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After the shocking news of Couchsurfing accepting a $7.6 million investment and becoming a for-profit company, I just wrote a message to the hospitality exchange community. Most important: Hospitality Club will never be a for-profit business, we are currently developing an open-source site for HC and some behind-the-scenes info on CS. Please read the statement here: http://volunteerwiki.hospitalityclub.org/couchsurfing-for-profit-business-now
Oh, and a special shoutout to my haters here 
I think almost all of John’s comments deserve to be blog posts on their own. So I’m copying this one over here:
“I think it was Matrixpoint who said that Casey really insists that he is not the true leader of CS…”
Actually, I don’t know that he ever said this. On the contrary, since I first appeared at the Montreal Collective, and during the following year as a volunteer, I found it very difficult to determine the organizational structure of CS and Casey’s role in it.
Everyone knew that the organizational structure was being revamped as part of CS 2.0, but the only public information I could find was an organizational diagram on the website that showed a central box labeled “Admins and Founders” or the like, months after I left Montreal. I was disturbed to see this for two reasons: 1. the complete lack of detail of the internal structure of this box, and 2. it’s central position, which was in conflict with the agreed upon decentralized organizational structure suggested by the tree model (see the logo of this website) that was created during the Montreal Collective.
There was no particular mention anywhere that Casey was the supreme, unaccountable head of CS. He was only included among the list of 4 founders prominently featured on the website. There were no by-laws to be found. The only information available about the Admins was a brief statement that they were volunteers who helped with important administrative duties involved in running the website. No information about how they got their positions or whether there was a term of office, etc. No information about performance reviews, etc.
As someone who had begun volunteering full-time with the intention of working freely on behalf of the hospitality community for years to come, I sought clarification as to who I was actually working for. I made it clear that my intent was to work for the Community, not for Casey and the Admins unless they were in some way accountable to the Community. Why in the world would I (or anyone) work full time so that Casey and his hand-picked buddies could live it up in exotic locations, unless the Community who provided the support for that had some say in it?
I got no meaningful response to two lengthy requests for information from the Admins beginning in December, 2006. That’s when I started reconsidering my commitment to CS and paying attention to such matters as the NDA (another whole story in itself).
It wasn’t until the following year (in the spring I think) that Casey finally revealed to the developers that he was the sole member of the Board of Directors. (According to Pickwick, Casey’s told a different story to NH government officials).
So, you see, Casey’s style was very indirect. CS 2.0 was supposed to be about members participating in the operation and evolution of CS, and the emphasis was **decentralized** participation. It was “The CouchSurfing Project”, not “Couchsurfing International, Inc., Casey Fenton CEO and sole member of the Board of Directors”. “Do-ocracy” was promoted by at least one of the Admins, and another Admin was generating most of the communication which included a call for member involvement.” No where was it mentioned that these Admins derived all their power from Casey and that he quietly controlled everything with absolute authority. He rarely took a public stand one way or the other, but rather allowed people to form impressions, whether they agreed with his personal agenda or not, that he did nothing to correct.
An example of his indirect style was when he made Chris Burley the new Tech Team leader near the end of the New Zealand Collective. Chris obviously was functioning as Casey’s tool, being used by Casey to shake up the development team (probably due to issues with Joe and Kasper). Chris had very little familiarity with the code or with ongoing initiatives. He only had Casey’s authority backing him up and used it to rule with an iron fist, announcing that no “personal ideologies” would be tolerated and all developer-initiated projects would be put on indefinite hold. (Developers were clearly now to be thought of as order-following employees, but without the pay, not co-participants in a project to make the world a better place.) Casey remained quietly in the background while Chris took most of the heat for Casey’s “house-cleaning”. Chris quietly dropped off the radar by the end of last summer, as if his usefulness as a tool had expired.
What was most disturbing to me about this incident was that not long before this Casey had finally talked with me on the phone (after a 3 month wait) for a few hours and we seemed to have reached a meeting of minds. I explained to him that I would begin no new projects until the NDA was fixed (as he had promised some nine months before). I told him that it was outrageous as it stood. He said nothing in response. But he actually invited me to participate in the formulation of the organizational structure that was in its final stages. I said, yes, I would very much like to be involved. The result of this call was that I felt Casey had heard my concerns and that I now was getting some respect as a full-time volunteer (of more than half a year).
So I was very shocked that Casey appointed Chris, without even consulting me or any of the Tech Team about it, especially since he had the opportunity to discuss it with me on the phone and had given me the impression that he wanted me to be in the loop when it came to organizational issues.
I was even more shocked when I sent him an email saying that although Chris might be a good choice based on his past general contributions (this was before his new personality as a “leader” emerged) but that he didn’t have enough technical knowledge to lead the team, and a least another co-leader who did was needed. Casey never responded to my email.
I was even more shocked when the new organizational structure was announced (completely done in secret), and that what little apparent accountability it seemed to include amounted to nothing.
I was ultimately shocked when the proposed NDA came out (after a year) that was supposed to be the “fixed” version, but it was 10 times worse than the original. It had the feel of the Patriot Act to me. I was utterly uppalled by the mindset that produced it, and by the way this whole drawn-out fiasco was conducted by Casey and his appointed elite.
I certainly felt the trust I had put in Casey as a result of the phone call completely betrayed, and I took the NDA as an indirect message to me that I was no longer wanted as a developer, since I had publicly announced I would no longer begin any new projects if the NDA wasn’t sufficiently fixed.
I would have much preferred that Casey had told me this directly, as I would have preferred that he shake-up the Tech Team himself instead of having a henchman do his dirty work for him.
This is Casey’s style: indirect, manipulative, pulling strings from behind the scenes, while giving a casual, no-worries, laid-back, often non-committal impression in public: a fun guy to party with.
In case any one is wondering whether Casey might have been justified in “cleaning house”, I can say that the 4 core developers made a huge contribution to CS, much more so than Casey, at least in the technical area, for most of the year following the Montreal Collective. (I suspect it was our very success that scared Casey, and threatened his absolute control.) Speaking for myself, the greatest problems I encountered as a volunteer developer were all caused either directly or indirectly by Casey or the Admins due to their arbitrary assertions of power without understanding the situation, extremely poor communication, and poor judgment. Working with the Community, on the other hand, was delightful and I still have those good memories.
John
To clarify what OpenCouchSurfing is and isn’t and to give a more balanced view in our blog posts I’m writing this tiny blog post about why Casey Fenton needs to stay.
Still, even legally there is a problem with Casey in a paid position while being a member of the Board. And it would be totally useful if Casey’s ideas about transparency and volunteer participation would change a little bit. Though, also without it, with an estimated half a million US dollars coming in during year 2008 it’s unlikely that the ship will go down any time soon. And I am sincerely happy about that.
About limiting the acceptance of new members Pickwick writes:
Kasper: “major source of income”
Is that income needed? Surely a much smaller stream of new members, recruited in a better way, could raise the moderate amounts necessary to pay server costs, paper clips and a few postage stamps.
Current spending is mostly for
A) salaries, and I think we had much better quality work from the volunteers “no longer retained”;
B) the exodus to Thailand, and I have yet to see any actual WORK mentioned that was done there in the 31 days of December (other than picking the place for January).
So the money seems to benefit those who make the decisions. Thankfully we are a charity now and published accounts have to be more accurate and more detailed than hitherto. Which reminds me that there are still areas of concern regarding the charitable status:
1. The financial statements online are still not identical with the ones filed with the US tax authorities and the New Hampshire charities regulators.
2. Casey may have perjured himself by stating falsely to the Attorney General that from 2003 to 2006 the company had several directors besides himself. The major reason for that could be that the truth may affect the legality of his own employment.
a) New Hampshire law requires a minimum of five directors, so with Casey as sole director the company had no legally composed Board of Directors. For that reason alone contracts entered into during that time may be invalid, including the employment contract he made with himself.
b) Casey as sole director signed his own employment contract on the dotted lines of both sides of the contract. There could not be a more blatant violation of all ‘conflict of interest’ principles, and for that reason alone this contract may be invalid.
c) New Hampshire law does not allow the chairman/president of a charity to be an employee at the same time. So when Casey as chairman/president signed his own employment contract he violated that law, and for this reason alone the contract may be invalid.
d) If Casey’s employment contract is invalid, he will have received his salaries without legal grounds, and may have to pay ~$70,000 back to the company. (That, and the other ~$70,000 of accumulated profits in the bank should keep CouchSurfing going for a good many years to come, as a volunteer based charity, without ill prepared world trips for the management.)
At the New Hampshire Department of Justice the case has been queued for review by an investigator in early 2008. My advice to the new Board of Directors is: sort it out before they start asking questions.
To sum up: I don’t think money is a valid argument to continue this unhealthy growth pattern.
Pickwick about the difference between a non-profit organization and a charity:
A charity needs to be non-profit, but not every non-profit organisation is automatically a charity.
A Non-Profit Corporation can’t pay the owner a dividend. He has to pay himself (or others) a salary instead, which he does ($88,150.22 since 2005, for salaries, payroll taxes, and temporary help). The rest of the money needs to be piled up on the company’s books: there’s an ‘emergency fund’ of $30,000 and accumulated ‘net income’ of $40,135.89 from 2004 to date. Other than that, a Non-Profit Corporation, which is NOT a charity, can do whatever it wants with its money like any other privately owned company. This includes the possibility of one day dissolving the company, or changing its status to For-Profit, and cashing in.
A CHARITABLE non-profit corporation will have a clause in its corporate bye-laws where corporate assets are dedicated to charitable purposes. It receives tax privileges, and in exchange comes under public supervision and is subject to reporting and disclosure duties. It will be much more difficult for individuals to profit, and if done right, even impossible.
The confusion is understandable because colloquially the terms ‘charity’ and ‘non-profit’ are sometimes used as if synonym. The problem here is that this misunderstanding might be intentionally exploited. Ultimately the proof whether an organisation is or isn’t a charity lies in the public register of charities, both on State and Federal level, neither of which contains an entry for this company.
So the logical conclusion is that either it is NOT a charity and claims that it is are false, or it IS a charity, in which case it has not complied with registration, reporting and disclosure duties. In either case, as a NON-charity, or as a NON-REGISTERED (unrecognised) charity, any charitable solicitations, for money or volunteers’ time, might be illegal.
One thing that doesn’t cease to amaze me is the way in which many CS users react to Pickwick’s recent announcement to report the fraudulent actions of CouchSurfing International inc. to the New Hampshire District Attorney. Besides the deafening silence by He Whose Opinion Matters, two kinds of responses are noticeably frequent:
To me these reactions indicate that the community at large does not recognise a crucial difference between civil litigation and criminal prosecution. The former is a legal procedure between two parties, each with their private interests; the latter is between ‘the people’ and whoever harms the public interest.
That’s right, the public interest, and CS users would do good to realise that they are the public here. Just some points for consideration:
To return to the responses I started with, it will be clear that the potential harm to the public interest is all the moral entitlement Pickwick needs for his actions. Second, they aren’t even his actions to begin with, let alone they could serve a private interest; if the New Hampshire DA sees sufficient reason to prosecute, they are the public’s actions.
Pickwick about Ulf’s remarks to the formal query about the immigration requirements and CS management, in Brainstorm:
Ulf: “brought up only to be able to point out (once more) to how that mean, mean LT has not come up with them!!!”
How do you know? I brought this up because innocent volunteers were made to violate Thai law and risk jail, and I decided to do what I could to stop it.
Ulf: “I wonder why those authors would not first of all contact the organizers, tell them about those concerns”
How do you know they didn’t?
Ulf: “an appropriate amount of time to answer (2 weeks)”
It doesn’t take two weeks to answer “are you aware that a business visa and work permit are required?” In two minutes you can say either: “Yes, and we’ll brief all applicants fully”, or: “No, good gracious, thanks for telling us, we’ll check immediately, any more help you can give?”
Ulf: “that mean, mean LT”
Some who’ve met the people came here with pain, disappointment, and feeling their trust betrayed. I’m not one of them. I don’t know anybody.
From an outside view I think something happened I’ve seen many times, as consultant, and as participant, in new political parties, family businesses, charities:
The founder generation leaves a second generation power vacuum, by appointing mediocrity, so that their own power isn’t challenged, and their own glory doesn’t pale against real professional competence. I don’t think they are mean. I think they are overwhelmed by their responsibilities.
Because they don’t have what it takes to do this job they don’t react professionally, but try to lie when caught blundering. And when caught lying, they feel with their backs to the wall and try to bully. The inappropriateness of those acts backfired, so the strategy now is to be silent or evasive. It’s neither wicked nor original. It’s human nature. It comes from making inept appointments, in an inept organisational structure.
Since a management style has been established that sidelines criticism by applying naked power unchecked, change will only occur if and when there is a sense of real crisis. I would have preferred it to be an internal crisis, brought on by a ‘rebellion’ here, about censorship or communication, rather than something that puts volunteers in a Thai jail, or leaves surfers stranded all over the globe should the site go down (again).
But I no longer hope for the ‘internal crisis’ option. Non-communication from above, most noticeably from Casey (the only voice that counts), and the resulting tedious repetitiveness of criticism, has left people with nothing else to talk about than each other, and that seems to have worked regrettably well. All are at each other’s throats, and blaming each other for it too. The issues fade.
It’s like the man shouting: “Move, Liz! Car coming!” and she replies: “Not in this tone, Henry!”
Copied with Pickwick’s permission
I might have used other words, and I definitely don’t have the skill to do (or bluff?) this sort of stuff, but I’m not unhappy to see that Pickwick is seriously kicking some butt:
It’s getting heart breaking in here. And cold. Icy cold. All the ‘open source’ and ‘charity’ debate left me disagreeing, but unhurt. This Thai project does me in.
www.couchsurfing.com/collective_thailand_application.html
First the cold, demanding, uppity language itself. Then what looks like a “suck ‘em dry & spit ‘em out” attitude of present and future ‘Volunteer Coordination’. Then the cynicism luring generous, well meaning people to commit crimes and risk jail for lying to immigration police in a post 9/11 world.
www.couchsurfing.com/group_read.html?gid=429&post=401914#pos…
Shame on you. Shame on those who do it. Shame on those who sit close by and watch in silent complicity. It’s time to hold Casey & Friends accountable, if not to members, then at least to the law.
The Royal Thai Government have received a formal query about the immigration requirements for the project. They know you are coming, so you better cut out the criminal part of your plan.
The charity question needs a decision. Casey opened his mouth in 2003, and he now either sings, or shuts it again. No more smoke screens. Run the show how you think you must, but run it well, and stop lying. A thoroughly documented formal query about possible Unlawful Charitable Solicitations will be placed before the Attorney General of New Hampshire “practically tomorrow”. My advice: hurry and be there first, with a genuine charity.
In 2005 CouchSurfing was a business entity in the US state of New Hampshire, that’s for sure. You can even find the annual report of 2005 there to see that the Board of Directors consisted of Casey Fenton, and that the president of the organization was Casey Fenton. The treasurer was Casey Fenton, and last, but not least, the secretary was, you might have guessed it… Casey Fenton. This might have changed in the meanwhile.
So, what is the current status? Why hasn’t there been an annual report of 2006? As of this day, is there more variation in the official positions of CouchSurfing International Inc.? We were informed that Dan and Seb are members of the board now, but before January 2007, when Casey announced that he was the only member of the Board, many people thought that all 4 Founders were on the Board. Or not? We can’t know, since…
| Last Annual Report Filed Date: | 12/24/2005 |
| Last Annual Report Filed: | 2005 |
More burning questions:
With the nauseating smell of deception all around, it’s probably about time for Casey Fenton to start thinking about disclosing some more of “the facts”.
Disclaimer: Do not believe everything you read here. But do check out the links.
As posted in the politics and policy group
As Norbert points out here, the LT’s apparent unwillingness to make haste with the 501c3 application for tax exempt status, as well as their unwillingness to publish corporate bylaws or make drafts of these available for discussion, may well be construed as an (attempt at) fraud, because donations and services are and have been obtained under the (currently false) pretense that CS is a charity.
Needless to say, this renders CS extremely vulnerable to all sorts of liability suits, interestingly of the kind that is likely not to be covered by the ToA. Basically, any user who has donated volunteer work or money (besides the verification fee) to CS can claim that he has been the victim of this fraud; add to this the easy access to legal representation in the US (due to no cure, no pay) and Norbert’s prediction that liability is likely to extend to all natural persons working in, and owning CS, and you can easily grasp the size of the time bomb Casey’s currently sitting on.
And how do you reckon that Casey, Jim and Mattthew were to produce the funds needed for compensation if this happens? Precisely, from the sale of CS to a commercial third party, which is entirely within Casey’s right…
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