Originally posted March 26, 2015

Berkeley-Pacifica’s response to the December 17th document request by the California Attorney General, sent on February 17th, contains some startling omissions to straightforward questions. For example, question 12 from the AG asks for “records of all donations and grants received by PFR, including but not limited to donations received via Twitter, Facebook and Pacifica’s websites, from January 1, 2010 to the present”.

Pacifica was not gifted with a huge amount of donations and grants in 2014, but Pacifica’s CFO Raul Salvador can be heard announcing the receipt of a $150,000 unrestricted donation from the Toyashima Foundation drawn from a T. Rowe Price brokerage account in this sound clip from the Pacifica National Board meeting of July 31, 2014. 

The trial balance ledger sent to the California Attorney General in answer to question 12 for the Pacifica National Office in fiscal year 2014, which can be found here,does not contain the $150,000 grant/donation. The ledger contains no donation to the National Office for more then $3,500 between 10-1-2013 and  9-30-2014.

Similarly, a $105,000 bequest to Berkeley station KPFA donated in Chevron stock in 2014 and deposited into KPFA’s bank account in May of 2014also doesn’t appear in the ledger sent to the California Attorney General in response to question #12 for KPFA for fiscal year 2014.

On a less serious note than six figure checks not appearing in the trial balance, even the name of the organization appears to be a matter of confusion. This RRF-1 form, a form that is itself filed *with* the Attorney General and was filed in August of 2014 to accompany the 990 tax form is from “The Pacifica Radio”. 

While this is humorous (getting the name of the company right is just about the easiest question an executive director will ever face), the ineptness involved in filling out the form with the wrong name, then filing the form with the wrong name, then returning the form filed with the wrong name to the agency in an audit  – still with the wrong name on it – isn’t really all that funny.

When it comes to the name of the organization, the Pacifica Foundation became Pacifica Foundation Radio in February of 2013 when a temporary Franchise Tax Board suspension due to state tax form errors dating from 2007 during the Lonnie Hicks/Dan Siegel administration got publicized on the open stream of a Pacifica National Board meeting by WBAI Justice and Unity Caucus member Don Debar. Just days before the suspension was lifted and within 48 hours of De Bar’s public announcement, the name was claimed at the California Secretary of State by residents of Yorktown Heights, NY using a “create an LLC overnight” package.

The name-stealers never responded to legal inquiries from Pacifica, and were themselves suspended by the California Franchise Tax Board in January of 2015, making the name available for reclaiming by Pacifica. Former board treasurer Tracy Rosenberg noticed the suspended status on March 24, 2015, two months later, and notified the interim executive director and Pacifica’s National Board they could reclaim the name. No response was received. It is unclear whether Pacifica has filed a form to reserve the Pacifica Foundation name.

Pacifica’s national board has seemed somewhat oblivious to the level of financial distress in the organization in 2014, with Berkeley station KPFA down to only $33,000 in its bank account on November 26, 2014 (the station’s monthly salary/benefits alone run in excess of $150,000 a month) and Los Angeles station KPFK overdrafted on its Bank of America operations account by -$16,000 on November 25, 2014, with a month-end balance of a whopping $212.

Nonetheless, Pacifica’s executives continued to maintain expense accounts with CFO Salvador drawing $3,351 in supplementary expense checks between November of 2014 and January 2015 (with another $1927 taken directly from KPFA’s operating account in the summer of 2014) and unpaid IED Wilkinson drawing $1,044 on November 21, 2014. Even now-departed former IED Bernard Duncan got into the act drawing a supplementary $2,636 check from KPFK’s operating account on April 17, 2014 and then drawing another supplementary $4,687 from KPFA’s operating account, despite receiving payroll checks.

This financial myopia is made possible by the network’s sprawling financial structure which maintains in excess of 22 different bank accounts at all times and wires money between these accounts a minimum of 50 times a month and usually more than that, wasting as much as $12,000 a month or $150,000 a year in bank fees. The financial decentralization allows frivolous use of money in one geographical area while another part of the nonprofit is struggling to pay vital bills with no knowledge of where funds need to be deployed at a given moment. Certainly overdrafting a bank account while paying executives thousands in expense accounts and looting restricted funds makes no sense. Attempts by ED’s Grace Aaron and Summer Reese to call for more logical banking arrangements were met with hostility, even Reese’s moderate suggestion that perhaps all of the bank accounts could be consolidated within one bank instead of seven different ones to lower the costs of the frequent wire transfers.

Oddly, Wilkinson and Salvador were intensely critical of ED predecessor Reese for reimbursals no larger than amounts they took themselves, describing the checks as “self-dealing transactions” to the Attorney General. Reese took documented salary advances and paid them back to Pacifica. Wilkinson, Salvador and Duncan seem not to have not paid the amounts back nor did they report their own supplementary compensation to the Attorney General..

The network also seems to have forgotten about loans provided to its stations. In answer to the Attorney General inquiry requesting “A list of any loans made to PFR and documents related to those loans, including name, date, amount, purpose, copy of the note, terms of the loan, board minutes detailing the discussion of the loan, and a payment schedule (from January 1, 2010 to the present)”, Pacifica mentions only a $156,000 loan from real estate investor Aris Anaganos, leaving out a $25,000 loan repaid in 2014 (per the CFO’s report to Pacifica’s finance committee) and smaller loans from a NY attorney to New York station WBAI.

In December of 2014, another restricted account was tapped when DC station WPFW bit into its only real asset, which is a $162,000 donation restricted for capital use. The grant was originally $200,000 and was tapped in 2013 when the station moved from its long time home in the City Paper building when the building was demolished. A temporary move cost $38,000. Now the station is moving again to DC’s K street lobbyists row, and $27,000 was removed from the restricted account to pay the rent deposit – bringing the restricted fund down to $139,000. At the same time, several of the station’s staff and local station board are suing Pacifica requesting $3 million dollars to buy WPFW a building – simultaneous with the station depleting assets in a series of relocations from one rental property to another. The case file can be seen here..

Controversial right-wing corporate call center Comnet, whose owner Bruce Hough is a Tea Party campaign consultant in Southern Oregon, collected at least $76,801 from Pacifica between June of 2014 and January of 2015, with $52K remitted from KPFA and $24K remitted from KPFK (It’s possible some of KPFK’s expenses are still missing due to the station’s 2014 accounting meltdown). These substantial charges replace the volunteer community fund drive rooms Pacifica ran for the previous 65 years at little to no cost. KPFA has since announced a move to a different call center and returned some community fund drive room hours.

On the good side, Berkeley’s KPFA did launch a new website on March 25th, a long-needed update to a ten-year old website that was increasingly dysfunctional. The new site has a vaguely Southwestern feel with a Kokopelli-type figure wearing a crown and shouting through a bullhorn.

New York’s WBAI is losing its studio at City College in the next month and will be moving the broadcast studio to the Brooklyn administrative office. The station will try broadcasting from an ad-hoc studio that for financial reasons, will not be initially fully sound-proofed, which means the occasional passing ambulance siren may find itself on the air at 50,0000 watts.

Pacifica’s long-delayed 2013 audit, as discussed in the previous issue of Pacifica in Exile, has numerous oddities. Some of the strangest might be the accrual of almost a million dollars in legal expenses that occurred between 2007 and 2015 into the single solitary year of fiscal 2013. One case, a sexual harassment case at Washington station WPFW was litigated in 2007 and settled in 2010, another election case in New York was litigated in 2007 and settled in 2008. A third case was not litigated until 2014, and was settled in 2015. A fourth case at KPFA was litigated in 2010, settled in 2012 and seemingly already accrued in the previous fiscal year and is now accrued yet again in the succeeding year.

Leaving this fuzziness aside, preliminary financial statements for the 2014 fiscal year are showing a million dollar loss without the $658,000 Democracy Now contract, meaning the rogue 2014 board will post as dismal financial results as their predecessors, improved only by Reese’s July 2013 decision to lay off 75% of New York station WBAI’s staff, saving $800K a year in payroll expenses.

Pacifica’s national board is going through its annual bylaws amendment cycle again. Last year the board proposed over a dozen amendments and supported none of them except the one doubling the number of bylaws amendment cycles. This year’s exercise has two recycled amendments the board voted down last year (and for the last two years before that as well), one cutting the number of annual board meetings and one reducing the size of the national board from 4 representatives per station to 3 representatives per station. Neither comes close to addressing the deep structural changes that seem long overdue.

Pacifica in Exile readers may write to the board at pnb@pacifica.org.

To subscribe to this newsletter, visit www.unitedforcommunityradio.org.

###

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-supported radio.