Pacifica Safety Net = Accounting Fraud

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Berkeley – The ironically named “Pacifica Safety Net” has had their 1st and only tax filing rejected by California’s Attorney General, demonstrating that co-founders Donald Goldmacher and Sherry Gendleman, aren’t up to running a nonprofit organization. 

While the AG public notice sticks to all the things that are missing, when you dig into the filings, it becomes clear that they are fraudulent on numerous counts. 

1) The balance sheet submitted to the IRS on Form 1023 is not balanced. On a balance sheet, assets are equal to liabilities plus fund balance or net assets. PSN submits a balance sheet with assets (cash in hand) of $40,750, liabilities of $35,000 (a loan from an undisclosed party) and a fund balance of $0. That’s a fund balance of $5,750, not $0. 

2) The Form 1023 submitted to the IRS in April of 2021 records total revenue of $40,750, expenses in the tax year completed 12/31/20 of $11,900. This includes $7,000 to lawyers, $2,170 in fundraising expenses (!) and $2,730 to produce a 5 minute video with actor Peter Coyote. (And if you’ve seen the video, you will likely agree that they overpaid). You can probably anticipate what I’m going to say next. If total revenues are $40,750 in your first year of existence, and $11,900 is spent prior to the end of that tax year, then the cash on hand at the end of the year is $40,750 MINUS $11,900 or $28,850.

3) Just in case one suspects the money was actually spent in 2021 after the end of the tax year – nope. Before the CA AG just rejected the whole filing, a tax year 2021 filing was briefly displayed (filed in January of 2022). We saved it for you. The fiscal year has shifted around (on one form it ends on 12/31/20, on the other the next tax year ends on 10/31/2021), but it’s a lot worse than that. On this return, total revenue is $10,000, total assets are $10,000, and total expenses are $9,000. So the $11,900 in expenses fit in neither year – or both years put together – and the asset of the $35,000 loan is entirely gone without being paid back (an expense) or forgiven (which is revenue). Just gone in a puff of smoke. 

To state the obvious, these are small amounts of money and the mathematics skill level required is about 8th grade. 

More importantly, the people submitting these fraudulent tax returns over ridiculously small amounts of money arrogantly claim that no one but them is qualified to sit on the Pacifica Foundation’s board overseeing tens of millions of dollars in assets, sue their colleagues personally in attempts to take their homes, and attempt to strip the Pacifica Foundation of its radio licenses. When they can’t keep track of $50,000 and fill out tax returns like bingo cards. 

It would be funny if it weren’t so sad. 

If you take one thing from this email – take this: The Safety Net/KPFA Protectors group treat nonprofit compliance like a joke. They aren’t safe and they can’t protect anything. Pacifica Safety Net is submitting fraudulent tax returns.  

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Started in 1946 by conscientious objector Lew Hill, Pacifica’s storied history includes impounded program tapes for a 1954 on-air discussion of marijuana, broadcasting the Seymour Hersh revelations of the My Lai massacre, bombings by the Ku Klux Klan, going to jail rather than turning over the Patty Hearst tapes to the FBI, and Supreme Court cases including the 1984 decision that noncommercial broadcasters have the constitutional right to editorialize, and the Seven Dirty Words ruling following George Carlin’s incendiary performances on WBAI. Pacifica Foundation Radio operates noncommercial radio stations in New York, Washington, Houston, Los Angeles, and the San Francisco Bay Area, and syndicates content to over 180 affiliates. It invented listener-sponsored radio.


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