LETTER TO THE EDITOR
The following Letter to the Editor is in response to Bill Mann's March 29 Fool on the Hill column, "Some Sirius Questions."
There is no "dark side" to the in-car entertainment revolution being ushered in by Sirius Satellite Radio, contrary to Bill Mann's Fool on the Hill opinion piece posted on The Motley Fool March 29th.
Motley Fool readers would have been better served if Mr. Mann had removed his blinkers and done some independent checking before selectively parroting the opinions of others and, in the process, duping interested investors with fantasy served up as fact. If he had done some elementary, open-minded research to check his information, he could have painted a much truer picture of Sirius Satellite Radio's origins and remarkable market prospects.
At various points Mr. Mann claimed that I am the largest single shareholder of Sirius Satellite Radio; that through my wife I am the largest shareholder; that I am the lead investor; and that somehow I exert great influence over the corporate direction of Sirius. He is wrong.
My wife and I together currently own less than 6% of the common shares. I am focused on my other business interests, and we have no role in the company's activities. I first invested in Sirius in 1992 when it was a high-risk venture, assisting it with crucial, early stage financing years before its initial offering and years before it secured a federal licence to launch and operate broadcast satellites. Under long-standing voting trusts with my wife and I, David Margolese, Chairman and CEO of Sirius Satellite Radio, votes our shares at his sole discretion. These facts are a matter of record. The company's record of achievement under Mr. Margolese demonstrates that our confidence in his leadership, and in the promise upon which the technology is about to deliver, is very well placed.
It presumably also suited Mr. Mann's agenda to ignore the very successful, prominent public-company business ventures with which I have been associated -- Fairbanks Gold and Diamond Fields Resources, for example. Perhaps the same agenda prevented him from mentioning that for the better part of a decade I have been a significant investor in companies listed on the Toronto Stock Exchange.
It's astounding just how many falsehoods Mr. Mann marshalled to parade past unsuspecting readers. The EPA did not shut down a Galactic Resources mine in 1991; discharges from the mine did not kill all marine life in a 17-mile stretch of river; and I did not leave the company and sell my stake just prior to the closure of the mine. Contrary to Mr. Mann's sweeping slurs, it is a matter of record that I incurred substantial personal losses on Galactic. I did not leave the U.S. after the company ceased mining and environmental remediation activities in 1992; I had left the U.S. to live in Canada 10 years earlier!
An attempt by the U.S. to seize $150 million of my stock assets was not overturned on appeal; it was dismissed when the Canadian judge, who had only issued a temporary freeze order in a secret court session, eventually heard all of the evidence in open court and resoundingly criticized the underhanded tactics of the U.S. and EPA. The judge, said, in part: "In my view, the extent of non-disclosure and misstatement by the United States of America was serious and fundamental. It represents conduct which deserves to be sanctioned by this Court." The judge found that I had nothing to do with the bankruptcy of the mining company (I had resigned all positions with the company two years previously) and that I did not have a primary role in decision-making on the construction and operation of the mine. The extraordinary judgment is part of the public record readily available to writers.
The only serious question that arises from all of this is what Mr. Mann had to gain by crafting such a pattern of misinformation. He certainly made no attempt to contact me to verify anything. Mr. Mann is entitled to his biases, but he should declare them when he's inflicting them on others. New Media surely has as much responsibility as Old Media to tell the whole truth and to respect journalism's most fundamental principle of fact-checking for accuracy -- particularly when it is providing information to investors.
Robert M. Friedland
Ivanhoe Capital Corporation
Bill Mann responds:
Foolish readers can determine what level of fallacy exists in the article, but I stand behind the points expressed therein. Certainly, I mentioned that Mr. Friedland's position at Sirius had nothing to do with operational risk. That said, the fact that Mr. Friedland's voting rights have been assigned to the CEO of Sirius does not necessarily keep him from exerting de facto influence on the actions of the company, particularly as he did play such a key role in getting the company off the ground in 1992.
There is a great deal of controversy about Mr. Friedland's past activities. In regard to the cleanup of Summitville Mine, there are still lawsuits brought about by the Attorney General of the State of Colorado pending against Mr. Friedland as the operator of the mine. The "misinformation" referenced by Mr. Friedland came from such sources as the Canadian Broadcasting Corp., Forbes, and the State of Colorado.
I had no particular ax to grind with Mr. Friedland or Sirius, nor would my stance as a pro-nuclear, pro-business Libertarian suggest that I hold much sympathy for environmental extremism. Rather, I believe that the fiduciary responsibility that business has with investors' money is sacrosanct. The Motley Fool has always asked its readers to do their own research and make up their own minds. I would request that readers do the same in regard to this issue.
- Bill Mann
Robert Friedland later made another response to this article. You can read that here.