Does the $400K Bequest Belong to KPFA?

WHAT MY OCTOBER
DIRECTOR
S INSPECTION REVEALED

By Janet Kobren,

In mid-October 2015 after numerous inquiries from KPFA members regarding the two large bequests made to KPFA amounting to a total of $958,000, I decided to perform a director’s inspection at KPFA to look into the bequest documents.LastWill

Note that the bequests had been reported at the April 2015 KPFA Local Station Board meeting. SaveKPFA’s LSB member Margy Wilkinson was serving as PNB chair and interim Executive Director at the time. KPFA General Manager Quincy McCoy’s April and May 2015 General Manager’s Report reflected these bequests (see “A Partial Financial Landscape of KPFA”.)

As a result of my director’s inspection I learned, among other things, that:

1)   The will of the Hall Trust listed $400,000 to be distributed to PACIFICA FOUNDATION RADIO*,

2)   The estate’s check was made out for this amount to pay to the order of PACIFICA FOUNDATION RADIO and was deposited in KPFA’s bank account (albeit one of Pacifica Foundation’s DBA’s** is KPFA), and

3)   There was no reference to KPFA in the will or on the check.

I also learned that the check for the other bequest was specifically written to KPFA for $558,000 and correctly deposited in KPFA’s bank account.

This discrepancy caused me to explore the Hall Trust further, discovering some gaps in information with regards to how the Hall Trust bequest had been handled internally. The bequest that had been spelled out in the bequest document and the check to go to PACIFICA FOUNDATION RADIO, rather than going to or through a Pacifica Foundation bank account, was deposited directly into KPFA’s bank account.

I meticulously chronicled this matter with substantial source documentation that included references to and actions by individual employees and which also revealed other individuals and organizations named in the bequest documents, all of which would have precluded this matter from being addressed in an open session. I had suspected there was more to be learned regarding this matter, but absent any other documentation provided even after requesting additional information that would have filled in some of the gaps, I was motivated by my fiduciary duties as a Pacifica National Board Director to bring the matter to the PNB as soon as possible. There was some back and forth within the PNB by email but no additional documentation was provided. So I presented the chronology/analysis that I had prepared to the PNB prior to its October 29, 2015 PNB closed session meeting and made the following motion during the meeting:

That by the end of day November 4, 2015 the KPFA GM and the interim Controller:

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  1. Produce an accounting with documentation to the PNB of how the Hall Trust bequest has been allocated and spent to date, including what KPFA transferred to Pacifica units – KPFT, KPFK, PRA, WBAI and election deposit shortages and the remaining balance, if any; and
  2. If a remaining balance exists, transfer it to the PNO unit or other Pacifica units as appropriate; and
  3. Based on the accounting, revise the plan to repay KPFA; and
  4. Based on the accounting, revise the KPFA and PNO budgets accordingly.

This is how the vote went:

Voting YES: Teresa Allen (KPFT), Rodrigo Argueta (KPFK), Lydia Brazon (KPFK), Jim Brown (WPFW), Stephen Brown (WBAI), Adriana Casenave (KPFT), Janet Coleman (WBAI), Benito Diaz (WPFW), Janet Kobren (KPFA), Janis Lane-Ewart (KFAI Affiliate), Lawrence Reyes (KPFK)

Voting NO: Brian Edwards-Tiekert (KPFA), George Reiter (KPFT), Cerene Roberts (WBAI), Pete Tucker (WPFW), Margy Wilkinson (KPFA)

ABSTENSIONS: None

PRESENT NOT VOTING: Robert Mark (KPFT), Tony Norman (WPFW)

The tally came to: 11-YES, 5-NO, 0 ABSTENSIONS, 2-PRESENT NOT VOTING

The motion passed handily and was included in the report-out of the executive session.

The main argument against my motion, chiefly by those directors who have a vested interest in KPFA, included a claim that since the snail mail address of an individual whose name was similar to but not the same as the name spelled out in the Hall Trust documents, someone who had donated a total of $1,745 between 1990 and 2014 (which by the way was way less than 1% of $400K) was in the North Bay and within the KPFA “signal area”, it was the “intent” of the donor to bequeath the $400K to KPFA, and not the Pacifica Foundation, even though the will and the check had spelled out PACIFICA FOUNDATION RADIO on both, with no reference to KPFA.

Janet Kobren at a protest at the San Leandro Walmart, 2013

Janet Kobren (with green hand) at a protest at the San Leandro Walmart, 2013

To me this was an attempt by some within Pacifica to interpret the intent of the donor, and there is no way, short of a seance, to determine the donor’s intent beyond that specified in her will.

Many questions remain, among which are the following: Was SaveKPFA’s influence through the then PNB chair/iED Margy Wilkinson used to make the interest of the Pacifica Foundation network to solely benefit SaveKPFA? 

To what extent does a financially weakened Pacifica Foundation, possibly intentionally starved to facilitate its bankruptcy, benefit a private entity, the now not-so-secret KPFA Foundation?

And, how far will Brian Edwards-Tiekert, the SaveKPFA, KPFA LSB member, PNB Director and chair of the PNB National Finance Committee (aka the PNB treasurer) go through motion after motion to attempt to get proposals passed to “capture” KPFA’s license for the benefit of an undemocratic, private entity?

KPFA has transferred approximately $310,000 of the two bequests to various Pacifica units to compensate for network-wide shortages at WBAI, KPFT, KPFK, WPFW, PRA, and PNO (see the KPFA General Manager’s April and May 2015 Report here),

 ♦♦♦♦

* Between February 26, 2013 and January 20, 2015, the “Pacifica Foundation” name had been captured by an entity in New York during which Pacifica used the name “Pacifica Foundation Radio” until recapturing the “Pacifica Foundation” name back on April 9, 2015.

** DBA = Doing Business As.  A DBA is also sometimes referred to as a fictitious business name. In the case of the Pacifica Foundation, it is the Pacifica Foundation, not the fictitious name, that is the entity conducting any business in the name of a DBA.

 

♦♦♦♦

SEE MORE INFORMATION AND SUPPORTING DOCUMENTATION HERE A Partial Financial Landscape of KPFA

November 3, 2015

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“SaveKPFA” Squanders $600 Thousand Bucks

by Adrienne Lauby

Something remarkable happened earlier this year.   Two devoted KPFA listeners made bequests to KPFA in their wills totaling nine hundred and fifty-eight thousand dollars — nearly a million greenbacks. While these unexpected gifts allowed our sister station KPFT to finally replace their failing transmitter and made some improvements in KPFA’s building, most of the money vanished down a rabbit hole in routine salary expenses.2678453389_b997dd3496

It was remarkable to have such generous gifts. It was also remarkable that the SaveKPFA-led governing board allowed the money to disappear so quickly.

Here’s the details.

An Unrealistic Budget

The local station board adopted KPFA’s 2015 budget a year ago in the fall of 2014.   In what has become a yearly ritual, United for Community Radio board member, Janet Kobren, criticized the budget as unrealistic. The Save KPFA board members, as usual, claimed that the budget was reasonable because the projected expenses would be covered by an increase in fund drive income.

Why, one asks, was it reasonable when, KPFA subscriber numbers are decreasing? In only three years, KPFA’s subscriber numbers have dropped by 1800 individuals. And, what was the projection based on, given that fund drive numbers have dropped consistently over the last decade?

With the strong Save KPFA majority, the board passed the budget with the anticipated fantasy income intact.

That budget was again questioned when it went to the Pacifica National Board for approval.   The National Finance Committee asked the same questions that were asked by Janet Kobren on the local level. With several stations in the network unable to meet a payroll in the previous year and facing other financial problems, the Finance Committee wasn’t in the mood for fantasies. They said that KPFA’s income projections were over-estimated by at least $250 thousand dollars (1) and told General Manager Quincy McCoy to make cuts to bring that figure down.

Standard budget practices are contentious at KPFA. Generally, an organization makes its budget carefully, setting out the expenses it knows it can meet, and happily accommodating any additional money in a quarterly budget review process.

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At KPFA, most of the expenses are fixed. There’s no wiggle room in the electric bill and license fees, and only four managers do the administration and engineering work of a 300 person staff.  To stay within amount of money donated by the listeners, KPFA would have to lay off some of its union staff members.  Under SaveKPFA’s board majority and union leadership, this has become an unthinkable taboo.

The Bequests

Near the beginning of the year, $958 thousand in unexpected bequest income was greeted with great pleasure. For one thing, it alleviated General Manager Quincy McCoy’s immediate problem. As I said, the national board had told him to make cuts and later added that any cuts should include management. In addition, McCoy knew that after the spring fund drive, it would be obvious he didn’t have the cash to make his payroll.

McCoy knew that layoffs that would be greeted with a storm of public criticism and perhaps even the outright rebellion faced by former Pacifica Executive Director, Arlene Engelhardt, when she ordered tough cuts to save KPFA from bankruptcy in 2010. Nevertheless, McCoy began union negotiations to make the necessary cuts.

When news of the unexpected bequests arrived, McCoy not only cancelled the union negotiations but also cancelled two fund drives.   Save KPFA’s board members and staff representatives tacitly agreed with him. McCoy went on air to proclaim the fund drive cancellation and many paid staff members also made triumphant on-air announcements. They all spoke in glowing terms about “KPFA’s promise to the listeners” claiming that KPFA had cancelled the summer drive because listeners had asked for it.

There was a vague thank you for those who include KPFA in their wills in an announcement encouraging more listeners to leave some of their cash to KFPA. But, no one made it clear that the summer fund drive was cancelled because of the generosity and love of two deceased listeners.

This emotional manipulation of KPFA’s listeners hit a new propaganda low in the station that claims to “tell truth to power.”

How the Money was Spent

General manager, Quincy McCoy presented his plans for spending the money to the local station board after that spending was in progress. United for Community Radio representatives reminded the board that it is their responsibility to set budgets and asked that there be a discussion with Mr. McCoy about his plans for the money.   The SaveKPFA majority did not agree and managed the meetings to keep such a discussion off the agenda.

Here’s numbers the General Manager gave to the local board (rounded to the nearest hundred):

$119,000 help for other stations in the network2
$110,250 building improvements (carpeting, elevator repair, painting)

$30,000 new membership software
$223,400 routine payments (National Office and Pacifica Archives)3
$350,000 salaries4

$134,500 lost income due to cancelled fund drives

In short, only $260 thousand dollars of these incredible gifts were spent on one-time expenses and improvements.  $573 thousand dollars were frittered away on expenses that should have been covered by KPFA’s usual fundraising.

A Missed Opportunity

It’s fairly standard financial practice to sequester unexpected and large gifts.   It’s Bookkeeping 101 that large gifts should not be used for routine expenses.  To use gifts to push tough decisions down the road creates an unrealistic expectation that expenses can and will remain high.  It’s far better to make the tough decisions based on the routine income and use the major money for something that will strengthen the organization over the long haul.

Here’s a few things this money was NOT used for:

  1. A major outreach effort to new, more diverse and younger audiences.
  2. An improvement in KPFA’s digital and social media presence in order to connect with audiences who are migrating to wireless and web devices.
  3. A revamp of the program grid with new programs, hosts and formats.
  4. Remodeling work on the crumbling and currently uninhabitable property owned by KPFA on the corner of Martin Luther King Jr. Way and Berkeley Way.

These projects, many of them proposed as no-brainers by multiple listeners and staff members, have been on the back burner for years. Managers haven’t been able to find the money and staff time to spearhead anything beyond the next payroll.

Large gifts should be used for large projects, items that can’t be funded with the usual income. They should be used to initiate well-planned projects that might develop greater income, larger audience or be of use to listeners over the long haul. Naturally, most organizations are tempted to use an unexpected gift to relieve some immediate or chronic stress. But generations of bookkeepers and accountants have taught us that is the fast road to regret. If an organization receives a large gift, it should leave something tangible in place when it is gone.

Under Save KPFA and Quincy McCoy’s watch, these lessons have yet to be learned. Next year, unless more generous and devoted people die, KPFA will return to the grind of one fund drive after another, with the energy of paid and unpaid staff alike tied up in, (have I said this enough?) an unsustainable level of staffing.

10-18-15

  1. Link to National Finance Committee meeting.  Begin listening at 9:40 to hear the resolution.
  2.  $100 thousand was loaned to KPFT in Houston who had been operating at 30-50% of its authorized power (100 kilowatts) for almost three years in order to stay on the air despite a failing transmitter. This money allowed them to make the replacement.  Approx. $19 thousand was loaned to WBAI to help them meet an immediate legal obligation.   It’s unlikely either loan will be repaid.
  3. KPFA’s obligations to pay a share of the national Pacifica office cost as well as support the Pacifica Archives are anticipated expenses that should be covered in routine fund drive income.
  4. Salaries ($350 thousand). This figure was called a 3-month reserve but it will be, obviously, a reserve that is quickly spent.

 

photo credit: Money via photopin (license)  

photo credit: Pay Bills via photopin (license)

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Letter From The Gray Panthers

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Gray Panthers of San Francisco      2940 16th Street, Room 200-4, San Francisco CA 94103   415-552-8800       graypanther-sf@sonic.net

 

KPFA Radio      1929 Martin Luther King Jr. Way    Berkeley, CA 94704

Dear Quincy McCoy,

As long time supporters of KPFA, members of the San Francisco Gray  Panthers are writing to tell you of our disappointment in recent management decisions at KPFA.

Because our members have supported KPFA monetarily over the years, we are only too well aware of the financial struggles the station is facing.

That said, we are also long-time supporters of Flashpoints, and deplore the $25,000 cut proposed in the new budget.  Flashpoints is a public affairs show with reporters on the ground conducting live interviews, for which it has won multiple awards.  How can KPFA cut  Flashpoints and propose in the same budget *adding* an additional wire service at a cost comparable to the Flashpoints cuts.  It is deeply problematic that KPFA proposes using money taken from quality on-the-ground live investigative reporting such as Flashpoints,  and using it for an additional news wire that will result in more news reporting read verbatim from the service.

In addition, given the financial status of KPFA, we are  concerned that the budget is also proposing an additional $40,000 for an automatic back-up answering service to collect pledges during KPFA and KPFK fund drives.  We have learned that the company is headed by a Tea party member. Each call to donate to KPFA or KPFK routes 90 cents a minute to this company or $3-5 per call.

This corporate call center is owned by Bruce Hough, an Oregon Republican who runs Impact Marketing, a Tea Party advertising and fundraising business. His partner is rabid Tea Party Congressman Sal Esquivel, who traveled to Arizona to stand with Michelle Malkin, the Minutemen and others in support of Arizona’s anti-immigrant  SB 1070.  Hough and Esquivel also funded vicious attack ads against local Democratic candidate and military veteran Jeff Scroggin. The ads were so disgusting that two out of three local Republican County Commissioners refused to endorse the Tea Party candidate associated with Hough’s Impact Marketing.   Hough and Esquivel were also labeled “Rogues of the Week” by the Willamette Weekly for an unethical scam to charge gullible voters to email Congress. Hough and Esquivel also  house conservative political action committees at Impact Marketing giving hundreds of thousands of dollars to local and national Tea Party candidates.  This flies in the face of what we have come to love and support about the Pacifica mission.

Lastly, Gray Panthers is concerned that the recent hiring process for the new Program Director was flawed.  We understand that rules of Pacifica hiring policies were violated as follows:

Section 1:  Specifying the number of Local Station Board members that must be on the search sub-committee.

Section 3: Specifying placement of advertisements for positions and distribution of applications for positions.

Section 5: Specifying notice of meetings and their open meeting previsions.

Section 8: Specifying voting procedures in the committee.

Section 10: Specifying disclosure of the selection process, once completed.

Section 12: Specifying the Local Station Board’s oversight of the committee’s process.

As long-time listeners and supporters of KPFA, we feel that precious resources should be spent on furthering KPFA’s mission of community radio, and that decisions over critical personnel matters should be made in accordance with Pacifica policies. Please respond to us addressing our concerns.

San Francisco  Gray Panthers Board

Patricia Jackson, Convener

cc via email: KPFA Local Station Board, Pacifica National Board

kpfalsb@googlegroups.com

pnb@pacifica.org

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