- Being responsible for the appointment, compensation, and oversight of the independent auditors' work.
- Asking questions of the independent auditors to evaluate the audit process.
- Receiving reports directly from the auditors (not management) in connection with the audit’s findings.
Sunday, April 3, 2016
Pacifica Radio in Exile newsletter: April 3, 2016
Two Lawsuits and a Judgement
Berkeley-It was a busy week for the Pacifica Foundation in the New York court system as two new lawsuits were filed against the radio network, a judgment was entered and a complaint was temporarily withdrawn. On April 7th, a request for a temporary restraining order (TRO) will be heard In New York City to restore voting rights for WBAI's PNB delegation and seat elected staff delegate Kathryn Davis. The complaint can be seen here.
The Associated Press also filed suit against Pacifica. The legal complaint filed by AP is not yet available, but a record of the filing can be seen here. Members of the Pacifica National Board indicated they had not been apprised of Associated Press vs Pacifica by interim executive director Lydia Brazon.
The judgment entered against Pacifica is yet another legal bill connected to the failed Bernard White litigation. White, WBAI's program director for most of the 2000's, sued Pacifica for racial discrimination after his employment was terminated in 2009. White also sued then WBAI local station board member Steve Brown asserting that Brown "caused him to be fired" and that Brown "owned WBAI". Chartis Insurance, wary after forcing attorney Dan Siegel off the Eva Georgia sexual harassment case after Siegel tried to represent both Pacifica and Georgia individually, insisted Brown and Pacifica must have different attorneys. Brown attempted to get himself dismissed from the case early on, but unfortunately was held in the case all the way through discovery (Brown faults Pacifica for this), and the legal fees in the case practically doubled as a result. The judgement included legal fees in excess of $150,000, payable by Chartis Insurance to the attorney, and attorney costs to Brown for taking the action to collect the money. The practical implications of the judgement for Pacifica is that it will have to pay the long overdue deductible amount on the White case which as of the last legal fees spreadsheet Pacifica produced (in the fall of 2013) totaled $91,000. The judge's scathing dismissal of White's claim of being fired due to racial discrimination can be seen here.
The final NY-area legal action was the temporary withdrawal of the piracy and premiums fraud case filed by broadcaster Gary Null in January of 2016. Null emphasized the withdrawal was temporary and the request was filed "without prejudice", which is a legal term for a withdrawal that allows refiling of the identical complaint against the identical defendants at another time. Null discussed his case on WBAI. That audio is available here. His final words: "Is there a systemic culture now at Pacifica that is incapable of functioning at the level necessary to run a foundation and five radio stations? I found that was true."
The Siegel/Brazon majority has been busying itself with a full court press effort to prevent auditor Armanino from meeting with the board's audit committee. A clue as to why can be gathered from an email sent by the audit lead at Armanino, which asks what the June 30th deadline for audit completion is related to. This indicates the audit firm does not know about the Corporation for Public Broadcasting (CPB) deadline for audited financial statements (AFRs) by June 30th. Pacifica missed audit deadlines in 2014 and 2015 and was declared ineligible for CPB funding. Another $750,000 may go down the drain in June of 2016. The email points to communication problems between the auditor and Pacifica management and the need for the audit committee to get up to speed on the scope and timing of the audit. With Pacifica under investigation by the CA Attorney General, the wisdom of complying with California's Nonprofit Integrity Act, which also requires the submission of audited financial statements by 9 months after the close of the fiscal year, is clear. Pacifica has been out of compliance with the NPA for the last 21 months. Pacifica's status with the California Attorney General's Registry of Charitable Trusts shows as delinquent again, most likely a reflection of the missing financial audit.
A timeline of the now two year old coup by the Siegel/Brazon faction can be seen here.
PNB secretary Janet Kobren took the lead in attempting to block the audit committee from meeting with the auditor stating "While the PNB Audit Committee has a right to meet with the auditor, this is a limited right". (The auditor has not met with the audit committee for a year). Kobren indicated she was afraid of incurring costs, but the price of a two-hour meeting pales in comparison to the doubling of the audit fee from the quoted $70K to the $150K+ the incomplete 2014 audit will now cost.
The role of a nonprofit's audit committee as defined by the National Council on Nonprofits includes:
The Siegel/Brazon faction's first attempt at setting up a secret nonprofit was dissolved after 8 years in existence. 5 years before Margy Wilkinson and Dan Siegel set up the KPFA Foundation to acquire Pacifica's licenses in the event of insolvency or dissolution, Save KPFA associate Sherry Gendelman secretly set up The Friends of the Pacifica Archives as a CA nonprofit with herself as the agent for service. Gendelman was serving as Pacifica's Interim Executive Director and chair of the board of directors in 2008. Friends of the Pacifica Archives was dissolved by Gendelman in February of 2016.
Berkeley's KPFA alarmed its listeners last week with an online statement that it had "lost its main antenna" and needed money right away. The main antenna had not been lost and remained atop the tower, but required a repair. Due to a $242,000 shortfall in expected revenue to date and an operating deficit described in the March 29th finance committee meeting, KPFA was unable to utilize the $84,000 annual maintenance allocation from the budget-in-limbo to pay the $10,000 bill for a crew to climb the tower and install the replacement parts on the main antenna. The station had been broadcasting from the 100 foot lower auxiliary antenna causing a degraded signal in some higher terrain areas. The impromptu fundraising appeal came a month after the last on-air fund drive ended and 6 weeks before the next one begins. Finance committee chair Brian Edwards-Tiekert had earlier decided to avoid expensing equipment depreciation in KPFA's budget document (which, like all the budgetary plans, remains unapproved 6 months into the fiscal year), in practice allocating $0 dollars to the replacement of equipment when it breaks.
KPFA's budget took another hit when it was quietly announced the Summer Crafts Fair, which premiered in June of 2015, would be opened up for free admission due to an inadequate number of booth rentals by artists and craftpersons. The announcement can be seen here. The crafts fairs, which used to be operated as a traditional nonprofit benefit by KPFA, morphed in 2015 when former employee Jan Etre started running them through her event management business Jan Etre Presents, with booth rental fees going to her company and KPFA keeping only the $10 admission fees. By charging no admission fees, the event no longer benefits a nonprofit financially (whatever the intangible benefits of email harvesting as referred to in the announcement) and probably couldn't be advertised on-air without running afoul of FCC regulations that prevent calls to action (i.e. attend the crafts fair!) for an event whose revenue flows to an individual's private business. The Summer Crafts Fair had been previously anticipated to produce $20-$25K in income for KPFA per the budget-in-limbo.
In a finance committee call on March 29th dedicated to KPFA's financial condition, business manager Maria Negret reported that KPFA was running a six figure operating deficit for the year to date, with a $242,000 revenue shortfall, primarily due to lack of bequests from the wills of deceased donors. Negret also announced that a look back at fulfillment rates from 2012-2015 revealed that KPFA's fulfillment rate was 86%, not the 90%+ she had insisted was the case for the last four annual budget cycles. (Negret describes the 2016 budgetary rate as 89%. It was 90%). GM Quincy McCoy announced that KPFA would be asking for significant concessions from the CWA union in negotiations that began on Friday and if unable to secure them, would proceed with some layoffs. You can listen to the meeting highlights here.
KPFK general manager Leslie Radford sent the LA station's staff a social media guide. The 14 page document is a listing of the names of various platforms for content sharing and instant messaging with descriptions cut and pasted straight from Wikipedia (with the footnotes missing). It contains no instructions, no samples of how content might be shared, and no social media planning. Seemingly prepared by a new volunteer, the so-called guide would be useless to anyone without social media skills and insignificant to anyone with them. The document illustrates how far some of Pacifica's executives are from a professional understanding of social media and how unable they are to convey *what* the network's social media approach and plan is.
In the aftermath of the disastrous March 19th special program that went awry with a 20 minute meltdown which saw the biggest radio signal west of the Mississippi River loudly blare a Michael Jackson song over a government meeting, then run a fundraising cart right over the presentation and then simultaneously play an Alternative Radio program with Dave Zirin and the meeting broadcasting at the same time in cacophany, the engineer at the remote location explained "the board operator at KPFK didn't know how to monitor the audio feed, so he didn't hear the conference speakers". GM Radford continued to inexplicably blame "wires", instead of management leaving inexperienced and unsupervised personnel at the station's controls. You can hear part of what was broadcast here.
KPFK Volunteer coordinator Adam Rice, who was banned from the April local station board meeting after calling the board "motherfuckers" twice at the last meeting, posted a picture of himself on Facebook on a road trip to Arizona announcing that he was "bumping bootlegs" from the Zulu Collective program on the overnight Safe Harbor block. The Safe Harbor programs have been axed from the station's archived programs due to the hosts not filling out Soundexchange logs for the payment of streaming royalties. Rice's slang didn't indicate if his bootlegs were for personal use only or if he was giving away or selling his bootleg copies.
KPFA listener rep Jose Luis Fuentes, who worked for Dan Siegel's law firm Siegel and Yee for a dozen years and replaced his boss on Pacifica's board of directors in 2014 brought his loose cannon approach to another Bay Area nonprofit, People United For A Better Oakland (PUEBLO). PUEBLO's executive director penned a letter detailing what he described as harassment by Fuentes. John Yuasa, a veteran nonprofit manager who led the Tiburcio Vasquez Health Center and the East Bay Asian Local Development Corporation, among other accomplishments, described Fuentes' actions as a board member as "antics" and called his behavior "at a minimum, condescending, rude, impolite, threatening and hostile". Yuasa described the nonprofit's staff as "in apprehension and fearful for their safety" after he resigned his ED position and then revoked that resignation after cooling off. What Yuasa details has similarities to Fuentes' behavior in 2014 when he moved to terminate Summer Reese as ED 10 days after joining the national board,. Both Pacifica's corporate counsel Terry Gross and DC-based labor lawyer Cathy Harris complained about disrespect from Fuentes to their professional advice. Gross resigned from his position as Pacifica's corporate counsel on March 25, 2014 rather then continue to represent the board majority. Pacifica has not had an official corporate counsel since.
The national board has been quiet about the CFO's ultimatum for major restructuring including the sale, liquidation and/or lease of one or both of the East Coast stations by May 15th, but further developments are expected fairly soon. There has been no report back from NY-area meetings with the Empire State Building, the leaseholder for WBAI's $650,000+ annual transmitter lease atop the skyscraper.
As "organizational darwinism" plays out in Pacifica, this publication, which prefers the simpler term "cannibalism" will leave you with a song that sums up the current Pacifica landscape: Grace Slick and Paul Kantner'sSilver Spoon. Sharpen your teeth for the family feast.
However "organizational darwinism" works out, it is looking like one ugly process. To remind you to keep laughing and keep fighting for a Pacifica Radio that can not only heal itself but also help to heal the world, take 30 minutes to enjoy this Twit Wit radio satire from way back in March of 2014 when Pacifica's national office was occupied in an effort to keep the network from being dismantled.