AADAO Oversight Special Report: GM Misconduct/Mismanagement

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https://forum.cosmos.network/t/aadao-oversight-special-report/14441/82

Forget GPT, here is a discussion about this: Is there an option on Discourse forums to allow users to see their own deleted posts - #4 by JammyDodger - Support - Discourse Meta

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Sorry about the presumably misleading wording, again - I guess this is too near to the German semantic. Should actually mean:
I am quite confident that you meet these criteria.

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At no time was there anything preventing this. That’s kind of the point.

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Let me get this straight: you’re not allowed to report dao matters to other family members, but Youssefs wife can just make a phone call to Pati because she’s vetoing against Youssefs giving himself a monthly bonus if 5k$ (Atom at ~8.5$)?

@Youssef @Syed @CuriousJ

Are you gonna argue that YOUR COC policy doesn’t work for your GM? Because his wife knew Pati before, that’s okay?
Do you realize how y’all jump on the COI Atone train AFTER resolving the issue internally, only so that you don’t have to deal with the shit that’s going on in your own org? That is the definition of a witch hunt.

Y’all should realize one thing: your first year was a complete mess, and if oversight did his job before your renewal proposal, I don’t see the proposal passing. So instead, you get an oversight now that’s trying to turn this mess into the right direction. From working messy to working responsibly with community funds.

My hope is going to zero. Atom still performs like shit, you trying to pay yourself for bad work, and you try to get around your own policies.

@Youssef

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Neither myself nor @CuriousJ are able to comment on these issues while the DAO is looking into the issues.

For your reference, Youssef is not part of “the DAO” that I’m referring to above, as the DAO placed him on an Operational Freeze.

It’s a little tiring to point out the obvious but I’ll do it anyway.

I think most people who read the report agree with its relevance and don’t try to deny or defend what it says.

I care a lot about it, because Grace shows integrity by reporting to the community what she’s observed and experienced. That’s oversight and why I voted for her. And its not ACCUSATIONS, since she can back up her claims. Framing her report as accusations makes the report look as just some drama that has nothing to do with what she’s supposed to do.
That way you sell the community the idea that she’s trying to nuke AADAO, ignoring the fact that reporting is her job.

That raises the question, why suddenly the strategy committee is doing the oversight job in response to the operational freeze. That’s not your job. And you’re clearly in a COI since Youssef is paying you your salary and potential bonuses.

Freezing Grace (and Pati) was wrong. By freezing them, you are not only showing that you don’t respect the role of oversight board, but also that you are immune to whatever they say. Simply play a uno reverse card that really is accusatory. Freezing only Youssef would have been the right thing to do.

Proposal: instead of freezing Grace and Pati, ask for documents.
Also recommend feeding ChatGPT your COC along with the report

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Yes, ChatGPT is not god, but since it´s common practise to use chatgpt summaries on proposals, it´s fair to just feed it with the report and AADAO´s COC Policy.

Strategy committee: Do with this what you want.

The AADAO report outlines various alleged actions by the General Manager (GM) Youssef Amrani that potentially violate the DAO’s Code of Conduct. Here’s an analysis of the report based on specific provisions of AADAO’s Code of Conduct:


1. Conflict of Interest:

Policy:

  • “All conflicts of interest, including potential conflicts, must be disclosed to the Oversight Committee.”
  • “Do not take any business-related action for your personal financial benefit.”
  • “No family member should report directly to another family member.”

Potential Violations in the Report:

  • Salary and Bonus Allocation: The GM increased his base salary by 36% in 2024, which contributed to an 86% increase in his total monthly compensation compared to 2023. The report indicates that the GM took unilateral decisions to benefit his own compensation disproportionately through retention bonuses (50% of the bonus pool) and used a retention formula that favored him. This appears to directly violate the policy against taking business actions for personal financial benefit without proper oversight.
  • Involvement of a Family Member: The GM’s spouse allegedly made an intimidating phone call to the Financial Controller after she questioned the GM’s compensation practices. Involvement of a family member in internal governance matters could violate the provision prohibiting direct reporting or influence by family members in DAO operations.
  • Lack of Transparency: The GM allegedly withheld or obscured pertinent financial information (e.g., details of retention and bonus formulas) from the Oversight Committee. This lack of disclosure could be seen as a breach of the obligation to report potential conflicts and the transparent use of resources.

2. Misuse of Financial Resources:

Policy:

  • “Do not use the Program’s financial resources for personal use and protect them as if they were your own.”
  • “Do not take for yourself any opportunities that are discovered or advanced through the use of your position within the Program.”

Potential Violations in the Report:

  • Retention and Bonus Formulas: The GM’s retention formula, which included inflated 2024 salaries instead of 2023 base salaries, resulted in a disproportionate financial benefit to him. This appears to be a misuse of the Program’s financial resources for personal benefit.
  • Control Over Compensation Decisions: The GM exercised singular control over defining and distributing bonuses, without oversight, and allegedly designed compensation schemes to significantly benefit himself. This demonstrates potential misuse of financial resources and a conflict between personal and organizational interests.

3. Fraud, Dishonesty, or Criminal Conduct:

Policy:

  • “Any use of fraudulent or illegal tactics violates trust and carries consequences.”
  • “We do not encourage taking unfair advantage of anyone through manipulation, concealment, abuse of privileged information, or misrepresentation of material facts.”

Potential Violations in the Report:

  • Alleged Manipulation and Concealment: The Financial Controller’s concerns about the GM’s compensation being “excessive and potentially abusive” suggest potential dishonesty or manipulation. The Controller alleges that the GM used performance bonuses to conceal the true extent of his total compensation, instructing her to disburse performance-based bonuses monthly to avoid scrutiny from the community. This could be seen as deliberate concealment of material information, which violates the Code’s integrity standards.
  • Accusations Against Oversight: The GM allegedly accused the Financial Controller of withholding approval of his bonus methodology out of retaliation, which she denied. This accusation could represent a misrepresentation of facts and an attempt to discredit oversight efforts.

4. Interference with Oversight Functions:

Policy:

  • “Consult with the Oversight Committee when suspecting any unethical situation.”
  • “Team members must treat each other with respect and dignity.”

Potential Violations in the Report:

  • Obstruction and Intimidation: The GM allegedly used intimidation and threats to suppress inquiries from the Financial Controller and Oversight members. The report describes a pattern of verbal abuse and threats against the Controller, including a phone call from the GM’s spouse. Such behavior could violate the Code’s requirement for respect and dignity in internal relationships.
  • Attempt to Halt Oversight Review: The GM’s “cease and desist” letter to the Elected Member, aimed at stopping the internal review of his alleged misconduct, could be seen as an attempt to undermine or interfere with established oversight mechanisms. The GM’s efforts to avoid accountability further contravene the principles of transparency and governance outlined in the Code.

5. Abuse of Compensation Structures:

Policy:

  • “Do not accept money, token equity, fees, commissions, or any other financial incentive from any person or business involved in any business with the Program.”

Potential Violations in the Report:

  • Excessive Compensation and Bonus Allocation: The GM’s control over the retention bonuses and his significant base salary increase raise serious concerns about self-dealing and the abuse of compensation structures. The GM’s alleged pressure on the Oversight Committee to approve his financial methodologies is also a clear conflict of interest and could be seen as exploiting his position for personal gain.

6. Fraud, Dishonesty, or Criminal Conduct:

Policy:

  • “Any fraud, dishonesty, or criminal conduct is to be reported to the Oversight Committee.”

Potential Violations in the Report:

  • Lack of Objectivity in KPIs: The Controller’s assertion that the GM’s proposed KPIs for performance-based bonuses lacked objectivity, potentially qualifying the GM for bonuses that other contributors would not receive, suggests potential dishonesty in the creation of performance metrics. This could be seen as an attempt to manipulate the performance evaluation process for personal financial benefit.

7. Bribery and Unethical Behavior:

Policy:

  • “Do not offer, give, accept, or receive a bribe to/from anyone.”
  • “Fraud, dishonesty, and any criminal conduct must be reported.”

Potential Violations in the Report:

  • Potential Coercion of Oversight Personnel: The GM’s alleged threats and verbal abuse against the Financial Controller and attempts to discredit the Elected Member’s review could be construed as unethical behavior aimed at evading scrutiny and accountability.

8. Failure to Treat Others with Respect and Dignity:

Policy:

  • “Team members must treat each other with respect and dignity.”
  • “Never discriminate against anyone.”

Potential Violations in the Report:

  • Hostile Work Environment: The report highlights numerous instances of the GM allegedly engaging in aggressive, abusive, and retaliatory behavior toward the Financial Controller and other Oversight members. This conduct clearly violates the Code’s requirement for respect and the maintenance of a professional, non-hostile work environment.

Conclusion:

Based on the report, the General Manager’s actions appear to violate several key provisions of AADAO’s Code of Conduct, including conflicts of interest, misuse of financial resources, fraud and dishonesty, interference with oversight functions, and disrespectful behavior toward team members. The GM’s control over compensation structures, alleged manipulation of KPIs, and intimidation of oversight personnel raise serious concerns about ethical violations and governance within AADAO.

These potential violations underscore the need for further investigation and corrective action, particularly to restore transparency, accountability, and proper governance in AADAO’s internal operations.

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This report is honestly embarassing and it’s unfortunate that it had to come out, but what’s even more embarassing is the fact that Youssef has still not stepped down out of sheer shame, and that the rest of the crew and more importantly the validators are not screaming for him to do so.
This is fairly telling of how little the vast majority of large stakeholders and participants in this ecosystem truly give a shit about any of it, which is even more discouraging and deeply bearish than the whole grift project this “dao” has become (or maybe was planned to be from the start? It’s irrelevant anyway).

This type of behavior and the overwhelming acceptance of such is the reason just about every token in this ecosystem is “down only” and will continue to be. I intentionally avoid using the term ‘Cosmos ecosystem’ because it carries extremely negative connotations, and that leads into my next point:
I don’t know how many of you ever venture outside of this lovely little bubble that is the IBC ecosystem, but Cosmos as a project, and as a brand is an absolute joke that garners nothing but chuckles and snide comments if mentioned to literally anyone from any other ecosystem, and it’s specifically because of this shameless grifting and scamming behavior, the “turn a blind eye” attitude the vast majority of validators have regarding that same behavior, and the fact that key players will defend this bullshit to the bitter end without even skipping a beat.

TLDR: To Youssef, to the silent members of AADAO, and to the validators “securing the chain”: You are an embarassment. Do better, please, for the sake of the entire goddamn ecosystem, do better.

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The operational freeze of the Oversight committee and myself, voted by AADAO internal
governance, is now in effect. I will honor it and I admire AADAO collective wisdom and
resilience in navigating such a complex time. Furthermore, I’m happy to fully collaborate with
the ongoing investigation and help the team shed light on the circumstances that caused this
extraordinary situation.

Now that the entire situation is public (it should never have been if properly managed internally), I want to shed light on some of the events that led to it. The mistake I made a few months ago was to not ask Patricia Mizuki to resign after committing multiple ethical violations. Back then, I wanted to protect the team from internal politics.

Our scope of work has significantly expanded in 2024 and I did everything I could to shield
my collaborators from distractions so they could stay laser focused on their work. I realize
now how big of a mistake it was.

Below what I consider to be grave failures that disqualify the 2 members of the Oversight:

Patricia Mizuki failures
A. forcing herself into the performance bonus pool
B. Trying to change the retention pool period of reference to maximize her financial benefit, where she would have been the only one to benefit. At the same time, that change, if
implemented, would have negatively impacted all AADAO members eligible for the 2024
retention allocation.
C. Sharing individual salaries and bonuses on a public slack channel (with twisted numbers,
to damage my own reputation and undermine my leadership), hence breaking basic
confidentiality and social peace best practices within the organization.

The combination of A and B above resulted in an oral warning to Patricia on a call (February
23rd.)

Grace Yu failures
A. Intentionally rushed the publishing on an inflammatory report instead of attempting to
resolve the issue internally. By doing so, she has severely damaged the trust
between Oversight and the AADAO team on one end and between AADAO
contributors and their leadership on the other end. This approach is completely at
odds with protecting the best interests of AADAO and the ATOM community.
B. Selective prosecution: Didn’t investigate Patricia’s alleged failures (see above) when
reported by Youssef Amrani. Oversight, by nature, is supposed to be the body with
the highest ethical standards and allegations of serious misconduct by an Oversight
member by the GM should have been processed by the Elected Oversight member
with as much diligence as the investigation into the GM himself.
C. Intentionally broke communication lines between GM and his team in order to isolate
him. By doing so, Grace started a shadow leadership that left the team confused and
fearful.
D. Encouraged Patricia Mizuki to publish salaries with the entire team, breaking basic
confidentiality and social order rules.
E. Clear COI with involvement in ATOM ONE, a direct fork of the Hub whose founder
rage quitted the ATOM community.

As an ATOM-focused organization, AADAO’s primary goal should be to preserve and
maximize the value of ATOM and the Cosmos Hub.
The recent actions by Oversight, which we assume should be aligned with the success of
ATOM, undermined this mission by scaring away ATOM holders and prospective investors
while seriously disrupting (some would say put to a halt) AADAO operations. Oversight
actions are deeply troubling and raise questions about their commitment to maintaining the
integrity of our organization.

I believe that effective oversight should be constructive, benevolent and hands off, only
acting as a last resort when AADAO is unable to self-regulate. After all, AADAO has limited
autonomy from the Hub, as voted in prop 865. Limited autonomy means AADAO can
privately manage its own internal affairs without the need for the Oversight to interfere or
even worse bring chaos to the public space.

False. Publishing was not rushed. At the time of release, the report was conclusive and we had substantial supporting materials and interviews of evidentiary value.

We also delayed publishing of the report, twice – per explicit requests of the team. I communicated to the team on August 29th and again on August 30th that Oversight feels an urgent reporting obligation.

As a courtesy to the team, we postponed the notification to the community to September 5th.

On August 30th you even thanked me for postponing our reporting obligations to the community.
I have all calls recorded. Should I share the audio file, Youssef?

We were asked to postpone the report again on Sept 5th bc the DAO indicated it was prepared for remove you via all DAO proposal.

That didn’t transpire. The team asked to delay publishing again on September 9th, and Oversight refused. We communicated that Oversight had already given the team two weeks-- and at that juncture the reporting obligation to the community supersedes.

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False.
Patricia informed me of the issues and circumstances of your misconduct and mismanagement on August 27th. This call evolved to a 130 minute interview.
I spoke to her again with @Better_Future on August 29th for another 150 minutes. I had a follow up interview with Pati on Sept 3rd for 90 minutes.

On August 30th you verbally consented to speaking with me to provide your account. But in the subsequent days you were actively avoidant. And refused to fix a time or date to calendar.
Despite all DAO members agreeing with the procedure I proposed, you unilaterally called off my review and demanded an external investigator/ombudsman be hired on Sept 5th.

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False. You are deliberately distorting the limited communication limitations as they applied to the active review/investigation…

On Sept. 2nd I shared an internal memo that outlined the guidelines, procedures and safeguards for the review underway concerning your misconduct and mismanagement.

For transparency, this is how the relevant guideline read:

Communication Limitations (In Effect Immediately and Until Further Notice):

These communication limitations are designed to preserve the integrity of the review process, prevent potential interference, and ensure a fair and unbiased investigation.

A. Youssef Armani and Patricia Mizuki are strictly prohibited from communicating with each other regarding the review process and the contents of the Alleged Misconduct Incident Report(internally published August 30th).

B. While Youssef Amrani and Patricia Mizuki are permitted to discuss the review process and the contents of the Alleged Misconduct Incident Report with current DAO members, the following conditions must be met:

  • All such discussions must be formally scheduled and recorded in their entirety.
  • A complete transcript or recording of each discussion to be shared within 24 hrs with full team in #general
  • Minutes summarizing the key points of each discussion must be prepared and to be shared with me (please share in Slack, and send copy of minutes via email to grace@atomaccelerator.com)
  • No private, unrecorded conversations about the review process or the Alleged Misconduct Incident Report are permitted between Youssef, Patricia and other DAO members.
  • DAO members are required to report any attempts by Youssef or Patricia to engage in off-the-record conversations about these matters.

C. All parties involved in the review – including Youssef, Patricia, and all current DAO members, are prohibited from discussing any aspects of the review or the Alleged Misconduct Incident Report with external parties.

D. All review-related interviews will be recorded and transcribed to ensure accuracy and transparency.

E. Any attempts to influence or interfere with the review process must be immediately reported to the Elected Member of Oversight.

F. All information shared with me during the interviews and review process will remain strictly CONFIDENTIAL.

ALL DAO CONTRIBUTORS: Please affirm you have read above and accept the suggested procedure. If you have recommendations for how the review process must be changed, I remain open to your inputs. But I ask you to abide by the communication limitations delineated above, immediately.

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False. During the August 29th team biweekly I openly suggested the file be shared with the whole team. You did not express dissent. And you did not express disagreement with the file being shared until September 5th.
The file was shared on August 30th via AADAO Slack.

But kinda a moot point anyway. The community is entitled to know the true total possible compensation of all DAO members. Your published “compensation brackets” can be construed as misleading team compensation information.

If you concede to the public knowing, by extension, the compensation range can be made known internally. All the data is broadcasted on chain anyway, Youssef.

Neither True or False. It’s an exaggeration to label my support and interest for AtomOne as “involvement.” It is my opinion – I do not perceive AtomOne to be a direct competitor. If youre familiar w crypto history, you’ll understand that Litecoin was not perceived as a direct competitor to Bitcoin, rather a necessary experiment that launched as its own chain.
I don’t believe “forks” exist in Cosmos. Using your reasoning, one can argue that Osmosis, Stargaze and other sovereign chains are also “forks” of the hub. They are not forks. They are their own hub/zone. That said, I’m an elected member. Should the community feel strongly I shouldn’t be involved – I won’t be. But it shouldn’t preclude me from having an intellectual interest in the project. That’s censorship.

Wow… OK. Let’s talk about several points here:

what I consider to be grave failures that disqualify the 2 members of the Oversight

What is the mandate of the oversight role(s)? Where is this written? When was it written? Under what authority?

Intentionally rushed the publishing on an inflammatory report instead of attempting to
resolve the issue internally.

Straw-man, deflection.
Refer to the above.
Additionally, the fact that a transparency report looks bad on any particular person does not make it inflammatory. The the entire purpose of such a report is to give insight to the public, regardless of the outcomes. The timing is irrelevant, whether this happened yesterday or a month from now really has no bearing on the “ethical correctness” nor the appropriateness of the way it was handled.

Selective prosecution

Whataboutism, false equivalence.
This again has no bearing on the ethics of your actions. In the event that this does bear some weight and bring into question the ethics of the oversight “officer” herself, are there records of these allegations?

Intentionally broke communication lines between GM and his team

Playing on emotions, more deflection.
Did she lock you all in separate rooms with no devices or other methods of commnuicating with eachother, or was it somehow forbidden to speawk to eachother during this time? Again, you’re attempting to shift blame onto the investigation itself rather than the actions which led up to said investigation.

Encouraged Patricia to publish salaries, breaking confidentiality rules

Hurt feelings aside, where is it written that this was prohibited? This information is already public, it is on a public blockchain. The funds are essentially “public funds”. It’s not very difficult to see why these details are fairly relevant to the overall situation.
Rather than focusing on a supposed breach of confidentiality I’m not sure really exists/existed, try addressing why this information was shared in the first place.

Conflict of interest (COI) due to involvement with ATOM ONE

Guilt by association.
I can just as easily prove “innocence by association” using a number of past statements and situations, but I’m not going to because they are irrelevant.

TLDR: It might be more productive to have an adult discussion about this instead of deflecting blame onto the fallout of your own shitty actions

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Excuse me?

This is August salaries :arrow_up:

And you’re saying Grace pushed Pati to
publish something, that AADAO promotes on their own website for transparency sake?

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I did not “encourage” @Patricia to “break confidentiality or social rules.” In fact, you will hear in this audio extract from the August 29th team wide Biweekly that Youssef encourages Oversight to share all relevant documents that can fully inform the team as we continue bonus methodology related discussions on the following day.

In this audio file, you hear me making the request to Patricia transparently during a team meeting. And you will also hear Youssef agreeing to the reasonableness of my request.

Youssef, for your own sake — please stop with your distortions and misrepresentations. I have every call relevant to this report on the record.

It’s all recorded.

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I think Max deconstructed your logical fallacies pretty cleanly so I will avoid doing it again. My only comment would be that you should try to address the accusations themselves and show how/if they are wrong, instead of focusing on whoever is accusing you of not doing their job. This report is literally why the oversight position was needed and requested by the community, attacking who the Atom community chose as their representative on this committee does you no favors.

I agree you should’ve fixed this internally and not force Oversight to publish all of this, but by now it’s too late so the best approach is refuting any claims you deem false/wrong and be as transparent as possible about everything related to this matter.

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You’re right. Oversight should intervene in extraordinary situations. And that’s what we did.

Issues of misconduct and management are not “internal affairs” of the DAO. You’re a community owned DAO, and if the misconduct/mismanagement directly relates to misuse or misappropriation of community resources for self dealing or personal gain, it’s absolutely a public interest matter. Your invocation of limited autonomy here is incorrect.

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I’m struggling quoting Max initial post on mobile but I want to say that everyone should give it good read. It was very well said and captured my thoughts better than I ever could. Absolutely nailed it.

I did read through Youssefs response and I have to admit I chuckled quite a bit. He seems to think oversight should be optional and “hands off”. In what world is this ever the case? When I audited public companies, we always had the saying “trust but verify” and to practice “professional skepticism”. Grace has done her job professionally in every respect. It is not her fault that there were findings that needed to be reported to the public. In fact, aadao should be thanking her because she is the only thing left giving the organization any credibility. I think this needs to be investigated fully and transparently and appropriate actions to be taken if necessary.

Also I have to say some of nepotism that occurred is disgusting but I have to applaud Patricia coming forward despite the stress I’m sure that caused personally.

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