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HomeMy WebLinkAbout06/26/2003 SUNSHINE and PO Box 1 Q46 Lorraine Andrade Southold, NY 11971 FRESH AIR for 631 7655479 Frank Carlin SHELTERED ANIMALS 4canine@optonline.net Corinne Donopria Carole Geiss Gunther Gelss Gerard McElroy Ms. Pamela Mann June 26, 2003 Dorothy Wolf Pamela A. Mann, LLC 225 Broadway, Suite 2501 New York, N.Y. 10007-3088 Dear Ms. Mann, This letter is a response to your memorandum to the NFAWL members attached to the proposed Amended and Restated Bylaws. But, before we state our objections and concerns on that subject, we would like to draw your attention to your copy of a letter to Mrs.Anna Cosimano, May 5, 2003, in which it is made clear that the settlement arrived at on December 2, 2002 in Geiss v. North Fork Animal Welfare League has been violated. The minutes of the Organizational Meeting following the election state, "terms were assigned."The settlement requires drawing of lots for board terms of the 7 newly elected directors and that the drawing not affect those previously elected directors continuing their terms. There being no other restriction, a drawing of lots would result in a random distribution of terms of office, i.e., 3 of one term, and 2 of each of the other terms. No reasonable interpretation, expectation or random outcome would result in 1 one-year term! Therefore, there must be a minimum of 2 of the newly elected directors who drew one-year terms. Further, Mrs. Gertrude Iglesias has not attended one regular board meeting in 16 months (January 2002 through April 2003) per Board minutes. She should be removed from office according to the current Bylaws. No reasonable understanding of an excused absence would include such a consistent and long period of absences. Therefore,we conclude and will assert that 5 directors are to be elected at the 2003 meeting. And, we remind you that, as the attorney for the League, you owe a duty to our organization that takes precedence over your duty_ to the current leadership—the Board. Please refer to your own web site for the details. RE: PROPOSED AMENDED AND RESTATED BYLAWS ARTICLE I Purposes and Policies Section 1. Purposes The NFAWL Charter dated June 11, 1963, as provided by the FOIL Department, Charities Bureau, Office of the NYS Attorney General states, °... The purposes do not include direct law enforcement powers and the League is not incorporated as a society for the prevention of cruelty to animals ... ."This is directly contrary to what you have written. Section 2.Policies and Standards There are no stated minimum or other standards promulgated or prescribed by the Humane Society of the United States.A simple contact with HSUS will confirm this. ARTICLE IV Members ' Section 3.Termination of Membership In 1997,the current Board proposed Bylaw changes that included removal of the requirement that the'Board approve each new member individually.They had sued in 1996 to force acceptance of 125 new members that the then-Board had erroneously denied as a group. The 1997'Bylaw revision did not enjoy a-quorum, and we have argued, as you know,that the r Pamela Mann June 26, 2003 2 revisions of 1997 and 2001 were, and are, illegal. The 2001 revision, like your revision of 2002, did not even have the required member petition or member vote, let alone have a quorum. Your restatement would create a "revolving doors for determined opponents—no membership requirement other than dues for expelled members to return. Your logic leads to the conclusion that bylaw revisions, organizational dissolution, etc. are all less important than the reinstatement of an expelled member which requires a 9/vote of those voting members present while the other"lesser" issues require a 2/3 or simple majority. There is no specification of what an "appropriate hearing"or the required Board vote is to expel. Nor is there any specification of when, and by whom, the rules and procedures for an "appropriate hearing" will be developed. Since you are not concerned with whom to admit to membership, or whether to restrict membership, as existed prior to 1997, one can conclude that expulsion'is aimed at current members with views that diverge from the incumbent board. This does not serve our organization, violates the founders'commitment to organizational renewal, and only serves incumbents who cannot win by reason, but must rule by sheer power. Section 5. Notice of Meetings Regardless of the size of the membership, all members should receive mailed notice. Their dues included the expense of mailings. Membership organizations with hundreds of thousands of members mail notices to the members. Published notices in newspapers are notably ineffective, witness the number of people who never read public notices affecting their own real property. "Only active members shall be entitled to vote at meetings."This is redundant with Section 8. Voting and should be removed. Section 6. Quorum,Adjournment of Meetings If a meeting fails the quorum call,then there should be notice of the time and date of the adjourned meeting to all members, since those present would be the only ones who might come to the adjournment. QED. Never a quorum again! A quorum is defined as"the minimum number of members required to be present at an assembly or meeting before it can validly proceed to transact business."The quorum does not and should not include proxy voters, otherwise one individual possessed of sufficient proxies can conduct a meeting--reductio ad absurdum. Section 9.Action by the Members An action to be taken without a meeting requires written consent of all the Active Members. Is it likely that this condition can ever be met?Why is a process so unlikely to occur included? Section 10.Special Actions Requiring Vote of Members Change to the Certificate of Incorporation or petition for judicial dissolution requires a majority vote. These changes are apt to represent some of the most significant, "life or death"decisions about the organization, and in your restatement require a simple majority vote. It has been traditional, ever since Maj. Robert codified the rules of organizational behavior(1876)',to require a super majority, e.g., a 2/3 vote, to enact significant changes in the organization's path. ARTICLE V, Board of Directors Section 1. Powers and Number "... The number of Directors of the entire Board,shall be ten (10). The number of Directors may be expanded or reduced by the Board, but in no case shall the number of Directors consist of less than three (3) nor more than twelve (12)Directors. ..."This is self-contradictory. However, adding ; typically, "following shall in the first sentence will correct the error. Pamela Mann June 26, 2003 3 Section 3. Election and Term of Office As stated at the outset,the minutes of the Organizational Meeting after the 2002 Annual Meeting and Election state that the terms of office were"assigned."They were not determined by lot. This statement in your proposed Bylaws is plain false. Section 4.Vacancies and Newly Created Directorships You failed to include the provision in the current Bylaws that a Director absent from 3 or more meetings,without excuse,will be removed. Why?This is an important way to remind Directors of their duty to the organization. Is it to take attention away from Director Iglesias who has not attended 16 consecutive meetings? Section 10. Compensation typographical error: second line: ... not receive any salaries of or fees ... Sections 11.through 12. Attention is given to transactions between the League and Board Members, procedures for considering interested party transactions, and conflict of interest disclosure. The proposed Bylaws fail to consider the most insidious relationships—directors who are related by blood, marriage, or other demanding connections, e.g., a President who is the spouse of the Treasurer! Where is the concept of "checks and balances"which is required by prudence and care?Once again, are you serving the organization or the Board? ARTICLE VI, Officers, Employees and Agents Per the paragraph above, a section should be added that prohibits members who are related by blood, marriage, partnership, etc. from both being officers. Section 10. Treasurer typographical error, line 4: "...The Treasurer shall disburse funds in accordance with a budget approved by the Board ... Insert the following to emphasize, and enable,the Board's fiduciary duties: ,and the Treasurer shall report at each Board meeting on the-financial transactions vis a vis the budget. ARTICLE VII,Committees Section 1.Committees of the Board "2.the amendment or repeal of the by-laws•[sic]or the adoption of new by-laws[sic];" Why do you exclude a power from committees when the Board does not have that power? "4.the fixing of compensation of the Directors for serving on the Board or any committee;" Compensation is ruled out in ARTICLE V, Section 10. So 4. is again prohibiting a power that is illegal and prohibited elsewhere. Section 2. Committees of the League "... Such committees created by the members, including the Nominating Committee, shall be elected by the members, unless the members authorize the President to appoint said committees. Such authorization shall not be made for the Nominating Committee The Founders intended that the members control the Nominating Committee and its election in order to give members some control over who serves on the Board. This is clear from the original Bylaws in which the Founders made two such provisions—the member election of the Nominating Committee, and the member petition for-nomination of Board candidates. The Fortieth Anniversary of the founding of NFAWL is not the time to violate the intention of the Founders. ARTICLE XII,Amendments As you well know, it is traditional and prudent to make the amendment of the organization's rules,the Bylaws, relatively difficult by requiring a super-majority, a 2/3 vote of the members, not a simple majority. ,1 Pamela Mann June 26, 2003 4 FAILURE TO REFERENCE ROBERT'S RULES OF ORDER: Ever since Major Henry M. Robert codified the rules of order, it has been traditional and prudent to refer to Robert's Rules of Order in any bylaws, no matter how presumably comprehensive, to provide for conditions that may have been omitted or were not anticipated. Your failure to incorporate Robert's Rules as the source for resolving issues that were not anticipated leaves the organization with no sure place to tum when in doubt. Once again, have you served the organization well? RE:YOUR MEMORANDUM ON THE AMENDED AND RESTATED BYLAWS ARTICLE I -Purposes and Policies "... The proposed amendment uses the precise wording of the Certificate to describe the purposes of the League." FALSE.As shown above the Certificate prohibits law enforcement activity and "... the League is not incorporated as a society for the prevention of cruelty to animals. ..." ARTICLE IV-Members "The proposed revisions to the Article clarify terms relating to membership rights and status, without making any changes in the way things have been run since the 2001 amendment of the bylaws. ..."The 2001 amendments of the Bylaws were illegal because they were done by the Board without a member petition and without a member vote. Your statement is patently false as well. Section 3. Termination of Membership is completely new and is a process for"blackballing" members with whom the Board disagrees.As the attorney for the organization—all members—you are clearly violating your duty in this statement. - "Since the only meeting of members at present is the annual meeting, the provisions for regular meetings(Section 4c of the current bylaws) is deleted. ..."There is no Section 4c in the current Bylaws. You do not make clear that a quorum is the minimum number of voting members present and required to validly conduct business. Proxies count in voting, but not to establish a quorum. ARTICLE V-Directors While you discuss the limitations on transactions between Directors and the League, you do not touch on the egregious violation of"checks and balances"already in place with the President being the spouse of the Treasurer. Much ado about nothing! ARTICLE VII -Committees Paragraph 1: While these restrictions on committees may be based in law,two of them, 2. and 4. are inappropriate as noted above in our comments on the Bylaws. Paragraph 2:ARTICLE IV, Section 3 deals with member termination. There is an ARTICLE VII, ??Section 3, Nominating Committee. ARTICLE Vill-Books and Records It is disingenuous to say Robert's Rules of Order create ambiguities when, in fact, Robert's Rules are widely cited as the resource for resolving disputes arising in organizational meetings. Without Robert's Rules, or an equivalent, you leave the NFAWL members with no resource or recourse for resolving disputes. ARTICLE XII -Amendments Once again you mislead the members by arguing that your changes simply make it easier to amend the Bylaws. The Founders recognized that Bylaws were to be the foundations of organizational functioning and should not be easily changed to satisfy transitory whims.That is why they required a petition of members and a period of 40 days in which members could seriously consider proposed changes. Nothing in the current bylaws forbids a special meeting at which amendments could be considered. Were you genuinely concerned with the welfare of the Pamela Mann June 26, 2003 5 organization, you could have specified a petition of members, at any time of year,with 40 days notice to the members, and a meeting after the forty days for a vote.This could occur at any time of the year, but it would honor the founders' intention that the amendments be supported by a number of members and then be approved by 2/3 of the members voting. Bylaws are meant to be the bedrock of organizational functioning—providing the organization's philosophy, and broad, somewhat timeless, guidelines for the organization's operation. The original Bylaws have served NFAWL well,for forty years. Why is there suddenly a great need to create a wholesale restatement? Based upon the above,we believe that: 1. the current Board has.not honored the settlement of December 2, 2002; 2. the current Board does not honor the current Bylaw requirement that Mrs. Iglesias be replaced as a Director given her attendence record; 3. the proposed Amended and Restated Bylaws contain significant errors of co-mission and omission; 4. your memorandum to members is disingenuous, incomplete and misleading; and,thus,that you have not served the organization and its members, but have served only the self-interest of the current Board Members. This, as we understand your own words on www.pamelamann.com, is a breach of duty to the organization, if not a breach of legal ethics. A. Ethical Parameters for Representation of Nonprofits Although an attorney may be retained to represent a dissident faction of the board or one employee of the organization, attorneys who become involved in the nonprofit area typically represent the organization itself. 1. Rule 1.13(a) of the ABA Model Rules of Professional Conduct("ABA Rules') indicates that"[a] lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents." 2. Similarly, New York law states that"a lawyer employed or retained by an organization ...is the lawyer for the organization and not for any of the constituents."22 NYCRR§ 1200.28(a). ... In the current climate of increased public concern over not-for-profit "accountability," it is extremely important that practitioners advising not-for-profit boards observe the ethical rules governing their own conduct and, at the same time, provide concrete suggestions for the boards in.implementing the fiduciary duties of care and loyalty.As the United Way and Adelphi debacles so dramatically illustrate, volunteer boards ignore these obligations at their peril. It seems that it is time for you to give serious consideration to the questions, "To whom is your duty and loyalty owed?" and"Have I properly discharged my duty and loyalty to my client?"Our judgment is that you have not given your duty and loyalty to the North Fork Animal Welfare League. In closing,we ask, "Can you show us how the$114,196 NFAWL Directors spent on legal fees in 2002, and the$32,997 of accrued legal expenses have benefited our organization?"The total expended by NFAWL since we first submitted a nominating petition has exceeded 25%of the NFAWL fund balance! Respectfully, Supporters of Sunshine and Fresh Air for Sheltered Animals cc: NFAWL Directors