Statement from The Rolling Jubilee Fund legal team:
September 24, 2013
We have been advising the founders of The Rolling Jubilee Fund since August 2012. We have worked with them in connection with entity formation, corporate governance and related issues, including transactional and corporate matters.
We invited David Miller from Cadwalader onto the legal team as pro bono tax counsel after he was kind enough to volunteer his services in this regard.
We have reviewed the September 23 Naked Capitalism blog post by Susan Webber (who writes under the pseudonym Yves Smith) and frankly are dismayed by the apparent effort to discredit one of the most practical, potentially high-impact, constructive initiatives to have emerged from the Occupy movement.
The Rolling Jubilee Fund has a perfectly standard and unremarkable structure for its corporate governance. What is remarkable is the transparency that has been demonstrated. Minutes of board meetings as well as The Rolling Jubilee Fund financial policies have been posted on the website. Details of debt buys and purchase agreements are also available for download directly from the website. The names of the individual board members are in boldface. The Fund’s decision to engage in a structured roll-out is based upon legal and public relations considerations that have been fully vetted.
The Board has a horizontal structure, in keeping with the non-hierarchical principles of the Occupy movement. No actions are taken, nor are any funds expended, without the approval of the Board. The Rolling Jubilee Fund board members consult with the Rolling Jubilee Working Group, which in turn works closely with the OWS Strike Debt collective. As a result of its completely voluntary transparency, The Rolling Jubilee Fund has welcomed the scrutiny of the entire blogosphere.
We are proud to have worked with of the founders of The Rolling Jubilee Fund. These young people have developed a project that is bold and brilliant and brazen. Every step along the way, they have sought advice from us and our colleagues to ensure that what they are doing is squarely within the law. One would think that those who are concerned with the worst abuses of our economic system would support such initiatives. Constructive criticism is always welcome. We question the motivation of those who make allusions to impropriety without citing a single example of any specific questionable action.
In any corporate structure, there is a theoretical possibility that a principal could abuse his/her power. In the case of The Rolling Jubilee Fund, those of us closely involved know that this has not occurred here.
Margaret Ratner Kunstler
Hrbek Law LLC
On November 15, 2012 Strike Debt launched the Rolling Jubilee initiative through which we purchase debt for pennies on the dollar. But instead of collecting on that debt like a debt collector would, we abolish it.
After the last announcement of the $1.1 million medical debt that we abolished in March, the Rolling Jubilee team got to work researching and vetting additional portfolios. This is a time-intensive process but we’d rather do it right than do it quickly. Once we purchase the portfolios we then have to go through the process of contacting the debtors and planning a media and education strategy and organizing campaign. That’s the stage we are in right now. One of the goals of the Rolling Jubilee is to help spark a debt resistance movement while helping each other along the way. There is some excellent, tough legislation aimed at the debt buying industry that has recently passed in California and we might like to champion such legislation elsewhere. We are also in conversation with allies in other parts of the country about how we can work with them. All of this takes time. And this is an all-volunteer project.
After the telethon, we made a public promise to abolish at least 11 million dollars of medical debt with the money raised. Although we haven’t announced the details of our most recent purchases yet, we are very proud that we have not just met this promise but exceeded it. We are currently gearing up to make our next announcement in mid-November. Each debt purchase will be accompanied by full transparency reports (our CPA is in the process of preparing the latest one), just like our earlier purchases.
Yves Smith recently posted a critique of the Rolling Jubilee operations on her website, Naked Capitalism. When we developed our financial policy we sought to follow best practices and looked to some of the most respected nonprofits as examples. Smith raises some concerns about our Financial and Control Policies. Smith says that “[i]ndividual board members have the power to spend significant amounts of Rolling Jubilee funds and make binding commitments,” which is simply not true. She also implies that board members can bind Rolling Jubilee to contracts that the entire board hasn’t approved. That’s not true either. The entire board of directors of Rolling Jubilee has always approved and will continue to approve all expenses and all contracts before they are signed. No board member has authority to approve an expense, write a check, or enter into a contract on his or her own authority without board approval, and no board member ever has. Given that many organizations authorize their executive director to sign all checks (even those over $10,000) without requiring a second officer to also countersign the check, our check signature policies are actually conservative. However, it is important to note that our controls are even tighter than the information on our website suggests, because only two board members are authorized on the Fund’s bank account. To reiterate: board members simply do not have the power to unilaterally spend Rolling Jubilee’s money. Nobody writes a check or spends money, even for a dollar, without the input and approval of the entire group.
In addition to this internal oversight we have an independent professional bookkeeper who volunteers her services and have hired a third-party CPA to produce quarterly reports and thorough audits. Please know that our legal and accounting teams have assisted us in developing our organizational structure and continue to advise us every step of the way. We are always open to adapting and improving our system.
We recognize that we have not updated the website in some time and have begun to do so. We will be sending out an email blast to our list soon. We have nothing to hide and look forward to our next announcement planned for mid-November. Supporters will not be disappointed. This kind of organizing requires slow and thoughtful work. We are determined to do this right.