Court Says Trump Appointee Had No Authority To Fire Open Technology Fund Board; Says They Remain In Place

Legal Issues

from the good-news dept

Back in July, we wrote about how Trump had appointed a Steve Bannon mentee, Michael Pack, to head the US Agency for Global Media (USAGM), the organization that oversees a bunch of independent media organizations, including the Voice of America, Radio Free Europe/Radio Liberty, Radio Free Asia, and Middle East Broadcasting. The plan was to turn them into a state-sponsored Breitbart. That process has begun, including the recent attempt to investigate Voice of America journalists for impure thoughts about Dear Leader.

But, perhaps much more troubling to us was the desire to completely revamp the Open Technology Fund. OTF is connected to USAGM mostly for legacy reasons. It was originally spun up as a project by Radio Free Asia to help fund open source anti-censorship tools for activists around the world. The work it does and funds is incredibly important to free speech around the globe — and for unclear reasons, Pack, Bannon and friends had wanted to completely change that, taking funding away from open source projects, and dumping it into some extremely dubious closed source projects.

Soon after Pack joined USAGM he told the head of OTF she was fired, and then fired the entire OTF Board as well when they protested, and said he was appointing a brand new board and CEO. This resulted in lawsuits and even Republican Senators asking what the fuck Pack thought he was doing.

In true Trumpian fashion, Pack simply ignored Congress, and even ignored a subpoena from House Representatives to answer questions about what he’s done with USAGM. As if to poke a stick in the eye of Congress, at the very moment he was supposed to be appearing before Congress in response to a subpoena, Pack instead was opening up an RFP asking for new vendors to take over the role of OTF in building censorship circumvention tools.

A few days later, a bunch of top USAGM employees, including its Chief Strategy Officer, Chief Financial Officer, General Counsel, Executive Director, Deputy Director for Operations, and Director of Management services filed a whistleblower complaint with the State Department, after they were all put on administrative leave for raising concerns about how Pack was creating real harm in destroying the ability for the various USAGM organizations to do their job. For example, one of the whistleblowers was specifically concerned about the OTF defunding, and how it would harm protesters in Hong Kong:

n. Mr. Powers raised urgent concerns regarding the impact that Mr. Pack?s spending freeze was having on USAGM?s ability to support internet freedom tools in Hong Kong amidst the ongoing Chinese crackdown and takeover of local governing authorities. Mr. Powers specifically pointed out that the spending freeze was placing USAGM?s journalists at grave risk, and that the funds needed to be released to ensure that both USAGM?s journalists and its audience were safe from surveillance and persecution. Mr. Pack?s failure to support the internet freedom tools created a specific physical danger to USAGM journalists.

For that, Pack effectively fired him.

However, there is finally at least a glimmer of good news in all of this. A few days ago, the court hearing the case about whether or not Pack could fire the entire OTF Board and its CEO and replace it with his cronies ruled that no, he absolutely cannot do that. Indeed, it’s right in OTF’s bylaws that only the Board itself can fire executives or replace Board Members:

Neither OTF?s bylaws nor the International Broadcasting Act (?IBA?), as incorporated by reference in the bylaws, provides the USAGM CEO with the removal and replacement authority Pack claims.

OTF?s bylaws presume that the Board of Directors is responsible for both election and removal of directors. The bylaws state, ?Individuals shall be elected by the Board of Directors for three-year terms upon majority vote of the Board of Directors, or as may be authorized by 22 U.S.C. 6203 et seq?.He or she shall hold office until the expiration of his or her term and until his or her successor is elected and qualified, or his or her earlier resignation or removal or as may be authorized by 22 U.S.C. 6203 et seq.?

OTF bylaws also grant authority to the Board of Directors to fill vacant positions on the Board: ?Any vacancy occurring on the Board of Directors due to removal or resignation may be filled by a majority vote of the remaining Directors. The Director so elected shall hold office for the remainder of his or her predecessor?s term or until his or her successor is elected and qualified or until his or her earlier resignation or removal.?

And then the court notes that the Board of Directors did not agree to fire themselves and did not agree to appoint the new board:

The Board of Directors did not hold a vote to elect any of the new directors that Pack attempted to appoint…

Section 6.12 of OTF?s bylaws contains the only clear mechanism for removal of directors: ?Any Director may be removed from office for cause by the vote of two-thirds (2/3) of those Directors present at a meeting of the Board of Directors at which a quorum is present, provided that all Directors, including the Director to be removed are provided no less than ten (10) days? notice of such meeting.?…

The Board of Directors did not hold a vote to remove any of the directors that Pack attempted to remove.

No other provisions within OTF?s bylaws modify this removal authority.

The court further notes just how incredibly damaging Pack’s weird attempted coup of OTF has been:

Pack?s purported removal and replacement of the OTF?s original Board of Directors has left OTF without clear leadership. This confusion has made OTF incapable of authorizing decisions on behalf of the nonprofit corporation that allow it to carry out its functions, including an inability to authorize funding for partner organizations or provide support for potential partner organizations.

The actions of Pack and USAGM have undermined trust in OTF as an organization. The nature of the projects funded by OTF means that partner organizations and individuals, who are often citizens of repressive regimes, could be subjected to harsh repercussions ? even having their lives endangered ? if their personal information is jeopardized. However, OTF has been able to work with these partners to promote internet freedom because it has earned their trust that it will ensure the safety of their identities and their work. This trust in OTF will continue to erode, though, the longer that there is uncertainty about the legitimacy of the leadership of the organization. Without the trust of its partners, OTF cannot fulfill its mission of promoting internet freedom efforts.

Because of the conflict created by these actions, OTF has been denied business for foreign currency payment services, resulting in increased transaction fees and additional financial burden to the organization.

These actions have caused serious delays in OTF?s ability to hire necessary staff, including delaying the hiring for six open positions crucial to the management and monitoring of OTF?s applications and projects…. The sudden upheaval in leadership also leaves the organization at risk of losing expert staff, including researchers, technologists, and regional experts. Losing such staff could compromise OTF?s ability to carry out its mission.

End result? Court says Pack has to take his fake board and go home. The original board and CEO are the rightful ones in charge of OTF:

Accordingly, pursuant to the plain language of the OTF?s bylaws, the Court concludes that Plaintiff has demonstrated prima facie entitlement to summary judgment insofar as Plaintiff has demonstrated that the original Board is the only valid board.

It then orders that the original board is the valid board, that the removals by Pack were not valid, and that his replacement board is also not valid. Hopefully this is the end of Pack’s willful destruction of important American institutions that protect freedom of speech, but somehow I doubt it will be.

Filed Under: michael pack, otf, usagm, voa
Companies: open technology fund, otf, voa, voice of america