NEWS FROM THE LEGAL FRONT

LETTER FROM CLASS ACTION ATTORNEY TO PACIFICA BOARD

August 4, 1999

Mary Frances Berry, Chair,
and Members of the Board of Directors Pacifica Foundation
1929 Martin Luther King Jr. Way
Berkeley, CA 94704

Re: Adelson v. Pacifica Foundation, Alameda County Sup. Ct. No. 814461-0

Dear Chair Berry and Members of the Board of Directors:

I am writing to express the concerns of my clients and myself regarding recent expenditures by the Pacifica Foundation. On the one hand, according to its officials, Pacifica is in such a precarious financial situation that it is threatening to cut off salary payments to KPFA employees within the coming weeks. Nonetheless, Pacifica is spending untold amounts of money for security, public relations, legal matters, and consultants of various kinds to carry out a dubious battle with staff and supporters of KPFA in Berkeley. Further, Pacifica has announced additional, substantial expenditures for moving the foundation's office from Berkeley to Washington and for technical innovations apparently designed to bypass KPFA's broadcasting.

To put the matter succinctly, we demand that you stop wasting Pacifica's resources immediately.

It is well established in the law that a nonprofit corporation may not expend its resources other than for purposes authorized in its articles of incorporation. This restriction is strictly enforced. See, Queen of Angels Hospital v. Younger (1977) 66 Cal.App.3d 359, 369, 136 C.R. 36. In that case the court ruled that a nonprofit corporation organized to operate a hospital would not be allowed to lease the hospital to a for profit business and use the proceeds to operate outpatient clinics.

Pacifica's articles of incorporation state that its purposes are: "to establish and operate for educational purposes.one or more radio broadcasting stations;" "to encourage and provide outlets for the creative skills and energies of the community;" "to.contribute to a lasting understanding between nations and between the individuals of all nations, races, creeds, and colors; to gather and disseminate information of the causes of conflict between any and all of such groups;. to promote the study of political and economic problems and of the causes of religious, philosophical and racial antagonisms;" "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."

Our position is that in recent months Pacifica's activities have directly contradicted its mission. Instead of operating a radio station (KPFA) that provides an outlet for the creative skills and energies of its community, it has closed that station and, until the last few days, fought to keep it closed. Instead of working to bridge the gaps among people of different races and nations, its officials have engaged in rhetoric that can only serve to widen those gaps. Instead of providing a forum for airing news not commonly broadcast, it has suppressed that news and punished those who defied its gag orders. And Pacifica has squandered its very limited and precious resources on public relations firms, security guards, and lawyers to protect and defend its actions.

Our goal here is not to threaten but to insist that each of you fulfill your legal obligation to insure that the resources of the Pacifica Corporation are properly conserved and utilized for appropriate purposes. Each of you has the individual responsibility under Corporations Code 5231 to protect the assets of the foundation. You must act in the best interests of Pacifica and must act with prudence, care and good faith. You cannot simply accept the actions and explanations of your officers and staff but must instead act with due care, which includes making reasonable inquiries when appropriate, to insure that the Foundation is taking proper and appropriate actions. If you do not meet this standard of care, you may be held personally liable for the Foundation's losses.

We are very concerned about Pacifica's resources and want to insure its future viability. We are looking to you to fulfill your legal and moral responsibilities to insure that our stations survive and thrive. You must change the present direction of the foundation and insure that it has leadership committed to its goals and mission.

Very truly yours,
DAN SIEGEL
DS: pr
cc: David Rapaport, Esq.

(Interesting development --This letter is a "shot across the bow". It qualifies as legal "notice" of financial malfeasance and might meet the legal notice requirement to expand the lawsuit to ask the court to remove the board. -- Carol Spooner, Editor)

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