Disarray at the Hacker Dojo
mv-voice.com
mv-voice.com
Good on Sudarshana Banerjee, who took her board responsibilities seriously and uncovered this shortly after starting.
Sounds like Hacker Dojo was not following the rules already in place to prevent this sort of abuse.
When someone embezzles $30k, they don't do it in one transaction. That would be far too obvious. If you space it out over a year, one could make it fairly invisible.
The other issue is these charges (apparently) weren't invisible/low key transactions. If someone can literally thumb through recent statements and immediately identify suspicious activity like Gym memberships and Vegas trips then that's an obvious problem.
It's one thing if $30k was missing and the company was generating $30 million in cash flow but Hacker Dojo only has $300k in the bank and I have a hard time believing embezzling $30k could be as easily hidden in small transactions if proper controls were in place.
1. Is the non-profit in Deleware? So many shady non-profits set up shop in Deleware. When you read the requirements you will see exactly why. I've gotten to the point, I will only listen to CA non-profits when it comes to donating. California has some stringent requirements.
2. Yes--they have rules, and procedures, but there's a lot of people who don't follow the rules. The rules are getting harder to get around, but so many non-profits are there for one reason. The reason--provide a job, and a good wage to the founders. The Obama administration enacted rules that make non-profits more transparent though.
3. I have watched a few non-profit founders make, usually a husband and wife, very rich. I could go on at lenght, but tired, and it seems like no one really cares.
4. When ever I get someone asking for money for their little non-profit, I go to, forget the name--Guidestar. I download the free preview. I go to the bottom of all the pages, and look at their 1040's. I then look for the one, or two people making a lot of money. There's always one, or two individuals. I get so discouraged, and wonder if anyone in these nonprofits really cares about what they proclaim.
The fact that the thief is eventually caught shows that the system does work, and the amount of damage that has been done isn't fatal to the organisation.
There is going to have to be some amount of trust between the staff of an organisation and this trust can be abused to steal money, this is true in any organisation, it has nothing to do with being non-profit.
Finances are transparent to the public.
I’m amazed how many people think there’s some all seeing eye watching everything a non-profit does. That’s no more true for a for-profit. Sadly it’s mostly the thieves who realize how little there is to prevent massive theft. Oversight/the Government only cares when it realizes it’s not getting money it thinks its owed, and that only shows up after YEARS of leaving accounting mistakes in the wake. Loosing non-profit status by not filing taxes is not only incompetet, but now the government cares because it wants taxes on any property owned by what it sees as a for-profit company now.
And the government doesn’t care about personal purchases made by the board using NFP funds. However it does care about the sales-tax it’s missing out on, and $30k is likely just barely enough for them to even care about that. It only turns into a criminal case when the crime is reported to the police because the members or the rest of the board realize theft from the org is happening.
Why the diatribe? Running any organization with a physical space is hard work. Hackers just want to work on projects, and keeping the doors to a hackerspace open is a pain in the ass. However it can be rewarding to the right people who want to learn more about running a non-profit. But it’s too easy for us to turn a blind eye and otherwise ignore what is going on behind the curtain because you just want to pay your money and have a place to hack. It’s ok for a few people to do that, but you need an active community of people involved in running the place. It’s also hard work creating a culture of open-nes from the boards perspective. Hackers are not always the most socialized folks, and inviting critisism is hard for anyone, let alone hackers to do. But creating a transparent board from the start helps the members to expect that transparency as new people fill the ranks. And if a board tries to go rouge it makes it harder as the members will be more likely to notice the lack of transparency. Not that it makes it impossible to commit theft at that point, any report provided by the treasurer is still just taken on good-faith without anyone else actually seeing the banking records.
The financial filing rules for 501(c)(3)'s (I have no idea if that's what HJ is) are substantially more rigorous than for C or sub-S corps w/ small number of shareholders.
The Board needs to be highly vigilant about pushing for transparency and getting outside independent help to get to the bottom of things.
I repeat. Financial mismanagement and abuse is not something you try to fix in-house. The reason being you really don't know who has had their hand in the cookie jar (on purpose or accidentally) and there is going to be incentive by some to not expose the skeletons and the laws broken.
People want to protect friends but the Board really needs to retain professionals to run a forensic audit, get a full picture of what happened, and put in the proper financial controls. Cost isn't an excuse. Many law and accounting firms offer pro-bono services to non-profits, and I'm sure there would be plenty of firms who would be happy to help Hacker Dojo clean things up.
It's mostly a co-working space now. As of a year ago, people sat silently at laptops under harsh industrial lighting, coding apps into the night. Now that the get-rich-quick app boom is over, not sure what's going on there.
$199 per month is way too much. TechShop is only $125 a month, and they have a full machine shop, wood shop, electronics benches, paid staff, etc. Hacker Dojo is a bare space into which members bring stuff. I wondered where the money was going. Now we're finding out.
According to their web site, they're in the midst of a move, with the old location closed. It's not clear if the new location is open yet. Marie Knox (yes, the accused thief) is in charge of the move logistics.
I only remember the prior location as a member for a couple of years (while working near by).
Marie Knox has been suspended, so I suspect the web description of her being in charge is merely out of date.
FYI, membership is $195/month. And yes, with TechShop at $125, and Founders Floor in downtown San Jose at $200/month, $195 seems far too high for what you get at Hacker Dojo.
The $195/month is for people who use it as their office all day. If you're only there on evenings and weekends it's only $100/month.
The article appears to somehow have missed some key pieces of information. I leave it to you to decide whether Mr Klug and Ms Sudarshana Bannerjee's motives are:
1) Brian Klug, a disgruntled previous member who was banned from the premises failed to submit tax returns on time when he was executive director of the organization
2) Sudarshana and Mr Klug were romantically involved in the past
3) Sudarshana applied for the Executive director position at the organization in late 2015, with a salary of around $55,000, but another candidate was selected.
4) During the time of her election and investigation, she was unemployed.
5) She has previously admitted being friends with Marie Knox (who in turn, was hired by her former boyfriend, Brian Klug)
6) Sudarshana resigned just before a board meeting where a conflict of interest vote was on the agenda, stating that no current or former board member would be eligible for a paid staff position (all board members are unpaid volunteers)
7) Sudarshana resigned as soon as she received confirmation of a new paid position, apparently working with the Kamala Harris Senate campaign.
Sudarshana was not forced out of the board, she resigned herself. She posted her resignation on the HD slack channel.
Mr Klug is also the person who created this submission (dustball)
The last executive director was brought in to fund raise via grants and sponsorships, and failed miserably, instead raising that $400K ($300K + $100K stolen), off the backs of it's members by doubling membership fees, and converting a quarter of the Dojo into a private VC incubator.
He also wasn't an entrepreneur or a hacker, but more the slick politician type, and killed the Dojo culture, driving away most of the best volunteers and people, by ending member voting, spying on members, and banning anyone he didn't like (at the slightest of excuses at times). This and the previous board ignored members complaints, until he let the corporate status lapse, and there was no corporate veil for the board to hide themselves behind.
And now we are at war with this board, trying to gain back control that existed as a gentleman's agreement between the founders and the members, but wasn't written in the bylaws because clueless lawyers were consulted.
Also - the $30K number is a made up number by the most recent board member, who bought his board position, and is the most responsible for harassing the recently resigned whistleblower member. There are few to no records kept of the purposes of expenditures. If all unaccountable expenditures were added up - it'd be double or triple that $30K number...
Lesson: Bake your culture into your DNA, or when the good King era ends, the bad king era will begin...
Kind of blows my mind that in Silicon Valley - the Valley of the Disruptors, Hackers build an organization utilizing 100 year old feudal corporate antique autocratic bylaws.
Don't tell me we can't smart phone app, wisdom of the crowd, self govern our own hacker asses.
"bought his board position" - First of all, isn't donating money to a non-profit a good thing? Are you saying that you're proud of the fact that you don't donate any time or money to the organization? I'm a full-time emergency physician, and have lot's of my own tech projects I want to spend time on, what possible reason would there be take on what is currently almost a full-time job fixing the mess?
In fact, Sudarshana ('Sophie') Bannerjee is the reason I got involved, she asked me to to get involved as an 'independent observer', and she is the one who nominated me to be treasurer in her email of March 2nd 2016: "Appoint a new treasurer immediately. I would recommend Ghufran, who along with his wife just donated $10K to the Dojo. He is passionate about the Dojo, and volunteered over 20 hours in the last two days. "
https://gist.github.com/ghufransyed/db9c923b49efe57ef1edf0f0...
"made up number" - This is the message I posted on slack, while trying to provide members as much information as we reasonably could. HN readers can decide whether this is an accurate characterization: https://gist.github.com/ghufransyed/393de8dc0a06782cdebb0099...
If you look at the comments at the bottom of the original mv voice article, it looks like quite a few people have posted further information that was mysteriously missed by the author and many of the sources, who IMO quite clearly have an axe to grind. The fact that Sophie was unemployed during this entire time, wanted the $55k / year executive director fired so she could take his job, and left the board as soon as she found other employment is pretty well documented...and still doesn't take away from the fact that she did the Dojo a huge service by uncovering the financial issues.
I think there was a shocking lack of financial controls by the previous treasurer and board members, but those people are no longer on the board. The question is whether the way to fix it is by shouting a lot like the poster of this message, or actually do the work.
If we're talking about culture, Hacker Dojo never claimed to be a 'democracy', but a 'do-ocracy' - you want something done, you go do it. The current board are all people who are putting lots of their own time to try and fix the Dojo, along with full-time work elsewhere. We are not 'at war' with anyone, but you claim to be 'at war' with us: well, we don't plan to show up for your war, we'll just focus on actually putting in place the financial controls and other issues that will make the Dojo stronger. We'd love it if you would do the same. [typo edited]
>Lesson: Bake your culture into your DNA, or when the good King era ends, the bad king era will begin...
What I see at the fundamental problem with the Dojo is that, baked into its DNA, is the belief that legal compliance and good management are not really important. The Dojo had to leave its old space because they were so in violation of Mountain View building codes that it would have taken hundreds of thousands of dollars to bring them into compliance. A problem that could have been easily avoided if they had bothered to talk to the City about code compliance before moving into that space.
And now they've demonstrated a lack of interest in basic financial governance.
I wish Ghufran, and the new board, the best in terms of turning the Dojo around. But I worry that the disinterest in compliance and management is so integral to Dojo culture that it will have another (completely avoidable) crisis in 3-4 years.
That said, Hacker Dojo doesn't work because recurring revenue > expenses. They work because of the tremendous goodwill they've built up in the community and a devoted base of supporters who are willing to help.
Organizational controls should be aimed to strengthen that support -- too much formalization around process risks killing the goose that laid the golden egg.
Doesn't the fact that you know your dues were embezzled mean that they have in fact succeeded at being transparent? Seems like this is the best outcome. The alternative is that your money was embezzled and you never found out.
Poor little hackers, they have no self-control.
Also, isn't it standard practice in the US to present audited financials to an annual general assembly? With $300k in the bank, you should be able to afford to hire a CPA, no?
It's interesting how members who have finance experience, and members who want to learn something about finance, both step forward. A good volunteer audit can be part of the educational mission of the org.
Very creative atmosphere there, and something that really doesn't exist here in Finland at that scale. Kinda sad to hear their name is being dragged down.
I felt it's a bunch of good people there, got to meet some of the people running the place too.
The next big thing could rise from places like Hacker Dojo, I wish them all the good and hopefully finding a new place.
Hacker Dojo also has incubated the Hackers/Founders COOP which is also a solid organization.
One interesting quote: "My role and what I do has grown beyond what it was originally envisioned to be at Hacker Dojo, and frankly I'm not sure if there are too many terribly hard lines around what I do and don't do."
I get the feeling that she didn't have much in the way of supervision.
Noisebridge in SF https://noisebridge.net
TechShop in SF, SJ, and several other non-Bay Area locations http://www.techshop.ws/
Ace Monster Toys in Oakland http://acemonstertoys.org/
Sudo Room in Oakland https://sudoroom.org/
Noisebridge is still at 2169 Mission St.
> ...it seemed to me that all it needed was a match to go up in flames.
The space has been inspected by both the fire marshal and professional electricians and is not a fire hazard and is (after some work during the Great Noisebridge Reboot back in mid 2014) up to code. :) Appearances can be (and often are) deceiving.
If you're in the neighborhood, maybe pop on by during open visiting hours to see if the changes alleviate some of your concerns.
noisebridge - it's a very good place but the last two times I was there it was quite dirty. it also had homeless people (nothing against the homeless but it's not the right place for them) which made it hard to work there.
TechShop - is not a computer hacking place. mostly for mechanical/engineering.
I will try the other two, thanks for your suggestions!
Have you been there since this happened? https://noisebridge.net/wiki/Reboot The character of the place has changed dramatically for the better.
Anyway, happy to help.
Granted that the last time I was involved at HD was their 2012 move and shortly after, but at the moment I feel like I have rediscovered something in the middle of an implosion or hyper-political tempest.
The article says, "The board agreed to perform an audit and on March 1, one day after the board gained full access to the nonprofit's bank accounts, Marie Knox, Hacker Dojo's longtime office coordinator, came forward and admitted to misusing the credit card for personal use, Banerjee told the Voice."
While perhaps technically true that she "fessed up before accused", it was at a moment of inevitability, IMO.
> Note also no-charges were pressed
"It noted the board is still working on a plan for Knox to provide restitution for the stolen funds and that, so far, the board has held off on filing criminal charges against Knox."
No charges yet. They'd first like to see if they can find a way for her to repay them before she's rendered permanently unemployable.