GRASSROOTS ACTION and the Times Union ARE OH SO HELPFUL!

Posted by Laura Hagen, HWFC Member-Owner

I won’t be able to post more about Tuesday’s board meeting until tomorrow, however, you should know that Times Union reporter Tim O’Brien has written an article about the HWFC board meeting which occurred on Tuesday, January 5, 2016. The article, entitled Four Resign From Honest Weight Food Co-op Board, can be found here.

UPDATE: Draft minutes of this board meeting have just been posted here, at Member-Owner, Member-Operated HWFC.

UPDATE: See this Sunday, January 10, 2015 message from current HWFC board member Ned Depew: his personal response to the recent resignation of four HWFC board members.

HWFC member-owners & shareholders, please send a quick note of thanks to Tim O’Brien and post underneath his article at the TU. We grassroots advocates have a friend in this reporter and in our own local paper.

Do you know how fortunate we are that a local reporter of his caliber is following our story? One who consistently comes to our meetings (and stays ’til the bitter end! Almost midnight, really!), listens, observes, interviews key people, researches the issues, and produces a fairly well-balanced article to boot? He likely guesses or understands that there is a critical national issue that is being played out here at our own local food co-op: the fight which member-owners of community food co-ops across the United States are having to maintain ownership & control of their local food co-operative corporations.

Two key unanswered questions: who are we (the local owners of US food co-operatives) fighting off, and why are they leveraging so much time, effort & money to wrestle control of US co-operative corporations out of the hands of the local community members who are the legal owners of these co-operative corporations?

What is so gosh darned important about small, locally-owned, community food co-ops anyway that we are under attack all across the nation?

A FOOD CO-OP BOARD SPENDS $257,000 FOR LAWYERS IN HOW MANY MONTHS?

Just what do you think of our (former) board spending $257,000 in legal fees (!!!) ) (!!!) over just a six-month period, facts uncovered & disclosed by our new Treasurer at the board meeting on January 5, 2016? $42,833 a month, roughly $10,500 a week? Without our knowledge. Without disclosing the purposes. Without asking for a vote of membership approval.

There is no more information available at this time as to the scope of work: how much was paid for which activities. We do know the two law firms which the HWFC (former) board retained were involved in both the changes to or elimination of our member-owner labor program (MLP) and changes to our bylaws. [1]

All (former) board secrets & secret operations, which are now slowly being uncovered, have left a trail which leads back to these same issues: either changes to, or elimination of, the MLP or changes to the bylaws. Why these two issues in particular?

SECRETS REVISITED: MLP UNDER ATTACK

The (former) board’s secret plans received their first public exposure – the operation was rolled out – with the note the board tacked to its bulletin board on Friday, October 23, 2015; a note which informed membership that the board had moved to “end member-labor on the floor and administration by January 1, 2016.” This legal maneuver attempted to go around the will of member-owners, who, alone, hold the right to alter our MLP.

Given that the board had utilized an electronic means of communication to membership for years – the Inside Scoop – a note tacked to a bulletin board, on a Friday no less, was disingenuous.

Two law firms retained; secret executive sessions which absolutely and patently excluded member-owners; at least two secret letters to the NYS Department of Labor (DOL) Acting Commissioner [2] which we have had to FOIL to get a hold of; a secret follow-up meeting to the October 26, 2015 secret letter, with a NYS DOL Deputy Commissioner and staff held on December 2, 2015 (one meeting which we know of, to date).

Former acting-President Deb Dennis required that the board’s December 2nd meeting with NYS DOL Deputy Commissioner James Rogers remain a secret, from both the membership and from three newly-elected board members (elected on November 30, 2015): secrecy with which the Governance Review Council (GRC) of HWFC, its three-person Leadership Team  (LT or management), and the members of the (former) board complied.

This secrecy was requested before and kept after our historic emergency Special Membership Meeting, attended by over 700 people, which took place on November 30, 2015.

The only information member-owners have about this meeting is the memorandum from Ursula Abrams, co-chair of the GRC (for background, see here and here under “Secrecy”) – who was the board’s appointed representative to the meeting – and a list of names Ms. Abrams provided at the December 10, 2015 GRC meeting.

This list of names is still missing the name of one participant from the NYS DOL, whom neither Ms. Abrams, Mr. Vero nor Ms. Dowling (the two board lawyers representing HWFC’s board) could remember. [3]

Why was it critical to the (former) board that this meeting, with a top NYS Labor official, take place and that it take place sans member-owners of the co-operative?

A NEW SECRET UNCOVERED: TWO HWFC CONTRACTS POSTED ON A
NYS LOBBYING DISCLOSURE WEBSITE

There were two, 2015 signed contracts between HWFC and Corning Place Communications,

an award-winning, full-service strategic communications and public affairs firm located in Albany – New York’s capital city. At Corning Place, we are committed to client success – and our specialty is government-oriented communications. [4]

We know this because the contracts were recently discovered on the NYS JCOPE website (Joint Commission on Public Ethics), a NYS entity through which lobbyists & their clients are required to register. Honest Weight Food Coop [client] and Corning Place Communications [lobbyist] were registered during 2015 with JCOPE: two separate contracts were signed, one on April 25, 2015, by Board President William Frye for $5,000 (at $250.00 per hour) and one on October 21, 2015 by Board acting-President Deborah Dennis for $15,000.

No lobbying activity is apparent on the bi-monthly reports. The contracts do not state lobbying is intended, although they both require filing with NYS JCOPE.

The (former) HWFC board had retained a registered lobbying firm in April 2015 and they never disclosed to membership that they may have discussed lobbying or had intentions to lobby.

Membership is in the dark, to this day, as to the nature of any intended or executed lobbying activities by the (former) board.

It is now known, however, that one of the registered lobbyists, Joshua Poupore from Corning Place Communications, attended the secret 2 1/2+ hour executive session which took place on October 20, 2015, one of the many to exclude co-op member-owners. [5] Membership is in the dark, to this day, as to the purpose of this meeting.

Since the final bi-monthly report for the year will not be posted on JCOPE for another week, we member-owners may yet uncover more information via these public postings. [6] [7]

(FORMER) BOARD: WHAT HAPPENED TO FIDUCIARY RESPONSIBILITY TO CO-OP OWNERS?

It is important to understand that the intent and actions of secrecy were utilized against one specific class of people within our co-operative: the working, voting, shareholders who are considered the legal owners of this New York State co-operative corporation.

The (former) board was intent upon both making a NYS regulatory body aware of what it saw as the risks of our MLP and its plan to, therefore, “transition” HWFC away from its MLP (read, again, this October 26, 2015 hand-couriered, carefully-crafted, “confidential and proprietary communication” sent to the NYS Acting Commissioner of Labor by the board’s attorneys). These (former) board intentions, decisions  & plan (!) to “transition” our MLP were first revealed to member-owners when they received the FOIL copy of this letter, weeks after it had been delivered to the Acting Commissioner of the NYS DOL. This top official of a NYS regulatory agency knew of board intentions before the member-owners of our food co-op did!

Given that the Acting Commissioner’s assumption would be that the board and its attorneys spoke for the corporation (and a second secret letter would have guaranteed that member-owners and the Acting Commissioner and his staff would never meet [2]), one is left in shock as to the willful, deceitful and devious behavior of this (former) board of directors, as related to the owners of the corporation and as related to its MLP.

At the risk of appearing to delve into minutiae just a little too much, let me express my opinion that I believe this “confidential and proprietary communication” to the Acting Commissioner of the NYS DOL was dated October 24th (a Saturday), even though it was hand-couriered to NYS DOL on October 26th (a Monday), to make it appear that the letter had been conceived & written before the board had had, placed in its hands, a petition for an emergency Special Membership Meeting signed by 65+ voting, member-owners of HWFC: an action which occurred on Saturday, October 24th, later on in the day, by petitioner Chris Colarusso. This date would allow wiggle room were the question to be raised to the board: why did you send this letter out knowing the membership’s written, legal intention was to call into question your right to “end member-labor” and knowing that membership was also calling for a recall election of every elected board member?

I think our petition was the cause for that letter to be sent out, on the next available work day, fast as greased lightening can travel from the attorney’s law offices to the NYS DOL offices: via a hand-courier.

Like the board’s note tacked up to a bulletin board maneuver, disingenuous: designed to obfuscate, disguise, conceal, obscure.

In order to uncover the secret plans & activities of this (former) board of directors, the owners of this co-operative have been forced to resort to:

• FOIL’s
• combing public information websites
• interpreting vague language on (available) contracts & board motions
• combing board minutes, devoid of key information
• reading (after the fact) confidential letters sent to the head of a NYS regulatory agency
• relying upon the (former) board’s hand-picked designees to interpret the results of a critical, secret meeting with NYS DOL about our MLP
• reviewing (and now questioning the validity of) the (paucity of) information provided by this (former) board, as it saw fit
• begging member-owners, who were forced to sign non-disclosure agreements (“gag orders”) in order to participate in co-op committee work, to please speak up (see below, under Bylaws’ Revisions heading)

There is also concern that members of the board, under “Policy Governance” initiatives introduced by the national CDS Consulting Co-op firm to the HWFC co-op board, have prohibited board members from discussing certain decision-making processes of the board, with the owners of the co-op. [8]

It appears that not only was secrecy practiced by this (former) board, it was institutionalized in the very governance of our co-operative.

Board secrecy is definitely a message brokered to the (former) board by its national consultants from CDS Consulting Co-op. The May 5, 2015 board minutes state:

…Thane suggested that decisions only be made in executive session if they require the utmost secrecy. [9]

Utmost secrecy? At a food co-op? Given the (former) board’s propensity for making decisions in multiple, marathon, secret executive sessions – which excluded co-op member-owners – it appears there was a lot which required the utmost secrecy recommended by this national consultant.

Thane Joyal, who is an attorney from Syracuse, NY, is one of the two consultants from CDS Consulting Co-op, who worked with the (former) board, the other being Mark Goehring.

Our job has now become to uncover, to: reveal, divulge, expose, make public, so that our co-op can – with a spirit of inclusion & a commitment to transparency – move forward.

Information about this NYS DOL meeting assumes a critical role in member-owners being able to defend the MLP. Defend it, that is, from what has all the appearance – as more and more facts come to light – of it being under attack by the co-op’s own (former) board of directors.

THE SECRET AP NEWS ARTICLE: HWFC MLP ISSUE IS (SECRETLY) LEVERAGED TO GO NATIONAL

Mary R., in a comment below, reminded me to add to the list of (former) board secret operations, the January 3, 2016 AP news article. Thanks, Mary R., for this reminder.

Contact with the AP reporter, Michael Hill, was brokered to former acting-President Deb Dennis by the Strategic PR & Lobby firm Corning Place Communications (CPC), according to Dennis. The interview took place a day or two after our emergency Special Membership Meeting on November 30th, which would have placed it on or about the same day as the secret NYS DOL meeting on December 2nd: in fact the article makes mention of that meeting. The photo shoot for this AP article took place with Ms. Dennis at HWFC on December 15, 2015. Membership was unaware that this national AP article was even in the works and that Dennis’s interview & photo shoot had already taken place; these facts came out to a packed room at the board meeting on the evening of December 15, and only because an alert member-owner, Chris Colarusso, armed with information about this AP story, pressed Ms. Dennis to reveal them.

Ms. Dennis chose to go forward with this AP interview despite the fact that the membership had passed an advisory vote at its emergency Special Membership Meeting (SMM) on November 30th, putting down the board’s attempt to “end member-labor on the floor and administration by January 1, 2016” with an overwhelming disapproval vote of 85.7%.

She chose to go forward despite the fact that she had been present at the vote count late into the evening after the SMM, and knew that of 593 votes cast, she had received 403 votes to remove and only 190 votes to retain (what was later quantified as a 67.9% vote of non-confidence and censure – with 75% required for removal: 42 votes shy of recall).

Ms. Dennis could not claim, by any stretch, to be representing a majority of member-owners of our co-operative, nor our position on our MLP when she was interviewed by a member of the national print media.

The subject matter of the AP article: failing member-labor programs at US food co-ops, labor law fears, and examples of food co-ops which ditched their member-labor programs.

This AP article received PREMIER coverage in multiple Sunday US news’ outlets.

Its title, Will work for food? Co-op Programs End Amid Labor Law Fears (or this secondary title, Food Co-ops End Worker Programs Once Tied to Idealistic Origins Amid Legal Fears, Competition) and lead sentence,

Food cooperative programs that allow members to scoop rice, sort organic vegetables and ring up sales in return for grocery discounts are fading fast amid a changing marketplace and fears of violating labor laws…

broker a “labor law fear message” to a wide, national food co-operative audience, as well as to elected officials, regulatory agencies, and the teams of lobbyists on K Street and in each state capital, which are hired by wholesale & retail grocery & food corporations and their trade organizations, including those selling natural and organic food & products. [10]

One of Ms. Dennis’s last acts as the acting President of HWFC [11] was to insure the delivery of this MLP & labor law fear-mongering to the entire country, an act which will certainly assist national .coop organizations, like CDS Consulting Co-op and others, into frightening food co-ops to end their member-labor programs.

This national article will remain archived on the internet and future searches will provide PR gold ( aka spin) to any entity seeking to end MLPs at community-owned co-ops, using labor law fears. (Note, for example, that reporter Tim O’Brien used this very AP article as a source for this morning’s TU article.)

Here at Honest Weight, if a member-owner is prevented from exercising his or her right to do weekly or monthly work (member-labor), he or she is also being prevented from voting. Therefore, ending member-labor can be viewed as a backdoor means to disenfranchise the owners (the voting shareholders) of a co-operative corporation: to weaken or entirely eliminate their control & ownership.

The damage this AP article has done to both HWFC and all US member-owned food co-ops with active member-labor programs, is inestimable.

This AP article and its connections to the board President of a community-owned co-op – through the Strategic PR & Lobbying firm with whom her board contracted – deserves its own blogpost (stay tuned). This connection is troubling, particularly if one is a member of a (real) grassroots coalition: the voting, member-owners of a local, community-owned food co-op being an example of one.

As a food co-op grassroots advocate, you will need to become familiar with terms like: media manipulation, synthetic media, democracy-for-hire, manufactured journalism, media manipulation, fake news, fake grassroots aka astroturfs, sockpuppets, co-opted, skunkworks, and stinktanks. These are terms which citizen, grassroots advocates have coined to identify mechanisms & operations which subvert, undermine, sabotage or expertly imitate real citizen, community-based, grassroots’ efforts: be alert for secret, corporate or industry influence & backing. [12]

A quick way to usually distinguish real grassroots from fake grassroots? Real, citizen grassroots actions are usually (not always!) cash-poor and people-rich. If you see citizen, community-based actions which appear to be grassroots, but they’re attached to big sums of money and a Strategic PR firm and there is also evidence of a small group running the show, be suspicious: do your homework.

BYLAWS UNDER ATTACK
STRATEGIC PR & LOBBYING FIRM TO SINK BYLAWS’ REVISIONS IN THE CORNER POCKET: ANOTHER $20,000

How much money was spent using two legal teams to change our bylaws …the bylaws by which we member-owners maintain legal control & ownership of our corporation?

We can’t answer that yet: the data is incomplete. However, we do know that a substantial amount of money was additionally (yes, I said additionally) spent by the (former) HWFC board – to the tune of $20,000 – in retaining the services of a Strategic PR and Lobbying firm: CPC. One major goal: to help get new bylaws in place. And there was, additionally, a very specific contractual timeline established for this project.

The three-month contract – (referenced above under NYS JCOPE header) signed by Deb Dennis, vice-president [sic] on October 21, 2015, states, in part:

For the duration of the agreement, CPC will provide strategic and crisis communication services on behalf of the HWFC as it evaluates its bylaws and implements its bylaws revision [emphasis added].

The contract end date is January 15, 2016.

Deb Dennis’s board had planned a vote to change the HWFC bylaws at the membership meeting scheduled for January 24, 2016 …nine days after the termination of this same contract.

Bylaws Secrecy, National .coop Consultants, and MLP (Crops Up Yet Again)

The draft bylaws, begun in April 2015, have not yet been seen by any member-owners (save, we believe, by the 27 members of the Bylaws Task Force (BLTF), only 6 of whom are unaffiliated member-owners; its remaining members are the (former) board, management, GRC members, lawyers and consultants: including Thane Joyal and Mark Goehring of CDSCC, referred to in a BLTF Powerpoint presentation as “subject matter experts” and “Consultants with extensive experience and knowledge of other co-ops.”) [13]

We discovered that policies of secrecy had been embedded into HWFC co-op governance. Non-disclosure agreements (“gag orders”), which were required to be signed by HWFC members working on bylaws’ revisions, have greatly hindered member-owners’ abilities in gathering any information about the process used to draft these bylaws. The BLTF FAQ itself contains a gag order! [14]

This FAQ, BTW, contains a list of Citations drawn up by CDSCC, fully 95% of which relate – not to bylaws – but to the (presumed) labor law risks associated with MLPs! Of the 19 sources provided, the only bylaws’ reference included is an electronic copy of CDSCC’s ‘Fresh Start‘ bylaws template. [15]

Included in both this FAQ and in the BLTF Powerpoint Presentation at the September 27, 2015 Membership Meeting, was, again, source material provided by CDSCC to HWFC: examples of five US co-ops with “Member Labor Programs Phased Out Due to Legal Concerns:” Food Fair, Independence, MO (a 1992 article); La Montanita, Albuquerque, NM (a 1991 example); City Market, Burlington, VT; East End Cooperative Market, Pittsburgh, PA; and Monadnock, Keene NH. Four of these co-ops are listed on CDSCC’s website as being clients since September 2008. [16]

There were no examples provided of US food co-ops which maintain active, successful member-owner labor programs.

The list of Citations of the Bylaws Task Force FAQ begins with:

1.  Member labor programs at comparable co-ops and related resources, by Mark Goehring and Thane Joyal. Prepared for HWFC Bylaws Research Team, May 15, 2015. This paper contains the full text of the following [six] articles…

Of the six articles, four are dated from 1991, one from 1992 and the only current source is a 2012 article penned by Thane Joyal entitled, Who’s Watching Member Labor in Retail Food Cooperatives.

I have not yet located a copy of the research paper written by Mr. Goehring and Ms. Joyal for HWFC.

Virtually all of the electronic source materials provided by this national consulting firm to our co-op have a clear bias against MLPs at food co-ops. The only evidence of opposing viewpoints are three articles by Laddie Lushin, a lawyer and nationally-recognized nonprofit and co-operative expert who has written articles in support of MLPs (Mr. Lushin’s sources  – unlike all the others – are missing their URLs). [17]

As to why Mr. Lushin’s article, Assessing the Adequacy of Your Co-op’s Bylaws, was excluded as a source, as it relates directly to the topic at hand, I cannot say.

One citation title says it all (about MLPs, not bylaws, that is): Alicia Freese’s, Why Some Co-ops Are Killing Off Their Member Labor Programs.

Getting back to the secrecy embedded into co-op governance, the following motion was proposed at the May 5, 2015 board meeting:

A discussion of the pros and cons of the confidentiality agreement from the board to the bylaws research group was held. Leif moved that the board request Joanmarie Dowling [board’s attorney] review the existing confidentiality agreement to determine if it can be changed and limited to attorney client privileged information to allow for maximum participation and discourse.

The entire (former) board passed this motion. [18]

It is beyond shocking that a democratically-run food co-op would require of its board & members who are conducting committee work, the legal silence reserved for “attorney-client” privilege: just what is there about food co-op bylaws that would ever demand this level of secrecy, however limited?

SECRECY BECOMES THE WAY OF DOING CO-OP BUSINESS

Excessive use of lengthy executive sessions excluding member-owners; co-op governance functions attached to the terms “utmost secrecy” and “attorney client privileged information;” “policy governance” training from national consultants brokering secrecy in co-op governance; gag orders required for members’ bylaws committee work; a board motion slyly tacked to a bulletin board; board minutes devoid of key information; secret, hand-couriered letters and secret governmental meetings; massive amounts of secret expenditures; a secret national media article; possible secret lobbying; and, yes, even a FAQ (yes, a FAQ!) with warnings of nondisclosure and confidentiality attached to it.

Secrets, secrets and still more secrets …being uncovered one-by-one, and always after-the-fact by the owners of our co-op. This, in what is supposed to be a democratically-run co-operative corporation with the member-owners (supposedly) in control.

I pose the question: if the former board’s true intent was, in fact, to protect the co-operative corporation by both revising its bylaws and ending its MLP why the need for all the subterfuge and secrecy?

FOUR BOARD MEMBERS RESIGN 36 DAYS AFTER RECEIVING VOTES OF NON-CONFIDENCE

At Tuesday night’s board meeting four board members resigned, with no prior notice: the same four board members who received the highest votes of non-confidence and censure (short of the 75% required for removal from the board) from the more than 620 eligible voters at our historic emergency Special Membership Meeting held on November 30, 2015:

Acting-President Deb Dennis (67.9%)
Treasurer Leif Hartmark (65.2%)
Roman Kuchera (67.8%)
Rossana Coto-Batres (58.4%)

Here is a copy of their resignation letter, read by Ms. Cota-Batres at the board meeting.

JUST THE TIP OF THE ICEBERG IN LEGAL AND CONSULTANT FEES?

$257,000 expent in just six months for lawyers’ advice, counsel and participation (Joanmarie Dowling Law PLLC and Couch White LLP).

$20,000 with a Strategic PR and Lobbying firm (Corning Place Communications).

$277,000 and counting.

It remains to be seen just how much money the former board spent for legal fees for the period Jan-June, 2015.

It remains to be seen just how much the former board spent on organizational change consultant Shem Cohen and his firm, Change Events, whose help had been utilized since April 2015 in both the HWFC Strategic Planning process and with its Bylaws Task Force.

It remains to be seen just how much the former board spent on the nationally-based consultants from the CDS Consulting Co-op firm (CDSCC), who offered up their board-management axis training program, bylaws’ revisions and “Policy Governance” advice. The HWFC contract was initiated in December 2014 for their Co-operative Board Leadership Development (CBLD) program, which includes their ‘Fresh Start’ bylaws template: a template which erases member-owner control in a food co-operative.

And it remains to be seen just how many United States’, locally-owned food co-operatives there are, who have contracted with CDS Consulting Co-op corporation, received their CBLD training and ‘Fresh Start‘ bylaws and – at the other end of the contract – no longer have member-owner labor programs and no longer have a food co-op with local, community member ownership & control.

Start your research into this national issue here with CDSCC.

Or start reading the websites and blogs of grassroots, citizen advocates and members of US food co-ops who are writing about and fighting the takeover of their local, community-owned food co-ops. Independent journalist and co-op member Mimi Yahn from Putney, Vermont, here at HWFCInfohub; Losing Our Principles; Searching for Democracy at the Putney Co-op (also read the comments); and Still Searching for Democracy at the Putney Food Co-op. Or here with the Concerned About the Co-op Facebook page of members of an 80 year-old New Hampshire Co-op, the Hanover Consumer Cooperative Society. Or this blog of a former president of the Hanover Consumer Co-operative Society in NH who is, again, running for its board. Or view this document, created by a team of HWFC member-owners, comparing the East End Co-op in Pittsburgh, PA to HWFC, both of which utilized the same consultants from CDSCC, Thane Joyal and Mark Goehring.

TAKE TIME TO REFLECT: WHAT – and who – IS UNDER ATTACK, SPECIFICALLY?

Throughout this, and recent posts, what phrases keep popping up over and over?

1. Labor (specifically to us, member-owner labor program or MLP) and
2. The Bylaws

What two areas of our co-op have been under full-frontal attack, targeted for change, extreme alteration, or elimination?

1. The MLP
2. The Bylaws

Which two HWFC co-operative corporation principles and/or documents legally vest the corporation’s owners (the member-owner shareholders) with voting power?

1. The MLP as memorialized, legally, in
2. The Bylaws

Which operations have been shrouded in secrecy? Let me amend that: shrouded in secrecy from the corporation’s owners, in specific?

1. Changes to or elimination of the MLP
2. Changes to the Bylaws
3. (Elimination of the voting rights of the corporation’s owners)

Since Friday, October 23, 2015, when member-owners discovered that piece of paper tacked to that bulletin board – and in every blogpost here, every time the word secrecy has been mentioned – to which operations does it attach?

1. ?
2. ?
3. (Elimination of the voting rights of the corporation’s owners)

If the corporation’s owners can no longer vote, what happens to their ownership of the co-operative corporation?

1. It is eliminated.

Where do you guess $277,000 (and counting) may have gone to?

TAKE TIME TO REFLECT, AGAIN

Was all this secrecy – combined with all this money paid out to law firms & Strategic PR & Lobby firms & organizational change experts & national “.coop” firms – being utilized by the former board of Honest Weight Food Co-op to help the standing of member-owners …or was it used to harm our standing?

What do you now think?

Just what was the (former) HWFC board’s endgame? And why?

This does appear to be shaking down to be a fight (secretly) lodged for control of the corporation: a knock-down in which we member-owners didn’t even know we were in the ring. It certainly does appear that the (former) board had been leveraging corporation resources ($277,000 and counting) in order to legally vest control in the board of directors & management (our three-person Leadership Team) …and to, thereby, remove ownership from the, roughly, 1,350 local, community members & families who co-operatively own the Honest Weight Food Co-op, Inc.

Could this explain the marathon secret meetings? Two law firms, one with D.C. offices? The contracts with a PR & Lobbying firm, partner to a NYS “top-ten” lobbying firm (in the state which includes Wall Street)? A nationally-recognized professional “organizational change” agent? A nationally-based .coop firm with a reputation for its “streamlined” bylaws and propensity for strengthening board-management power, at the expense of local, community co-op ownership? The $257,000 in legal fees?

The utter exclusion of member-owners?

Does this explain why the bylaws process has an airtight, legally-binding confidentiality agreement attached to it? Why the bum’s rush on passing the bylaws in January, 2016? Why nobody, I mean nobody, can uncover a copy of the (former) board’s draft bylaws?

Because a printed copy of these bylaws would reveal – finally and in black & white for all to see – the (former) board’s true corporate intentions?

Is this why the (former) board hired an organizational change consultant?

Because, shrouded from the owners of the corporation, our corporation & its owners were being levied and primed and positioned – slowly, methodically, inexorably, and secretly – to undergo and accept major organizational change? Corporate change?

Could this be possible? Could this have been the endgame of the (former) board of directors?

This co-op story has some of the same underpinnings found in your favorite Wall Street corporate-takeover movie: Gregory Peck in Other People’s Money, Michael Douglas in the classic movie (what else?), Wall Street, and the more recent Margin Call or The Wolf of Wall Street.

Apparently, business rubrics advertising “natural,” “organic,” and “independently & community-owned” no longer make a co-operative corporation immune from corporate shenanigans.

 THE POWER OF GRASSROOTS ACTION: ALSO INESTIMABLE

Take a moment to imagine all the wonderful things – local organic food projects; healthy-food education programs; organic gardening assistance programs; local backyard composting programs; projects connecting local organic farmers to local HWFC families; increasing our co-op’s networking with regional organic farmers; community outreach to local, under-served communities here in the city – our cash-poor & community spirit-rich group of grassroots HWFC member-owners could have done with this $277,000.

Just imagine.

Now, turn away from the power & secrecy this $277,000 represents …and look to the power of grassroots action: the power of people, friends, colleagues, neighbors, and families, all the owners, co-operatively, of a community-owned food co-op.

In 39 days (!), a smaller, grassroots group of these people were successful in rousing fellow member-owners, shareholders & family members –  roughly 700 people! – to show up at our largest-ever membership meeting …on the Monday night right after Thanksgiving!

620 were eligible, voting member-owners! They showed up to vote. To show solidarity. To show displeasure at the actions of a board run amok. To put down board attempts to leverage power they did not own. To show displeasure at the direction in which management was taking our co-operative. To vote in new board members, committed to transparency in governance and committed to supporting a strong, legally-defendable member-owner labor program.

They showed up fighting back against the disenfranchisement the (former) board was attempting to secretly embed into our co-operative corporation & its bylaws: the power of all these votes ended that attempt on November 30th.

They came out to show just how important our community-owned food co-operative is to us all: a thing of inestimable value because its backbone is its people.

If we member-owners hadn’t petitioned (hard, co-operatively & successfully) since October 23, 2015 for an emergency Special Membership Meeting, would we have become one of those US food co-ops to have CDSCC ‘Fresh Start’ – like bylaws voted into place: bylaws which remove local, member-owner power in the corporation? 17 days from now, on  January 24, 2016, would our co-operative corporation have quietly morphed into a co-op which looks the same and seems the same …but which would have, in fact, become a food co-op (like so many others across the US) efficiently stripped of its local, community, member-owner control, power and ownership?

Did that 39 day marathon that we, co-operatively, put in from October 23, 2015 – November 30, 2015, to get that emergency Special Membership Meeting off the ground and legal, pay off? Was it worth it?

If we hadn’t given 39 days, could our 40 year-old locally-owned, member-owned, community-owned food co-operative corporation have died on the evening of January 24, 2016?

The answer to that question is yes. [19]

Furthermore, with new bylaws in place, which used CDSCC’s CBLD  ‘Fresh Start‘ bylaws as a model, we member-owners would have been absolutely prevented from ever again reining in the actions of a wayward board through an emergency Special Membership Meeting, such as was just held. Well, we could have held a Special Membership Meeting; however, according to the CDSCC CBLD Fresh Start Bylaws Template, Article III 3.2,  “Decisions made at any special meeting are advisory only.” [20]

Erase these thoughts.

I am more than happy to report that, instead of that particular, outrageous bylaws’ vote taking place – instead of that particular future being realized – the membership meeting – and any voting – scheduled for January 24, 2016 has been cancelled. (Note: This membership meeting has been rescheduled for Sunday, 01/31/16, with no voting scheduled: 5:30pm dessert potluck, 6:00pm meeting, at the Unitarian Church in Albany. Here is the meeting agenda.)

Member-owners, take one moment to reflect: each one of you – all of us – helped to change history. Your – our – grassroots’ actions changed the course of history for our small, wonderful community co-operative. That is about as powerful as community action gets!

But … you must stay involved! There are five HWFC board members who did not quit, who did not abandon ship Tuesday night and who need your help: Nate, Ned, Carolynn, Kate and Daniel. Keep going to board meetings. Seriously consider joining a committee of the board. Email the board with a quick, heartfelt thank you. Stay engaged.

Please be sure to keep thanking each other in small, meaningful ways for community advocacy well-done! We member-owners did an absolutely amazing thing: we turned the tide!

This is the power of grassroots advocacy, of citizen activism, and of community-members, neighbors and families bonding together to save something of great value to them all, something which, we all realized on November 30th, is irreplaceable.

But the work is not over, not by a long shot.

More change is on the horizon: on Tuesday night it was announced that one of the three members of HWFC’s Leadership Team (management), its CFO Duke Bouchard, has also tendered his resignation. [21]

More next time …if and when the ($277,000 and counting) steam stops coming out my ears.

~~~

[1] As examples: both attorneys Joanmarie Dowling, with local offices in Rensselaer, NY and John Vero, whose firm, Couch White, is noteworthy for also having offices in NYC and Washington D.C., were present at the 2 1/2+ hour secret executive session on October 20, 2015; the October 26, 2015 letter to NYS DOL was sent out on Dowling Law PLLC letterhead and signed by both Ms. Dowling and John Vero; the HWFC Bylaws Task Force FAQ lists attorneys Dowling and Vero as members of the Bylaws Task Force.

[2] We have not been able to secure a copy of the 2nd secret letter sent to NYS DOL by the (former) board yet; a FOIL request is in the works (thanks, again, to member Jules Harrell). We have been told, unofficially, that the letter directed the NYS DOL to disallow any other person or entity from attending any meetings with the NYS DOL about HWFC, except the two law firms representing the (former) board of HWFC.

[3] In the interest of accuracy, particularly since this secret meeting remains a contentious & divisive issue, I am still trying to track down the name and title of one of the meeting participants at the December 2, 2015 meeting held between the NYS DOL and representatives of the HWFC board of directors. At the December 10, 2015 GRC meeting, Ms. Abrams provided a handwritten list of names, minus the name and title of one NYS DOL employee. In subsequent emails to Ms. Abrams I was not provided with the information. At the December 15, 2015 board meeting I asked Ms. Abrams again; she requested the information of Mr. Vero and Ms. Dowling, who were seated on the dais, neither of whom could provide the name or title of this NYS DOL employee.

Ms. Abrams written memorandum from the meeting to member-owners states: “From the DOL were representatives from Labor Standards, Worker Protection and the General Counsel’s Office.”

Additional information from Ms. Abrams and the NYS DOL website (job titles):

James Rogers, NYS DOL Deputy Commissioner for Business and Labor
Affairs
Maura McCann, NYS DOL Acting Director of Labor Standards
Michael Pagliolonga, NYS DOL General Counsel
1 woman (name & title not known) from NYS DOL
Joanmarie Dowling, Dowling Law, PLLC, representing HWFC board
John Vero, Couch White, LLP, representing HWFC board
Ursula Abrams, invited guest of HWFC board, representing HWFC GRC

[4] See the homepage of Corning Place Communications.

[5] Given the discovery of two HWFC-Corning Place Communications’ (CPC) contracts posted with NYS JCOPE – where lobbying activities in NYS must, per statute, be disclosed – one needs to revisit the use of peculiar language in one of the two motions passed subsequent to the 2 hour 40 minute secret executive session held at the board meeting on October 20, 2015: a meeting which included the entire board, the entire Leadership Team (management), two law firms with three attorneys present, and two consultants, and which pointedly excluded member-owners, as well as the general public:

The Board authorizes the Co-op’s attorneys (Couch White and Dowling Law, PLLC), in consultation with the Leadership Team and the Executive Committee, to interface with the New York State Department of Labor and entities in connection with ending member labor on the floor and administration by January 1, 2016 [emphases added].

The HWFC-CPC contract, dated October 19th, was likely discussed at this October 20th executive session and was signed the following day, on October 21st. We now know that Joshua Poupore, who attended this executive session (and whose affiliation was obscured by being left off of the minutes), works for CPC and was, at the time, a registered lobbyist for HWFC, per the April 25, 2015 HWFC-CPC contract and its related JCOPE filings.

All of these facts underscore the use of these unusual, strange terms in the context of this non-public, marathon meeting and this motion, which was ratified immediately and in public, upon the conclusion of the secret executive session: these terms are deliberately vague, they obscure intent.

A red flag has gone up.

Given all the secrecy and deception thus far, given the newly-uncovered $257,000 in unknown legal expenditures, and two previously unknown HWFC-CPC contracts uncovered on a lobbying disclosure website, with contracts representing $20,000, could lobbying have been planned, unbeknownst to any but those who attended this secret 2 1/2+ hour executive session?

It is, of course, entirely possible, that CPC registered with NYS JCOPE simply as a prudent measure – in the event that lobbying were to take place – and that, in fact, no lobbying ever took place.

It is noteworthy that Corning Place Communications lists as a partner, Hinman Straub, consistently one of the top 10 lobbying firms in NYS.

It is also noteworthy that the motion itself restricts “interfacing” with the NYS DOL “and entities” to the (former) board’s two law firms; CPC is not mentioned in either of the two motions passed subsequent to this executive session.

The fact of these two 2015 HWFC-CPC contracts on the JCOPE website raises more questions than it answers. Also, since the final bi-monthly report for the year will not be posted for another week, we are missing key public data.

These two contracts and their deliverables do, however, bear scrutiny. There has already been too much subterfuge; clarity would be welcome.

[6] Citizens can track NYS governmental meetings, including with NYS DOL: visit the Project Sunlight website “established in the Public Integrity Reform Act of 2011 … [which] provides New Yorkers with unprecedented transparency regarding the appearances made by individuals and entities before the New York State government.”

[7] Phone call, January 5, 2016: thanks to Russ Haven, Legislative Counsel at NYPIRG (New York State Public Interest Research Group), for his assistance in interpreting NYS JCOPE filings.

[8] A contract between the HWFC (former) board and CDS Consulting Co-op was executed in December 2014, specifically for CDSCC’s Cooperative Board Leadership Development program (CBLD). HWFC began its contractual relationship with CDSCC in 2009; it is unknown if there has been an ongoing contractual relationship since then (this information is being checked into).

A presentation to the HWFC board was made by CDSCC representative Marilyn Scholl on November 3, 2009; the December 1, 2009 board minutes state the board’s decision to proceed with a contract with CDSCC. Board minutes list reports about CDSCC under “CBLD Report.” Member-owners please see the December 1, 2009 minutes, here.

Information about policy governance and the CBLD program was discussed and a July 18, 2010 retreat with Marilyn Scholl of CDSCC took place, with the six-hour retreat focusing on board policies. Member-owners please see the board minutes for June 8, 2010 and July 6, 2010.

At the July 6, 2010 board meeting, at which the July 18th board retreat with CDSCC was discussed, “it was clarified that our current by-laws do not support the policy governance structure.” This raises an urgent question for our current board: were CDSCC-recommended policy governance initiatives implemented by previous boards, which were at direct odds with the bylaws?

[9] Member-owners, please see the May 5, 2015 board minutes of the Honest Weight Food Co-op: Section 4d, Board Work: “Update on Executive Session Minutes/Notes”

[10] See Michael Hill’s January 3, 2016 Associated Press article entitled, Will work for food? Co-op programs end amid labor-law fears.

[11] This horse is out of the barn, the damage done, and Ms. Dennis is gone from the board. This acting-president was removed from executive office on December 15, 2015. The AP article came out nationally on January 3, 2016. She resigned from the board on January 5, 2016.

[12] See Professor Sharon Beder’s article, Public Relations’ Role in Manufacturing Artificial Grass Roots Coalitions and her list of publications, here.

Also, view this 2015 TEDx Talk by journalist Sharyl Attkisson, entitled Astroturf and Manipulation of Media Messages, here.

The Center for Media and Democracy’s project, Sourcewatch is a good place to begin your education about astroturfs and other terms used to describe corporate hijacking of real grassroots efforts, especially involving Strategic PR & Lobbying firms.

Newnetworks.com, a highly-respected national, grassroots group, advocating for consumer-based telecom issues, has accurate, concise definitions for: astroturf, co-opted, skunkworks and stinktanks, here.

Think (the appearance of) grassroots advocacy & activism isn’t for sale to those corporations which can afford to pay? Think again. Read this webpage of a top D.C. “integrated public relations and public affairs agency,” advertising its grassroots services, when “lobbying alone isn’t enough:” seventwenty strategies.

[13] Member-owners, see the minutes for the September 27, 2015 Membership Meetings under Text of Powerpoint Presentation on Bylaws Task Force (located under November 17, 2015 Board Minutes’ Attachments).

[14] See these two posts for detailed information about this bylaws process, here and here.

The Bylaws Task Force FAQ footer states the following: “Revised: November 9, 2015. This document is confidential and provided for the sole purpose of internal Co-op discussions. This document may not be disclosed in any manner (including photos) to any third party or used for any other purpose without the express, prior written permission of the HWFC’s Board of Directors.”

[15] See CDSCC’s CBLD ‘Fresh Start‘ Bylaws template, here.

[16] See the CDSCC Clients & Case Studies, here.

[17] Mr. Lushin’s three referenced articles, in the HWFC Bylaws Task Force FAQ List of Citations from CDSCC, are:

Lushin, Laddie. Co-op member labor programs under the Fair Labor Standards Act: A matter of economic reality. Published by Laddie Lushin, 2009. Available here.

Lushin, Laddie. Summary of patronage dividend requirements for consumer co-ops. Published by Laddie Lushin, 2011. Available here.

Lushin, Laddie. Member labor and federal employment taxes. Published by Laddie Lushin. Note: I cannot locate either a copy of this article or a URL. I recommend contacting the author directly at 4120 Braintree Hill Rd.,Braintree, VT 05060-8854. Tele./fax: 802-728-9728; e-mail: laddie@sover.net.

[18] Member-owners, see the HWFC board minutes for May 5, 2015, here. I have been unable to locate a copy of either the “existing confidentiality agreement” or the new confidentiality agreement referenced in this motion.

[19] From personal correspondence with Ms. Yahn, dated December 3, 2015, I found out that the Putney Food Co-op did not retain their original bylaws: that fight was lost.

Re-read journalist Mimi Yahn’s February 11, 2015 Letter to the Editor of The Commons Online, Still Searching for Democracy at the Putney Food Co-op. It provides details about her Vermont co-op board’s work with CDS Consulting Co-op and their CBLD (Co-operative Board Leadership Development) program, “policy governance,”and “the board’s determination to replace the current bylaws with a ‘streamlined’ template model provided to them by CDS Consulting [Co-op], the consulting firm that has been a driving force behind the wave of expansions, new building projects, governance restructuring, and gentrification of food co-ops across the nation.”

The (former) HWFC board signed a contract with CDSCC in December 2014, specifically for the CBLD program, which includes their “streamlined” bylaws package called ‘Fresh Start‘ bylaws. These bylaws virtually eliminate local, member-owner control in the co-operative corporation, replacing it with power vested in the board, and shared between board & management: shareholders become virtually powerless in this top-down model and are no longer owners.

We do know that HWFC Bylaws Task Force (BLTF) members were provided with a copy of the ‘Fresh Start‘ bylaws template in the source materials provided to the HWFC BLTF by CDSCC.

The (former) HWFC board had not only planned a vote to change the bylaws on January 24, 2016, it had also planned a vote to add 12,000 new shareholders.

Therefore, a food co-op with this new structure in place can no longer be considered a co-operative corporation, at least here in NYS.

To understand this issue, read these two documents prepared in November, 2015 by Kate Doyle, a member-owner and attorney who was elected to the HWFC board on November 30, 2015:
Critical Legal Information
A Letter to Shareholders

Please also read Ms. Yahn’s post here at HWFCInfohub, and her two articles, published just prior to her Letter to the Editor: Losing Our Principles and Searching for Democracy at the Putney Co-op (also read comments at the end of the article.)

[20] See the CBLD ‘Fresh Start’ Bylaws Template, Article III: Member Meetings, 3.2 from CDS Consulting Co-op.

[21] Effective January 28, 2016 Duke Bouchard will leave HWFC in his role in top management (a member of the three-person LT or Leadership Team) and as CFO and assume a new position as Finance Manager at the River Valley Co-op in Northampton, MA.