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 takes action on election, WBAI crisis

wbaigraphicIn its new configuration, the board took several notable actions. It passed a motion that will put long-overdue board elections into motion. Pacifica’s bylaws required it to hold elections in 2013, but Pacifica’s executive director Summer Reese failed to hire anyone to run them, and that year’s board ratified her inaction by voting to postpone elections — effectively extending many of their own terms.

National board members also brought more transparency to discussions over what to do about long-suffering Pacifica station WBAI in New York City. After years of running massive deficits, the station was dealt a near-lethal blow when Superstorm Sandy flooded the building it broadcast from, rendering WBAI homeless in the middle of a fund drive. WBAI made sweeping layoffs last year, and has been struggling to catch up on unpaid bills.

The Pacifica National Board held a public discussion with FCC attorney Melodie Virtue about the implications of entering into a Public Service Operating Agreement (PSOA) in which another organization would temporarily take over responsibility for running the station and paying its bills. It also allowed the audience to ask her questions, and make comments. Eventually, the board approved a motion to hold off on entering into negotiations over a PSOA contract while it solicits an alternative plan from WBAI’s elected Local Station Board, and asks Pacifica’s management to come up with more detailed information on the station’s financial performance and prospects for the future. | READ about WBAI: Village Voice, Current, Radio Survivor

Meanwhile, on its 14th anniversary of February 11, Free Speech Radio News has relaunched its website and begun filing stories from around the globe. The independent newscast had gone off the air last fall after Pacifica’s national office failed to pay over $200,000 in fees owed to it.