Concerned Listener Slate Member Sued for Fraud By Pacifica Shareholders

RICHARD PHELPS (SBN 103141)
Attorney at Law
405 14th Street, Suite 508
Oakland, CA 94612
Telephone: (510) 268-9919
Facsimile: (510) 268-0368

Attorney for All Plaintiffs


SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA

UNLIMITED JURISDICTION


DANIEL BORGSTROM; CAROLYN BIRDEN; ROBERT ENGLISH; LINDA HEWITT

Plaintiffs,

vs.

DANIEL SIEGEL; SIEGEL & YEE; PACIFICA FOUNDATION and DOES 1-100

Defendants
________________________________/



Case No.: RG10502520

FIRST AMENDED COMPLAINT FOR DAMAGES FOR FRAUD, CIVIL CODE SECTIONS 1709 & 1710 AND REQUEST FOR DAMAGES AND EQUITABLE RELIEF FOR UNFAIR BUSINESS PRACTICES, BUSINESS & PROFESSIONS CODE SECTION 17200 ET SEQ



PLAINTIFFS ALLEGE:


1. Defendant DANIEL SIEGEL, hereinafter referred to as "SIEGEL" is, and at all times herein mentioned was, a resident of Alameda County, California, an attorney licensed to practice law in the State of California and a partner in the firm of SIEGEL & YEE.

2. Defendant SIEGEL & YEE is a law firm doing business in California with its office in Alameda County, California at all times mentioned herein.

3. Defendant PACIFICA FOUNDATION, hereinafter referred to as "FOUNDATION", is, and at all times mentioned herein was, a non-profit corporation duly organized and existing under the laws of the State of California and has its principle place of business in Alameda County,
California. The FOUNDATION has five radio stations, KPFA in Berkeley, KPFK in Los Angeles, KPFT in Houston, WBAI in New York and WPFW in Washington D.C.

4. Plaintiffs are ignorant of the true names and capacities of defendants sued as DOES 1-100, inclusive, and therefore sues these defendants by such fictitious names. Plaintiffs will amend the complaint to allege their true names and capacities when ascertained.

5. At all times herein mentioned each of the DOE defendants was the agent and or employee of each of the remaining defendants and was acting within the scope of such agency or employment when they participated in the wrongful acts or failures to act that caused the FOUNDATION to suffer damages.

6. At all times herein mentioned, and at the time of the wrongful conduct complained of herein, plaintiffs were voting members of the FOUNDATION as defined by the FOUNDATION Bylaws,

Article Three, Section A:

"Listener-Sponsor Members" shall be any natural persons who within the preceding 12-month period: (1) have contributed a minimum of $25 to any Foundation radio station, or such minimum amount as the Board of Directors may from time to time decide; or (2) have volunteered a minimum of three (3) hours of service to any Foundation radio station...."

FIRST CAUSE OF ACTION-FRAUD

7. By this reference, Plaintiffs hereby reallege and incorporate into this Cause of Action each and every allegation contained in paragraphs 1 through 6 of this Complaint as if fully set forth herein.

8. In 2006 defendant SIEGEL sought and obtained the position as counsel for FOUNDATION. At that time he failed to disclose that his true intention was to represent and support a faction in FOUNDATION 's internal politics at the expense of the FOUNDATION whenever they were in conflict. SIEGEL withheld this information to induce the FOUNDATION to hire him and his firm, SIEGEL & YEE, to maximize his ability to support his faction and their goals. SIEGEL kept his true agenda secret until he resigned in January 2009. Shortly after he resigned he ran for office on a slate with his faction and defamed the then leadership of the FOUNDATION, accusing them of ethnic cleansing when he knew such allegations were untrue. His conduct as demonstrated with examples herein was to support the goals of his faction and not the FOUNDATION. The FOUNDATION's reliance on his direct or implied representations that he was working for the best interest of the FOUNDATION, while withholding his true intentions, cost the FOUNDATION countless hours of lost or wasted work and tens of thousands of dollars in unnecessary and or unproductive attorneys fees, costs and expenses.

9. From his position as FOUNDATION counsel he convinced the board of directors to let him also be Interim Executive Director (IED) for some periods of time when that position was vacant and used his power as IED to put his faction's goals above the best interests of the
FOUNDATION. This also denied the FOUNDATION of an independent legal opinion.

10. The following are some of the actions SIEGEL took that demonstrate his loyalty to his faction over the FOUNDATION:

a. Contrary to the past practice of FOUNDATION management, SIEGEL used his position as IED to attack a slate running against his faction at KPFA by posting a condemnation of the opposing slates' candidate statements on the FOUNDATION web site in October 2007, Exhibit 1.

SIEGEL's condemnation conflates the KPFA opposing slate's writings with some alleged race baiting at WBAI by an opponent of his factions allies at that station. He accused the opposing KPFA slate of "...personal attacks on their opponents and station staff". SIEGEL's letter does not give an example of a personal attack and when later asked to demonstrate one he has always declined to do so. Compare his condemnation under color of authority to his own candidate statement when he ran for FOUNDATION office at KPFA in 2009. Exhibit 2. The national election supervisor refused to publish his dishonest charge of "ethnic cleansing" and then SIEGEL produced a slightly changed candidate statement. Exhibit 3. The new statement maintains the dishonest attack with milder language.

b. In February 2008 SIEGEL directed station management to deny a FOUNDATION director her right to inspect FOUNDATION property and documents; the director was an opponent of SIEGEL'S faction. Director's Inspections are a tool available for a director in fulfilling her/his fiduciary responsibility. Director's Inspection rights are specifically allowed in the

FOUNDATION Bylaws at Article 12, Section 3:

"Every Director, or his or her designated agent, shall have the absolute right at any reasonable time to inspect and copy all of the Foundation's books, records and documents of every kind and to inspect the physical properties of the Foundation. "

c. When a station manager, who was an ally of SIEGEL'S faction, was sued for sexual harassment and retaliation he took the following actions that are contrary to "established best practices" in employment law to protect his ally, despite putting the FOUNDATION in jeopardy:

i. He did the investigation and interviews of the witnesses himself instead of hiring an independent investigator.

ii. He interviewed the witnesses regarding allegations of sexual harassment and retaliation against the station manager in the station where the accused station manager could see who was being interviewed and the witnesses knew she could see who they were.

iii. Despite the allegations of intentional torts against a FOUNDATION employee SIEGEL answered the law suit and represented both the accused station manager and the FOUNDATION despite the obvious potential conflict of interest regarding punitive damages.

iv. SIEGEL did not attempt to stop the FOUNDATION board of directors from issuing a public statement praising the station manager during the law suit against her for sexual harassment and retaliation. Exhibit 4. SIEGEL had to know that the statement could be construed as ratification of the station manager's alleged intentional torts.

11. In the Fall of 2007 SIEGEL interfered with the election at WBAI to advance the chances of his faction's allies to get elected.

SECOND CAUSE OF ACTION-UNFAIR BUSINESS PRACTICES

12. By this reference, Plaintiffs hereby reallege and incorporate into this Cause of Action each and every allegation contained in paragraphs 1 through 11 of this Complaint as if fully set forth herein.

13. By engaging in the business practices described above, fraud, deceit and taking fees under the guise of working for the FOUNDATION when in fact they were working for the goals of their faction, Defendants SIEGEL and SIEGEL and YEE have engaged in unlawful, immoral , and unfair business practices with respect to the FOUNDATION and other members of the public in violation of Business & Professions Code 17200 et seq.

14. SIEGEL and SIEGEL & YEE continue to seek payment for time fraudulently spent on their own goals and not for the FOUNDATION and they continue to work in California.

15. The FOUNDATION suffered actual harm by virtue of Defendants' unfair business practices in that FOUNDATION money and staff time were directed away from work to benefit the FOUNDATION toward work designed to benefit Defendants' faction based on Defendants' deceptive, dishonest and self-serving advice.

16. SIEGEL'S conduct, as described above, was despicable and was intentional and or done with a conscious disregard for the rights and security of the FOUNDATION, such that punitive damages are appropriate.

17. Plaintiffs did not make any effort to secure action from the board of directors in prosecuting this action since any such effort would have been futile in that the cause of action is for fraud, a request for action to the Executive Director in 2009 was not responded to, the new Executive Director has not returned phone calls from Plaintiffs' attorney, and the current FOUNDATION counsel has told plaintiffs' attorney that he is against the FOUNDATION taking such action. Additionally, the FOUNDATION is having financial problems and is in the middle of some reorganization. A copy of this complaint has been mailed to FOUNDATION.

18. If plaintiffs are successful in this action, a substantial benefit will result to defendant FOUNDATION on whose behalf this action is prosecuted and if successful plaintiffs are entitled to their attorneys fees based on the common fund doctrine.


WHEREFORE, plaintiffs pray judgment against SIEGEL, SIEGEL & YEE and DOES

1-100 as follows:

1. Damages according to proof for monies paid by the FOUNDATION to SIEGEL and or

SIEGEL & YEE for work done for the benefit of SIEGEL'S faction and for all damages

proximately caused by his fraudulent conduct;

2. Punitive damages in an amount appropriate to discourage such fraudulent conduct;

3. For equitable relief as deemed appropriate by the court;

4. For costs of suit; and

5. For such other and further relief as the court may deem proper.



Date: LAW OFFICE OF RICHARD PHELPS



By_____________________________
RICHARD PHELPS
Attorney for All Plaintiffs


Exhibit one:

An Open Letter to the Pacifica Community From Dan Siegel, Interim Executive DirectorOctober 24, 2007

Dear Friends, Pacifica’s local station board elections have taken a particularly nasty turn. A group of candidates running for the KPFA local board have issued statements that contain little more than personal attacks on their opponents and station staff. A candidate at WBAI engages in blatant race-baiting.As a community and a progressive organization we must ask ourselves whether this type of rhetoric is acceptable. Pacifica has important challenges. We live in a nation whose leaders wage unjust and unpopular wars around the globe, attack our civil rights and liberties, oppose efforts to achieve racial justice and equality for all people, and pursue policies that widen the gap between rich and poor. The often toxic debate within Pacifica restricts our ability to respond to these issues, saps the morale of our hard-working and underpaid staff, and discourages people of good will from participating in our organization.Many people are now calling for administrative and legal responses to abusive candidate speech. We are reviewing our options, but libel laws, difficulties in distinguishing between reasonable criticism and “personal attacks” (as well as deciding who should be empowered to make such judgments), and Pacifica’s tradition of support for free speech make such measures problematic.In the end, Pacifica’s members will decide whether hate speech and hateful speech will be tolerated in our community. We need leaders who will work to improve our programming, broaden our listener base, and attract needed financial support. I urge all of you to carefully review the candidate statements and to cast your ballots for candidates who reflect both your views on how this organization should be run and your values on how democratic debate should occur in a progressive organization that reflects the diversity of our society.Dan SiegelInterim Executive DirectorPacifica Foundation____________________________

Exhibit 2

Dan Siegel
Listener Candidate for the KPFA Local Station Board
Statement

At a time of great opportunity – and great need – for courageous, progressive journalism, Pacifica and KPFA face an internal crisis that threatens to undermine their 60-year-old role as an independent voice for the American left. I have joined the Concerned Listeners (CL) slate to oppose this frightening development and urge KPFA’s listeners to support us in our effort to restore democratic, diverse leadership to our station and to the network.We live in a time of great risk and great opportunity. The American people voted for peace, civil rights, and economic justice in last year’s election. But none of these is assured, as our country remains at war in Iraq and Afghanistan, the administration in Washington appears reluctant to reverse many of the Bush regime’s attacks on the rule of law, and real steps to reverse the growing economic inequities in our society seem like a distant dream. Pacifica and KPFA seem perfectly positioned to inform and mobilize the millions of people who demand the real change that we voted for last November.Instead, Pacifica’s survival is once again threatened by a national board whose main effort appears to be the consolidation of its own power and the elimination of people who hold differing views. Rather than choose an executive director with broadcasting skills and experience, the Board has allowed its chair to fill that role for over six months. Most shockingly, the Foundation’s new leadership is engaged in a campaign of ethnic cleansing directed at African Americans in positions of leadership in the Foundation. Since January, Pacifica has fired its Chief Financial Officer, the station managers at WBAI and WPFW, and the program director at WBAI, all black men. Meanwhile, the organization’s finances and audience continue to decline.I have been a Pacifica activist and supporter for almost 40 years, and was lead counsel in the lawsuit that restored democracy to Pacifica in 2001. I resigned as Pacifica’s general counsel in January 2009 after three years because of my opposition to the direction of the present majority on the national board.As a member of the KPFA Local Station Board, I will work for:1. Appointment of qualified, experienced administrators to serve as Pacifica’s Executive Director and Chief Financial Officer.2. Increased emphasis on the development of diverse, progressive, and high quality programming that includes national and local shows and balances news, public affairs, and cultural offerings.3. The development and execution of a financial recovery plan that will require each station to function with a balanced budget. National and local board members must be held accountable for Pacifica’s fiscal well-being. KPFA’s resources must be protected against efforts to have it serve as Pacifica’s bank.4. A strong focus on expanding our listener base, reaching out to younger listeners, members of all racial, ethnic, sexual, and cultural communities, an effort that requires both better programming and the increased use of digital media.Please support me and all of my dedicated, talented colleagues on the CL slate. ConcernedListeners.Org.


__________________________________________________________

Exhibit 3

Dan Siegel
Candidate for the KPFA Local Station Board
Statement

At a time of great opportunity – and great need – for courageous, progressive journalism, Pacifica and KPFA face an internal crisis that threatens to undermine their 60-year-old role as an independent voice for the American left. I have joined the Concerned Listeners (CL) slate to oppose this frightening development and urge KPFA’s listeners to support us in our effort to restore democratic, diverse leadership to our station and to the network.We live in a time of great risk and great opportunity. The American people voted for peace, civil rights, and economic justice in last year’s election. But none of these is assured, as our country remains at war in Iraq and Afghanistan, the administration in Washington appears reluctant to reverse many of the Bush regime’s attacks on the rule of law, and real steps to reverse the growing economic inequities in our society seem like a distant dream. Pacifica and KPFA seem perfectly positioned to inform and mobilize the millions of people who demand the real change that we voted for last November.Instead, Pacifica’s survival is once again threatened by a national board whose main effort appears to be the consolidation of its own power and the elimination of people who hold differing views. Rather than choose an executive director with broadcasting skills and experience, the Board has allowed its chair to fill that role for over six months. Most shockingly, in my opinion the Foundation’s leadership is engaged in a campaign of eliminating African Americans from positions of leadership in the Foundation. Since January, Pacifica has fired its Chief Financial Officer, the stations managers at WBAI and WPFW, and the program director at WBAI, all black men. Meanwhile, the organization’s finances and audience continue to decline.I have been a Pacifica activist and supporter for almost 40 years, and was lead counsel in the lawsuit that restored democracy to Pacifica in 2001. But I resigned as Pacifica’s general counsel in January 2009 after three years because of my opposition to the direction of the present majority on the national board.As a member of the KPFA Local Station Board, I will work for:(1) Appointment of qualified, experienced administrators to serve as Pacifica’s Executive Director and Chief Financial Officer.(2) Increased emphasis on the development of diverse, progressive, and high quality programming that includes national and local shows and balances news, public affairs, and cultural offerings.(3) The development and execution of a financial recovery plan that will require each station to function with a balanced budget. National and local board members must be held accountable for Pacifica’s fiscal well-being. KPFA’s resources must be protected against efforts to have it serve as Pacifica’s bank.(4) A strong focus on expanding our listener base, reaching out to younger listeners, members of all racial, ethnic, sexual, and cultural communities, an effort that requires both better programming and the increased use of digital media.Please support me and all of my dedicated, talented colleagues on the CL slate.__________________________________________________________
NOTE: The person who was the GM of WBAI is now Pacifica's National Development Director - NES

Exhibit 4

RESOLUTION BY THE PACIFICA NATIONAL BOARD
IN APPRECIATION OF KPFK GENERAL MANAGER EVA GEORGIA

WHEREAS, Eva Georgia has served as the general manager
of Pacifica Station KPFK in Los Angeles for approximately five years
and has demonstrated innovative leadership and dedicated commitment
to the mission of the Pacifica Foundation;

WHEREAS, under Eva Georgia's leadership KPFK's paid and
unpaid staff has become more diverse and its programming has become
more relevant to the needs of the Los Angeles area's diverse
communities;

WHEREAS, under Eva Georgia's leadership KPFK has
provided strong leadership to the Pacifica Foundation and the radio
broadcasting industry in the development of Spanish language
programming;
WHEREAS, Eva Georgia has led KPFK's staff and volunteers
in successful fundraising efforts throughout her tenure at KPFK,
which has substantially increased its membership;

THEREFORE BE IT RESOLVED that the Pacifica National
Board expresses its full and sincere support for Eva Georgia and its
appreciation for her responsible leadership and dedication to the
Pacifica Foundation and its mission.