CA AG Launches Audit of Pacifica Radio With Wilkinson & Edwards-Tiekert At The Helm

California Attorney General Launches Audit of Pacifica Radio
http://www.unitedforcommunityradio.org/?p=1952
California Attorney General Launches Audit of Pacifica Radio

Posted on December 27, 2014, By update1
Berkeley-In response to a March 2014 complaint from 8 former board members who served on the Pacifica National Board between 2008 and 2013, the Registry of Charitable Trusts, the division of the California AG that supervises California nonprofit organizations, has launched a comprehensive audit of Pacifica Radio’s accounting and compliance functions. The scope of the initial document request is broad and encompasses most financial records from the past five years of operations. (see list below).

The Attorney General defines their charity oversight purpose as: The Attorney General regulates charities and the professional fundraisers who solicit on their behalf. The purpose of this oversight is to protect charitable assets for their intended use and ensure that the charitable donations contributed by Californians are not misapplied and squandered through fraud or other means.

The reckless and foolhardy actions of the rogue board majority, who threw out an executive director with a 3 year contract and rehired a CFO who had been removed for poor performance, were followed by 10 months of aggressive non-compliance with legal reporting requirements including the failure to produce an audit 15 months after the close of the fiscal year (in violation of the Nonprofit Integrity Act), failing to amend erroneous tax returns, and the issuance of only one incomplete profit and loss statement.

The inability of the 2014 board to supervise the executives they installed (unelected board chair Wilkinson and CFO Salvador) in the basics of legally operating a nonprofit organization has opened the door for government interference in Pacifica’s operations. The ongoing audit is likely to prevent any immediate action towards network dissolution or the sale of license and/or real estate assets.

Here is a list of the 23 sets of documents requested by the California Attorney General

1. Articles of Incorporation and any amendments

2. Bylaws, and any amendments

3. Names, addresses, telephone numbers and email addresses of all members of the national board of directors and all corporate officers from January 1, 2010, identifying each by position and term.

4. IRS form 1023 and proof of tax-exempt status from the Internal Revenue Service and CA Franchise Tax Board

5. Complete minutes, including attachments and reports, of all meetings of the board of directors and board committees, including any resolutions passed, from January 1, 2010 to the present.

6. 990 forms from January 1, 2010 to the present.

7. Form RRF-1 and filings with the CA AG from January 1, 2010 to the present

8. Financial statements, including income statements and balance sheets from January 1, 2010 to the present.

9. General ledgers (if maintained electronically, please send electronic files) from January 1, 2010 to the present

10. Bank statements for all checking, savings, and investment accounts from January 1, 2010 to the present.

11. Canceled checks for all checking, savings and investment accounts from January 1, 2010 to the present.

12. 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.

13. Receipts and itemized expenditure journals documenting expenses, from January 1, 2010 to the present

14. All written policies, procedures, internal training manuals and documents related to solicitations including solicitation scripts, question and answer sheets, brochures or promotional materials used in soliciting donations and audio records of fundraising solicitations from January 1, 2010 to the present.

15. Correspondence and documents related to donations from the public, including restrictions on the use of those donations from January 1, 2010 to the present.

16. Identify and produce all complaints and donation cancellation requests along with the name, address, telephone number and email address of the requesting party from Jan 1, 2010 to the present.

17. A list of any loans made by 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.

18. 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).

19. A list of any self-dealing transactions (transactions in which a member of the board or an employee has a financial interest, with the date, parties, amount and purpose and board minutes of the discussion from inception.

20. W-2 forms of all employees including board officers from January 1, 2010 to the present.

21. A list of employees, consultants, officers and board members and the amount of salary and wages paid to each from Jan 1, 2010 to the present.

22. All policies and procedures related to fiscal controls

23. All policies and procedures related to governance.

In other news:

Before the blockbuster announcement of the Attorney General probe, the Pacifica National Board had a meeting on December 18, 2014. While uneventful in concrete actions, the meeting contained several flare-ups. Texas listener representative Hank Lamb tried to force a discussion of national fundraising onto the agenda but was defeated by the failure of the board majority to support his effort. Only 1 of his 11 former faction mates in the rogue majority supported his effort and 8 of them voted no. Lamb made some comments afterwards directed to the public, in which he asked “all people concerned for Pacifica’s health and survival to make calls directly to their representatives and demand they do their fiduciary duty and raise the money needed to pay all our bills, debts, and salaries and benefits” and said some of his unnamed colleagues on the PNB “support going into bankruptcy.”

The CFO report from the 12-18 open session can be heard here. In it, grave concerns are expressed about the ability of California stations KPFA and KPFK to meet upcoming payrolls and pay immediately outstanding bills. Berkeley station KPFA is described as having $86K in bills due now. It was not explained how KPFA came to have $77K in the bank only 8 weeks after ending a fund drive that grossed $690K in pledges in October. The report ends with KPFT listener rep Richard Uzzell expressing aggravation about the CFO’s assertions that the 2013 audit would begin in June, July, August, September and then October of 2014. (It finally began in November of 2014, but stalled by the end of the month and has not resumed).

PNB treasurer Brian Edwards-Tiekert took to the air in Berkeley to try to explain the financial difficulties. Calling the Corporation for Public Broadcasting a “quasi-governmental agency” (CPB is a nonprofit organization), Edwards-Tiekert speaks optimistically of a “plan to get the funding back by spring”, not mentioning that it will take the completion of not one, but two audits (2013 and 2014) to restore Pacifica to funding eligibility. Pacifica has been unable to complete the 2013 audit and has released only one incomplete income statement during the 2014 board’s entire year-long term.

Documents from Pacifica prior to the 1999 democratization, especially financial records, can be hard to find, but recently an old policy document came to light and provided some interesting numbers. The document attested that total listener support for all 5 Pacifica stations totaled $1.2 million in 1981 (as compared to the current $11-$12 million dollars). The total operational budget for 1993 Pacifica (including CPB funding and all 5 station’s operational costs plus the archives and national office) was $6.5 million dollars. Using an inflationary index, $6.5 million 1993 dollars is equal to $10.7 million 2014 dollars. This suggests that Pacifica’s deep financial distress with a $12-$13 million dollar annual budget (whatever one thinks of the programming circa 1993) has more to do with overspending than with the financial resources required to run the network.

Reports that the Tea-Party-affiliated Oregon call center, Comnet, had been removed from KPFA’s fund drive may have been premature. Community fund drive volunteers reported on December 17th, they were told all local calls were being routed to Comnet and only “out-of-the-area” calls would be sent to KPFA’s fund drive room, where 4-5 volunteers were sitting around answering one call every 10-15 minutes. This is contrary to a statement made by KPFA general manager Quincy McCoy, who told the station’s local board the Comnet call center service would only be used for “rollover service” when there were not enough volunteers available to answer calls. The local board, which exploded in applause when it was announced Tea Party outfit Comnet would not be processing calls, may have celebrated a bit too soon.

Berkeleyans who witnessed and often participated in the daily Black Lives Matter protests that shook the small university town in early December may enjoy this Twit Wit Radio satire which riffs on the protests, Russell Brand and KPFA’s fund drive room.

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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.