PACIFICA AND KPFA FOR SALE AGAIN? Sunday, August 7, 2005 Bulletin #13 ---------------------------------- Please feel free to distribute. http://www.struggle-and-win.net
"This is the only non-profit I've ever been involved with without a line-of-credit. You cannot keep doing business this way. The board ought to authorize a line-of-credit... Read the bylaws. Read the powers of the Executive Director. He doesn't have to [get board authorization]. It's my choice..." -AMBROSE LANE, PACIFICA INTERIM EXECUTIVE DIRECTOR
"Each station is now struggling with a deficit or shortfall... I do not believe it can be ignored for any reason. We must act." -LONNIE HICKS, PACIFICA CHIEF FINANCIAL OFFICER (CFO)
"We spoke to Wells Fargo today which has the loan on Pacifica's KPFA building. They talked about a 7.25% interest rate, which is about 1% above prime. We chatted a bit and made a connection. It's always good to make a connection, especially in the banking business where we're already banking... We're also looking at the Bank of America..." -MARNIE TATTERSALL, PACIFICA NATIONAL FINANCE COMMITTEE MEMBER, Treasurer, KPFA Local Station Board (LSB), and Director of Finance for KGO & KSFO (radio stations owned by ABC/Disney)
The quotes above are from the Pacifica National Finance Committee meeting of July 29, 2005. Is this deja vu all over again?
In 1999, in his infamous email to then-board chair Mary Frances Berry, Pacifica National Board (PNB) member Michael Palmer suggested that "The [KPFA] primary signal would lend itself to a quiet marketing scenario of discreet presentation to logical and qualified buyers."
Today, in 2005, Pacifica's management wants to take out a "line-of-credit" in order to pay for the looming budget deficit that they have created through their gross mismanagement. Is this not one more "quiet marketing scenario of discreet presentation" -- this time to Wells Fargo or the Bank of America?
DOWN THE MONEY HOLE
The Pacifica network is hemmoraging money. According to a report presented at the National Finance Committee meeting, prepared by Chief Financial Officer Lonnie Hicks, each of the five Pacifica stations are over budget.
Pacifica's national office, located in Berkeley, is also significantly over budget. According to Hicks, "We have spent $100,000 over the gross salary line, and $139,000 in salaries and related... Adding salary increases for management staff put us over budget." Under questioning, Hicks confessed that these management salary increases had not been authorized by the Pacifica board. Some of these increases, Hicks said, were "retroactive" for six months.
Is this one of the reasons that Hicks and other Pacifica management personnel, including former Executive Director Dan Coughlin, have repeatedly refused to allow elected PNB members full access to the network's financial records?
The biggest financial hemmoraging is at WBAI, Pacifica's station in New York. WBAI is currently about $500,000 in the hole. How does a station get this far out of whack? According to Stephen Brown, a WBAI LSB member:
"Every year, since 1978, the Gary Null Natural Living program has been responsible for raising up to 1/3 of WBAI's total yearly revenue... This revenue stream was deliberately cut off approximately three years ago, when WBAI Program Director Bernard White began personally insulting Null on the air, snipped 20% off Null's daily air-time with no reason or explanation, pre-empted him from virtually all pledge drives (again with no reason or explanation), and then finally fired him in December of 2004." Brown calculates that the "still unexplained decision to pre-empt Null from more than 12 pledge drives has so far cost the station (and the foundation) up to $3.6 million."
Is this mismanagement, or sabotage?
In one small example, the KPFA Local Station Board is now paying a parliamentarian $80 an hour to attend every meeting, including "executive sessions," because the current chair is so unfamiliar with elementary parliamentary procedure.
Another example -- security guards are now routinely hired for all PNB meetings.
"GIVING TEEN-AGE BOYS CREDIT CARDS..."
The discussions on what to do about the looming financial crisis are now centered in the PNB's National Finance Committee. These discussions have focused on a debate about whether or not to take out a line-of-credit. But what is not being discussed are the underlying political problems that plague the network and are the real cause of the financial crisis -- bloated staff expenses, poor programming that fails to garner the necessary financial support from listeners, and the failure of the PNB to seriously address these problems.
For example, the PNB National Finance Committee is now meeting almost weekly. Yet the PNB National Program Committee, where real political discussion about programming should occur, has barely met since the first PNB was elected in 2004.
Instead of dealing with the very real problems that plague the network, Pacifica management is proposing to resolve the crisis by borrowing money. This is like "giving teen-age boys credit cards," said Sandy Weinman, the LSB Treasurer of KPFT in Houston, Texas. "We've survived this far in our history without a line-of-credit. It's not time to turn over the Monopoly cards and mortgage our future."
To borrow money, Pacifica would have to put up something as collateral -- the buildings, the broadcast equipment, the station licenses. In one scenario, the collateral would be future income. Imagine a pledge drive where your money goes, not to Pacifica, but to Wells Fargo or the Bank of America.
It should be obvious that if Pacifica goes deep into debt to cover up our runaway budget problems, we are just asking for trouble, and serving up the network on a silver platter to our creditors. "Our assets are beyond our buildings. The real worth is the FCC licenses and the bankers know this," said Weinman at the most recent National Finance Committee meeting.
But, in the minds of our current management, not to be in hock to the banks is somehow unbusinesslike. "Is our role to survive?" mused Interim Executive Director Lane. "The responsibility of a board member is to enhance the value of the corporation for which they serve."
Not so, said PNB member David Adelson, a representative from KPFK in Los Angeles. "I think the charge is to see that the Pacifica mission is fulfilled, not to enhance the assets of Pacifica."
WHO'S IN CHARGE?
When it was her turn to speak, Patty Heffley, a PNB National Finance Committee member from WBAI, said that she had not known that Pacifica management had received unbudgeted raises and bonuses. "Who is in charge of the managers," she asked, "so they don't overspend?"
"That's an interesting question," CFO Hicks answered. "Who's accountable for management expenses of this organization? The issue has not been resolved... We need a national policy for monitoring and controlling expenses."
If the current Pacifica management has its way, the Pacifica community might find Wells Fargo or the Bank of America "monitoring and controlling expenses."
[ The quotes in this report are transcribed from the Pacifica National Finance Committee meetings of July 29 and August 2, archived at: http://www.kpftx.org/#archives ] -------------- next part -------------- An HTML attachment was scrubbed... URL: <../attachments/20050808/b96e5427/attachment.htm>