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

Pacifica board votes 11-5 to censure Gray and Uzzell for role in secret contract

gotethicsThe Pacifica National Board (PNB) voted 11-5 on August 14 to censure members Heather Gray (affiliates rep) and Richard Uzzell (KPFT) “for the illegal, unauthorized, and irresponsible act of signing a secret contract with the former Interim Executive Director Summer Reese, which they dated January 30, 2014 and in which they made promises that exceeded the terms approved by the PNB, and which a judge has affirmed is invalid. Their action, the ill will and controversy it caused, and the continuing costs to defend against a lawsuit in which the false contract was used have caused serious damage to the Foundation.” | BACKGROUND on the secret contract here

During discussion of the motion made by board member Adriana Casenave (KPFT), SaveKPFA member and elected Pacifica financial chair Brian Edwards-Tiekert (KPFA) called their actions “an astonishing abdication of any commitment to the well-being” of Pacifica. The five members who voted against the censure motion were Heather Gray (affiliates), Richard Uzzell (KPFT), Janet Coleman (WBAI), Janet Kobren (KPFA) and Kim Kaufman (KPFK). | LISTEN to audio of Edwards-Tiekert (1:30 min); the entire board discussion is near the end this recording.

Uzzell is currently facing an effort to recall him from the Pacifica National Board at his home station of KPFT in Houston. Gray will face re-election in December, when the same board that voted to censure her will decide whether she can continue to represent Pacifica’s affiliate stations.

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

Pacifica asks judge for TRO to remove Reese from its office

kpfamikeguitarThe Pacifica Foundation has asked the Alameda County Superior Court for a Temporary Restraining Order to remove former executive Summer Reese and her supporters from the Pacifica National Office in Berkeley, next door to KPFA. [Update: the court has continued this case to May 6 at 10am]

After a new majority took control at the Pacifica National Board this spring and terminated her employment, a disgruntled Reese broke into the office with bolt cutters and began sleeping there with her mother and a handful of supporters, illegally blocking the network’s elected directors from access, making wild accusations, and preventing the network from conducting business.

The case will be heard by Judge Ioana Petrou on Monday, April 28 at 9:00 AM in Dept 15 of the County Administration Bldg, 1221 Oak Street (3rd floor), downtown Oakland. SaveKPFA supporters are encouraged to attend.

“The Board and the public are suffering irreparable damage,” notes the legal case filed by the Pacifica Foundation on Friday, causing a “loss of good will, donations, and work hours.” It states that Reese’s actions “unquestionably violate state law and local ordinances,” and that Pacifica’s board sought the assistance of the Berkeley Police Department, which “after weeks of considering the matter, requested that [Pacifica] obtain a Court order to abate the nuisance.” |LEGAL DOCUMENTSMemorandum for TRO, Yee declaration, Wilkinson declaration, Verified cross-complaint, Application for TRO, Order to show cause

The complaint also notes that Reese and her supporters have prevented Pacifica’s elected chair, Margy Wilkinson, and its CFO, Raul Salvador, “from having access to the accounts payable and financial data to begin the Foundation’s audit….”

“The havoc caused by Reese and her supporters could very well bring this financially-fragile network down,” said Donald Goldmacher, a member of KPFA’s Local Station Board, and producer of the film Heist: Who Stole the American Dream?

Pacifica responds to lawsuit from 9 Reese supporters, says case has no merit

Pacifica’s board has also filed a response to a rambling lawsuit from 9 Reese supporters, who last month slapped the network with the suit in an attempt to force it to rehire Reese. Those 9 Reese supporters lost the first round, when Superior Court Judge Ioana Petrou denied them a TRO on April 9.

The Pacifica board’s response starts with a clear statement of facts about Reese’s employment and why she was terminated. It states Reese was not in possession of a valid contract because several preconditions were not met. The contract she has publicly released, Pacifica’s response states, signed by two of her supporters, was not authorized by the national board, and when presented to the full board for a vote, was rejected.

Pacifica’s response also points out many logical inconsistencies in the Reese supporters’ case. For instance, that they failed to follow basic procedures set out in the organization’s bylaws for remedying disagreements, which are supposed to be taken up by the board itself before landing in a court of law. And that in suing Pacifica, the 9 Reese supporters are effectively suing themselves since they sit on the Pacifica board. | LEGAL DOCUMENT:  Response to pro-Reese lawsuit

As Pacifica National Board chair Margy Wilkinson has said, she hopes the judge’s initial ruling against the 9 pro-Reese directors would encourage them “to express dissent with their voices and their votes, not litigation. Pacifica is in a fragile state, and can’t afford the time or expense of this lawsuit.”

So far, over 800 of Pacifica’s listeners and staff have signed an open letter essentially saying the same thing. Signers include Sasha Lilly, co-host, Against the Grain, former Pacifica National Affairs correspondent Larry Bensky, UC faculty Candace Falk and John Hurst, free speech activist Lynne Hollander Savio, community activist Ying LeeUpFront’s Brian Edwards-Tiekert, former Pacifica board chair Sherry Gendelman, KPFA’s Aileen Alfandary, labor journalist David Bacon, PM Press founder Ramsey Kanaan, Alameda County School superintendent Sheila Jordan, KPFA’s Philip Maldari, former KPFA GM Jim Bennett and former KPFA iGM Andrew Phillips, KPFK’s Jim Lafferty of the Lawyer’s Guild Show and Ian Masters of Background Briefing, KPFA programmers Sandy Miranda, Derk Richardson, Saadia Malik, David Gans, Tim Lynch, Vanessa Tait, Judith Scherr, Richard Wolinsky and many, many others.

Many have added comments, like KFCF listener Richard Stone“KPFA has been a broadcasting treasure, Pacifica its caretaker,” Stone writes to the pro-Reese group. “Do not destroy this bastion of radio sanity by selfish action.”