[Sent to the Interim Board members on 7/6/02. -- Carol Spooner]

To the Interim Pacifica Board

I request that the Chair call a special meeting of the interim board for the purpose of discussing the following resolutions:

Resolved: That the interim Board's ratification on June 23, 2002 of the contract dated June 1, 2002 between Pacifica Foundation and Democracy Now! Productions, Inc. is hereby rescinded. The board directs the Executive Director to: (1) notify Democracy Now! Productions, Inc. of the board's desire to renegotiate the contract, (2) obtain expert legal counsel who specializes in intellectual property law to assist the board in renegotiating the contract, and (3) to sign no further documents and take no further actions in performance of the contract.

Be it further Resolved: That a 3-person committee of the board shall be formed to renegotiate the contract consisting of: (1) Carol Spooner, (2) James Ferguson, and (3) _________ (one interim director appointed by the old board "minority" who is not a close associate of Amy Goodman, i.e., Rob Robinson, Pete Bramson, or Teresa Allen). Any proposed contract renegotiated by this committee shall be brought back to the full board of directors for review and approval prior to the signing of any documents.

I request that the board be given 7 days' notice of the special meeting, as required by the bylaws, and set the meeting up for a telephone conference on Tuesday, July 16th. I also request that Pacifica's legal counsel John Crigler join the meeting to advise the board on the terms of the contract as it currently exists.

As you all know, after careful reading of the contract I believe it is one-sided, disadvantageous to Pacifica in the extreme, and amounts to a divestiture of substantial Pacifica assets without compensation. I believe ratification of this contract was a grave mistake that will have longranging negative ramifications for Pacifica and will dangerously impact our financial viability, among other negative consequences.

Because I have not heard back from any board member about my concerns, except Dave Fertig who provisionally continues to support the contract, I am calling for this meeting. I believe that, while Leslie and Dan acted in good faith, their very close relations with Amy over the years clouded their judgment as to what is in Pacifica's best interests.

I am so concerned that I am seriously considering asking the California Attorney General to step in to this matter, as he has the right to do not only as a signatory to the legal settement agreement, but also under the law to ascertain the condition of Pacifica's affairs and to what extent, if at all, it fails to comply with trusts which it has assumed.

I do also urge every board member to consult with independent legal counsel prior to the meeting to review the contract and give you some unbiased advice on its nature and terms. None of us are expert at reviewing complex multi-million dollar contracts involving intellectual property and licensing rights. If you cannot afford to consult an attorney, I will pay for it -- up to $200 each.

I have pasted below, an analysis of the contract by Peter Franck, who is an intellectual property lawyer, and who was formerly a member of the Pacifica Foundation Board of Directors in the 1970s and 1980s.

Carol Spooner

Peter Franck's Analysis:

I am a lawyer, and I am afraid that I have some serious concerns about this contract. (There is a tendency in our culture to couch policy concerns in legal terms, so what I am raising here are worries about the content of the agreement, and the policies implicit in it, issues that, frankly, I think need to be re-negotiated. It is not an analysis of legal issues which might cause the contract to be set aside).

The following critique of the contract may sound a bit harsh, but it seems necessary to point out its weaknesses. There is a question of precedent and sub-text here. The next negotiation for such a contract will be with Free Speech Radio News, and Flashpoints wants to negotiate an independent contract. Inevitably the DN contract will set a precedent and a pattern.

Given Pacifica's poor history of governance there is an argument to be made for dismembering it, leaving the five stations as basically a distribution network. That may well be the best thing to do, the course of action which will best protect against another takeover. If that is what we want to do, then a contract like this, with DN, FSRN, Flashpoints, etc. makes sense. But it does seem to me that is a policy decision that needs to be made consciously, not backed into. Its only in that spirit that I make these points about the present DN contract.

• it's a five year contract, starting essentially at $488,000 a year (when you figure in the costs Pacifica is agreeing to pay).
• There is really no quality control clause; i.e. if the program went downhill, Pacifica is still committed, except for the vague standard that is should have *content* (which is not the same as quality) similar to the past six years.
• In the event there is a dispute (about any aspect of the agreement) it is to be resolved by arbitration (which is a good thing, much cheaper and faster than courts), and the arbitrator is to be Michael Ratner. Now I consider Michael to be a friend and comrade, and he has a wonderful record of human rights law, associated with the Center for Constitutional Rights in NY, but he is quite close with Amy and the group around DN, and it seems that for him to be the arbitrator of any dispute would put him in a difficult position.
• The rights in all of the *past* DN programs, which is part of the Pacifica archives are given over to this new corporation.
• Pacifica is obligated to turn over all of its fund raising contact and source information to DN for its fundraising. I take it this means subscriber lists, donor lists, small donors and large donors, and foundation contacts. We learned during the struggle to take back Pacifica that supporters don't make clear distinctions about who they have given to. (People who sent money to the legal funds thought they had sent money to the station, and vice versa). With no provisions for coordinating fund raising the sharing of these lists can be a big fund raising problem for Pacifica and the stations.
• The Democracy Now servicemark (trademark) registration, filed by Pacifica, with name recognition built up over Pacifica over the years, is transferred to the new DN corporation.
• Governance: The contract is between Pacifica and a new corporation called Democracy Now! Productions Inc. There is nothing in the contract that indicates who the board of directors of the new corporation is, how they will be chosen in the future, etc.
• Rights. With respect to each program, Pacifica only has the right to broadcast it for the first 24 hours after initial broadcast, with certain rights to use parts for promotional purposes later.
• Cross promotion. Pacifica agrees to promote DN (as it should on its web site); however a look at DN's web site as it is now shows barely any reference to Pacifica.
• Insurance and indemnification. This gets a bit technical, but at least in the first period Pacifica's insurance policies must insure DN against being sued for things like defamation and copyright infringement, and the indemnification by DN for Pacifica (in case it is sued for broadcasting something libelous etc. contained in a DN program), is weak.
• Loyalty. Paragraph 25 (c) bars any Pacifica officer, employee, agent, etc. from doing anything that would "seek to impede, block or sabotage" the distribution or broadcast of the program. Criticizing the program and saying that Pacifica should drop it could be construed as 'seeking to impede. the distribution of the program.'
• Legal consultation. This does not look like a contract negotiated with the help of counsel on Pacifica's side.
• What happens if Amy is no longer available (for any reason). I don' t expect it to happen, but Amy could retire next week, and still the DN trademark and all past programs and the archive would belong to the new corporation. Presumably the contract itself would terminate at that point, but it does not deal with the question at all. What is clear is that if Amy retired, Pacifica could not, without a new agreement with this corporation, broadcast a show called Democray Now.

Again, I don't mean to sound harsh, and I know everyone is in good faith and trying their (our) best, but my sense is that this was done in a hurry, by people with much to much on their plates, and its in everyone's best interest to take a second look, so the whole community comes out of this with a good feeling and a sense of fairness.