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Democratized Pacifica radio has spent over $2.4 million on its boards

source: Wikimedia commons

source: Wikimedia commons

Since I wrote my last post on the calamitous state of Pacifica radio, various correspondents have complained that my figures on the network’s subscriber/staff elected board expenses were inaccurate. I roughly estimated them at “close to a million” since the organization has transitioned to an elected board regime.

“When we speak about these matters publicly, we should try to be accurate about the figures,” one Pacifica station KPFA local station board member lectured me.  “Pacifica does have financial stresses, but they are caused by many factors including structural operating deficits at several of the stations. We don’t help when we oversimplify or say things that are simply not true.”

This critic continued her quest for complex truth by blaming me for the chaos at a national board meeting that I didn’t even attend. Whatever. In any event, her post was useful, since it pointed to the network’s updated financial audits page (and Terry Goodman has some helpful annotations to my comments).

Sure enough, my guesstimate was way off the mark. The situation is much worse than I thought. Since the network began its process of democratization in 2002, by my arithmetic, Pacifica has spent $2,424,662 on its boards. And if the organization blows about the same sum that it did in 2007 on these wasteful and internally destructive elections, the figure will edge toward $3 million.

Here are the numbers with their accompanying line item descriptions:

2009 “board expense” 265,687
2008 “board expense” 377,977
2007 “National board expenses” (230,695)and “board election expenses” (153,256) 383,951
2006 “National board expenses” (275,124)and “board election expenses” (47,578) 322,702
2005 “National board expenses” (224,677)and “board election expenses” (183,941) 408,618
2004 “National board expenses” (119,133)and “board election expenses” (206,571) 325,704
2003 “National board expenses” 161,918
2002 “National board expenses” 178,105
Total
$2,424,662

Take a look at some of these numbers. Unbelievable. Nearly 400K in 2007. What on earth did Pacifica spend this on? A free chocolate truffle for every subscriber who voted? Single transferable voting fact finding trips to Australia? That probably would have been money better spent than the actual expenditures, which are not detailed in these audits.

In previous posts I’ve complained that board members spend most of their time on internecine politics and precious little on building up the organization. The 2008 audit says it all. Of that 377,977, the line item says 377,902 was spent on “management and general.”

How much was spent on “Fundraising and development”?

75 bucks.

Out of control

And please, don’t tell me that these numbers only represent a small portion of Pacifica expenses. We’re talking about $2.4 million to an organization that lost over $4 million in revenue last year. We’re talking about a network that suffers from something far more severe than “financial stresses” and “structural operating deficits.”

I refer you to the comments of Pacifica’s financial auditor, offering his perspective to the Pacifica National Board’s audit committee via teleconference on March 22 of this year. Forward to the middle of the clip and note the tone of alarm in his voice:

“Quite frankly, we believe that your internal controls are atrocious. And I’m not mincing my words. You’ve got stations that act completely on their own,” he warned the PNB. “This organization is out of control.”

Stations don’t properly collect pledges, he noted. They don’t even keep adequate records of their subscribers. They don’t know how to use the organization’s computerized accounting programs. They don’t know how to keep track of station inventory, such as computers and pledge reward items. “You don’t count the inventory. You don’t control it. You don’t count it.”

Your subscriber pledge cards at WBAI, he lamented, “they’re kept in boxes. They’re kept around the place. They’re not maintained by program or by the time the pledges were made. . . . ” Personnel are allowed too much access to pledge cards. “Once a pledge card is made out . . . it should be locked up. This is an asset. It represents somebody’s name, telephone, address, credit card number. Those need to be controlled. That’s just like cash.” The fulfilled pledges aren’t even inputted into the network’s financial database system.

Feel free to listen to the rest of the horror show at your leisure. By the way, in 1999, prior to the democratization of Pacifica, the audit didn’t even have a “national board” category. It listed “conferences and meetings” at a little over $77,000, and the dissidents who constantly complained about Pacifica’s “corporatized” bureaucracy and finances called that a bloated figure.

Sorry

‘Whose fault is this?’ the auditor was eventually asked. “The finger has to be pointed at the Board of Directors,” he replied. “The Board of Directors need to make its employees accountable.”

That’s why, as a listener subscriber to KPFA in Berkeley, I’m not going to endorse any slate or even vote this year. There’s an old saying from the 1960s: “Don’t vote. It only encourages them.” In this case, I’m afraid that’s true. Pacifica urgently needs a board with the skills to can handle this mess. And it’s not going to get it through this process.

Voices of reason, resources, and influence beyond the organization, where are you? Speak now, before all is lost.



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9 Responses to Democratized Pacifica radio has spent over $2.4 million on its boards

  1. Michael Huntsberger June 29, 2010 at 10:44 am #

    Amen.

  2. Cappadonna June 30, 2010 at 12:54 pm #

    hmm………this isn’t shocking; Pacifica as long been the dysfunctional stepchild of public and listener sponsored radio (sorry, but they can learn a thing or two from their ‘arch nemesis’ NPR and Christian Radio). But its also a pandemic on the Left — an inability to organize and implement ideas.

  3. John Van Eyck June 30, 2010 at 12:54 pm #

    Not voting will only assure a win for the dysfunctional, political factionalists that Matthew correctly points to. Please vote to SaveKPFA!

  4. Chris Albertson June 30, 2010 at 1:56 pm #

    Outrageous, but not surprising. In the old days, the local* boards didn’t meet, didn’t listen to the station, didn’t cost money, and didn’t care (unless there was a photo-op). It is interesting to note that the programming was generally more substantial. Perhaps these boards need to be gotten rid of, for the sake of the stations and listeners. Have any of them ever made a positive contribution?

    *The National, Pacifica Board did have regular meetings, but generally stayed out of the way of the 3 station, and I recall only one instance when the Board made a programming decision (it was successfully rejected by the managers). The National Board’s expenses were minimal, basically airfare for the NY manager.

  5. Mitchel Cohen July 1, 2010 at 9:33 am #

    Matthew raises some debatable points, so let me add a few of my own (also in response to Chris Albertson):

    In the old days, no one at the stations was paid — no salaries for staff, no existence of nor large payments to Democracy Now or Free Speech Radio News, and until George Carlin not much in the way of lawsuits/legal costs. Today, yup, things’r different — maybe not for the better, but it does take a much more daily hands-on administration to administer all of that, and those administrations are salaried too.

    Matthew’s figures (or I should say the auditor’s figures) include costs, unless I’m not understanding correctly, for salaries for National Office personnel (which, in the past 1-1/2 years, have been cut dramatically when the previous faction was kicked out and a responsible management team put into place). So we are not simply talking about the costs of elections, here.

    Additionally, the $4 million cited by Matthew as having been “lost” by Pacifica from one year to the last one, is the result, mostly, of the auditor’s category changes — that is, an artifact, not an actual loss, or so we have been assured. WBAI LSBers and our PNB directors have been asking for an accounting of this discrepancy in a final auditor’s report in writing (which as far as I know has not yet been done) and we are expecting it any day now. (You know, “checks in the mail.” Still …. )

    The elections cost each station around $23K per election, when done properly. When you think of it that way, it’s not such an onerous expense. At WBAI we included a contribution slip with the ballots for the 2004 election and this almost paid for itself. (Again, I’m writing from memory like any good historian, so my dates and exact figures may be off; but we’re in that ballpark.) After that, the Justice and Unity management at WBAI, in its infinite wisdom, decided not to include requests to voluntarily finance the elections independently nor to even include surveys, which could have been invaluable both in obtaining important feedback and increasing the number of voters.

    While of course insanities in the maintenance of lists occur and have cost a good deal of unexpected money, the elected (and of course all-volunteer) Board at WBAI has also uncovered gigantic losses in mismanaged funds and proposed detailed solutions that more than make up for the financial costs of the elections — those people would most likely have not dedicated themselves to the time-consuming undertakings as they have done, had they not been elected to do that.

    Of course, proper management would have in place people a bit more competent, who would not allow, say, $60,000 in equipment to be purchased by the station that ended up in the home of one of the official’s relatives (!), or even more compelling mis-management and theft. I think the elected Boards have been paying a good deal of attention to those problems, now that the network is being run by a management Matthew opposed in the last election, and all sorts of disgraceful doings of the recent past are coming to light and are being addressed.

    Which is why many of WBAI’s core listenership stay involved with the station — not only because of the occasionally great programs, but because we feel part of an experiment in listener democracy, where members and staff have crucial governance functions. Without that, many people would simply drift away, tuning in now and again (if that). So if you want to do a cost/benefit analysis of elections, there is a lot more to be considered here — and I’m talking about financially — than the crazyness Matthew points to.

    Mitchel Cohen
    Chair, WBAI Local Station Board*

    *For ID purposes only

  6. Tracy Rosenberg July 1, 2010 at 1:58 pm #

    Matthew Lasar’s response to this comment can be found here.

    Hi Matthew,

    What is the compulsion with posting things that are untrue over and over again? They don’t become any more accurate with repetition.

    2009 Audi:ed Financial Statement

    Pacifica – all Divisions – Total Fundraising and Development Expenses: $3,925 million

    Pacifica – all Divisions – Total Board Expenses (election, 4 in-person meetings and 25-35 teleconferences combined): $265,000

    Ratio – Board Expenses to Fundraising/Development Expenses 2009
    6.7%

    Ratio – Board Expense to Total Organizational Revenue
    2.8%

    I agree with you it is the fundamental responsibility of the Board of Directors to address any and all material defects identified by an auditor. That is why you pay for an annual financial audit. The auditor identified WBAI in New York and KPFA in Berkeley as the two stations with the most serious problems.

    The problems identified included database maintenance, inventory tracking, and pledge receipt tracking. AT KPFA they also included bank statement reconciliation and failure to perform them. All tasks performed by staff members and supervised by station managers.

    At the two stations cited in the audit as the most problematic, the incumbent managers at the time of the audit are no longer in their positions.

    As a national board member, I can’t process the pledges and reconcile the bank statements myself.

    What I can do is insist that management and staff perform their duties adequately and if they cannot do so, then the time has come to look for other staffing options.

    If your colleagues on slates you enthusiastically endorsed and campaigned for previously, would cease calling such necessary actions “ethnic cleansing” and other inflammatory language, it would be easier to get foundation business taken care of – as we all agree should be done.

    Regards,

    Tracy Rosenberg
    Executive Director – Media Alliance
    Director, Pacifica Foundation
    Board Member – Media and Democracy Coalition
    Board Member – Alliance for Community Media, Western Region
    Co-Founder, Independents for Community Radio

  7. Tracy Rosenberg July 1, 2010 at 2:16 pm #

    Matthew Lasar’s response to this comment can be found here.

    Here is a statement that you endorsed last year regarding the managerial changes at the New York station which has had such atrocious financial management.

    Candidate Statement 2009 Concerned Listener Candidate:

    “Most shockingly, the Foundation’s new leadership is engaged in a campaign of ethnic cleansing directed at African Americans in positions of leadership in the Foundation”

    Endorser 2009 – Concerned Listeners
    –Matthew Lasar, Pacifica historian, author, teacher

  8. Mitchel Cohen July 1, 2010 at 3:26 pm #

    Matthew Lasar’s response to this comment can be found here.

    Gee, Tracy, I’ll do you one better on the ethnic cleansing front. Here’s a statement from the Justice & Unity’s lead candidate, Lynne Stewart, in last year’s election. (Justice & Unity was and remains aligned with the slate at KPFA that Matthew Lasar endorsed:

    “The abrupt removal of Anthony Riddle as manager, the firing and banning of Bernard White and of producer Ayo Harrington, all indicated that moves were being made to cure the station of being ‘TOO BLACK.’ “[Emphasis in original. p. 17, Lynne Stewart Candidate Statement.]

    Yep. Not doubt that’s why a higher percentage of WBAI’s management team and top staff are now people of color. (I think it’s 92 percent — let’s see, Berthold Reimers (iGM), Kathy Davis (Public Affairs), Indra Hardat (Business director), Yvonne Singh (Premiums), Shawn Rhodes (interim Operations), Jose Santiago (News Director), all people of color. And I forgot– o yea, the laid-off (and non-POC) Janet Coleman; and the replaced Operations chief Peter Boshan (also non-POC) — hmmmm. I’m wrong. The leadership at WBAI is not 92 percent, it’s 100 percent People of Color. But why let a little thing like race-baiting and facts get in the way when you’ve an election to win?)

    No doubt Matthew Lasar also believes along with Lynne Stewart that the replacements of Ayo Harrington (appointed to head up the Premiums dept. by and under the supervision of Bernard White), and Anthony Riddle had to do with the fact that they are Black people — yea, right! — and nothing whatsoever to do with the fact that over 5,200 premiums had been paid for over that period but never sent out. Right Lynne? Right Matthew?

    Mitchel Cohen

  9. Matthew Lasar July 7, 2010 at 11:09 am #

    Pacifica Foundation Director Tracy Rosenberg’s responses to this article (here and here) strike me as coming from as someone who simply doesn’t want to acknowledge my concerns. I don’t know why. I don’t know her. But these issues are important and I want my perspective to be understood clearly.

    First, Rosenberg notes that in 2009 the Pacifica Foundation itself (e.g., National Office; the five stations) spent $3,295,812 on development. That’s irrelevant to the obvious point I made. The previous year’s audit indicated that Pacifica’s board system cost $377,977. The line item says $377,902 of that was spent on "management and general" and a mere 75 dollars on "fundraising and development."

    Similarly, the 2009 audit indicates that Pacifica’s board system cost $265,788. Of this, a crummy $101 went to the fundraising and development category. In other words, Pacifica’s boards spend almost nothing on the crucial activity that healthy non-profits need such boards to embrace: fundraising and development.

    My point (again): these democratized boards cost the organization tons of money, but don’t carry their weight. They don’t even try.

    Next, Rosenberg throws that 2009 $265,788 board expense number out again as if it was a talisman, somehow making disappear the $2.4 million that Pacifica has spent on governance since 2002. After that, she offers statistics that suggest to me that she sees this huge quantity of money as an acceptable expense.

    But it isn’t. Pacifica doesn’t have between a quarter to well over a third of a million to spend each year on idiotic bickering and infighting. And note that, following all her cosmetic number crunching: Rosenberg makes no effort to actually defend Pacifica governance. All she says, as far as I can tell, is that she thinks the $2.4 million spent on these boards since 2002 is a bargain.

    Finally, Rosenberg resorts to more ad hominem rhetoric to discredit me, suggesting again that I somehow support the current management at Pacifica station WBAI in New York, because one candidate on the Concerned Listeners slate at KPFA (which I no longer endorse) sided with people at the New York station that she doesn’t like. And Mitch Cohen of ‘BAI governance has me taking positions on management issues at that station regarding people whom I have never met or in one instance never heard of.

    Let me make it clear what I think of the internal situation at WBAI. I see there a two decades old crackpot race war fought between combatants whose directions on how to cross the street I would not trust. Their governance board antics in 2009 cost the Pacifica Foundation $38,422.

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