Saturday, November 12, 2016
Outgoing PNB majority kicks the carcasses
ORGANIZATIONAL DARWINISM 2.0
Berkeley - (From Day 4 of Trumpocalypse) ... Pacifica's outgoing Siegel/Brazon board majority hit the network's five stations with a large central service fee increase, with the deepest impact to be felt at Berkeley's KPFA and DC's WPFW. The maneuver, which was pushed by NY rep Cerene Roberts and Houston rep Adriana Casenave, is complicated so bear with us for an explanation of what happened and the likely effect if not repealed.
The motion, referred to as the "SCA motion" purports to provide credits against shared service fees payable to the national office from each station based on how many subcarrier signals are rented out on the station's transmitter. By subtracting subcarrier income amounts (which legally belong to the 501c3 license-holder) from national office revenue, the central service fee levy must increase by the same amount (approximately $300K a year), as there is no proposed decrease in national office spending or increase in national office revenue to provide the funds for the "credits". Central service fees would be adjusted upwards by the relative income levels of the five stations, but offset by the amount of their subcarrier rental activity. You can hear a brief snippet from the board meeting explaining this here.
2016 subcarrier income totaled $308K per Pacifica's financial statement. To provide "credits", national office income would have to increase by $308K annually. Additionally IED Brazon provided a draft national office budget for 2017 that asks for an unfunded $82K increase over 2016 national office spending, so the required offset amount could be as much as $396K additional if the finance committee does not cut the national office budget request.
Central services fees are assessed proportionately:
KPFK (32%) - Increase of $92K - $126K
KPFA (30%) - Increase of $90K - $118K
WBAI (15%) - Increase of $45K - $60K
WPFW (12%) - Increase of $39K - $47K
KPFT (10%) - Increase of $30K - $39K.
The board majority is concealing the amount of subcarrier income generated by each station, making it hard to be precise about the amount that would be offset with credits. Some of what we do know is DC's WPFW has no subcarrier income at all and would be charged the entire increase. Board member Casenave slipped up and disclosed KPFT's subcarrier income as $36K a year -- and Berkeley's is known to be a smaller amount than KPFT's -- so the Berkeley station would face an increase of as much as $80-100K a year. LA's KPFK and NY's WBAI have most of the subcarrier income so they would not face immediate levy increases. Both stations have large past debts and spotty payment records, with KPFK on the record as intending to default on a quarter million dollars more in 2017 central service fees due to the punishing cost of their labor arbitration loss.
The board made the SCA decision in a sparsely attended meeting with only 8 affirmative votes, which constitutes 38% of the board's bylaws-mandated 22 member body and 47% of the truncated 17-member board. The entire KPFA delegation was missing, meaning the station had no say in an increase of 25% in Pacifica's levy. DC reps Ron Pinchback and Jim Brown voted to increase their station's expenses despite its currently insolvent state, but perhaps were unconcerned as WPFW has not paid a single dollar in central service fees to Pacifica's national office in a year. In LA and Houston, support for the measure went along factional lines with Siegel/Brazon-affiliated reps Bethune, Casenave, Patel-Adams and Novick voting for it and independent reps Aaron and Crosier voting against it.
What are the real-life consequences? In short, a crushing burden on Berkeley's KPFA. With KPFK's quarter-million dollar default in 2015 and planned default in 2017 of the same amount, the burden of supporting the national office and the network's insurance, satellite, payroll, legal and audit expenses, will fall largely if not almost entirely, on the Berkeley station as the east coast stations pay central service fees intermittently or not at all and KPFT only covers 10% of the total. Controller Lalarinas confirmed on October 31 that only KPFA had paid the central services levy for October. Such a disproportionate weight on just one station is likely to reactivate the plan leaked in 2015 for the Berkeley station to "go independent" as the KPFA Foundation, and in practical terms, force the dissolution of the Pacifica Foundation. Given the enthusiasm of KPFA's local "Save KPFA" board majority for secession from Pacifica, the absence of the entire KPFA delegation from the national board meeting may be understandable. KPFA's secession, which the implementation of this SCA motion in 2017 would likely make inevitable, would leave the 4 remaining stations, archives and affiliates network unable to maintain operations and probably force the immediate sale of remaining assets to pay debts. IED Brazon appears to be busily preparing, having prioritized getting real estate assets appraised for sale. She recently disclosed the appraisal results for the KPFK building in Studio City, CA at $4.65 million dollars.
It is highly recommended the new 2017 Pacifica National Board move to repeal the "SCA Motion".
Pacifica's national office confirmed via email that it has defaulted on 2015 pension payments due September 30, 2016. The pension default violates all 4 union contracts with the CWA in Berkeley and SAG-AFTRA in LA, NY and DC as well as employee agreements with non-unionized divisions at KPFT, the archives and the national office. The email from interim controller Efren Llarinas can be seen here. In addition to factually confirming the default, which was not previously disclosed to affected employees nor to the board of directors, the email which contains a cut and paste of an earlier email indicates Radford and Brazon were planning to fund pensions for KPFA and KPFK employees exclusively - before being informed the law prevents discriminatory pension funding. Any funds paid by Pacifica into the plan would have to be distributed equilaterally between all eligible employees employed by Pacifica. Pacifica's last pension administrator ceased plan administration after expressing concerns about Pacifica's conduct in 2015. The September email sent out by Llarinas in November details a plan to distribute pension funds by direct check payment to some employees and not others based on their division of employ, which would seem contrary to ERISA law when done intentionally to evade the non-discrimination clause.
The previous national board meeting on November 3 lasted for three hours with no tangible result.The tension between members of the Siegel/Brazon faction was pretty much the focus, with interminable fighting and shrieking between chair Tony Norman and listener reps Cerene Roberts and Adriana Casenave. With an almost unbelievable lack of irony, Casenave accused Houston board member Bill Crosier of "hurting her eardrums" just minutes before she engaged in a screaming diatribe over - a 5 minute extension of time. You can listen to a brief five minute clip here - at your own risk. (Aural discomfort is possible).
Despite threats of imminent appearance for months, the 2014 audit for the year ending 9-30-2014, now 25+ months ago, has not yet surfaced. Accrued expenses recorded on Pacifica's financial statement to auditor Armanino since the December 2015 audit start date now total $193,00, making this the most expensive audit in Pacifica history. Half the new charges were accrued from June to September of 2016, a period of time when IED Brazon repeatedly assured the board of directors the audit was "virtually completed" and the holdup was merely the need to pay for it. After most of a $50K one-time bequest was used to pay Armanino in July, an additional $41,00 in charges were accrued in August and September, with more probably to come in October and November. When confronted with the startling numbers, Brazon blamed the over-run on a $50,000 bill for 990 tax form preparation. This assertion was ridiculed by former CFO Sam Agarwal who commented when asked about it by Pacifica in Exile: "This is outrageous. We had hired a very experienced accountant for a short while. We had prepared all the schedules and provided all information timely and in a prompt manner. I was expecting Form 990 preparation and filing fee to be small as all the work was done by us. We had even prepared the draft Form 990 as the accountant had the software. I can provide more details, if needed. My expectation was the bill to be in the range of $10,000 - $15,000".
Neither Brazon nor Armanino responded to further inquiries about $50,000 in tax preparation charges. Board member Adriana Casenave said it was "misinformation" that Armanino had charged Pacifica $193,000 since December of 2015. The misinformation can be found on Sheet 7, Line 76 of Pacifica's profit and loss statement.
During the finance committee meeting of November 1, it was confirmed Pacifica no longer had Directors and Officers Liability Insurance and would not be carrying any going forward into 2017. A $32,000 extension may be purchased providing coverage for claims that occured prior to the expiration of the old policy, but any new events would potentially carry unlimited liability for members of the national board, LSB members and/or employees personally named in lawsuits and indemnified by Pacifica's bylaws. This creates a volatile situation for an organization with 100 employees, no human resources staffing and a long history of harassment, discrimination and wrongful discharge lawsuits.
In Washington DC, WPFW is shortly to be homeless again, for the second time in three years. It has been announced by IED Brazon the building at 1990 K Street is slated to be torn down. WPFW moved there after rejecting a secure space in Silver Spring MD, signing a lengthy lease for the $13,000 a month office on DC's K street "lobbyist row". The new facility quickly went sour, with the landlord filing legal complaints against Pacifica in both June and August of 2016 and now the end is at hand. WPFW has spent its entire $200K restricted capitol expense fund down to $0 and will have to struggle to meet another round of moving expenses.