Dear Margy –

I do not wish to add to your worries – since as both Chair and Acting Executive Director of the foundation for nearly a year, you have had enough to worry about.

However, I have no choice. Several times now, because of the many apparent cases of financial irregularity that have come to light, I (and other members of the Audit Committee) have made repeated requests to our auditors for specific information pertaining to foundation income, expenses, and payables. But, surprisingly, the auditors were unwilling (or, as they claimed, unable) to release this information (even though it is supposed to be public under California law). Instead, they told me that the information was in your possession and CFO Raul Salvador’s. If I wanted it, they said, I would have to ask you.

But to date, neither you nor the CFO have replied to – let alone honored – the numerous requests from me and other foundation directors for this financial information, to which, as directors of the foundations, we are legally entitled under California law.

I ask you, Margy, what is the director of a California public corporation to do if — after receiving numerous credible allegations of significant financial error (or significant financial misbehavior) in the management of the foundation’s funds – he is refused the documentation that will enable him to investigate those allegations in accord with his fiduciary responsibility? Indeed, when the very persons who refuse to provide this information are the same auditors, chair of the board, interim executive director, and chief financial officer who are supposed to make this information public, but instead, astonishingly, seem to be colluding in hiding it from the public?

After a director such as myself has knocked on all the proper doors, and attempted to activate all of the appropriate internal levers of governance, but still finds himself blocked by management from receiving information he believes may shed light on important financial irregularities, it would seem that he has only two choices. He can either slink away, cease to investigate, and in effect abdicate his fiduciary duty. Or, however reluctantly, he can escalate the issue to outside authorities, who can enforce disgorgement of the requested information, and take over the investigation that the director was blocked from pursuing.

In other words, with great reluctance, I can become a whistleblower. I can notify the Attorney General that management and certain members of the board of directors appear to be in continuous intentional violation of California’s Corporate Code for deliberately abetting the withholding of information from a director; and further, for making it appear, by their intransigence, that they are trying to hide either serious mistakes or serious misbehavior, or both.

This letter, Margy, is to put you and your staff and certain members of the national board on notice that, absent immediate satisfaction of the information requests made by me and other directors of the foundation, I will make a complete report to the Attorney General describing numerous violations of law by foundation officers, staff, and certain members of the Pacifica board that have put the survival of the foundation in jeopardy, caused the foundation to forfeit more than $2 million in CPB (Corporation for Public Broadcasting) subsidies, and compromised hundreds of thousands of dollars – perhaps even millions of dollars – of public money contributed by thousands of foundation’s listener-members.

I am unhappy to write this letter, but I would be unhappier still to stand by and do nothing as Pacifica goes down the drain.

Sincerely,

Stephen M Brown

Director of the Pacifica Foundation

Member of the WBAI Local Station Board

Member of the Pacifica Audit Committee