determining group of broadcasters might find that no one, not
the least minority of the minority audiences, gave a hang for their product,
morally responsible or not. What then? Then, you will say, there would be no
radio station - or not for long - and the various individualists involved could go
scratch for a living. But it is the reverse possibility that explains what is most
important about listener sponsorship. When we imagine the opposite situation,
we are compelled to account for some conscious flow of influences, some
creative tension between broadcaster and audience that constantly reaffirms
their mutual relevance. Listener sponsorship will require this mutual stimulus
if it is to exist at all.

[...]

"KPFA happens to be the pilot experiment. No one there imagines he is the
artist or thinker whose talent ultimately must be attracted to radio. KPFA is the
beginning of a tradition to make that possible. The survival of this station is
based upon the necessity of voluntary subscriptions from 2 percent of the total
FM audience in the area in which it operates. We are hoping to succeed for
several reasons, not the least among which is the realization that our success
may inspire others to experiment for the eventual betterment of the broadcast
product."

2. This "experiment" succeeded for nearly 50 years, despite investigations into Pacifica

programming for alleged "subversion" by the House Un-American Activities Committee, the

Federal Bureau of Investigation, and the Senate Internal Security Subcomittee, and FCC

challenges to its licenses for alleged "communist affiliations." KPFA first began broadcasting on

April 15, 1949, and became a cherished resource for its listeners throughout the Bay Area.

Pacifica went on to acquire four other FM radio broadcast licenses: KPFK in Los Angeles in

1959, WBAI in New York was given to Pacifica by philanthropist Louis Schweitzer in 1960,

KPFT in Houston, Texas, went on the air in 1970, and WPFW in Washington, D.C., went on the

air in 1977.

3. In 1994-1995, Pacifica was again under attack in the halls of the United States

Congress, where Pacifica was denounced as "Hate Radio" and Senator Larry Pressler (R-S.D.)

demanded to know from all public broadcasting employees whether they had ever worked for

Pacifica, as part of an investigation into re-authorization of federal funding for the Corporation

for Public Broadcasting ("CPB"). The CPB is a private non-profit entity created by Congress to

develop noncommercial telecommunications services for the American people. Pacifica

currently receives about $1.7 million dollars annually in CPB funds. In response to this political

pressure, the CPB promoted Robert Coonrod to Chief Executive Officer. Mr. Coonrod's

background is in overseas propaganda with the Voice of America and United States Information

Agency. In response to pressure from the CPB, members of the Pacifica Board of Directors and

the Executive Director secretly made plans to divert Pacifica from its historic purpose and

tradition of providing politically controversial programming and cutting-edge alternative news

and information to the public. In order to carry out their secret plans, this small cabal set about

consolidating their power by illegal bylaws amendments destroying any semblance of democratic

process at Pacifica, packing the Pacifica board of directors with persons supportive of their plans,

firing station staff, issuing "gag orders" to station staff and local station advisory board members,

and, ultimately, conspiring to "shut down and reprogram" KPFA and/or sell KPFA and/or

WBAI.

PURPOSE OF ACTION

4. The purpose of this action is to restore Pacifica to conformity with its 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 elected

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. Relators 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. Relators 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.

 

STANDING AND AUTHORITY FOR ACTION

5. This action is brought in service of the public interest pursuant to: Code Civ. Proc.

803; Corp. C. 5142, 5223, 5250, and 5520; Govt. Code 12580, 12591, 12598; and 11

Barclay's Official Cal. Code Regs. 1-11. The Attorney General of the State of California, as

guardian of the public interest, supervises charitable entities and enforces their legal responsi-

bilities, including, but not limited to, each entity's fiduciary duties owed the public and each

entity's adherence to the purpose for which it was founded. On September 14, 2000, the

Attorney General of the State of California granted Relator status to Plaintiffs, via the following

letter to Relators' attorney, a true copy of which is attached hereto as "Exhibit A":

September 14, 2000

Daniel Robert Bartley, Esq.
Bartley Law Offices
P.O. Box 686
Novato, California 94948-0686

Dear Mr. Bartley:

The allegations set forth by Relators raise 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 consistent with the requirements of
the California Corporations Code. The answers to these questions require
judicial resolution.

Therefore, the application of Carol Spooner, John D. Biello, Carolyn
M. Birden, Kurt Guerdrum, Arturo Griffiths, Amburn R. Hague, Leigh Hauter,
Patricia Heffley, Barbara MacQuiddy, Rick Pothoff, Charles P. H. Scurich,
and Ronald Swart, individually and on behalf of Pacifica Foundation, for
Relator status to sue in quo warranto for breach of charitable trust, removal of
directors, accounting, declaratory and injunctive relief ordering revision of
bylaws and election of directors and definition of voting members, and such
other causes of action and relief as Relators deem appropriate, against the
Pacifica Foundation, and its past and current officers and directors, is hereby
granted.

Sincerely,

[signature]

TAYLOR S. CAREY
Special Assistant Attorney General

For BILL LOCKYER
Attorney General

 

6. At all times material hereto, Corp. C. 5142 was in full force and effect, and was

binding upon Defendants, and each of them. Such section permits legal action to enjoin, correct,

obtain damages for, or otherwise remedy a breach of a charitable trust. Section 5142 grants

standing to: (a) the corporation, or a member in the name of the corporation pursuant to 5710;

(b) an officer of the corporation; (c) A director of the corporation; (d) A person with a rever-

sionary, contractual, or property interest in the assets subject to such charitable trust; and (e) The

Attorney General, or any person granted relator status by the Attorney General.

7. Each of the Relators, at times pertinent hereto, is, and has been, a listener-sponsor of

PACIFICA FOUNDATION. Relators bring this action on behalf of the State of California, as

guarantor of the rights of the public and especially those members of the public who are listener-

sponsors of PACIFICA FOUNDATION and have a clear and direct interest in the charitable

purpose of PACIFICA. On information and belief, PACIFICA FOUNDATION has tens of

thousands of listener-sponsors, roughly 40% of whom reside in the State of California. By virtue

of their status as both sponsors and listeners, Relators and all other PACIFICA FOUNDATION

listener-sponsors have cognizable special, beneficial, proprietary and contractual interests in the

charitable trust run by PACIFICA FOUNDATION's directors. The listener-sponsors of

PACIFICA FOUNDATION are the intended beneficiaries of the PACIFICA FOUNDATION

charitable trust. The listener-sponsors have a direct and defined interest in the PACIFICA

charitable trust, distinct from that of the general public, in the enforcement of the charitable

obligations at issue. Relators constitute listener-sponsors from each of the five areas of the

Country where PACIFICA owns and operates listener-sponsored radio stations. Each of Relators

is, and at all times relevant hereto, has been, a listener-sponsor of PACIFICA FOUNDATION in

such Relator's particular listener area, donating funds for the support of PACIFICA FOUNDA-

TION. Each Relator is, and has been, the beneficiary of free-speech broadcasting by PACIFICA

FOUNDATION stations. Relators are members of the class that the charitable trust is designed

to benefit.

\\\

\\\

RELATORS

8.Lead Relator CAROL SPOONER is a citizen and resident of Santa Rosa, California,

and is a listener-sponsor of radio station KPFA, Berkeley, California. Relator JOHN D. BIELLO

is an adult citizen and resident of New York, New York, and is a listener-sponsor of radio station

WBAI. Relator CAROLYN M. BIRDEN is an adult citizen and resident of New York, New

York, and is a listener-sponsor of radio station WBAI, New York, New York. Relator KURT

GUERDRUM is an adult citizen and resident of Spring, Texas, and is a listener-sponsor of radio

station KPFT, Houston, Texas. Relator ARTURO GRIFFITHS is an adult citizen and resident of

Washington, D.C., and a listener-sponsor of radio station WPFW, Washington, D.C. Relator

AMBURN R. HAGUE is an adult citizen and resident of San Francisco, California, and is a

listener-sponsor of radio station KPFA, Berkeley, California. Relator LEIGH HAUTER is an

adult citizen and resident of The Plains, Virginia, and is a listener-sponsor of radio station

WPFW, Washington, D.C. Relator PATRICIA HEFFLEY is an adult citizen and resident of

New York, New York, and is a listener-sponsor of radio station WBAI, New York. Relator

BARBARA MacQUIDDY is an adult citizen and resident of Nevada City, California, and is a

listener-sponsor of radio station KPFA, Berkeley, California. Relator RICK POTHOFF is an

adult citizen and resident of Houston, Texas, and is a listener-sponsor of radio station KPFT,

Houston, Texas. Relator CHARLES P. H. SCURICH is an adult citizen and resident of both

Oakland, California, and San Clemente, California, and is a listener-sponsor of radio station

KPFA, Berkeley, California, and KPFK, Los Angeles, California. Relator RONALD SWART is

an adult citizen and resident of Long Beach, California, and is a listener-sponsor of radio station

KPFK, Los Angeles, California.

 

DEFENDANTS

9. At all times herein mentioned, Defendant PACIFICA FOUNDATION ("PACI-

FICA") was a nonprofit public benefit corporation and charitable trust, organized and existing

under the laws of the State of California, with offices and operations located in the City of

Berkeley, Alameda County, California. At all times mentioned herein until some time in

January, 2000, the Pacifica national headquarters offices were located at 1929 Martin Luther

King Jr. Way, Berkeley, Alameda County, California.

10. Defendants DAVID ACOSTA, MARY FRANCES BERRY, ROBERT FARRELL,

KEN FORD, JUNE MAKELA, FRANK MILLSPAUGH, and MICHEAL PALMER, collec-

tively referred to herein as "EXECUTIVE COMMITTEE", were directors of the Pacifica

Foundation during the spring and summer of 1999, when they secretly conspired together to

carry out the extraordinary abuses of authority and discretion alleged herein, leading up to and

including the shutdown of radio station KPFA. All of such directors continue to serve on the

board of directors and on the EXECUTIVE COMMITTEE of the Board except defendant JUNE

MAKELA who resigned in February 2000.

11. Defendants PETE BRAMSON (KPFA), ANDREA CISCO (WBAI), AARON

KRIEGEL (KPFK), and ROB ROBINSON (WPFW) at all times mentioned herein were and are

directors of the Pacifica Foundation, elected by the local station advisory boards of the respective

stations they represent.

12. Defendants WENDELL JOHNS, TOMAS MORAN and KAROLYN van PUTTEN

were purportedly elected as "at large" directors by the board of directors in October 1999, and

each of them continues to serve as directors of Pacifica Foundation.

13. Defendants LESLIE CAGAN, VALRIE CHAMBERS, BERTRAM LEE, BETH

LYONS, and JOHN MURDOCK were purportedly elected as "at large" directors by the board of

directors in February 2000 and each of them continues to serve as directors of Pacifica Foundation.

14. Defendant LYNN CHADWICK served as Executive Director of Pacifica Founda-

tion from 1997 until she resigned in February 2000.

15. Relators are unaware of the true names and capacities of the Defendants sued as

Does 1 to 100. Relators will amend their complaint when the true names and capacities have

been ascertained. Relators are informed and believe, and on that basis allege, that each Doe

Defendant is responsible in some actionable manner for the events, occurrences, injuries and

damages alleged herein.

16. All managerial employees of the Defendants, in doing the acts and things described

in this complaint, were acting within the course and scope of their agency and employment with

the Defendants, and each of them, with the knowledge and consent of the EXECUTIVE COM-

MITTEE Defendants, and each of them.

17. Relators are informed and believe, and on that basis allege, that at all relevant times

each EXECUTIVE COMMITTEE Defendant and defendant Executive Director, LYNN

CHADWICK, agreed and conspired together to do the acts complained of herein, and that each

co-conspirator committed the acts alleged herein in furtherance of their conspiracy.

 

FACTS

18. The Pacifica Foundation Articles of Incorporation, have, since amendments Filed

August 20, 1949, stated the purposes of Pacifica, at Article II, as follows:

"That the purpose of this corporation shall be:

(a) To establish a Foundation organized and operated exclusively for
educational purposes no part of the net earnings of which inures to the benefit
of any member of the Foundation, and no substantial part of the activities of
which is designed to carry on propaganda or otherwise attempt to influence
legislation.

(b) To establish and operate for educational purposes, in such manner that the
facilities involved shall be as nearly self-sustaining as possible, one or more
radio broadcasting stations licensed by the Federal Communications
Commission and subject in their operation to the regulatory actions of the
Commission under the Communications Act of 1934, As Amended.

(c) In radio broadcasting operations to encourage and provide outlets for the
creative skills and energies of the community; to conduct classes and
workshops in writing and producing of drama; to establish awards and
scholarships for creative writing; to offer performance facilities to amateur
instrumentalists, choral groups, orchestral groups and music students; and to
promote and aid other creative activities which will serve the cultural welfare
of the community.

(d) In radio broadcasting operations to engage in any activity that shall
contribute to a lasting understanding between nations and between the
individuals of all nations, races, creeds and colors; to gather and disseminate
information on the causes of conflict between any and all of such groups; and
through any and all means compatible with the purposes of this corporation, to
promote the study of political and economic problems and the causes of
religious, philosophical and racial antagonisms.

(e) In radio broadcasting operations to promote the full distribution of public
information; to obtain access to sources of news not commonly brought
together in the same medium; and to employ such varied sources in the public
presentation of accurate, objective, comprehensive news on all matters vitally
affecting the community."

19. Relators are informed and believe, and on that basis allege, that beginning as early

as 1994, in response to fears of losing Corporation for Public Broadcasting ("CPB") funding, or

in hopes of gaining more CPB funding as well as foundation grants, the executive director and

the directors Pacifica began a campaign of curtailing politically controversial news and public

affairs programming on Pacifica stations, adding popular "niche music" programming,

"professionalizing" air sound in a National Public Radio-type mimicry, reducing the numbers of

volunteer programmers, "union busting" to remove volunteer programmers from the staff unions,

reducing the diversity of arts, literature and cultural programming, and "pitching" Pacifica

programming to more a wider more affluent, more "mainstream" listening audience and to

corporate-funded foundation grant-makers. These plans were made in secret board "retreats" in

1994 and 1995. Anticipating that these plans would meet with strong opposition from the

listener-sponsors, station staffs, and local station boards, the Executive Committee of the board

issued a memo, dated July 15, 1995, advising that "vast changes" were about to occur, "freezing"

membership on local station advisory boards retroactively as of May 15, 1995, "superceding"

local station "bylaws", and advising all local station board members that they served at the "will

and direction" of the Pacifica board, that their main responsibility was to "carry out the

directives" of the national board, and advising local station board members to resign if they did

not feel they could assist Pacifica in its "present" mission. The board also issued "gag orders"

forbidding station personnel from mentioning the changes in Pacifica policy and direction on the

air on pain of firing, characterizing such discussions as "personnel matters" and "dirty laundry."

20. In 1997 Dr. Mary Frances Berry was elected Chair of the Pacifica Board of

Directors. Dr. Berry, simultaneously, was and continues to serve the Clinton administration as a

political appointee as Chair of the Federal Civil Rights Commission.

21. Each of the Pacifica stations has long had a local station board with broad

"advisory" powers of review and recommendation over station policies, programming,

fund-raising and budgets, and performance review of and recommendations regarding the hiring

of the station general managers. There is no formal mechanism for listener-sponsors to elect the

local station board members, and for many years these bodies have been self-selecting. In

addition, the Pacifica board deems itself empowered to dissolve these bodies, and has done so in

the past at least once. Currently, the local station boards are referred to as local advisory boards

("LABs"), and in order for Pacifica stations to be eligible to receive CPB funding the LABs are

required to carry out the functions of "Community Advisory Boards" under section 396(k)(8) of

the Federal Communications Act. Under the CPB guidelines for "minimum compliance" with

the Act, Pacifica is required to permit the LABs "to independently perform the following

activities:

(1) establish and follow its own schedule and agenda;

(2) review the programming goals established by station;

(3) review the service provided by the stations;

(4) review the significant policy decisions; and

(5) advise the governing board of the station whether the programming and other

policies of the station are meeting the specialized educational and cultural needs of the

communities served by the station, as determined by the advisory board.

The advisory board may make recommendations to the governing board to meet those

specialized needs."

22. Under the Pacifica bylaws since 1984, each of the five station LABs has had the

right to nominate and elect by majority vote directors to sit on the Pacifica national board of

directors. In addition, Pacifica policies and procedures documents long provided that each of the

LABs was entitled to elect two (2) directors, for a total of ten (10) LAB-elected directors, and

that "at large" directors not to exceed half the number of LAB-elected directors (i.e., not more

than five) could be elected by the board of directors, for a maximum number of Pacifica directors

not to exceed fifteen (15). Beginning in 1995, the national board began attempts to amend the

bylaws to eliminate the right of the LABs to elect directors or to reduce the 2/3rds majority of

LAB-elected directors. Several such bylaws amendments were proposed and defeated or tabled

between 1995 and 1997. In 1984 Article Three, Section 2, of the Pacifica bylaws was adopted by

the board, which read as follows:

"ELECTION OF DIRECTORS: In order to be elected, a member must receive
the nomination and vote of a majority of the station board which he represents,
unless such member is classified as an "at large" member, in which event he
must be elected by a 2/3 vote of the Board of directors of the Foundation,
voting by secret ballot, subject to approval of FCC council or FCC."

This bylaw was amended on 1/9/88 to change "he" to "s/he", but otherwise remained unchanged

until 2/9/91, when a final sentence was added which read, "Each station board shall nominate at

least one person of color as a permanent representative to the National Board."

23. On September 28, 1997, the board purported to amend the bylaws, changing Article

Three, Section 2, to read as follows:

"NOMINATION OF DIRECTORS: Candidates for Directors may be
nominated by: 1. Receiving a majority vote of a local advisory board. Of two
nominees from the local advisory board, at least one must be a person of color;
2. The Foundation's Board Development Committee."

Also on 9/28/97, the board purported to add a new Article Three, Section 3, which

read as follows:

"ELECTION OF DIRECTORS: In order to be elected as a director, a nominee
must receive the majority vote of those seated in a quorum."

These purported bylaws changes eliminating the LABs' right to elect directors were

never presented to the LABs for their vote of approval.

24. In late 1998, still not satisfied with the limitations on the powers of the LABs to

merely nominating directors, as opposed to electing directors, then Pacifica executive director

Pat Scott telephoned CPB President Robert Coonrod to ask if Pacifica was in compliance with

CPB funding requirements regarding community advisory boards. Mr. Coonrod responded in

a letter dated September 14, 1988, that:

"Based on my understanding, Pacifica Foundation's current governance
structure appears to be at variance with both the law and our guidelines. If it is
true that a majority of members making up Pacifica's Governing Board are also
members of Pacifica station Community Advisory Boards, that makes it
impossible for the two to remain distinct and independent."

At the time, the problem pointed out by Mr. Coonrod was that members of the Pacifica

board of directors were sitting concurrently on the LABs that had elected them to the national

board. However, rather than addressing that problem by requiring that members of the board of

directors resign from the LABs upon election to the board of directors, the board proposed a new

amendment to Article Three, Section 2, of the bylaws for adoption at its February 28, 1999

meeting, which read as follows:

"NOMINATION OF DIRECTORS: Candidates for Directors may be
nominated by the Foundation's Board Governance and Structure Committee."

When it became apparent that a majority of the board of directors would not vote to

approve this amendment, Pacifica's then new Executive Director, LYNN CHADWICK, again

sought assistance from the CPB in persuading the board with threats of de-funding from the

CPB. In a letter dated February 24, 1999, from Richard H. Madden, CPB vice president for radio,

four days before the scheduled Pacifica board meeting, Mr. Madden wrote to Lynn Chadwick:

"You have asked about how flexible CPB might be. That was the purpose of
our Sept. 14 letter. CPB made a first payment on Pacifica's FY 1999 grants on
the assumption that Pacifica would resolve this issue promptly. It is now five
months later and I am not aware that Pacifica has adopted a plan to achieve
compliance. What CPB wrote then, I repeat now: 'compliance with this portion
of the law gives little wiggle room to CPB in its interpretation.' If we are to
comply with the law and apply it equitably -- that is, as we have other grantees
-- than CPB has no choice but to withhold Pacifica's second FY 1999 payments
for each of its five stations, due for release in mid-March, unless the Pacifica
board chooses to bring itself into compliance with the requirements of the
law."

Based upon this threat of immediate withholding the second half CPB funding for 1999, the

Pacifica board of directors was stampeded into voting unanimously to adopt the proposed change

to Article Three, Section 2, of the bylaws at its February 28, 1999 meeting. Again, this bylaws

change, eliminating the LABs' right to nominate directors, was never presented to the LABs for

their vote of approval.

25. Relators are informed and believe, and on that basis allege, that, with the LABs

now completely toothless, Executive Director Lynn Chadwick acted swiftly to begin carrying out

the secret plans of the Board Executive Committee to stage a crisis, "shut down and reprogram"

KPFA, and remove the national headquarters from Berkeley to Washington, D.C. On March 31,

1999, KPFA General Manager Nicole Sawaya, who had been asking inconvenient questions

about Pacifica money and budgets, as well as programming and the direction of Pacifica, was

informed that her contract due to expire April 1st would not be renewed. When horrified KPFA

staff mentioned Ms. Sawaya's termination on the air, they were summarily fired. Members of the

local listening community began peacefully demonstrating outside the national offices in

Berkeley, and Ms. Chadwick conducted numerous citizens' arrests. When a delegation of

community members, including a Berkeley City Councilwoman and a local Catholic priest,

attempted to speak with Executive Director Chadwick about the growing crisis, Ms. Chadwick

claimed she had been cornered in her office by a "mob" that threatened her staff with racist

epithets. Armed security guards from IPSA International, Inc., were hired. IPSA International,

Inc., advertises on its Internet web page that it specializes in "corporate downsizing" and

"intelligence gathering" and that all of its personnel have "state and federal law enforcement

backgrounds." Personnel from other Pacifica stations were brought in to enable KPFA to

broadcast without its staff, including the General Manager of Pacifica's Houston radio station,

tapes from the Pacifica archives were secretly shipped from Los Angeles to KPFA, and special

equipment was ordered to enable KPFA to broadcast using alternative sources of programming,

without the KPFA staff.

26. On July 12, 1999, Executive Committee Member MICHEAL PALMER leaked a

memo that Pacifica planned to "shut down and reprogram" KPFA, and was considering the sale

of KPFA in Berkeley and/or WBAI in New York. The recipients of the leaked memo, Media

Alliance of San Francisco, held a press conference on July 13, 1999, and the story was widely

reported in the press. KPFA news and public affairs journalist, Dennis Bernstein, broadcast

taped portions of the press conference on his 5:00 o'clock "Flashpoints" program on July 13th.

27. Plaintiffs are informed, and believe and on that basis allege, that at the termination

of the Flashpoints program, Garland Ganter and IPSA agents pursued Mr. Bernstein through the

KPFA studios to the newsroom in order to eject him from the station for allegedly breaking the

"gag rule." The live 6 o'clock news program was interrupted with the sounds of Mr. Bernstein

and his struggle with the guards and Mr. Ganter. Mr. Ganter "pulled the plug"and took KPFA

live broadcasts off the air. Many community members, hearing the struggle live on the radio,

rushed to the station to defend it, and were arrested - along with staff members - for trespassing.

28. The KPFA employees and volunteers were locked out of the KPFA studios from

July 13, 1999, through August 1, 1999. The Pacifica Executive Committee used threats,

coercion, private armed guards, arrests, and force to carry out the lockout and their attempt to

"shut down and reprogram" KPFA. During the lockout thousands of community members

gathered in front of the station in protest, and on July 31, 1999, approximately 10,000 people

marched in the streets of Berkeley demanding re-opening of the station.

29. Relators are informed and believe, and on that basis allege, that the IPSA agents

occupied the KPFA premises 24 hours a day during the shutdown, and that these agents rifled

files, photographed and photocopied documents, videotaped, dusted for fingerprints, and

otherwise had access to and breached the priceless security and confidentiality of investigative

journalists' news sources and files during this period. Relators are informed and believe, and on

that basis allege, that Pacifica spent more than $500,000 on expenses related to the KPFA

shutdown, including expenses for the guards, public relations firms, and equipment installation.

Relators are informed and believe, and on that basis allege, that the Executive Committee failed

to take proper care to safeguard the KPFA station equipment during the shutdown and to insure

that qualified engineers familiar with the equipment were on hand to properly operate the

equipment during the shutdown, resulting in more than $50,000 in damages to KPFA equipment.

Relators are informed and believe, and on that basis allege, that former KPFA Station Manager,

Nicole Sawaya, and fired KPFA programmer, Larry Bensky, filed suit and/or union

administrative proceedings for breach of contract, wrongful termination, and other causes of

action, and that Pacifica has incurred attorneys' fees in defense of these actions and settlement

damages in an amount to be determined.

30. Relators are informed and believe, and on that basis allege, that sixteen

(16), or approximately one quarter of the Pacifica affiliate stations staged a one-day "Day

Without Pacifica" in October 1999 to protest the above-described actions by defendants, and that

several affiliate stations have cancelled their contracts with Pacifica, withheld payments to

Pacifica, or otherwise registered their dismay at the conduct of defendants.

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31. The original 1946 Pacifica Foundation Articles of Incorporation specify, at Article

VI, that the number of directors shall be five (5), and that special authority is delegated to the

members of the corporation to change the number of directors by adoption of a bylaw to that

effect. This provision of the Articles has never been amended.

32. A bylaw was adopted on 9/30/61, at Article Three, Section 1, MEMBERSHIP ON

THE BOARD OF DIRECTORS, C., which reads as follows:

"Number: There shall be such number of directors as the Board of Directors

shall from time to time decide."

Except for changing "Board of Directors" to "Governing Board", this bylaw has remained

unchanged since 1961.

33. Relators are informed and believe, and on that basis allege, that Pacifica Foundation

has repeatedly permitted directors to continue serving past the expiration of their terms.

Currently, Ken Ford, whose term expired in June 2000, and David Acosta, whose term expired in

March 1999, are serving as directors and members of the Executive Committee.

34. Relators are informed and believe, and on that basis allege, that in January 2000,

without prior notice to staff or the listener community, the Pacifica national headquarters office

was moved in the dead of night from its historic home in Berkeley to some undisclosed location

in Washington, D.C. The Pacifica Foundation web page reads as of the date of filing of this

Complaint: "To contact the Pacifica Foundation National Office, mail or telephone: Pacifica

Foundation c/o Haley, Bader & Potts, P.O. Box 3825, Arlington, VA 22203-9998, (703)

243-6844." Haley, Bader & Potts is a law firm.

35. At its meeting in October 1999, the board purported to elect three new "at large"

directors - TOMAS MORAN, KAROLYN van PUTTEN, and WENDELL JOHNS. These

directors were elected as a group, up or down, and were not elected individually by a 2/3rds

majority voting by secret ballot as required prior to the unlawful September 1997 bylaws

amendments.

36. At its meeting in February 2000, the board purported to elect five additional new

"at large" directors, JOHN MURDOCK, LESLIE CAGAN, BERTRAM LEE, VALRIE

CHAMBERS, AND BETH LYONS. This brings the total number of "at large" directors to nine,

including the Chair and the three "at large" directors elected in October of 1999, or four more "at

large" directors than the traditional maximum number of 5 "at large" directors permitted under

Pacifica policies and procedure since 1984. Again, these directors were elected as a group, up or

down, and were not elected individually by a 2/3rds majority voting by secret ballot as required

prior to the unlawful September 1997 bylaws amendments. As a result of this election, there are

currently 18 directors, three more than the traditional number of 15 allowed under Pacifica

policies and procedures since 1984, and thirteen more than the five directors specified in the

Articles of Incorporation.

37. Relators are informed and believe, and on that basis allege, that at the meeting of

the KPFK LAB in May 2000, pursuant to their rights under California Corporations Code

5222, the KPFK LAB members voted to remove director Robert Farrell who had been originally

elected to the Pacifica Board by them for a three-year term commencing February 1999. Mr.

Farrell continues to act as a director of the Pacifica Foundation.

38. Relators are informed and believe, and on that basis allege, that at the meeting of

the WBAI LAB in May 2000, pursuant to their rights under California Corporations Code

5222, the WBAI LAB voted to remove directors Andrea Cisco, who had originally been elected

by them for a three-year term commencing in March of 1998, and Frank Millspaugh, who had

originally been elected by them for a three-year term commencing in October 1994 and

re-elected by them for a three-year term commencing in March 1998. Ms. Cisco and Mr.

Millspaugh continue to act as directors of the Pacifica Foundation.

39. Relators are informed and believe, and on that basis allege, that at the May 2000

meeting of the KPFK LAB, the members of that LAB nominated and elected by majority vote

Dawud Kahlil-Ullah as a director of the Pacifica Foundation representing KPFK. The defendants

have refused to seat him as a director.

40. Relators are informed and believe, and on that basis allege, that at the May 2000

meeting of the KPFA LAB, the members of that LAB nominated and elected by majority vote

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Jay Imani as a director of the Pacifica Foundation representing KPFA. The defendants have

refused to seat him as a director.

41. Relators are informed and believe, and on that basis allege, that since 1994 there

have been irregularities in Pacifica accounts, including without limit, unexplained payments for

space not built in the construction of studios for station WPFW and requiring personnel at WBAI

to sign blank checks.

42. Relators are informed and believe, and on that basis allege that since June 1995

defendants have held all board finance committee meetings in secret and have refused to inform

the public, or even other directors, of the finances of Pacifica.

43. Defendants' practices relative to the Pacifica Board of Directors are defective,

because such were made without a modicum of due process. Defendants have in place no

democratic mechanism giving listener-sponsors a fair and reasonable opportunity to serve as

voting members. As a consequence, listener-sponsors - the intended beneficiaries of the

PACIFICA charitable trust - are thereby denied an effective voice in the process for selection of

PACIFICA FOUNDATION directors. This denial of an effective role to listener-sponsors is

inconsistent with the purpose of the PACIFICA charitable trust.

FIRST CAUSE OF ACTION:

BREACH OF CHARITABLE TRUST

(Against Defendants MARY FRANCES BERRY, DAVID ACOSTA, ROBERT FARRELL,

KEN FORD, JUNE MAKELA FRANK MILLSPAUGH, MICHEAL PALMER, LYNN

CHADWICK, and DOES 1-100)

44.. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

45. At all times material hereto, Corp. C. 5142 and Govt. C. 12591, were in full

force and effect, and were binding upon Defendants, and each of them. Corp. C. 5142 permits

legal action to enjoin, correct, obtain damages for, or otherwise remedy, a breach of a charitable

trust. Govt. C. 12591 require the Attorney General to supervise the activities of trustees

administering trusts of a charitable nature, to protect the interests of beneficiaries of a charitable

trust, and to institute suit when the Attorney General has concluded after investigation that there

has been a breach of a charitable trust or a departure from the general purposes of which the

corporation was formed. Nonprofit public benefit corporations are deemed under California law

to be impressed with a charitable trust to carry out the purposes stated in their Articles of

Incorporation.

46. By virtue of their conduct set forth above, the EXECUTIVE COMMITTEE

Defendants, MARY FRANCES BERRY, DAVID ACOSTA, ROBERT FARRELL, KEN

FORD, JUNE MAKELA FRANK MILLSPAUGH, and MICHEAL PALMER, together with

Defendant LYNN CHADWICK, Executive Director, have conspired together in bad faith to

engage in, and continue to engage in, extraordinary violations of the express purposes of the

Pacifica Foundation and the charitable trust managed by Pacifica Foundation. By virtue of their

conduct set forth above, the EXECUTIVE COMMITTEE Defendants and LYNN CHADWICK

have acted in a manner contrary to the best interests of the corporation and lacking such care,

including reasonable inquiry, as an ordinary prudent person in a like position would use under

similar circumstances. These actions have perverted, and continue to pervert, the founding

purposes of Pacifica and the charitable intent of the founders and of the listener-sponsors over the

past 50 years. Further, these actions threaten the continued long-term viability of the Pacifica

Foundation and the trust. The EXECUTIVE COMMITTEE defendants and LYNN CHADWICK

have committed a breach of charitable trust.

47. The breach of charitable trust by the EXECUTIVE COMMITTEE Defendants and

LYNN CHADWICK, and each of them, has caused, and continues to cause, significant

irreparable injury to the business and reputation of PACIFICA FOUNDATION and monetary

damages to the PACIFICA charitable trust in excess of $500,000, according to proof.

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SECOND CAUSE OF ACTION

REMOVAL OF DIRECTORS - GROSS ABUSE OF AUTHORITY AND DISCRETION

(Against Defendants MARY FRANCES BERRY, DAVID ACOSTA,

ROBERT FARRELL, KEN FORD, FRANK MILLSPAUGH, and MICHEAL PALMER)

48. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

49. At all times material hereto, Corp. C. 5223 was in full force and effect, and was

binding upon Defendants, and each of them. Such statute permits the Attorney General to

prosecute an action to remove from office any director in case of gross abuse of authority or

discretion with reference to the corporation, and to bar from reelection any director so removed

for a period prescribed by the court.

50. By virtue of their above-described conduct, the EXECUTIVE COMMITTEE

Defendants - MARY FRANCES BERRY, DAVID ACOSTA, ROBERT FARRELL, KEN

FORD, FRANK MILLSPAUGH, and MICHEAL PALMER - committed gross abuse of their

authority and discretion. Relators are informed and believe, and thereon allege, that the

EXECUTIVE COMMITTEE defendants' conduct will continue if they are allowed to remain

members of the board of directors.

51. The EXECUTIVE COMMITTEE Defendants' gross abuse of authority and

discretion has caused, and continues to cause, significant irreparable damage and injury to the

PACIFICA charitable trust and to its intended beneficiaries, those members of the public who are

listener-sponsors.

 

THIRD CAUSE OF ACTION:

REMOVAL OF DIRECTORS - USURPATION OF OFFICE - REFUSING

TO VACATE OFFICE AFTER EXPIRATION OF TERM

(Against Defendants KEN FORD and DAVID ACOSTA)

52. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

53. At all times material hereto, Corp. C. 5520 and Code Civ. P. 803 were in full

force and effect, and were binding upon Defendants, and each of them. Consistent with Corp. C.

5520, director positions in California public benefit corporations are supposed to be filled via

"reasonable nomination and election procedures" available to the members, given the nature,

size, and operation of the corporation. Consistent with Code Civ. P. 803, an action must be

brought by the Attorney General, in the name of the People, upon his own information, or upon a

complaint of a private party, against any person who usurps, intrudes into, or unlawfully holds or

exercises any public office, civil or military, or any franchise, or against any corporation, either

de jure or de facto, which usurps, intrudes into, or unlawfully holds or exercises any franchise

within this state.

54. By virtue of their above-described conduct, Defendants KEN FORD and DAVID

ACOSTA each usurped, intruded into, and unlawfully held and exercised his respective Director

office, and continues to do so, by exercising the power of a director past the date of expiration of

his term Relators are informed and believe, and thereon allege, that these Defendants' conduct

will continue if they are allowed to remain members of the board of directors.

55. Defendants' usurpation of office has caused, and continues to cause, significant and

irreparable damage and injury to the PACIFICA charitable trust and to its intended beneficiaries,

those members of the public who are listener-sponsors.

 

FOURTH CAUSE OF ACTION

REMOVAL OF DIRECTORS - USURPATION OF OFFICE - UNLAWFUL ELECTION

OF DIRECTORS IN EXCESS OF THE NUMBER SPECIFIED IN THE ARTICLES OF

INCORPORATION AND IN VIOLATION OF THE BYLAWS AND POLICIES AND

PROCEDURES OF PACIFICA FOUNDATION.

(Against Defendants MORAN, van PUTTEN, JOHNS, CAGAN,

CHAMBERS, LEE, LYONS, and MURDOCK)

56. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

57. At all times material hereto, Corp. C. 5151, 5520 and 5527 and Code Civ. P.

803 were in full force and effect, and were binding upon Defendants, and each of them. Consis-

tent with Corp. C. 5520, director positions in California public benefit corporations are sup-

posed to be filled via "reasonable nomination and election procedures" available to the members,

given the nature, size, and operation of the corporation. Corp C. 5151 requires that bylaws shall

set forth (unless such provision is contained in the articles) the number of directors of the

corporation; or that the number shall not be less than a stated minimum nor more than a stated

maximum. Consistent with Code Civ. Proc. 803, an action must be brought by the Attorney

General, in the name of the People, upon his own information, or upon a complaint of a private

party, against any person who usurps, intrudes into, or unlawfully holds or exercises any public

office, civil or military, or any franchise, or against any corporation, either de jure or de facto,

which usurps, intrudes into, or unlawfully holds or exercises any franchise within this state.

58. By virtue of their above-described conduct, Defendants TOMAS MORAN,

KAROLYN VAN PUTTEN, WENDELL JOHNS, LESLIE CAGAN, VALRIE CHAMBERS,

BERTRAM LEE, BETH LYONS, and JOHN MURDOCK usurped, intruded into, and unlaw-

fully held and exercised his or her respective office of Director, and continue to do so, by

purportedly being elected in October 1999 or February 2000 as directors when the election was in

violation of the requirement of the Articles of Incorporation requiring that there shall be five (5)

directors.

59. By virtue of their above-described conduct, each of the Defendants CAGAN,

CHAMBERS, LEE, LYONS, and MURDOCK usurped, intruded into, and unlawfully held and

exercised his or her respective office of Director, and continues to do so, by purportedly being

elected in February 2000 as director when the election was in violation of bylaws requirements

for election of "at large" directors by secret ballot, and in violation of Pacifica policies and

procedures limiting the number of directors to a maximum of fifteen (15) and limiting the

number of "at large" directors to a maximum of five (5).

60. The purported election of such directors was in violation of Corp. C. 5520 by

being an election conducted without "reasonable nomination and election procedures" available

to the members, given the nature, size, and operation of the corporation; and of Corp C. 5151

being elected for the purpose of packing the board without a set number of Directors or a stated

minimum and maximum. Relators are informed and believe and thereon allege that the

Defendants' conduct will continue if they are allowed to remain members of the board of

directors.

61. Defendants' usurpation of office has caused, and continues to cause, significant and

irreparable damage and injury to the PACIFICA charitable trust and to its intended beneficiaries,

those members of the public who are listener-sponsors.

 

FIFTH CAUSE OF ACTION

REMOVAL OF DIRECTORS - USURPATION OF OFFICE -

REFUSAL TO VACATE OFFICE

(Against Defendants ROBERT FARRELL, ANDREA CISCO, and FRANK MILLSPAUGH)

62. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

63. At all times material hereto, Corp. C. 5222 and Code Civ. P. 803 were in full

force and effect, and were binding upon Defendants, and each of them. Corp C. 5222

authorizes removal of directors without cause by majority vote of the class or geographical

grouping of members that elected the director. Consistent with Code Civ. P. 803, an action

must be brought by the Attorney General, in the name of the People, upon his own information,

or upon a complaint of a private party, against any person who usurps, intrudes into, or

unlawfully holds or exercises any public office, civil or military, or any franchise, or against any

corporation, either de jure or de facto, which usurps, intrudes into, or unlawfully holds or

exercises any franchise within this state.

64. By virtue of their above-described conduct, Defendants ROBERT FARRELL,

ANDREA CISCO, and FRANK MILLSPAUGH usurped, intruded into, and unlawfully held and

exercised his or her respective Director office, and continue to do so, by refusing to vacate the

office of director after having been removed without cause in May 2000 pursuant to Corp C.

5222 by the local advisory boards that elected them.. Relators are informed and believe and

thereon allege that the Defendants' conduct will continue if they are allowed to remain members

of the board of directors.

65. Defendants' usurpation of office has caused, and continues to cause, significant and

irreparable damage and injury to the PACIFICA charitable trust and to its intended beneficiaries,

those members of the public who are listener-sponsors.

 

SIXTH CAUSE OF ACTION

ACCOUNTING

66. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

67. At all times material hereto, Corp. C. 6320(a)(1) was in full force and effect, and

was binding upon Defendants, and each of them. Such section requires Defendants to keep

adequate and correct books and records of account.

68. At all times material hereto, Corp C. 6336 was in full force and effect, and was

binding upon Defendants, and each of them. Such section requires Defendants to permit lawful

demands of any member to inspect the corporation's membership lists, books, records, or

minutes, and permits the Court to appoint one or more competent inspectors or independent

accounts to audit the corporations's financial statements, properties, funds, and affairs and to

report on them in the manner the Court directs. Defendants clearly have applied hundreds of

thousands of dollars in PACIFICA FOUNDATION funds toward purposes inconsistent with

supporting the free-speech purpose that is the very purpose of existence of PACIFICA

FOUNDATION. Moreover, Defendants, at all times pertinent hereto, have concealed from

directors as well as listener-sponsors specifics about the expenditure of the millions of dollars in

funding provided by the listener-sponsors.

69. As a proximate result of such conduct by Defendants, and each of them, the People

of the State of California, and the PACIFICA charitable trust's listener-sponsors in particular,

have sustained, and continue to sustain, serious and irreparable injury and damage. Declaratory

relief is justified, in the nature of compelling Defendants to submit to a full accounting of their

use and disposition of funds from January 1, 1994, to present, or such other period as the Court

finds is reasonable, and to compel Defendants to henceforth promptly make available their books

and records to reasonable requests therefor by directors, members and listener-sponsors.

 

SEVENTH CAUSE OF ACTION

DECLARATORY RELIEF COMPELLING ADOPTION OF

BYLAWS IN CONFORMITY WITH LAW AND IMPLEMENTATION

OF A FAIR, REASONABLE, AND CONSISTENT MECHANISM FOR

DEFINING AND DEMOCRATICALLY SELECTING VOTING MEMBERS

70. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

71. At all times material hereto, Corp. C. 5036, 5132 and 5520 were in full force and

effect, and were binding upon Defendants, and each of them. Consistent with Corp. C. 5520,

director positions in California public benefit corporations are supposed to be filled via

"reasonable nomination and election procedures" available to the members, given the nature,

size, and operation of the corporation. Consistent with Corp C. 5036 "member" means any

person who pursuant to a specific provision of a corporation's articles or bylaws, has the right to

vote for the election of a director or directors, and "member" also means any person who is

designated in the articles or bylaws as a member and, pursuant to a specific provision of a

corporation's articles or bylaws, has the right to vote on changes to the articles or bylaws.

Consistent with Corp. C. 5132, the articles of incorporation may set forth classes of

membership or any other provision not in conflict with law including any provision which is

required or permitted to be stated in the bylaws. The duly adopted 1984 bylaws of PACIFICA

FOUNDATION gave to the local advisory boards the specific right to vote for directors thereby

making the local advisory board members statutory members of the corporation pursuant to Corp

C. 5036. In addition, the Articles of Incorporation in Article VI establish a specific provision

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that delegates to the "members" of the corporation the right to vote on changes to the number of

"directors" of the corporation thus establishing a class of members separate from the directors..

72. By virtue of their above-described actions, Defendants have failed, and fail, to

establish or maintain a fair, reasonable, and consistent mechanism for defining the members of

the corporation, as distinct form the directors of the corporation, and for democratically selecting

voting members, with a modicum of due process.

73. PACIFICA FOUNDATION's current membership selection procedures for the

statutory members (consisting of the local advisory board members) are fundamentally unfair,

because they give listener-sponsors no voice in the selection of such members or the nomination

or election of directors, considering the significant nature, size and operations of the corporation.

74. The absence of a fair, reasonable, and consistent mechanism for the defining and

selecting voting members who have the right to elect directors and to change the number of

directors has constituted, and continues to constitute, a violation of Corp. C. 5036, 5132,.and

5520..

75. As a proximate result of such conduct by Defendants, and each of them, the People

of the State of California, and the PACIFICA charitable trust's listener-sponsors in particular,

have sustained, and continue to sustain, serious and irreparable injury and damage. Declaratory

relief is justified, in the nature of compelling Defendants to adopt a fair, reasonable, and

consistent mechanism for defining and democratically selecting voting members of the

PACIFICA. FOUNDATION.

 

EIGHTH CAUSE OF ACTION

DECLARATORY RELIEF COMPELLING ADOPTION OF BYLAWS IN

CONFORMITY WITH LAW AND IMPLEMENTATION OF A FAIR, REASONABLE,

AND CONSISTENT MECHANISM FOR SETTING FORTH THE NUMBER OF

DIRECTORS OF THE CORPORATION, OR THAT THE NUMBER OF DIRECTORS

SHALL BE NOT LESS THAN A STATED MINIMUM NOR MORE

THAN A STATED MAXIMUM.

76. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

77. At all times material hereto, Corp. C. 5151(a) was in full force and effect, and was

binding upon Defendants, and each of them. Consistent with such statute, the Bylaws of a

California public benefit corporation are supposed to set forth the number of directors of the

corporation (unless such provision is contained in the articles, in which case it may only be

changed by an amendment of the articles), or that the number of directors shall not be less than a

stated minimum nor more than a stated maximum. Article VI of the Articles of Incorporation

state, in relevant part, "That the number of directors of this corporation . . . shall be five (5) . . .

That special authority is hereby delegated to the members of this corporation to change the

number of directors thereof at any time by the adoption of a By-law to that effect." Additionally,

Corp C. 5151(b) requires that once members have been admitted any change in the fixed

number of directors or the maximum or minimum number or changing from a fixed to a variable

board or vice versa may only be adopted by approval of the members. Article VI of the Pacifica

Articles of Incorporation, providing for a change in the number of directors to be made by a vote

of the members by the adoption of a bylaw, appears to conflict with Corp C. 5151(a) which

requires amendment to the articles of incorporation in order to change the fixed number of

directors. Changes in the number of directors have never been voted on by members of the

corporation either as an amendment to the Articles or to the bylaws. The bylaws do not state a

fixed number of directors nor do they state a minimum and maximum of director and thus do not

comply with Corp. C. 5151(a). The Articles state a fixed number of five (5) directors, and the

Defendants are not in compliance with the Articles of Incorporation. The Defendants have and

continue to expand the number of directors by packing the board with persons who have no

demonstrated experience or commitment to the purposes of the PACIFICA FOUNDATION, and

instead have demonstrated past experience in organizations and business that are antithetical to

those purposes.

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78. By virtue of their above-described actions, Defendants have failed, and continue to

fail, to establish or maintain a fair, reasonable, and consistent mechanism for setting forth the

number of directors other than five directors.

79. As a proximate result of such conduct by Defendants, and each of them, the People

of the State of California, and the PACIFICA charitable trust's listener-sponsors in particular,

have sustained, and continue to sustain, serious and irreparable injury and damage. Declaratory

relief is justified, in the nature of the Court resolving the apparent contradiction between Article

VI and Corp C. 1 5151(a) and declaring whether the legal number of directors is five (5) or

another number or by compelling Defendants to adopt a fair, reasonable, and consistent

mechanism for setting the number of directors (including defining and democratically selecting

the members who have the right to vote on the number of directors).

 

NINTH CAUSE OF ACTION

DECLARATORY RELIEF COMPELLING ADOPTION OF BYLAWS IN

CONFORMITY WITH LAW AND IMPLEMENTATION OF A FAIR, REASONABLE,

AND CONSISTENT MECHANISM FOR DEFINING AND DEMOCRATICALLY

NOMINATING AND ELECTING DIRECTORS

80. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

81. At all times material hereto, Corp. C. 5520 was in full force and effect, and was

binding upon Defendants, and each of them. Consistent with such statute, director positions in

California public benefit corporations are supposed to be filled via "reasonable nomination and

election procedures" available to the members, given the nature, size, and operation of the

corporation. In addition, at all times material hereto, Corp. C. 5036 was in full force and effect,

and was binding upon Defendants, and each of them. Consistent with such statute "member"

means any person who, pursuant to a specific provision of a corporation's articles or bylaws, has

the right to vote for the election of a director or directors. In 1984 a bylaw was adopted that gave

the members of the local advisory boards the right to vote for the election of directors. The

members of the local advisory board have never adopted a change or amendment to that

provision. The Defendants, without seeking vote of approval of the statutory corporate members,

purported to adopt by their own exclusive vote an amendment to the bylaws that takes away the

rights of the local advisory board members to nominate and elect the directors from their station

areas.

82. By virtue of their above-described actions, Defendants have failed, and fail, to

establish or maintain a fair, reasonable, and consistent mechanism for defining and demo-

cratically nominating and electing a finite number of directors, given the huge size of the corpor-

ation. PACIFICA FOUNDATION's current membership selection procedures and director

election procedures are fundamentally unfair, because they give listener-sponsors no voice in the

nomination or election of directors, considering the significant nature, size and operations of the

corporation.

83. The absence of a fair, reasonable, and consistent mechanism for the defining and

selecting of voting members and for the nominating and electing directors has constituted, and

continues to constitute, a violation of Corp. C. 5520, 5151..

84. As a proximate result of such conduct by Defendants, and each of them, the People

of the State of California, and the PACIFICA charitable trust's listener-sponsors in particular,

have sustained, and continue to sustain, serious and irreparable injury and damage. Declaratory

relief is justified, in the nature of a declaration of the rights of the local advisory board members

to nominate and elect directors pursuant to the bylaws and compelling Defendants to adopt in

conjunction with the local advisory board members and any other defined members as the Court

may declare, a fair, reasonable, and consistent mechanism for defining and democratically

selecting voting members and for democratically nominating and electing a finite number of

directors, consistent with the substantial nature, size, and operations of PACIFICA.

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TENTH CAUSE OF ACTION

UNFAIR COMPETITION

(Against Defendants BERRY, ACOSTA, FARRELL, FORD, MAKELA,

MILLSPAUGH, PALMER, CHADWICK, and DOES 1-100)

85. The allegations of the above paragraphs 1 through 43 are incorporated herein by

this reference.

86. At all times material hereto, the Unfair Competition Law, Bus. & Prof. Code

17200, was in full force and effect and was binding upon Defendants, and each of them..

"Unfair competition" means "any unlawful unfair or fraudulent business act or practice . . . ."

A business practice constitutes unfair competition if it is forbidden by any law, be it civil or

criminal, federal, state, or municipal, statutory, regulatory, or court-made, or if it is unfair,

that is, if it offends an established public policy or is immoral, unethical, oppressive, unscru-

pulous or substantially injurious to consumers.

87. By virtue of their above-described conduct, Defendants engaged in unfair

competition, in violation of the Unfair Competition Law. Defendants' above-described conduct

is forbidden by law or is unfair, i.e., offensive to established public policy, immoral, unethical,

oppressive, unscrupulous, and substantially injurious to consumers.

88. Defendants' unfair competition has caused, and continues to cause, significant and

irreparable damage and injury to the PACIFICA charitable trust and to its intended beneficiaries,

the general public, especially those members of the public who are listener-sponsors

.

PRAYER FOR RELIEF

WHEREFORE, the following relief is requested:

1. Judgment requiring immediate removal of the EXECUTIVE COMMITTEE

Defendants BERRY, ACOSTA, FARRELL, FORD, MILLSPAUGH, and PALMER as directors

of Pacifica Foundation for their breach of charitable trust , and prohibiting Defendants, and each

of them, from running for or occupying any PACIFICA FOUNDATION director position for a

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period of six (6) years, or such other reasonable period of time as may be determined by the

Attorney General and the Court.

2. Judgment requiring immediate removal of the EXECUTIVE COMMITTEE

Defendants BERRY, ACOSTA, FARRELL, FORD, MILLSPAUGH and PALMER for gross

abuse of authority and discretion , and prohibiting Defendants, and each of them, from running

for or occupying any PACIFICA FOUNDATION director position for a period of six (6) years,

or such other reasonable period of time as may be determined by the Attorney General and the

Court.

3. Judgment requiring immediate removal of Defendants KEN FORD and DAVID

ACOSTA as directors due to expiration of their terms.

4. Judgment requiring immediate removal of Defendants MORAN, VAN PUTTEN,

JOHNS, CAGAN, CHAMBERS, LEE, LYONS, and MURDOCK and declaring their elections

invalid for exceeding the number of directors authorized by the Articles of Incorporation, and in

violation of the bylaws elections procedures, and/or in excess of the authorized number of "at

large" directors.

5. Judgment requiring immediate removal Defendants FARRELL, CISCO, and

MILLSPAUGH and a declaration that each of them was validly removed without cause by their

respective local station advisory board electors in May 2000 .

6. Judgment 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;

7. Judgment declaring the number of directors or requiring the exercise of special

authority pursuant to the Articles of Incorporation by the members of the corporation to set the

number of directors.

8. Judgment requiring a Bylaws amendment establishing a fair, reasonable, and

democratic mechanism for PACIFICA's members to democratically nominate and elect a finite

number, or a stated maximum and minimum number, of directors, of PACIFICA;

9. Judgment requiring a full accounting of Pacifica funds since January 1, 1994, or such

other period as the Court finds reasonable and appropriate, for the purpose of ensuring that such

funds have been spent in a manner consistent with the purpose of PACIFICA'S charitable trust,

and requiring Defendants to henceforth promptly respond to listener-sponsors' reasonable

requests for such data;

10. Judgment requiring cessation of Defendants' expenditures of listener-sponsors'

funds on pursuits inconsistent with the objectives of listener-sponsored free-speech radio;

11. Judgment requiring nomination and election of directors by the newly constituted

voting members;

12. Judgment appointing interim provisional directors (e.g., a retired judge, a CPA, a

long-time listener-sponsor, and a charitable trusts consultant) to assist the existing directors in

the expeditious implementation of each of the above measures.

13. Judgment requiring the provisional directors, within ninety (90) days of judgment

entry, to conduct a public meeting in each of the PACIFICA FOUNDATION station areas for the

purpose of receiving recommendations on Bylaws amendments establishing a fair, reasonable,

and consistent mechanism for defining and selecting voting members and for those members to,

in turn, democratically nominate and select directors;

14. Judgment requiring the provisional directors, within one hundred twenty (120) days

of judgment entry, to recommend to the Court one or more recommended Bylaws drafts

establishing a fair, reasonable, and consistent mechanism for defining and selecting voting

members, consistent with due process principles, and for those members to democratically

nominate and select directors;

15. Judgment requiring the provisional directors, within one hundred eighty (180) days

of judgment entry, to conduct a new election of directors, consistent with the new Bylaws;

16. Judgment, upon the election of new directors, determining that each of the

individual Defendants is no longer entitled to hold or exercise the office of Director of

PACIFICA FOUNDATION, ordering Defendants at that time still in office to yield their offices

to the fairly elected director;

17. Judgment awarding damages according to proof in favor of the Pacifica Foundation

and against defendants BERRY, ACOSTA, FARRELL, FORD, MAKELA, MILLSPAUGH,

PALMER, CHADWICK, and DOES 1 through 100, jointly and severally, for breach of

charitable trust;

18. Judgment awarding Relators costs of suit and reasonable expenses necessarily

incurred in the investigation and prosecution of this action, including, but not limited to, auditor

fees, consultant fees, expert fees, and attorney fees, pursuant to Code Civ. P. 1021.5 and any

other applicable law;

19. Judgment for such other and further relief as the Court may deem proper.

 

Dated: September 15, 2000 BILL LOCKYER, ATTORNEY GENERAL
STATE OF CALIFORNIA

BARTLEY LAW OFFICES
ATTORNEY FOR RELATORS

_____________________________________
By: Daniel Robert Bartley

 

VERIFICATION

STATE OF CALIFORNIA

COUNTY OF SONOMA

I, CAROL SPOONER, under penalty of perjury, under the laws of the State of

California, hereby declare:

I am the lead Relator in this action. I have read the foregoing VERIFIED COM-

PLAINT, and know its contents.

I declare that the matters stated therein are true of my own personal knowledge except

as to those matters which are stated on information and belief, and as to those matters I believe

them to be true; and that I am willing and competent to testify to such matters if called upon to

do so.

EXECUTED this 15th day of September, 2000, in Santa Rosa, Sonoma County,

California.

__________________________

CAROL SPOONER

 

 

 

                                        EXHIBIT A