If they have any common sense, they should be able to see that their registered members don't represent the number of active users. You should clearly be able to tell that there aren't thousands of participating members if there aren't many users contributing content or casting votes.
To help demonstrate how many "active members" are on your website, run this query in phpmyadmin to return a list of user accounts. Basically it returns users who have logged in and aren't spammers, and have contributed a vote, comment, or submission.
Here's a pastebin link for those who want to bookmark this query.
Select * FROM pligg_users
WHERE pligg_users.user_lastlogin NOT LIKE '0000-00-00 00:00:00' /* Make sure that the user has logged in once */
AND pligg_users.user_level != 'Spammer' /* Make sure that the user isn't a known spammer */
/* Here we check if the user has submitted a story, comment, or vote */
ORDER BY pligg_users.user_id
I just ran that query on the Pligg Demo website, and it returned 47 members out of the registered 2,700. Not the best example to work from, since the demo isn't designed to function like a normal site, but it shows that there are a huge number of what are probably inactive spam accounts.
Another quick way to get an idea of how many users are contributing is to check your topusers.php page. If you are using the Karma module to manage user karma, it will only display user accounts that have a positive Karma score (active members).