Michael Shames, pictured at UCAN's offices for a previous story, called the lawsuit "smoke and mirrors."
Employees of a non-profit consumer group in San Diego filed a lawsuit Friday alleging mishandling of donations, investments made to secret accounts and bonuses awarded to the executive director unbeknownst to the organization’s board of directors.
Two employees of the well-known Utility Consumers’ Action Network (UCAN), are suing the group's executive director and its board of trustees.
The critics claim executive director Michael Shames wrongly received "hundreds of thousands of dollars" in secret or "undisclosed" bonuses that were not properly authorized by UCAN's trustees and were not reported to the IRS.
The lawsuit, which was filed by attorney Mike Aguirre, also alleges that Shames "opened and controlled" at least five brokerage accounts that were not properly accounted for.
Charles Langley, a public advocate with UCAN said an organization that holds others accountable must be accountable to itself.
Langley called it “troubling” that when he and fellow employees reported what they believed to be financial impropriety, the board did nothing.
Bonuses to Shames, outlined in court documents, range from $400 following a Good Guys settlement to $58,853 after a December 2008 settlement with San Diego Gas & Electric. Court documents: Part I , Part II
Langley said he joined the lawsuit in hopes it will force UCAN and Shames to address these alleged illegal activities.
When contacted late Friday, Michael Shames called the lawsuit "smoke and mirrors" and said UCAN will prevail in court and "obliterate" these critics.
He also claims they violated California privacy laws by including UCAN emails and transcripts of board meetings in the lawsuit.
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