DC Superior Court Affirms the Open Technology Fund’s Board of Directors; Rejects USAGM’s Unauthorized Attempt to Take Over Independent Non-Profit (Press Release)

Last updated: 2020-10-16T16:01:21.533Z
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WASHINGTON -- In a major win for the Open Technology Fund (OTF), the Superior Court of the District of Columbia has granted summary judgment in a lawsuit brought by the DC Attorney General challenging U.S. Agency for Global Media (USAGM) CEO Michael Pack’s attempted purge of OTF’s Board of Directors and key officers. At issue in the case was whether Pack, as CEO of USAGM, had the authority to remove OTF’s bipartisan, expert Board of Directors and install a replacement Board of his own. In granting DC Attorney General Karl A. Racine’s motion, the Court held that Pack has no such right: “The Court finds that, pursuant to OTF’s bylaws, the Board of Directors is responsible for both the election and removal of directors.” Accordingly, the Court found that “pursuant to the plain language of OTF’s bylaws . . . the original Board is the only valid board.”

The Superior Court’s decisive ruling comes in response to AG Racine’s efforts to protect OTF in the wake of Pack’s attempted takeover of the DC-based non-profit. On July 20, AG Racine filed suit challenging Pack’s hostile actions pursuant to the District of Columbia’s Nonprofit Corporations Act. Because Pack did not have the authority to dismiss or appoint new members to the organization’s Board, the lawsuit called on the Court to recognize OTF’s original Board as valid and declare any actions taken on behalf of the organization by Pack or the replacement Board to be null and void. Wednesday’s ruling does precisely that. The opinion also dovetails with the DC Circuit Court of Appeals’ July decision to temporarily halt Pack’s attempted removal of OTF’s officers and directors.

A key funder in the global fight for internet freedom, OTF supports technologies that help citizens across the world communicate securely, circumvent censorship, and combat authoritarianism. Yet despite widespread bipartisan support and success, the independent USAGM grantee has been under attack since Pack was confirmed as CEO of the agency in early June. On June 17, Pack attempted to remove and replace OTF’s Board of Directors. The following day, he attempted to fire the organization’s President and acting CEO Laura Cunningham. Pack’s actions were resoundingly rejected by OTF’s Board of Directors and have drawn significant ire across both sides of the political aisle.

Problems continue to mount for Pack and the agency he oversees. In a statement shared with Voice of America, Rep. Michael McCaul (R-TX) said: “I remain very concerned about the state of affairs at USAGM and its grantees like OTF under CEO Pack’s watch.”

USAGM’s embattled CEO is currently under fire after choosing to defy a subpoena to testify before the House Foreign Affairs Committee. In addition, a whistleblower complaint alleging improper political retaliation by Pack and top USAGM officials was recently filed with the State Department’s Inspector General and the U.S. Office of Special Counsel. OTF has also requested an Inspector General investigation into USAGM’s repeated firewall breaches and political interference.

A lawsuit filed against USAGM at the Court of Federal Claims, in which OTF is seeking roughly $20 million in Internet Freedom funding that has been unjustifiably withheld, remains ongoing. Sen. Robert Menendez (D-NJ), a member of the Senate Foreign Relations Committee, has called Pack’s funding freeze “a gift to repressive governments.” Pack’s arbitrary decision to continue to withhold the Congressionally allocated funding has forced OTF to issue stop-work orders to 49 of its active internet freedom projects, bringing over 80 percent of the organization’s operations to a standstill.