Hi.
I was disappointed to see that comment from AMSAT Treasurer Robert Bankston KE4AL last night, incorrectly claiming that Michelle Thompson W5NYV and I were "aforded the same rights and privileges as the ... other elected and standing Directors." We did not have access to certain AMSAT corporate records from the first day we assumed our seats on the AMSAT Board of Directors in September 2019. Other directors and senior officers were made aware of this at that time - including Robert himself. Access to the archives of the private mailing list used by the Board was also denied to other directors when we joined the Board, but the other directors - along with some senior officers - already had knowledge of what was contained in those archives. Michelle and I did not have that knowledge, and had to fight for almost 5 months to get that access.
The District of Columbia Nonprofit Corporation Act, the law governing AMSAT due to its incorporation in Washington D.C., clearly gives directors of a corporation access to corporate records. From section 29-413.05(a) of that act, "Inspection of records by directors":
"A director of a nonprofit corporation shall be entitled to inspect and copy the books, records, and documents of the corporation at any reasonable time to the extent reasonably related to the performance of the director's duties as a director."
The law uses the word "shall", which makes this a mandatory requirement on corporations like AMSAT. With so much in electronic form, it is simple to receive the requested information via e-mail. For those documents too large to send via e-mail, there are other means to provide copies of requested records like using Dropbox or Google Drive. The archives of the Board's mailing list are available in a secured web page, and those archives were taken down just before we gained access to that mailing list last September.
In terms of expenses and financial obligations, Article II Section 1 of AMSAT bylaws has the following:
"No financial obligation shall be incurred by or on behalf of the corporation except by prior approval of the Board; provided, however, that the Board may, at its discretion, authorize any Officer or Officers to incur such obligations and/or to approve such necessary or incidental obligations as may be incurred by officials acting under such Officers' authority, subject to limits and procedures as the Board shall determine."
https://www.amsat.org/bylaws-of-the-radio-amateur-satellite-corporation/
There is record of one instance where the Board gave prior approval to a legal expense in the past few years, a motion during the November 2018 Board meeting in Huntsville, Alabama. This motion, passed in an executive session, authorized officers to engage FD Associates for a review of AMSAT's draft EAR/ITAR policy. That motion carried an authorization of up to $10,000.00 for that review. I have not seen any other records showing where the Board gave prior approval for legal expenses in recent years, in line with the bylaws. Minutes of Board meetings in recent years are available at:
https://www.amsat.org/minutes-of-the-board-of-directors/
In fulfilling my fiduciary obligations to AMSAT and its members as a duly elected director, I asked for details on the legal expenses I saw on AMSAT's 2018 IRS Form 990 tax return and subsequent reports, which Robert Bankston provided via e-mail or during Board meetings conducted via conference call. Some were for the engagement with FD Associates. Others were for a law firm called Hurwit & Associates - a name that does not appear in the minutes of recent AMSAT Board meetings.
Joe Spier K6WAO, AMSAT President at the time of a phone call in October 2019 that also included the Hurwit & Associates lawyer retained by AMSAT, mentioned that he had a plan for a conflict-of-interest policy. His proposed policy would have denied Michelle and me access to AMSAT corporate records for anything that occurred before we joined the AMSAT Board. There was no mention of anything else related to this proposed policy, like Michelle's work with Open Research Institute. Just the attempt to deny us access to older AMSAT corporate records. This proposed policy would have been a violation of the District of Columbia law - something I pointed out on that phone call, and later in e-mails to AMSAT directors and senior officers. This led to the demand letter Michelle and I sent AMSAT in late January 2020, quickly followed by Joe Spier's resignation as AMSAT President. Seeing that AMSAT spent over ten thousand dollars in late 2019 and into 2020 on legal expenses around this effort to deny us access to corporate records was disgusting.
Unable to get any other details on the Hurwit & Associates engagements, I asked in early May for copies of the cancelled checks - or copies of documentation showing the payments, if checks were not used - to pay these expenses. This led to AMSAT Executive Vice President Paul Stoetzer N8HM claiming that there was "full knowledge and consent of the Board" for these expenses. As a director since September 2019, I had no knowledge of these expenses until I started asking for the details on the payments made for these expenses. No director or officer took the time to explain these expenses, other than the brief explanations recorded for some of the payments in AMSAT's accounting system - until I asked to see copies of the cancelled checks.
Clayton's letter on Friday carries on with a theme that these legal expenses were incurred with "full knowledge and consent of the Board". When we joined the Board last September, we were not made aware of the engagements with Hurwit & Associates. Those were not documented in the minutes of past Board meetings or any other record we could see. Without knowledge of these expenses, I didn't have any opportunity to consent to them - not that I would have given consent. Simply having a letter with many co-signers outlining the spending after the fact is not, in my opinion, showing prior approval for those expenses in accordance with AMSAT bylaws.
Does AMSAT have the right to seek legal advice? Yes. In fact, this was done on the record during a Board meeting in November 2018, when AMSAT engaged FD Associates. AMSAT authorized a maximum outlay of $10,000.00 in the motion that was passed in an executive session at that meeting. AMSAT exceeded that $10,000.00 mark in August 2019, and ended up spending a total of $16,245.00 in its engagement with FD Associates. Senior officers did not return to the Board for authorization to continue the work with FD Associates, once the expenses exceeded $10,000.00. Michelle took the initiative to contact FD Associates to see what was being done for AMSAT after Joe Spier's resignation, and was able to stop those expenses from continuing to accumulate.
Michelle's initiative to contact FD Associates - a firm she had dealt with in the past - was greeted with criticism from some senior officers. The officers questioned why a director was getting involved in that matter. Clayton did rise to her defense, pointing out that none of the senior officers picked up this work after Joe Spier's resignation in late January. Clayton encouraged her to continue that work. I feel she was doing her part to ensure AMSAT would not incur more expenses, until such time as AMSAT was ready to reengage with FD Associates. If AMSAT needs to reengage with FD Associates, senior officers need to ask the Board to either amend the 2018 motion to allow for further expenses, or ask the Board approve a new motion to continue that work and incur the additional expenses.
Michelle and I ran for our seats on the Board wanting to make AMSAT more transparent. The actions Clayton outlined in his letter, in my opinion, are far from showing transparency. I feel his letter was a justification for why AMSAT directors and senior officers kept these expenses from being on the record, where members could have seen them and questioned them. We are approaching another opportunity for AMSAT members to make their voices heard, with the upcoming Board election. Michelle and I heard the membership loudly and clearly last year, from the votes we received. Please do not reelect the two incumbent directors, and please do not return a former director to the Board. I urge you to vote for the 3 challengers in the upcoming election - Howie DeFelice AB2S, Jeff Johns WE4B, and Bob McGwier N4HY.
Thank you, and 73.
Patrick Stoddard, WD9EWK/VA7EWK http://www.wd9ewk.net/ Twitter: @WD9EWK or http://twitter.com/WD9EWK