Pacifica: putting the pieces back together

pacifica logoLast month, we reported on the dire state of the books at Pacifica, the nonprofit that owns KPFA. Pacifica’s new CFO Raul Salvador and board chair Margy Wilkinson (a member of SaveKPFA) found an operation in disarray, after being locked out of the network’s National Office next door to KPFA for two months by ousted executive Summer Reese. Bookkeeping entries had not been made for nine months, and there were unpaid bills lying in large, unorganized stacks, some of which were slated to be shredded until Wilkinson intervened.

After weeks spent reconstructing financial data, Pacifica’s new staff have now issued the most complete network financial statements since Pacifica’s 2012 audit.

Stiffing pension to pay consultants

moneyThere was massive overspending at the National Office, which, according to a report from Pacifica National Finance Committee chair Brian Edwards-Tiekert “produced the largest loss the Pacifica National Office has posted since the height of Pacifica’s civil war in 2001.”

Adding injury to injury: while last year’s leadership was running up large bills with temp agencies, consultants, and law firms, they were skipping payments to the pension fund for Pacifica workers, and holding on to payroll taxes that were supposed to go to the IRS.

The good news: the overspending and deficits appear to have leveled out. So far this year, the network is basically breaking even, and there are more savings on the horizon. If Pacifica is able to restore its eligibility for Corporation for Public Broadcasting funding, it should run a healthy surplus. (CPB funding was suspended in 2013 over compliance issues, cutting the network’s revenues by over $1 million per year). | READ financial report, Excel financial spreadsheets (balance sheets, income statements, consolidated monthly sheet)

Crisis management

The biggest challenge facing Pacifica’s new leadership are the angry creditors they have inherited from the Reese era — several of which have initiated lawsuits.

But there is progress on this front as well: new interim executive director Margy Wilkinson negotiated a 21-month interest-free payment plan with an attorney who had been suing Pacifica over unpaid bills. And in early September, the Pacifica National Board voted to approve a 0% interest loan of $156,000 to cover an unpaid tax bill it inherited and head off further penalties. The loan comes from Aris Anagnos, co-founder of the Los Angeles Peace Center and the Humanitarian Law Project, as well as a long-time supporter of Pacifica’s KPFK in Los Angeles. (You can learn more about Anagnos by listening to this interview with him on KPFK). Anagnos had asked that the discussion of the loan and his name both be made public — to inspire other major supporters to join him in helping Pacifica through its current difficulties.

Now that Pacifica’s financial records are getting cleaned up, Wilkinson reports that it’s getting easier to push back on some claims by creditors. Recently, she talked down a vendor threatening to sue over money Pacifica had already paid.

Still unresolved is the money owed to Pacifica’s pension fund, and lawsuits over unpaid bills, including one from a temp agency Pacifica used heavily last year, and another from Free Speech Radio News, which was forced off the air in mid-2013 after Pacifica stopped making payments for its daily newscast.

RELATED STORIES:  Fixing Pacifica (includes financial report) | Lawyer representing board minority jumps ship | Finally, local control at KPFA

Fixing Pacifica

Margy Wilkinson

Margy Wilkinson

Pacifica is the nonprofit that owns KPFA and 4 other radio stations across the country. When this summer started, it was in chaos. Recently-terminated executive Summer Reese had barricaded herself in Pacifica’s offices, blocking elected board members’ access to Pacifica financial records. Her supporters were suing to reinstate her and throw some elected members off Pacifica’s board. And vendors whose bills Reese had left unpaid for more than a year were starting to file lawsuits to collect.

SaveKPFA‘s members and representatives have been hard at work to put things to rights. In May, long-time civil rights attorney (and SaveKPFA member) Dan Siegel took on Pacifica’s legal woes, winning a court decision that rejected each and argument by Reese’s supporters, and securing a court order that forced her to leave the building.

By late June, Pacifica’s chief financial officer, Raul Salvador, whom Reese had also locked out, had re-secured access to all of Pacifica’s accounts and electronic records. In July, Pacifica Board Chair (and SaveKPFA member) Margy Wilkinson became Pacifica’s de facto executive director, a job she’s doing on a volunteer basis while she works to get a permanent replacement into that position.

In a recent report, Wilkinson described an office left in complete disarray. “The staff in the national office is working hard. They are 5 (plus me) at this point – trying to locate files, reconstruct financial records, getting papers in their proper places, fielding calls from anxious vendors and trying to get a fix on how much money we owe and how many bills we can pay.”

The silver lining: by volunteering her time, leaving some recently-vacated positions unfilled, and whittling away at unnecessary bills, Wilkinson has already made significant cuts to spending at Pacifica’s national office. Wilkinson also reports progress resolving union/management conflicts at WPFW in Washington DC, and on making major reductions in the rental costs for the antenna of WBAI in New York, Pacifica’s most financially-distressed station.

Financial committee chair reports

pacifica logoThe new chair of Pacifica’s national finance committee, KPFA staff representative (and SaveKPFA member) Brian Edwards-Tiekert, has issued a report on the state of Pacifica’s books. “Most of Pacifica’s cash transactions (deposits and wire transfers, especially transfers between Pacifica’s stations and the national office) have not been recorded in its accounting system since the beginning of the fiscal year (October 2013). Beginning with the National Office takeover in March 2014, all payrolls went unrecorded. There is some evidence that inappropriate and unauthorized payments were made during this time.”

“Meanwhile,” Edwards-Tiekert’s report continued, “it appears few spending controls were in place at Pacifica: during a period when the Pacifica National Office was adding staff and raising salaries, it was also racking up large unpaid bills with vendors, attorneys, and consulting firms — the folks now working in the national office have discovered unpaid bills going back to last year that were never disclosed to the board, many of which were never recorded in Pacifica’s accounting system either. The poor state of the books makes it difficult to determine which past-due bills need to be prioritized. Two vendors have filed lawsuits against Pacifica to collect on what’s owed to them.”

But, Edwards-Tiekert added, he has confidence in the people working to clean things up. Their top priorities: completing a long-overdue audit to help secure the release of Pacifica’s Corporation for Public Broadcasting grants, and publishing long-overdue financial statements for the current fiscal year so that Pacifica can take stock of what it needs to do to bring its budget into balance and start catching up on unpaid bills.

RELATED STORIES:  Pacifica: putting the pieces back together (includes financial report) | Lawyer representing board minority jumps ship | Finally, local control at KPFA

Some still clinging to the past

Reese using a bolt cutter to break into Pacifica's offices

Reese using a bolt cutter to break into Pacifica’s offices

[UPDATE 4/9/14 @10:05 am: The national board minority’s attempt to get a Temporary Restraining Order to allow Reese to keep her job has been DENIED by the Alameda County Superior Court. More news as we have it.]

Pacifica’s former interim executive director, Summer Reese, remains barricaded in her former office, which she broke into with bolt cutters four days after the elected Pacifica National Board voted 11-7 to end her employment. In violation of California law, she’s still illegally blocking elected members of Pacifica’s Board of Directors from entering the premises to look at financial records.

Over the past week, Reese made moves to sabotage Pacifica’s funding from the Corporation for Public Broadcasting by complaining to the organization’s Inspector General about financial problems that either took place while she was running the organization, or that she failed to fix during her tenure. Reese has also signed a lengthy declaration as part of vague, rambling lawsuit against Pacifica brought by her supporters on the national board (Carolyn Birden, Janet Coleman, Heather Gray, Kim Kaufman, Luzette King, Janet Kobren, Janis Lane-Ewart, Manijeh Saba and Richard Uzzell).

Not coincidentally, on the day those board members filed suit against Pacifica, they also filibustered a meeting of the Pacifica National Board that was intended to retain counsel for the foundation — an apparent attempt to sabotage the foundation’s ability to defend itself. National board members reported that the litigants were so disruptive in the closed portion of the meeting that they prevented the board from even approving its agenda before its mandatory adjournment time.

Terminated interim executive Summer Reese and her supporters have been generating prodigious amounts of misinformation, from wild allegations of corruption that she never raised before her termination, to breathless reports of police interventions that never actually occurred. The treasurer of the KPFA local station board has released a statement rebutting Reese’s charges of financial improprieties. All of KPFA’s financial information is publicly available.

SaveKPFA has prepared a concise Q&A that cuts through the smoke and deliberate obfuscation that seem to be a standard part of Reese’s game plan. The Q&A is also available as a PDF flyer you can download and distribute.

What you can do: Join the over 600 Pacifica network staff and listeners who have signed this open letter demanding Summer Reese leave peacefully. Signatories include former Pacifica National Affairs correspondent Larry Bensky, community activist Ying Lee, KPFA’s UpFront’s Brian Edwards-Tiekert, former Pacifica board chair Sherry Gendelman, KPFA’s Aileen Alfandary, labor journalist David Bacon, Alameda County School superintendent Sheila Jordan, KPFA’s Philip Maldari, former KPFA GM Jim Bennett and former KPFA iGM Andrew Phillips.

Comments by petition signers have been pointed. Listener Benjamin Balthaser wrote, “I am embarrassed by the actions of Reese and hope the station returns to its mission of providing critical and informative programming.” Lee Block wrote, “Pretty selfish of you to bring down the whole network because you feel dissed. You’re as bad as a Koch Brother.”

“This destructive behavior serves no purpose,” noted listener Saraswathi Devi. Listener and Free Speech Movement activist Lynne Hollander Savio captured the conclusion many observers have reached: “Unbelievable behavior, which just confirms the wisdom of the Board’s decision.” You can add your own name and comments here. | DOWNLOAD PDF FLYER OF OPEN LETTER

 

Why this vote matters

Dan Siegel“The result of these elections could determine whether Pacifica survives or continues its slide into bankruptcy,” writes Pacifica National Board member and SaveKPFA activist Dan Siegel in Counterpunch.

“Pacifica has always been fractious, back to when KPFA was founded as its first station in 1949,” he continues, going on to describe the network’s current leadership as “inept and politically sectarian.” That leadership, he writes, “has brought the Foundation to its knees. It has spent down all its reserves, incurring cumulative deficits of $5.7 million in the last four fiscal years, according to its 2012 audit report.” | READ Siegel’s article and this overview of Pacifica’s audit

9/13/12: Last day to join KPFA to vote in fall elections

Changing the dynamic at Pacifica Radio is up for a vote in this fall’s election for Local Station Board members at KPFA and the other four Pacifica stations. In order to participate in these upcoming elections, you need to be a member of your local Pacifica station as of Thursday, September 13. The minimum membership contribution is $25 between Sept 13, 2011 and Sept 13, 2012.

At KPFA, if you haven’t made a donation between those dates, you can do so  by paying online with a credit or debit card at https://secure.kpfa.org/support. A pledge by itself is insufficient; you must actually have paid your pledge by close of business September 13 to be eligible to vote. So please don’t delay!

If you aren’t in the Bay Area, you can support Pacifica stations that you listen to in other areas. If you are a New York City listener, become a member of Pacifica’s WBAI. In Los Angeles, it’s Pacifica’s KPFK. In Washington, DC, jazz and public affairs fans alike pledge to Pacifica’s WPFW. And in Houston, Pacifica’s outlet is KPFT.