April 1, 2021 BY EMAIL

Mr. I. Scott Bogatz, Esq. Reid Rubenstein & Bogatz 300 South 4th St., Suite 830 Las Vegas, NV 89101 Email: [email protected]

Re: Reed Cowan’s Demand of WE Charity

Dear Mr. Bogatz:

We represent WE Charity. We write in response to your letter dated March 26, 2021 concerning your firm’s client, Reed Cowan. In your letter, on behalf of your client you demand that WE Charity: 1. Pay your client more than $20 million because it removed one of his two plaques on schoolhouses in Kenya that Mr. Cowan donated funds to help build in 2007; and 2. Pay your client an additional $20 million if it does not remove both plaques. You base this demand on purported reputational harm Mr. Cowan suffered as a result of his own public and false accusations that WE Charity committed fraud when it mistakenly removed a plaque. WE Charity has told Mr. Cowan privately and publicly that it regrets that the plaque was removed without his permission. But Mr. Cowan has no basis for accusing WE Charity of fraud. He does not dispute that the schoolhouses he helped fund were built. Nor does he dispute that the funds he raised were used for their intended purpose: to help educate hundreds of children in need. If WE Charity refuses to pay Mr. Cowan nearly a thousand times what he donated, your letter states that he will use his position and connections as a journalist to smear the charity with negative publicity in the United States. The demand letter says, “You have a rare chance to avoid additional heights of public infamy.” You say that Mr. Cowan will use his employer “Sinclair Broadcasting” and other media organizations for whom he has worked as a journalist to exact punishment if WE Charity does not pay. Should WE Charity not meet your client’s demands, you also threaten “referral of this matter to the government officials charged with investigating illegal solicitation and use of charitable donations.” In other words, pay us, or we will go to law enforcement. Your letter is extortion, not a settlement discussion.

I. Scott. Bogatz, Esq. April 1, 2021

Mr. Cowan asks WE Charity to bankrupt itself and give its funds to him for his personal use. The payment you demand in your letter would shutter humanitarian programs including a free boarding school and a free hospital serving the very people Mr. Cowan stated he intended to help. The same evening you sent your demand letter, the New York Post reached out about a story concerning Mr. Cowan. To our knowledge, the New York Post has never before reported on WE Charity—but they are named in your letter as a means for punishing WE Charity if it fails to meet your client’s demands. The Post gave WE Charity the same deadline you did: 5pm on March 31, 2021. Mr. Cowan has amply demonstrated his ability to follow through on his threats. Nevertheless, for the reasons stated below, WE Charity declines to meet Mr. Cowan’s demands. A. Background

We start with the facts. After the tragic death of his son, Reed Cowan approached WE Charity (then named “Free the Children”) to help him honor his son’s life by improving the lives of children in need. WE Charity’s records reflect that the organization received approximately $70,000 in donations associated with Mr. Cowan’s “Wesley Smiles Coalition” fundraising efforts, the majority of which came from individuals other than Mr. Cowan. Mr. Cowan’s donations to WE Charity were a generous act of charitable giving. To thank Mr. Cowan, WE Charity gifted two plaques to Mr. Cowan, which were placed on two schoolhouses he helped fund in Kenya. In an email on December 4, 2006, WE Charity executive director Dalal Al-Waheidi wrote to Mr. Cowan: Reed, I will also ask our country director to create a plaque at one school and stone base with carving in the other school compound you helped to support. I would like to offer this in honour of your son. Reed, you do not need to pay for the plaques. This is a small token of our appreciation. Mr. Cowan promptly replied: Thank you for the picture of the school sign and the GENEROUS GENEROUS OFFERING of the sign and the stone base and carving. You have made my night. In April 2007, on the year anniversary of his son’s death, Mr. Cowan traveled to Kenya to see the work that his and others’ donations in Wesley’s name had helped fund.

2 I. Scott. Bogatz, Esq. April 1, 2021

Mr. Cowan sought to film a documentary of his trip, but it was not, as you describe it in your letter, a service for WE. In an October 1, 2006 email, Mr. Cowan described his plans for the documentary, and for the plaque WE had offered: [W]e will be filming a documentary of our experience which we hope to win Emmys with, and have success at Sundance Film Festival and other film festivals and even perhaps the Academy of Motion Picture Arts and Sciences. Mr. Cowan was keenly interested in the staging of the school for his documentary and asked for what he called a “selfish favor” when he visited. Mr. Cowan asked if he could “[d]o some physical act myself to complete the school” that others had already built. Among his suggestions: “placing the school plaque.”1 Mr. Cowan did travel to Kenya, where he saw one school finished and filmed documentary footage of himself and the plaque. He returned the following year for more footage for his documentary. To our knowledge, he never went back. While WE Charity values every donation it receives of any size, your depiction of Mr. Cowan as having played a material role in WE Charity’s success has no basis in reality. Mr. Cowan’s “highly acclaimed TED Talk” in 2016 (actually, a TEDx Talk) has received less than 3,000 views, including all recent views in the wake of his allegations against WE Charity.2 Mr. Cowan’s documentary about his experience is not, to our knowledge, publicly available, much less a key driver for WE fundraising.3

1 To improve the optics for his film, Mr. Cowan asked, “CAN WE HOLD OPENING CEREMONIES ON APRIL 23RD WITH AS MANY PEOPLE THERE AS POSSIBLE? Villiagers? [sic] Locals? Children? Whoever?” WE’s executive director responded that no artificial staging was necessary; the community “genuinely love welcoming FTC visitors and donors.” 2 We assume Mr. Cowan does not contend that his TEDx talk was a fundraiser for WE as the TEDx Rules expressly bar using Tedx talks for fundraising. See TEDx Rules, TED, https://www.ted.com/participate/organize-a-local-tedx-event/before-you-start/tedx-rules (last visited Mar. 31, 2021) (“You may not use your event to raise funds for charities or other organizations.”). 3 WE Charity has publicly acknowledged Mr. Cowan’s role in helping bring in over $93,000 in donations from the Broward school district. Mr. Cowan, however, did not raise those funds alone. He also claims that he was responsible for WE Charity receiving the Shining World Compassion award of $10,000. 3 I. Scott. Bogatz, Esq. April 1, 2021

Mr. Cowan has publicly touted the millions of dollars he raised for WE Charity.4 News reports repeated that claim.5 But privately, Mr. Cowan admitted to WE Charity that he didn’t raise millions of dollars; he is claiming as his own the accomplishments of double-amputee Spencer West, who worked for five years as a motivational speaker employed by WE Charity. (3/4/21 Email from R. Cowan to R. Wiszowaty (“as it relates to me saying I’m connected to a ‘presumption of millions of dollars raised.’ What I mean by that is Spencer West.”)) Your letter name-drops celebrities, suggesting that they wanted to meet Mr. Cowan and were inspired by his story to help WE Charity. Many of those individuals fundraised for WE long before meeting Mr. Cowan. Mr. Cowan, who dreamed of making an Oscar-winning documentary, wanted to meet them. B. Mr. Cowan’s Allegations of “Fraud” Lack Any Basis in Fact.

Your letter refers to “overwhelming” “evidence” of fraud, then cites none. Indeed, you say, “the full extent of WE’s fraudulent activity has not yet been discovered.” More correctly, no evidence of fraud has been discovered. The lynchpin of Mr. Cowan’s fraud allegations before Canadian Parliament on February 26, 2021 was his claim that he had video proof that two weeks before Mr. Cowan placed a plaque on a school in Kenya, a different donor group, the Stillmans, held an opening ceremony placing a plaque on the same school. Mr. Cowan testified, I’ve matched it. I’ve matched it frame for frame because I have extensive documentary footage[.] It shows, or suggests damningly, that what the Stillmans celebrated in their video was the same one that I think 13 days later we opened. The ceremony was re-cued for us with the same people, same songs and same everything, but with different plaques.6

4 For example, in his testimony before Parliament, Mr. Cowan said, “All in, I believe I am connected to what I presume are millions of dollars raised.” Canada, Parliament, House of Commons, Standing Committee on Access to Information, Privacy, and Ethics, Evidence, 43d Parl., 2d Sess, No. 22 (26 February 2021) at 11 [hereinafter “Transcript”]. 5 E.g., Kate McKenna & Harvey Cashore, MP Joins Former Donor In Calling For RCMP Investigation Into WE Charity Following Testimony, CBC (Feb. 28, 2021, 3:55 PM), https://www.cbc.ca/news/canada/rcmp-investigation-we-charity-1.5931253 (“Cowan describes helping raise millions of dollars for the charity.”); Geoffrey York, WE Charity Was ‘Duplicitous’ In Its Kenya Dealings, Claims Prominent Donor Reed Cowan, GLOBE & MAIL (Feb. 26, 2021), https://www.theglobeandmail.com/world/article-we-charity-was-duplicitous-in-its-kenya-dealings-claims- prominent/ (“Reed Cowan, a U.S. television journalist who estimates that he has mobilized millions of dollars for WE Charity”). 6 Transcript, supra note 4, at 12. 4 I. Scott. Bogatz, Esq. April 1, 2021

The Stillmans’ video is almost entirely a slideshow set to music that could not be matched “frame by frame” or song-by-song with Mr. Cowan’s video.7 What the Stillmans’ video shows is that the Stillmans generously volunteered their labor to help build the school that was subsequently dedicated in memory of Mr. Cowan’s son. Mr. Cowan knew that others built the school; that is why he asked WE Charity if he could place a plaque as a “physical act” to “complete” the school for his film, as discussed above. What Mr. Cowan assumed was a “re-cued” “ceremony” dedicating a building was in fact the warm greeting groups of WE volunteers received regardless of whether a building was dedicated. Before he traveled to Kenya, WE Charity’s director told Mr. Cowan that the community “genuinely love welcoming FTC visitors and donors.” (10/3/2006 Email from D. Al-Waheidi to R. Cowan.) Mr. Cowan would also know from a video on the Stillman’s website that the prior year, in 2006, the Stillman group traveled to the same village in Kenya and built a different school, on which they placed a plaque.8 That plaque, which says “2006,” is shown in the 2006 video. A photo of that same plaque was included in the 2007 slideshow, as shown below. The Stillmans’ website notes that their volunteer work was done in memory of Howie Stillman, who is named on the plaque. Surely the group could not have imagined when they included a photo from the prior year’s trip—presumably to mark the purpose of their trip—that this video would later be misused to accuse WE Charity of fraud.

7 Howie Stillman April Kenya Trip, YOUTUBE (June 6, 2007), https://www.youtube.com/watch?v=kAau3bDUXdo.

8 Howie Stillman Young Leadership Fund Kenya School, YOUTUBE (Aug. 19, 2006) https://www.youtube.com/watch?v=c61tSQnTU2o; Kenya Project, HOWIE STILLMAN YOUNG LEADERSHIP FUND, https://www.howiestillmanfund.com/kenya.htm (last visited Mar. 31, 2021). 5 I. Scott. Bogatz, Esq. April 1, 2021

The plaque in the 2006 video:

The same plaque in the 2007 video:

6 I. Scott. Bogatz, Esq. April 1, 2021

It is clear from the video footage Mr. Cowan cites that the Stillman plaques are on a different building that the one Mr. Cowan opened for his son. The walls and cement backing are completely different. The Stillmans’ plaque:

Mr. Cowan’s plaque:

Your client’s “multiple openings” allegation further ignores the fact that multiple schools in the village bore no plaques. Mr. Cowan’s accusation presupposes that there were not enough schools on which to affix plaques, but that simply was not the case.

7 I. Scott. Bogatz, Esq. April 1, 2021

Mr. Cowan’s testimony to Parliament that WE held “multiple ‘opening’ ceremonies” led countless headlines the next day.9 Fueled not by facts but by fury, Mr. Cowan made no effort to verify the “evidence” he cited to Parliament, and to the world. Mr. Cowan touted his journalistic credentials multiple times during the hearing,10 and received the intended deference.11 After Mr. Cowan held up a photo of his deceased son and spoke in a venue protected by Parliamentary privilege, the press unquestioningly printed the allegations levied by their fellow journalist. Mr. Cowan’s false allegations about “multiple opening ceremonies” even caused a member of Parliament, Hon. Charlie Angus, MP, to call for the RCMP (Canada’s FBI) and the Canada Revenue Agency (Canada’s IRS) to investigate WE Charity for fraud.12 The Member of Parliament has publicly referred to Mr. Cowan’s testimony as revealing “donor gate.”13 Members of Parliament have repeatedly cited Mr. Cowan’s accusations of fraud as forming a foundation for their criticism of WE Charity. And now, after Mr. Cowan sparked a false media and political narrative that WE defrauded its donors, you write in your letter that these very same accusations “destroyed” “Mr. Cowan’s reputation, livelihood, and sacred place,” and demand more than $20 million. C. Mr. Cowan Does Not Dispute That the Donations He Made to Help Children in Kenya Were Used to Help Children.

WE Charity did precisely what it promised with Mr. Cowan’s money: WE used it to help needy children. Mr. Cowan has no legal basis for suing WE Charity to recover amounts he donated that were put to the purpose for which they were donated.14

9 E.g., Jacob Serebrin, WE Charity Had Multiple 'Opening' Ceremonies For Kenya School: Former Donor, CTV NEWS (Feb. 26, 2021, 10:52 PM), https://www.ctvnews.ca/canada/we-charity-had- multiple-opening-ceremonies-for-kenya-school-former-donor-1.5326686. 10 E.g., Transcript, supra note 4, at 14 (“I’m a journalist, so obviously I look at how stories are laid out and how stories are told”). 11 E.g., Transcript, supra note 4, at 14 (Mr. Angus: “I also recognize that you are an Emmy Award-winning journalist, so you're probably not used to having to answer questions. You’re probably more comfortable asking the questions, but you'll have to bear with us for a minute.”) 12 McKenna & Cashore, supra note 5. Mr. Angus took Mr. Cowan at his word that he was “a major WE donor.” @CharlieAngusNDP, TWITTER (Feb 28, 2021, 5:48 PM), https://twitter.com/CharlieAngusNDP/status/1366158373952094211 (“The allegations by a major WE donor and member of their advisory board regarding the fundraising practises of WE Charity are deeply concerning.”).

13 @CharlieAngusNDP, TWITTER (Mar. 2, 2021, 10:45 AM), https://twitter.com/CharlieAngusNDP/status/1366776721199034375. 14 The only reason Mr. Cowan is in a position to complain that a plaque is no longer on a Kenyan school nearly fourteen years after it was built is because it was built. And that school is still operating today. 8 I. Scott. Bogatz, Esq. April 1, 2021

As discussed above, WE Charity gave Mr. Cowan a gift of two plaques. Mr. Cowan does not have a contract he can rescind nor is he “out of pocket” any amount, which is the measure of what he may recover under Nevada law. Taddeo v. Am. Invsco Corp., 2015 WL 4416490, at *6 (D. Nev. July 20, 2015). Mr. Cowan’s donations were used as promised to build schools and help children. WE Charity’s “token of [its] appreciation” in putting up a plaque does not give rise to any legally cognizable claim. See infra. WE Charity has on multiple occasions apologized to Mr. Cowan that one of his plaques was removed. Although WE Charity never promised the plaque would remain forever15, it was contrary to WE Charity’s practices and values to remove the plaque without Mr. Cowan’s permission. WE Charity regrets that it did not in this instance meet its own standards, but that does not give rise to any viable legal claims. D. Mr. Cowan’s Proposed Legal Claims Are Riddled with Flaws

At the outset, all potential claims you contend create liability for WE Charity are well beyond their statutes of limitations because they arose over a decade ago. See Nev. Rev. Stat. §§ 11.190(1)(b) (6 years for breach of a written contract); (2)(d) (4 years for deceptive trade practices); (3)(d) (3 years for fraud); (4) (2 years for most intentional torts and negligence). Mr. Cowan furthermore has no viable claim for equitable tolling. By his own admission and according to his own footage, the plaques at Wesley’s school were in plain sight, as were the alleged “serious discrepancies” between them. There was nothing stopping Mr. Cowan from discovering what WE displayed in plain sight. Indeed, the entire point of Mr. Cowan’s allegation is that his plaque was visibly removed. His claims are time-barred and thus cannot constitute any claim of legal right. Mr. Cowan’s claims are also legally meritless. In the first instance, Mr. Cowan’s charitable contribution and WE’s gratuitous offer to place plaques with his son’s name does not give rise to a contract and cannot give rise to a breach of contract claim. Restatement (2d) of Contracts § 71(c) (1981) (“a gift is not ordinarily treated as a bargain, and a promise to make a gift is not made a bargain by the promise of the prospective donee to accept the gift, or by his acceptance of part of it”); see also 4 Williston on Contracts § 8:1 (4th ed.) (“Aside from the special cases of gratuitous agency, bailment and trust, and those cases invoking the ever-expanding Doctrine of Promissory Estoppel, there is little modern authority for holding that a gratuitous undertaking creates contractual liability.”). Moreover, the only restriction on the use of those funds—that they be used for the construction of schools—was fulfilled by WE, but even if it had not, it is not clear he would have standing to sue to enforce that restriction. See Styles v. Friends of Fiji, 373 P.3d 965, 2011 WL 488951, at *1 n.3 (Nev. 2011) (“Even if Styles had restricted his charitable contribution to some specific use, it is not

15 WE Charity does not own or run the schoolhouse on which the plaque was placed. Like other such schoolhouses, WE Charity gives the school to the village—the government of Kenya—once it is complete. WE Charity does not, and did not, promise that the plaque would remain in perpetuity because the building belongs to the community it was built to help. 9 I. Scott. Bogatz, Esq. April 1, 2021

clear that he would have standing to enforce the restriction or recover damages.) (citing Carl J. Herzog Found., Inc. v. Univ. of Bridgeport, 699 A.2d 995, 1002 (Conn. 1997), Russell v. Yale Univ., 737 A.2d 941, 946 (Conn. App. Ct. 1999)); see also Restatement (Second) of Trusts § 348(f) (1959) (noting that restrictions directing a gift to particular purposes are generally only enforceable by a state attorney general). The absence of a contract also dispenses with any potential fraudulent inducement claim. See Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001) (“Fraudulent inducement . . . arises only in the context of a contract and requires the existence of a contract as part of its proof.”). To the extent Mr. Cowan contends the only reason he donated to charity was to place a plaque on a school in Kenya, that purpose was not foreseeable to WE. Moreover, it is both logically questionable and objectively unreasonable to claim reliance on a gratuitous offer of two plaques made after a donation is promised. These facts undermine claims resting on foreseeable detrimental reliance or requiring proximate causation, including nearly all species of fraud. See, e.g., Chen v. Nev. State Gaming Control Bd., 116 Nev. 282, 284–85 (2000) (holding that card-counter did not commit fraud against a casino when he showed a fake passport to play blackjack because the casino failed to show that it detrimentally relied upon the passport or that the passport proximately caused his blackjack winnings rather than his “skill in playing blackjack”); Nelson v. Heer, 123 Nev. 217, 225–26 (2007) (reversing trial court’s denial of JMOL for defendant because there was no evidence in the record that water damage to a cabin proximately caused mold). The same principles foreclose any argument based on promissory estoppel. Am. Sav. & Loan Ass’n v. Stanton-Cudahy Lumber Co., 85 Nev. 350, 354 (1969) (noting that promissory estoppel requires “reliance which is foreseeable, reasonable, and serious”). Moreover, in Nevada, a plaintiff’s fraud damages are limited to the “benefit of the bargain”—if there was one—or to “what he has lost ‘out of pocket,’” Taddeo, 2015 WL 4416490, at *6, meaning that Mr. Cowan’s exorbitant claims for damage to his reputation are not recoverable. And claims of intentional or negligent infliction of emotional distress would likewise fail. First, while removing plaques is not consistent with WE’s standards, it is hardly “extreme and outrageous conduct . . . which is outside all possible bounds of decency and is regarded as utterly intolerable in a civilized community” as required to state a claim for IIED under Nevada law. Welder v. Univ. of S. Nevada, 833 F. Supp. 2d 1240, 1245 (D. Nev. 2011) (quoting Maduike v. Agency Rent–A–Car, 114 Nev. 1, 953 P.2d 24, 26 (1998)). And “[a] claim for negligent infliction of emotional distress for harm inflicted directly upon the plaintiff is only available where the plaintiff has asserted a negligence claim that includes emotional distress as an element of the damages suffered.” Ferm v. McCarty, Case No. 2:12-cv-00782-RFB-PAL, 2014 WL 6983234, at *7 (D. Nev. Dec. 9, 2014). WE had no legal duty that would support a negligence action. Even crediting that Mr. Cowan’s emotional distress is severe, that result is hardly foreseeable as required for proximate cause with respect to both IIED and negligence actions.

10 I. Scott. Bogatz, Esq. April 1, 2021

All potential claims that Mr. Cowan could bring are barred, fail as a matter of law, or would yield damages so meager that they cannot come close to justifying his demand of $20 million. E. Mr. Cowan Has No Plausible Basis for Demanding That WE Charity Bankrupt Itself to Pay Him More Than $20 Million

Your letter demands that “to resolve this matter amicably,” WE Charity must pay Mr. Cowan over $20 million for his personal use, which he “may” use for a charity in his own name, the “Reed Cowan Philanthropy Fund”—or he may not. As you know, the payment your letter demands dwarfs Mr. Cowan’s personal donations to WE. It grossly exceeds any amount you attempt to quantify. Mr. Cowan has no plausible basis for demanding $20 million:

• You claim that the removal of one of Mr. Cowan’s plaques in Kenya caused “destruction of his character and marketability as a journalist, public speaker, filmmaker, and author.” You offer no explanation. Mr. Cowan cannot recover alleged damages for his own self-inflicted media notoriety as an accuser of WE Charity.

• You claim that Mr. Cowan “can no longer perform his profitable speaker engagements.” If Mr. Cowan has been profiting by speaking about WE Charity for fifteen years, he did not give those profits to WE Charity. Mr. Cowan cannot legally compel WE Charity to pay him millions of dollars because he planned to profit off of WE’s charitable work.

• You claim that Mr. Cowan is “an MLA candidate at Harvard University” and now has “the additional burden of finding a new topic to be his graduate thesis at Harvard.” We assume you refer to Mr. Cowan’s pursuit of a creative writing degree at Harvard’s Extension School.16 You offer no explanation why the temporary removal of a plaque in Kenya forces Mr. Cowan to change his thesis topic, no legal basis for why WE Charity would be responsible for that change, and no basis for claiming millions of dollars. Perhaps the most counterintuitive demand in the letter is the demand that WE Charity remove Wesley Cowan’s name from schools in Kenya and never again “speak or write the name Wesley Cowan.” Your demand implies—falsely—that WE Charity has used Wesley Cowan’s name to raise funds. It has not. To our knowledge, his name

16 Reed Cowan, LINKEDIN, https://www.linkedin.com/in/reed-cowan-53285118b (last accessed Mar. 31, 2021). 11 I. Scott. Bogatz, Esq. April 1, 2021

appears in two places: the two plaques WE Charity gave to Mr. Cowan, which stand to this day. You demand that WE Charity pay Mr. Cowan an additional $20 million, for a total of over $40 million, if it does not remove his plaques. The legal infirmity of this demand speaks for itself. Nevertheless, WE Charity agrees to remove Mr. Cowan’s plaques per his request. F. Having Already Demonstrated His Ability to Harm WE Charity, the Demand Letter Threatens “Public Infamy” and Referral to Law Enforcement

If WE Charity does not pay Mr. Cowan over $20 million, your letter states that, in addition to commencing litigation, Mr. Cowan will launch a media assault in the United States against the charity. You warn, “You have a rare chance to avoid additional heights of public infamy.” The letter threatens that if not paid, Mr. Cowan, a television news reporter, will use his position to make WE Charity infamous, stating, Should you accept these demands, Mr. Cowan is willing to…decline television interviews with Dateline NBC, CBS News, Sinclair Broadcasting, Nextar Broadcasting, CBC, and all print interviews with Vanity Fair, The New Yorker, The New York Times, The New York Post and Bloomberg, and any other press outlet who requests interviews… This is no accidental list. Mr. Cowan leads with news organizations copied from his resume, listing his current employer and station (Sinclair and NBC) and former employers (Nextar and CBS). Mr. Cowan uses his position as a journalist to make clear that he is capable of following through on his threats. Your letter also seeks to cash in on public statements your client has already made about WE Charity, stating, “Should you accept these demands, Mr. Cowan is willing to delete all social media posts connected to this scandal.” Finally, your letter warns that if WE Charity does not pay your client the more than $20 million sum he demands, in addition to suing, Mr. Cowan will make a “referral of this matter to the governmental officials charged with investigating the illegal solicitation and use of charitable donations.” G. The Demand Letter Constitutes Criminal Extortion Under the Laws of the United States and Canada

WE Charity has privately and publicly apologized to your client for its mistake in removing one of Mr. Cowan’s plaques. WE Charity takes seriously any error in its donor engagement.

12 I. Scott. Bogatz, Esq. April 1, 2021

WE Charity also takes seriously threats of extortion. We are attorneys; we understand the hard-nosed tactics that are part of U.S. litigation. But you have demanded that a children’s charity bankrupt itself to pay your client tens of millions of dollars he does not claim to have lost. You have backed that demand by threatening to report our client to law enforcement if WE Charity does not pay. You have threatened to escalate a public relations assault against WE Charity, including through your client’s own media employer.17 Your client has demonstrated his ability to follow through on his publicity threats. After his appearance before Canadian Parliament, your client triggered further press coverage by promptly releasing social media content, including videos criticizing WE Charity. But if WE Charity pays your client $20 million, all of that will go away. He will delete the postings; the attacks will stop. These threats constitute extortion under the laws of the U.S. and Canada. E.g., 18 U.S.C. §§ 875(d), 1951; Criminal Code, R.S.C., c. C-46, ss. 302, 346.18 Styling extortion as a legal demand letter does not immunize it from criminal liability under the Hobbs Act and other federal statutes addressing extortion. See United States v. Villalobos, 748 F.3d 953, 955 (9th Cir. 2014) (affirming conviction of an attorney for attempted Hobbs Act extortion where civil demand letter was used in a scheme to demand payment of alleged “back wages” in exchange for acts to obstruct government investigation of immigration fraud); see also United States v. Villalobos, 567 F. App’x 541, 543–44 (9th Cir. 2014) (approving of sentencing enhancement because defendant’s status as attorney allowed him to “credibly approach [victims] with a civil demand letter that sought an alleged settlement offer”). We refer you in particular to the recent case of United States v. Avenatti, No. 1:19-cr-00373 (S.D.N.Y.). In a similar vein, the U.S. Department of Justice issued a press release last year stating: “Two licensed Virginia attorneys pleaded guilty today to federal extortion charges, admitting their roles in a scheme to extort a multinational chemicals company by threatening to inflict substantial financial and reputational harm

17 You suggest too that you will use discovery to expose WE Charity to further peril by using “the full extent of the law to uncover each and every of WE’s bad acts.” 18 We do not attempt to catalogue here the state laws your client’s demand may violate as well. We refer you, however, to the California Supreme Court’s holding in Flatly v. Mauro that a legal demand letter constituted extortion. 39 Cal.4th 299, 330 (2006) (“That the threats were half-couched in legalese does not disguise their essential character as extortion.”). Like here, the defendant in Flatley listed media organizations through which it would publicize its allegations if not paid. And like here, the defendant threatened that if not paid, it would notify “all appropriate authorities” of any information about illegal conduct. See also Mendoza v. Hamzeh, 215 Cal.App.4th 799, 837 (2013) (legal demand letter was extortionate even though it was not as “extreme or egregious” as in Flatley). 13 I. Scott. Bogatz, Esq. April 1, 2021

on the company if their demands for a $200 million payment disguised as a purported ‘consulting agreement’ were not met.”19 Federal courts have recognized that demands vastly disproportionate to any plausible claim of right may be extortionate. United States v. Jackson, 180 F.3d 55, 71 (2d Cir. 1999) (concluding guilty verdicts for extortion were supported by evidence because “a rational jury could find that her demand, given her age (22) and the amount ($40 million), did not reflect a plausible claim for support”—i.e., claim of right—and thus was extortionate). Likewise, Mr. Cowan has no plausible claim for $20 million (or $40 million) having only donated about a thousandth of that amount. Although the amount of your $20 million demand lacks a plausible basis in law, it does not seem to be a random number. The most recent WE Charity financial statements on its website when you sent your letter showed it to have approximately $20 million in net assets.20 Nor, we suspect, is it a coincidence that the only WE Charity board member you copied on your demand letter was the only one who is a member of a very wealthy family.21 The member you copied is one of two individuals who joined WE’s U.S. board last month and one of eight North American directors. You cite no basis for singling her out. Your letter demands silence: “this demand letter shall remain private between the involved parties. Should this letter or any portion thereof appear in the press, Mr. Cowan will cease negotiations and immediately file suit.” Unfortunately, we have no choice: We have shared your demand letter with law enforcement in the U.S. and Canada to protect the humanitarian programs your client would have us end. * * * * * Mr. Cowan has made no secret of his intentions. The afternoon after instructing you to send your demand letter, Mr. Cowan tweeted about WE, “Deconstruction can pave the way for new creation. That’s what I pray for.” Mr. Cowan is “deconstructing” WE Charity. By extorting it.

19 Virginia Attorneys Plead Guilty for Orchestrating a $200 Million Extortion Scheme Targeting a Multinational Chemicals Company, U.S. DEP’T OF JUST. (June 19, 2020), https://www.justice.gov/opa/pr/virginia-attorneys-plead-guilty-orchestrating-200-million-extortion-scheme- targeting.

20 WE CHARITY, AUDITED FINANCIAL STATEMENT OF 2018 FISCAL YEAR 5 (Mar. 2019), https://staticsb.we.org/f/52095/x/eaa2ca1655/audited-financial-report-we-charity-canada-2018.pdf. 21 E.g., https://www.forbes.com/sites/douggollan/2016/10/14/meet-the-biggest-travel-company- youve-never-heard-of/?sh=62ace78a4de7 14 I. Scott. Bogatz, Esq. April 1, 2021

We cannot claim to fully understand the emotional importance to Mr. Cowan of placing a plaque in his son’s memory on a school he helped build in Kenya. But that school is still there. The good Mr. Cowan set out to do in his son’s name is being done. WE Charity could not give in to Mr. Cowan’s demands even if it wanted to do so. It has responsibilities to thousands of children across the world whom it helps every day. WE Charity has responsibilities to thousands of donors who donated to help those children, not to pay Reed Cowan. In Mr. Cowan’s calculus, his suffering from the removal of a plaque outweighs the suffering of thousands of children who will, if his demand is met, lose the education, healthcare and clean water that WE Charity provides. WE Charity cannot in good conscience abide his demand. If you plan on filing a lawsuit, I assume you will include this letter so that the Court has a complete record.

Sincerely,

Joseph F. Kroetsch

cc: Jonathan Sherman, Esq. ([email protected]) William C. McDowell, Esq. ([email protected]) Canadian Counsel to WE Charity

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