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Pacifica: putting the pieces back together

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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

Pacifica in crisis: WBAI on the brink

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wbaigraphicThis week, Pacifica management laid off two-thirds of the staff at KPFA’s sister station WBAI in New York. The station will no longer have a local newscast; it’s unclear whether it will have any paid programmers at all. Pacifica’s interim executive director Summer Reese broke the news over WBAI’s airwaves, reports the Pacifica Evening News (2 min audio).

WBAI has long suffered from poor management, severe deficits, and the high costs of operating in New York City, as shown in Pacifica’s latest audits (to find out how this is connected with KPFA, read the last story in this newsletter).

Former WBAI and current KPFA programmer Doug Henwood delved into WBAI’s history for the New York Observer. Radio historian Matthew Lasar gave his perspective in Radio Survivor. Other coverage included Democracy Now!, the New York Times,  the Village Voice and Fishbowl NY.

Last fall, Superstorm Sandy flooded WBAI’s studios. KPFA’s staff spearheaded a network-wide emergency day of fundraising for the station — clocking over $185,000 in one day — enough to help WBAI move to temporary studios, but not to pull it out of its downward spiral. WBAI slipped further behind on the $50,000-per-month rent payments for its transmitter site on the Empire State Building, and in May began missing payrolls for its workers.

KPFA’s “on leave” interim manager transferred to WBAI 

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Reese has transferred KPFA’s interim general manager Andrew Phillips to WBAI as its new program director, and both spoke for 2 hours on WBAI’s airwaves last Friday, saying the majority of WBAI’s daytime lineup would be replaced by pre-recorded programs. Reese said WBAI was one of four financial units within Pacifica that don’t have the money on hand to make their next payroll. Over the past year, Pacifica has borrowed money from KPFA several times to pay expenses elsewhere in the network.

Appointing Phillips to program WBAI is a turnabout for Reese. In April, she placed Phillips on leave over the objections of KPFA’s local board and staff, pending the outcome of an investigation into unspecified allegations. His new position seems to indicate that either Phillips has been vindicated, or Reese never cared about the allegations in the first place — she just wanted him out of KPFA.

In a revealing interview after Reese removed him, Phillips indicated KPFA should return a Morning Show-like two-hour program — that’s something that would not go over well with Reese’s supporters on Pacifica’s board, like Tracy Rosenberg, the architect the of decision to cut the Morning Show in the first place.

KPFA’s budget in the black; challenges remain at Pacifica

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KPFAclockKPFA is doing well right now, with an upcoming budget under consideration by the Local Station Board (LSB). But problems elsewhere in the Pacifica network continue.

Financial support from the Corporation for Public Broadcasting for all five Pacifica stations is being withheld, after the network was cited in an audit for “insufficient accounting practices, misreported revenues and failure to comply with CPB rules on open meetings and financial transparency,” according to Current, an online magazine covering public broadcasting published by American University. At the same time, CPB ombudsman Joel Kaplan published a series of two reports (here and here) about questionable fundraising practices at Pacifica’s New York station, WBAI.

In our last issue, we reported that Pacifica’s interim executive director Summer Reese, who also serves as chair of the Pacifica National Board (PNB), had unilaterally put KPFA’s interim general manager Andrew Phillips on leave, even after KPFA’s elected LSB passed two resolutions overwhelmingly objecting to her actions, and hundreds of listeners signed this petition.

Radio historian Matthew Lasar interviewed Phillips, who makes it clear that Pacifica’s move to oust him is thoroughly political. “For about a year, remembering that I was employed by Arlene Engelhardt at Pacifica, I basically did her bidding,” Phillips told Lasar, saying he “realized over time that what she’d expected and what she implemented was the wrong strategy.” He explains why in this frank and revealing interview.

Pacifica’s Reese, whose supporters currently control the PNB, is also refusing to initiate this year’s bylaws-mandated elections, in what appears to be an attempt to prevent members from exercising their right to elect new leadership. Listeners have been signing this petition, initiated by Grassroots KPFK, urging that the election process be started immediately.

Meanwhile, layoff notices went out to all staff Pacifica’s WBAI in New York City last month. The station has long been running huge deficits, a situation compounded by unwise changes in programming and a declining listener base. “The status of Pacifica’s ability to cope with the situation is unclear,” writes Matthew Lasar in his RadioSurvivor blog. The cuts, which must be negotiated with the staff union, AFTRA, are expected to save $900,000 a year, according to Current.

In better news, the Pacifica Radio Archives, a separate unit at the network that preserves historic recordings, has won a $128,000 grant from the National Archives and Records Commission to save over 1,600 tapes in a project called “American Women Making History and Culture: 1963-1982.”