Wednesday, September 19, 2018

Questions regarding Form 990


Dear PNB Members, Tom Livingston and Eileen Rosen - 

Thank you for posting the FY 2017 990 on pacifica.org. [The 990 Form as posted by Pacifica] Having reviewed it, I have some serious concerns. 

Tom Livingston signed this Form 990 on August 15 but I wonder if he reviewed the contents or knows enough about Pacifica’s finances to review the contents without outside help. A cursory look at the Form shows many serious discrepancies and omissions. 


For starters, on page 6, Section C, question 18, which “requires an organization to make its Forms… 990… available for public inspection,” Tom checked the box to provide this Form 990 on “Own Website.” I asked several times publicly for it to be made available to the public on pacifica.org. On September 13, I sent a formal letter requesting a copy per the IRS code. This was all unnecessary. As of a few days ago, this 990 can now be found on pacifica.org


This 990 was not authorized for filing by the PNB as they would have had to take a public vote. Even in closed session, there would have to be a report out. 


I am listing some of the serious shortcomings that I am able to identify.


1. Page 7 – Compensation: The form does not specify the amount paid to two Directors, Kathryn Davis and Mansoor Sabbagh, although both were paid compensation.


2. Also on page 7, the hours listed for Jonathan Alexander are two whereas he is a full time employee. The hours should be 35 or 40. 


3. I believe Bertold Reimers and Quincy McCoy should also be listed as high-salaried employees. 


4. Balance Sheets are not prepared monthly. These are prepared only during the audit. We have also been told that the books were not ready for the audit. Therefore, any numbers that relate to a Balance Sheet for FY 2017 like Cash Balances, Liabilities, etc., can only be considered as “made up.” Some of the balances do not make sense:


a. Page 1, Line 21. It shows that Liabilities have gone up by about $172,000 during FY 2017. This does not seem right. WBAI did not pay Empire State rent for the full year and accrued penalties and late charges. This alone would add roughly $700,000 - $800,000 to the liabilities. 


b. We know that pensions have not been paid for the last several years. The unpaid amounts, interest and penalties have to be accrued in the books. This will also increase the liabilities significantly. 


c. Page 11, Line 1 shows Cash Balance of $944,879. How is it possible there was almost $1 million sitting in the bank? 


5. Revenue and expense numbers will change substantially when the books are ready. I believe Empire State charged hundreds and thousands of dollars in late fees and penalties which were never accounted for. When this is accounted for it will increase the losses substantially. This is just one example and clearly the income statement numbers that are stated in Form 990 are not correct. 


6. It is not mentioned anywhere that these financial numbers are based on unaudited statements and will change after the audit is complete. It is a serious mistake to let readers believe these numbers are final. 


7. On Page 6 and 30, Tom certified that the books are in the care of Sam Agarwal. Tom’s signature is dated Aug. 15, 2018. Sam resigned in March, 2018 and left a month or two later. This statement is easily identified as completely false and makes it easy to question if anyone reviewed this.


8. Several Declarations on Page 6, Section B Policies are questionable. For example, Line 12a and 12b asks for a Policy regarding Conflict of Interest. I never saw such a policy when I was on the PNB and I am sure none was made since then. If there is any such policy, please provide a copy so the public is assured there is one. 


9. Page 27, Schedule O, Part VI, Section B, line 11b – Notwithstanding the process described is unrecognizable as Pacifica practice, it states: “After a full review (with modifications where necessary), the final version of the tax return is provided to all members of the Organization's voting body.”

a. I think Tom is providing a false certification here as I do not believe the Form 990 was presented before the PNB nor reviewed by them. It was not approved for filing.


b. I do not believe Tom has the authority to approve the return for filing on his own. Nevertheless, it is the PNB who has the ultimate responsibility for presenting truthful or untruthful information to the IRS and the public. 


Tom signed this return “under penalties of perjury,” that he examined this return and “it is true, correct and complete.” I have serious doubts about such certification based on the shortcomings I have pointed out above. This falls under the Sarbanes-Oxley Act of 2002. Although Sarbanes Oxley, passed by congress in the aftermath of the collapse of Enron and its subsequent litigation, was written for public corporations, guidelines I have read indicate that non-profits should also follow those rules, especially where it disallows a CEO, or ED, from claiming they “didn’t know” what was going on in the company or organization.


The Form 990 is supposed to be accurate and complete information about a non-profit organization. It appears that the Auditor, and designated tax preparer, has also failed to ask questions or verify the information provided by management. This is serious.


The PNB has the ultimate responsibility to provide correct information to the public. I have based my analysis on publicly available information plus my knowledge and experience with Pacifica. If any of my statements turn out to be incorrect, please provide documentation or explanation. I would also expect the PNB to publicly report what action they plan to take, including if substantial changes are required. 


But, more importantly, why was such misleading information allowed to be filed with the IRS? Who is watching Pacifica’s compliance with laws and reporting? 


I am making my comments public and request that any responses also be made publicly.    —Kim

11 comments:

  1. thanks for representing the 'rest of us', Kim.

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  2. Thanks so much for this, Kim.

    1) #7: it beggars belief that the CFO, who is also the iED, wouldn't take responsibility & seemingly lie that he isn't "the person who possesses the organization's books and records" (page 6 of both the 990 & the PDF) – *present tense*, not even the possessor when the Form 990 was prepared.

    The CFO, Tom Livingston, shouldn't be a coward. He should accept the responsibilities & duties he has agreed to discharge. (Directors calling him 'the Acting CFO' is a superfluous pleonasm – in fact, as NETA's inability to access Great Plains for at least 14 weeks testifies (7 June PNB report-out), he has hardly done any acting of the right kind, but as an operator his seamless sliding into his new job at AIR (Association of Independents in Radio), the day after he leaves Pacifica, is quite a different testimony.)

    2) Sam Agarwal's name was correctly on the, undated, Form 8868 (page 30 of the PDF): this is the application he made on behalf of Pacifica for a time extension for the 990 submission. This might have been made in February, perhaps the middle: "I request an automatic 6-month extension of time until August 15, 2018". Filing online means no date is on the form itself.

    3) It's Rosin – https://kpftx.org/pnbmem/public_cm_list.php?id=3&yr=2018&eventdate=20180917 .

    Thanks again, Kim. Pacificans deserve you.

    ReplyDelete
  3. I have no interest in arguing for advocating for or defending Livingston. I am inclined however, to argue for cold rational assessment and perspective rather than a nitpicking unpacking of detail of minor documents and rule-structures.

    As a matter of perspective, bear in mind that Livingston was brought in to consult overall as Pacifica engaged in its then-most-recent paroxysm, to set up a recruitment and vetting process for a new Executive Director, and perhaps to see if he might be helpful in other ways.

    Well, not to call out the cheerleaders, but he seems to have done a pretty fair job overall, given his limited mandate and the intractable madness which is and has been Pacifica.

    Am I dazzled?

    No.

    I think he’s done a pretty fair job, though. I can’t imagine anyone willing to be fool enough to engage with Pacifica managing to do any better.

    The fact that they’ve apparently not been able to recruit anyone competent as ED illustrates the problem. Is that Livingston’s shortcoming, or reflective of the fact that these people are hapless hopeless loser fucks and have been for decades.

    Not so very long ago they hired a demonstrably capable capable Executive Director in the person of John Proffitt. He threw up his hands and walked away after only five months. Who the hell could blame him? In retrospect it simply made clearer than ever that these people can’t be helped. It’s very difficult, you know, to save people from themselves. As a rule, pretty much impossible.

    Proffitt was aided in part by their sheer desperation to not die right there and then, and he seems to have done what he could.

    Quite a bit, considering.

    I can’t imagine anyone competent taking a head position at Pacifica without clear authority to hire, fire, and clean house.

    Think that’s gonna happen?

    As I said, was I dazzled? No. I’m not inclined, however, to piss on a pretty damn good job in completely insanely impossible circumstances.

    Let’s see how they do when he moves on. Perhaps they’ll again be terrified and begin to get their shit together.

    Care to place a wager?

    ~ ‘indigopirate’

    ReplyDelete
  4. 1. Wait. Kathryn gets paid? Kathryn Helix Water Davis?
    2. Poor Jonathan. He still has PTSD from his time chairing the PNB. Watch him jump when you say point of order.
    3. Are you talking about the rogue GMs running unchecked doing whatever they want whenever they want?
    4. Fantasy budgeting has long been a staple at WBAI. Make up some revenue numbers and watch the deficits disappear.
    5. Funny. They've been going on about all the savings from leaving ESB. BTW What happened to that transmitter?
    6. They're just trying to check the box that says to submit this form. They can always change the numbers later.
    7. Major Tom Placeholder is too busy basking in the almost sincere adulation of the PNB to worry about such details.
    8. Ah! If only there was a conflict of interest policy. At least half the PNB, a chunk of LSB members and some managers would be thrown out.
    9A. The hope the PNB did review for their sake. They are the ones who are on the hook and perhaps personally on the hook as well.
    9B. Tom is the IED and CFO which is of course wrong but that would be the basis of his authority to file.

    Kim's concerns are valid and should be addressed. Its just hard to take Pacifica seriously at this point. Even a cursory review shows a sea of red flags which are being ignored and dismissed by those on the inside who claim to know better.

    ReplyDelete
  5. I have no interest in arguing for advocating for or defending Livingston. I am inclined however, to argue for cold rational assessment and perspective rather than a nitpicking unpacking of detail of minor documents and rule-structures.

    As a matter of perspective, bear in mind that Livingston was brought in to consult overall as Pacifica engaged in its then-most-recent paroxysm, to set up a recruitment and vetting process for a new Executive Director, and perhaps to see if he might be helpful in other ways.

    Well, not to call out the cheerleaders, but he seems to have done a pretty fair job overall, given his limited mandate and the intractable madness which is and has been Pacifica.

    Am I dazzled?

    No.

    I think he’s done a pretty fair job, though. I can’t imagine anyone willing to be fool enough to engage with Pacifica managing to do any better.

    The fact that they’ve apparently not been able to recruit anyone competent as ED illustrates the problem. Is that Livingston’s shortcoming, or reflective of the fact that these people are hapless hopeless loser fucks and have been for decades.

    Not so very long ago they hired a demonstrably capable Executive Director in the person of John Proffitt. He threw up his hands and walked away after only five months. Who the hell could blame him? In retrospect it simply made clearer than ever that these people can’t be helped. It’s very difficult, you know, to save people from themselves. As a rule, pretty much impossible.

    Livingston was aided in part by their sheer desperation to not die right there and then, and he seems to have done what he could.

    Quite a bit, considering.

    I can’t imagine anyone competent taking a head position at Pacifica without clear authority to hire, fire, and clean house.

    Think that’s gonna happen?

    As I said, was I dazzled? No. I’m not inclined, however, to piss on a pretty damn good job in completely insanely impossible circumstances.

    Let’s see how they do when he moves on. Perhaps they’ll again be terrified and begin to get their shit together.

    Care to place a wager?

    ~ ‘indigopirate’

    ReplyDelete
  6. I think Livingston has done a decent job. This was a low risk venture for him -- if he saved Pacifica he would look like a genius but if Pacifica failed it would not be seen as his fault. Failure would be because the task was impossible; they were too far gone; they are all crazy, etc. Getting an outside group to manage the finances is a good idea. Pacifica has been unable to do it in house. Time will tell if they will cooperate with the outside group and get a handle on where they really are financially. The giant debt of unknown proportions and terms of repayment wasn't Livingston's doing. Getting a transmitter installed at 4 Times Square was great. He showed real drive and an ability to get something done while the Pacifica culture is all talk no action.

    Of course the programming ranges from deeply offensive to completely unlistenable. The board members are hopeless incompetents. Pacifica's fate is to shrink physically as real estate and eventually broadcast licenses are sold off to pay off debt and survive in some shrunken form. Then it's lights out. No one will miss them, except maybe the most insane of the True Believers who will continue to fight and bicker on some forgotten internet discussion forum, arguing over who's fault it all was and how so-and-so should be in prison.

    ReplyDelete
  7. Reconsider your statement "Of course the programming ranges from deeply offensive to completely unlistenable." Here of a Sunday Morning, Through the Operaglass, Cat Radio Cafe, Golden Age of Radio, Ear Massage, and James Ersay give the New York market content and their personal style not found OTA, satellite, or podcasts.

    ReplyDelete
    Replies
    1. Judgement stands. These may or not be good programs but the overall schedule is terrible and needs to be changed.

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    2. Why isn't the California Attorney General, the IRS, and the companies with mechanical leans taking action?

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    3. The Micawber Organization has been audited in recent years by both the FCC & the California Office of the Attorney General, the latter running the state's Registry of Charitable Trusts. Sometimes the MO gets caught up in a random audit, other times it's a complaint from 'a member of the public', perhaps, heaven forbid, someone with a grudge, maybe a creditor, maybe a listener.
      https://oag.ca.gov/sites/all/files/agweb/pdfs/charities/charitable/ct9.pdf?

      The iED hails from Baltimore, home of 'The Wire'. So if Tommy-Clay Royce has acted beyond his powers in submitting this Form 990 without authorisation from the National Board, then his connection with Pacifica may continue as other than being a trustee on a pensions committee.

      Which raises the question why he's hanging around . . .

      . . . circling like a vulture . . . keeping close to a zombie radio network . . . kept in the loop of confidential info . . . mixing generally with the information gatekeepers . . . watching for the latest sign of necrotic degeneration . . . ready to make a move with others . . .

      . . . a true member of the Pacifica family . . .

      Delete