You are here

12 e-Mail To Attorney Scherer

Subject: RE: ARCE issues
Date: Wed, 22 Dec 2010 14:25:39 -0800

Dear Chris,
I have the following observations, comments and questions as to the Bylaws and ARCE's position that if will not provide to me as a candidate for the Board any information concerning the names and address of ARCE members.  
You state in your e-mail that "ARCE stands by its decision not to provide you its membership records." In this context, who is the anonymous ARCE? Is it Gerry Scott, the Board by way of discussion and vote, some Committee, or the like? If the Board or Committee, as a dues paying member, I hereby request copies of the minutes or other records concerning any discussion of the matter and a vote or decision on my request, so that I may identify the Board members involved and persuade them otherwise. This only seems fair and democratic.
Article V, Section 2 of the Bylaws of ARCE provides, inter alia, " The Board... shall consist of the following...(iii) six (6) Governors elected by and from among the Individual Members, as prescribed in this Article V, Section 4..."
Article V, Section 4, Election of Governors of the Board by the Individual Members and Term of Office  provides," The Individual Members of the Corporation at the Business Meeting shall elect, from within their own number, the number of Governors prescribed in Article V, Section 2."
If ARCE takes the position that only Present Management can have access to member records in order to solicit proxies for its hand picked candidates, which proxies it solicits by mail every year and Individual Members may not, then there is no mechanism available to an Individual Member to advise other Individual Members that he or she is seeking election to the Board. This negates and frustrates the provision in the Bylaws providing for Individual Members to vote on election of their own members to the Board, effectively disenfranchising them of their right to do so in violation of the Bylaws.   
Furthermore, it cannot be reasonably argued that an Individual Member can rise up at the annual meeting, announce his or her candidacy and solicit votes then. Only a small fraction of the actual membership attends the annual meetings, always far less than 50% of the total. Those who have not attended cannot be so notified and their votes solicited then, disenfranchising them from participation in the election process. ARCE can argue that because Present Management will have already mailed out its proxy solicitations to all members, those not in actual attendance have been given the opportunity to participate, either by signing and sending in the proxies sent by Management, or not doing so, in essence, foregoing voting. But by blocking other dissenting members from being able to send proxies and solicit member votes, Management deprives the non attending members of any choice in the matter. Non attending members either have to vote for Management's slate of candidates, or not vote at all, as they are never advised of and so are not able to vote for an alternative candidate.
In addition, to the extent that management has been unilaterally able to solicit proxies and obtain any votes through them before the annual meeting, this ensures the playing field is not level. Any member candidate, first announcing his or her candidacy at the annual meeting, will already be behind in the voting to the extent that Management has already secured from its proxy solicitation any vote for its slate of candidates, which the member candidate has been prevented from doing by Management's with holding the information Management used to solicit those proxies and votes in advance of the Annual meeting.  This again disenfranchises the non attending members, is undemocratic and smacks of banana republic elections, where lip service is paid to fair and democratic elections, while the reality is already preordained.
Will ARCE agree to forego its solicitation of proxies for the upcoming meeting in April, so as ensure a level field at the Business Meeting, or do I need to take action to prevent it? Will it agree that I be allowed to announce my candidacy and for other members to voice support for it at that meeting, in the presence of all other attending members and be given sufficient time to enunciate the reasons for such candidacy? Will it give its members a fair opportunity to hear the issues and democratically decide for themselves if there is merit to the contentions, or will it continue to try its best to squelch any dissent or exposure of its conduct? These are simple, direct questions of importance to the Members which require simple, direct answers.
Let me turn now to Article VIII, Section 3 of the Bylaws, the self nomination provision. This provides in pertinent part," The Board shall provide, yearly, for an opportunity for self nomination and nomination of Individual Members of the Corporation to the Board for consideration by the Nominating and Governance Committee."
Article VIII, Section 2, provides in pertinent part," The Nominating and Governance Committee shall ensure that a slate of qualified candidates is established and presented each year to the Board for openings on the Board. A slate of Candidates for the Board shall be presented to the Board, based on a needs assessment, at the fall Board meeting for approval."
I suspect that Present Management will take the position and try to persuade the Board that these provisions amount to effective control by the Board over which Individual Members may be allowed to run for the Board and allow it to veto any candidacy it chooses by refusing to allow such Member to run. If Present Management and the Board take this position they do so at their peril, for this is not what these sections say.
Section 3 speaks about "consideration by the Nominating and Governance Committee" of any self nominated candidacy. It says nothing about vetoing, preventing, blocking, denying, or otherwise interfering with such candidacy.
Section 2 provides," The Nominating and Governance Committee shall ensure that a slate of qualified candidates is established and presented each year to the Board...". This can only be read to mean that the Nominating and Governance Committee will review and recommend candidates which it believes are most favorable to and suitable for the Board, to be included on the "official" slate of candidates which it proposes to the Individual Members to vote on and which is the subject of its Management controlled annual proxy solicitations.  The approval mentioned in the end of the section refers to the approval by the Board of its "official" slate of candidates.
As with Section 3, there is no language about vetoing, preventing, blocking, denying, or otherwise interfering with a self nominated  candidacy. This is the only reading and interpretation which jibes with Management's current practices.
If Management takes the position that this section gives it the right to veto, prevent, block deny, or otherwise interfere with a self nominated candidacy, which language appears no where in that Section, this would be violative of Article 5, Section 4,  which provides, " The Individual Members of the Corporation at the Business Meeting shall elect, from within their own number, the number of Governors prescribed in Article V, Section 2."
That provision does not say the Individual Members have the right to elect from within their own number only those candidates approved or decided upon by the Board. The language gives them the right to elect whomsoever they wish, even if not approved by the Board, which is especially true if the Individual Members vote to elect a dissenting, independent Individual Member to a Board with policies and actions with which they may disagree. To take a position contrary to this would be to deny the Individual Members, who are the only voting members, their right to decide upon and control the actions of Management.  Does ARCE take the position that the Board can deny the Individual Members the right to vote for candidates of their own choosing and can vote only for candidates preapproved by the Board? Again, it is a simple, direct question to which the Members, of which I am one, deserve a simple, direct answer.  
I note also that Article VIII, Section 2 further provides that," A slate of Candidates for the Board shall be presented to the Board, based on a needs assessment, at the fall Board meeting for approval. It shall be the duty of the Nominating and Governance Committee  to provide to potential candidates a Board of Governors packet, outlining the Board responsibilities..."
As we are now at the end of 2010, the fall Board meeting has come and gone. As I have received no such packet, I must presume, with no surprise, that my candidacy, made in opposition to Present Management, has not been approved. The refusal to provide me the information which Present Management uses to solicit its proxies is therefore no surprise, either, though clearly not tenable as I have explained.  
As an Individual Member, I hereby request a copy of the minutes, recommendations, or other records of the Nominating and Governance Committee's decision on its selection of candidates for the upcoming meeting, specifically including all other self nominations and their statements accompanying those nominations. As these are of direct concern to ARCE and as I am a member, I should be provided with them. I also request a complete list of all the names and address of the current Board of Governors, to whom I intend to take this matter directly. There is nothing in the Bylaws which prevents this. It is business that directly effects ARCE, so I therefore expect that I should be able to raise this with the Board directly.
I fully expect that these requests will be denied or ignored, as have my other requests. If so, this will only serve to demonstrate the nature and tenor of Present Management and its contempt for Individual Members.  As soon as I have your response, I will begin whatever action is necessary to bring these matters to the attention of the Board and the Members. If I do not have a response by the end of the first week in January, I shall proceed accordingly.  
Thank you for your attention.
Very truly yours,
Ed Johnson

Subject: RE: ARCE issues
Date: Tue, 21 Dec 2010 17:24:57 -0600



Merry Christmas and a Happy New Year to you and Marcia!  Good news about Marcia’s recovery.  She’ll be doing one-armed push-ups soon . . . .


On to ARCE --


This confirms that Elsa’s contract expired and it was not renewed.  She is no longer with ARCE.


For the reasons previously stated, ARCE stands by its decision not to provide you its membership records.


I’ll be out of the office beginning tomorrow, Dec. 22 and I’ll return on Dec. 30.  I’ll have limited e-mail access during my vacation, but I will be checking-in.







From: Edward Johnson []
Sent: Monday, December 20, 2010 7:21 PM
Subject: RE: ARCE issues


Dear Chris,
Merry Christmas greetings to you and yours and best wishes for a good New Year.
Marcia has recovered nicely, thank you. Though in the worst demographic for this surgery, she has done exceedingly well, by the Grace of God and is ahead of the curve. She will clearly not experience a frozen shoulder, the complication we feared most.
Turning to ARCE matters, I would now like confirmation of the representations made to me at the meeting in San Antonio in August, to the effect that Ms. Bourguignon's contract would not be renewed and she would be terminated by the end of this year. Please advise me if she has been so terminated, or when such termination will be effective.
It is now time to turn to the issue of ARCE's refusal to make available the list of its members and their addresses at which I can write and solicit proxies for the elections at the next annual meeting in the beginning of April 2011, which will shortly be upon us.
There is no need to discuss the basis for its refusal to provide the information or any legal issues pertaining thereto. We have gone over these before in some detail. The fact is that ARCE's present management uses and has for years used the very same information to send out and solicit proxies for its own yearly hand picked slate of candidates. As I am running for the Board independent of present management, by virtue of the self nomination provisions of the By Laws and as present management, especially Gerry Scott, is extremely hostile to me personally and to my candidacy, the only way to ensure that I fairly have the opportunity to solicit proxies and ensure a level playing field is to provide me with the same information ARCE uses for the very same purpose.
Any argument that this unduly burdens individual members, or constitutes an invasion of such members rights of privacy is disingenuous and simply untrue. If present management takes the position that its own solicitation of proxies constitutes neither an undue burden on the members, nor a violation of their rights of privacy, it can hardly argue that providing me the same ability to do so is somehow any more onerous or invasive of such rights. As it is my contention that ARCE, especially its Luxor operations, is poorly managed and the actions of present management and staff there have ill served ARCE, as well as USAID, which funds much of these operations, any contention that these matters are not relevant to the members, or are in any way extraneous to its operations, is equally untenable.  
A refusal to provide the information is not founded on bona fide concerns, but is clearly designed to squelch dissent and election of any candidate not in complete accord with present management. It is designed to prevent revelations of management conduct which present management would prefer not see the light of day. Legitimate management, confident of its actions and conduct, would not quash dissent, but would welcome an honest, open and forthright dialog between it, the members and other candidates as to what would best serve the interests of the organization. Any attempt to block my candidacy by keeping me off of the slate of candidates running this year will clearly be seen for what it is. A refusal to provide the same information present management uses to solicit proxies will equally be seen for what it is, an attempt to prevent me from running for the Board and to communicate with members about interests of concern to ARCE members.  
I have already taken preliminary steps to see this does not happen and to ensure that members have the opportunity to be apprised of the respective positions of managment and myself. It is now up to ARCE to decide whether it will have an open debate as to the issues or not. It is a simple issue, requiring neither prevarication nor obfuscation, but a straightforward yes or no answer. To that end I await, briefly, its response as promised in your last e-mail.
All best regards.


Subject: ARCE issues
Date: Mon, 20 Sep 2010 16:53:47 -0500



I hope your wife’s recovery is going well!  Best wishes for a speedy, and complete, recovery.


This is ARCE’s response to your most recent e-mails:


Your self-nomination to the ARCE Board of Governors is being handled in accordance with ARCE’s By-laws.  ARCE never expected you to withdraw your self-nomination.  
ARCE appreciates the issues you raised and suggestions you made during the August 4 meeting and, as set forth in its Sept. 2 letter, it has taken actions it considers appropriate on some of the issues you raised.  ARCE simply does not agree with you on some of the issues you raised and it does not consider continued discussion of those disputed issues beneficial.  Accordingly, ARCE does not intend to supplement the responses it provided in its Sept. 2 letter.
ARCE will contact you about whether it will confirm its refusal (as set forth in my letter of June 22) of your demand for ARCE’s membership records.  I will be happy to discuss the legal basis for your demand in an effort to avoid unnecessary litigation.  What is a good date and time for you?





The Law Office of Chris A. Scherer

11107 Wurzbach Rd. #603

San Antonio, TX  78230


chris @


Developed and Hosted by 3media