Pacifica’s Plot Against New York’s WBAI Fully Exposed

Dateline Berkeley October 13, 2019

THE TURN OF THE SCREW: WBAI’S ELECTED DIRECTORS PREVENTED FROM VOTING ON WBAI SHUTDOWN

(Courtesy of PacificaInExile.org)

Berkeley-Faced with an imminent loss on an after-the fact and in-secret Pacifica National Board vote to approve the shutdown of WBAI-FM, the perpetrators are changing the voters. During a closed session meeting on Saturday night, a letter was presented proposing to invoke conflict of interest charges against 75% of WBAI’s elected directors,who are charged with being the voice of WBAI’s 8,000 members on the Pacifica Foundation board. The charges of conflict of interest invoked Section 5233 of the CA Corporations Code which is about financial conflicts of interest. The 5233 accusation seeks to prevent three of WBAI”s elected directors from being allowed to vote on all matters affecting WBAI members indefinitely. The three votes being eliminated are unable to vote on whether or not they are eliminated, allowing a minority of the board of directors to “vote” to disenfranchise the majority and therefore win a series of votes they would otherwise have lost.

The vote on the Pacifica National Board is vital because the actions to terminate all of WBAI’s staff and turn the NY community radio station into a repeater can only be legally supported as an action of the licensee, which are the 22 members seated on the national Pacifica board. If the majority of the directors seated on the Pacifica National Board do not support the shutdown of WBAI, the action is not an action of the licensee.

The removal of voting rights is being applied to WBAI staff representative Shawn Rhodes because is WBAI staff, and WBAI directors Alex Steinberg and James Sagurton because they are plaintiffs in WBAI vs Pacifica, the request to the Supreme Court of New York to issue a temporary restraining order to halt the shutdown of community radio operations in the New York metropolitan area.

The voter suppression being applied to WBAI’s elected representatives for the second time in the last four years, removes the representative voting rights promised to WBAI members in Pacifica’s bylaws.

Article Three, Members of the Foundation, Section 5: Rights

All Members shall have all rights granted to them by law or by these Bylaws, including without limit the right to vote, on the terms and in the manner set forth in these Bylaws

Article Five, Board of Directors of the Foundation, Section 1: Board of Directors –
Eligibility, Number, Powers and Duties

The Board shall have equal representation from each of the Foundation’s five radio stations. The Delegates from the five Foundation radio stations shall each elect four (4) Directors : three (3) of whom shall be Listener-Sponsor Delegates and one (1) of whom shall be a Staff Delegate — for a total of twenty (20) “Station Representative” Directors, as set forth in Section 3 of this Article of the Bylaws.

The activities and affairs of the Foundation shall be conducted and all corporate powers shall be exercised by or under the direction of the Board.

When last we wrote, Judge Frank Nervo of the Supreme Court of New York had halted the shutdown of WBAI with a temporary restraining order in effect until October 18th, which the perpetrators were choosing to ignore. On Thursday, Judge Debra James upheld the portion of the TRO that prevented the termination of WBAI’s staff thus removing the putative reason for the takeover, but allowed Pacifica to continue to pipe in reruns and keep WBAI’s local content off the air, including local news and information and PSA’s and public affairs programs generated by New York community-based groups. The judge’s decision which is in place until a hearing on October 18th, was based on the rights of the licensee which is why the license owner has to put the matter to a board discussion and vote. The perpetrators have since moved to shift the case to the federal courts, invoking the Trump administration FCC under Ajit Pai as a potentially interested party.

The decision by the perpetrators is contrary to Pacifica’s mission which is to provide an outlet to the members of the served community – “In radio broadcasting operations to encourage and provide outlets for the creative skills and energies of the community” and removes all content by and about New Yorkers and New York and $1.378 million dollars donated by New Yorkers in the last year to support that local content and to maintain their voting rights in the affairs of the Pacifica Foundation.

So why is this happening? We know that at least here in the Bay Area, you have been inundated by e-mails claiming imminent financial collapse due to WBAI and elaborate claims that WBAI will destroy all the rest of the Pacifica stations if not stopped in their tracks right now. Is there any basis in reality for these claims? Not really.

The Pacifica Foundation organizes itself into the 5 station areas, an archives division and a small national office that mostly deals with accounting and regulatory compliance (and none too well). The only income the national office generates is from selling sidebands and collecting affiliate dues, an amount that totaled about $575,000 last year. In order to support additional operations and an executive director, the Pacifica national office collects “dues” from the fund drives of the five Pacifica stations, an amount that equals about $1.4 million dollars a year when the stations can afford it. They call this central services.

The Pacifica National Office, whose power stems from holding the station’s licenses by grants from the FCC, a structure set up by Lew Hill in 1946 before KPFA went on the air three years later, has over the years shut down stations including KPFA in the summer of 199. After that, its structure was overhauled to allow donors to the foundation to exercise control and theoretically prevent future shutdowns by being granted membership rights. Over the years, this tiny office has authorized expansive contracts indebting the five stations, including the two Democracy Now contracts which transferred over $7 million dollars of member donations to an outside nonprofit organization, and the Empire State building tower contract which indebted the five stations to paying another $8 million dollars to Wall Street. Not surprisingly, the five stations which all had decreases in their membership rolls from 2018 to 2019 except WBAI which went up by 3%, have defaulted on these obligations, with Democracy Now forgiving the last $1.8 million of contract dues in 2018 and the last $3 million of the Empire contract rolled over into a low-interest loan from a NYC-area foundation.

You guessed it. It’s another Pacifica contract. In 2019, Pacifica contracted with NETA to do accounting. NETA (National Educational Telecommunications Association) is a South-Carolina-based corporation that signs contracts to perform administrative services for public media companies. Pacifica’s national office signed a contract to pay NETA $35,000 a month or $420,000 a year. How was this new expense to be paid for? Pacifica said they would reduce their administrative payroll by $400,000 a year by jettisoning their in-house accounting staff.

Oops. Pacifica did not reduce it’s administrative payroll by $400,000. It did not reduce its administrative payroll by $1. In fact it increased its administrative payroll in 2019 by $162,000. Without a CFO or any in-house accounting staff, Pacifica kept an administrative payroll of $650,011 in 2019, exactly the same the $655,000 average over the years 2011-2017 when it kept a full-time CFO, controller and staff accountant on the payroll. Then Pacifica added this new $420,000 contract, bringing its 2019 national office payroll to over a million dollars, which is unprecedented over the past decade. That is why the national office has a cash flow crisis. Unsupervised overspending at the national level.

In order to conceal this from you, the perpetrators have been throwing around a bunch of false numbers about WBAI, claiming WBAI owes them $7 or $8 million dollars. Not in recent history. Without boring you all to death, the $7 million dollars represents the following: $2.5 million is the unpaid portion of the Empire contract that Pacifica signed, not WBAI, and is now in the form of a loan from a NYC-based foundation. $500,000 is the unpaid vacation, sick time and pension payments owed to WBAI’s employees under their SAG-AFTRA contract, which Pacifica signed. Of the remaining liability of “central services”, $3,582,000 million (of a $4,182,000 total) dates from 2014 or earlier or more than five years ago. WBAI’s unpaid central services from 2015 onward have been entirely paid by a generous bequest from a NY donor who gave a $900,000 estate gift, of which $583,500 was directly given to the Pacifica national office.

The national office’s cash flow problem is that they have run through the money WBAI gave them (which if they were smart they would have socked away to help pay back the foundation loan instead of spending it all), and now they cannot pay the contracts they signed.

In fact, the largest central services shortfall from the 2018-2019 period is from WPFW in Washington DC and before that in 2015-2016, the largest shortfall was from Los Angeles station KPFK, which also incurred a $295,000 labor settlement in those years for anti-union activities.

This is all easily discernible from basic forensic accounting, but the perpetrators are relying on shouting “squirrel” in order to justify their actions. Let’s look at the short-term costs of the WBAI shutdown:

Loss of $350,000 to $400,000 in fall fund drive revenue in WBAI, immediate payout of accrued vacation, sick and pension accruals to WBAI employees of approximately $400-$500,000, refunds of the first four days of BAI’s fund drive of $40,000, loss of monthly “BAI buddy” recurring donations of $20,000 a month, upcoming arbitration with the SAG-AFTRA union for lack of notice to the union of impending layoffs which costs a minimum of $50,000 for anti-union activities, legal costs for 3 hearings, with many more to go, of at least $40,000. Ongoing costs of $30,000 a month to operate WBAI as a repeater station without any donations from the now-fired 8,000 WBAI members.

Who spends $900,000 to get out of a cash flow hole?

Nobody, that’s who. So operating WBAI as a repeater station is not the long-term plan. The vicious joke is that “WBAI is worth more dead than alive”. Very true. WBAI is a commercially convertible license so its value as a commodity is huge and dwarfs the value of the rest of Pacifica’s assets combined. The problem for Pacifica is those darned bylaws and that darned mission statement.

There’s a reason why you got an email recently from the “Pacifica Restructuring Project” to change the bylaws to a handpicked board and give those handpicked board members wide latitude to change the bylaws as they wish with nothing more than 30 days notice. The elected majority of the Pacifica board of directors stopped that bylaws amendment last month. But now the elected majority of the Pacifica board of directors can no longer vote and the gold rush is at hand.

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Pacifica Faction Expels WBAI Board Reps

Power Play at Pacifica Board – Latest News

Reggie Johnson, WBAI Programer for “From The Soundboard” posted some breaking news on his Facebook page of the events going on in New York. It is becoming clear that the Pacifica Board did not vote to shut down WBAI, that it was done by a faction led by the present Interim Executive Director. This faction is now trying to have the Board approve their activities retroactively. The Board, locked 11-11, is being changed by expelling the WBAI Directors, giving the faction a majority to complete the take-over. Rumors are rife that they plan to sell the WBAI Broadcast License, which would bring in millions of dollars. This is just a rumor, but something that has been bandied about for some time as the network has faced severe economic stress. See previous posts that discuss the financial problems with WBAI and it’s Empire State contract for the broadcasting tower. Thanks to Reggie Johnson for his continuous updates. Previous videos he posted showed the damage and ransacking of the WBAI facilities, allegedly by the IED and a faction of the Pacifica Board. New York has lost its Progressive Community Voice.

Below: Reggie’s video inside of WBAI showing the equipment that was allegedly damaged or seized in the Pacifica faction raid.

Pacifica’s Raid on WBAI Stopped in Court

FOR IMMEDIATE RELEASE: From Pacifica in Exile Tuesday October 8, 2019

Supreme Court of New York Stops Pacifica’s Attack on WBAI

Berkeley-In the morning, a crew of Pacifica Foundation board members led by brand new IED John Vernile, locked out the staff at WBAI-FM in New York and then fired them all, told the landlord to rent the space to someone else, and started piping in content from the West Coast over mid-Manhattan. In the night, the Supreme Court of New York told them to stop it and restored WBAI’s facilities, equipment, studio space, employees and control over the airwaves.

If this feels to you like a flashback, well there’s a reason for that. Two decades ago, the Pacifica Foundation locked out employees at Berkeley’s KPFA and started piping in content from Texas. At that time, the nonprofit’s board was united in their desire to teach KPFA a lesson and extract the millions in license value. Not this time. At least half of Pacifica’s elected board wasn’t informed, had no idea. and never consented. That’s probably why Supreme Court judge Frank Nervo (at home and in his pajamas) called a halt to things. This is what he said.

The Supreme Court of the State of New York has issued a stay and temporary restraining order enjoining the Pacifica Foundation from 1. Seizing any property files or equipment from WBAI 2. Terminating any employees of WBAI 3. Preventing WBAI from broadcasting it’s regularly scheduled programming. 4. Interfering in the business or orderly administration of WBAI pursuant to Section 1315 of the NYC Not for Profit Code and the Pacifica Foundation bylaws until a hearing to be held on October 18th.
The WBAI takeover followed immediately upon the collapse of a proposed set of new bylaws presented by the same folks who attempted to lock out WBAI, namely the KPFA board faction formerly known as Concerned Listeners, before they were formerly known as Save KPFA and currently known as United for Independent Radio. For the bylaws amendment petition, the name used was “The Pacifica Restructuring Project”. They were joined by a few board members from Texas and Los Angeles. The petition to the members sought to install six hand-picked people as a new self-selecting board majority that would perpetuate itself indefinitely with broad powers to further change the bylaws. The petition, which aimed to install the six by January of 2020, relied on the existing national board to open a bylaws amendment period and call another election. The board deadlocked at 11-11, blocking the petition until next year, and the proponents resorted to trying to kick one of their opponents off the board, KPFA’s Tom Voorhees (an action which is still scheduled for October 26th at KPFA).

Denied their hand-picked six to rubber stamp their actions, the group simply decided to go ahead in secret with the attack on WBAI with no board sanction. This secrecy meant that a number of things that needed to happen, didn’t: no meet and confer with the union prior to laying off union staff, no advance notice to employees and programmers, no notice to the landlord, and no consultation with the lender who holds as collateral studio buildings in LA, Houston and Berkeley.

Whether it could possibly be considered a sober plan no matter how carefully carried out is another matter. The lockout interrupted a fund drive in process that would normally book around $300,000. Laid off employees get severance pay and failing to meet and confer prior to layoffs results in a trip to arbitration. It probably wasn’t cheap to find a lawyer and dispatch them to Judge Nervo’s house in the middle of the night to argue unsuccessfully against the TRO. A repeater station still needs to transmit and WBAI’s 4 Times Square transmitter costs $12K a month. With no fund drive apparatus or staff and a program schedule of re-runs, where does that money come from? It’s unlikely to be the NYC audience whose programs were all cancelled. An organization so desperately broke that it has to cannibalize its own radio station can’t fly the IED and at least three board members to NYC and put them up in hotels to do the dirty work. It doesn’t really add up. Most WBAI’ers concluded the end game is a sale of the station license for the tens of millions of dollars it will get on the open market as a commercially convertible license.

Besides its role as a cash cow to provide a windfall to other 4 stations, are the finances at WBAI really that bad or that much worse than the other stations? Once the predatory Empire State Building tower lease Pacifica stuck WBAI with was ended, the answer is not really that much worse. You don’t have to take my word for it. Here is a profit and loss statement for 2018-2019.

It shows an operating deficit of -$227,000 including the internal transfers that Pacifica calls “central services” which are not direct costs, but payments to the Pacifica Foundation itself to support the national office. We want to be clear that in the end, all of the Pacifica stations are going to have to find a way to break even or the long-term prognosis is bleak. However, if every Pacifica unit that ran an operating deficit of -$227,000 or more was shut down, all the employees fired and the station turned into a repeater with every single local program cancelled, then the treatment would have happened to:

KPFK in 2007, 2013, 2014 and 2015

WPFW in 2012, 2013, 2014 and 2016

KPFA in 2009, 2010, 2011, 2013 and 2016

Only KPFT in Houston would be left standing.

In another ironic twist, the WBAI signal area in 2019 provided a generous bequest from the estate of a former WBAI fan of $583,500. A nice chunk of change that was left to the national foundation which promptly ratcheted up their annual spending from $1.82 million in 2018 to $2.49 million in 2019, an increase of $670,000 powered by that estate gift. Once it was all spent by national, they moved to shut WBAI down.

So what now? The Pacifica Foundation has been silent since the TRO was issued WBAI staff and programmers are meeting tomorrow to get themselves back up and running. WBAI members should support the station right now and show it with your words, emails and dollars. (Mail them checks. The Pacifica Foundation disabled the online donations system). In other signal areas, please speak up. Your delegates are elected and you put them there to represent you so can tell them what to do and what not to do in your name. Each station has instructions for contacting the local station board on the website and they meet in public once a month. Democratic Socialists of America, who have a program on WBAI, are mobilizing to support the station in New York. In Berkeley, which is the most responsible for the attack on WBAI, there should be accountability with the listeners who elected these delegates.

Since this all just happened on 10-7-2019, plans are still being developed, but we are told there may be a press conference on October 8 at 9am at KPFA and speakouts are expected at the planned local station board meetings on October 19th and October 26th here in Berkeley. Other signal areas will likely also arrange some events. To be clear, about the last thing in the world our listener dollars should be spent on is Pacifica fighting WBAI in court. None of that makes the stations stronger, better, more engaging, more technically sophisticated, more politically pointed or more culturally rich. It’s our responsibility to back this misguided board up and make them support our stations, not destroy them.

To subscribe to this newsletter, please visit our website at www.pacificainexile.org

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Started in 1946 by conscientious objector Lew Hill, Pacifica’s storied history includes impounded program tapes for a 1954 on-air discussion of marijuana, broadcasting the Seymour Hersh revelations of the My Lai massacre, bombings by the Ku Klux Klan, going to jail rather than turning over the Patty Hearst tapes to the FBI, and Supreme Court cases including the 1984 decision that noncommercial broadcasters have the constitutional right to editorialize, and the Seven Dirty Words ruling following George Carlin’s incendiary performances on WBAI. Pacifica Foundation Radio operates noncommercial radio stations in New York, Washington, Houston, Los Angeles, and the San Francisco Bay Area, and syndicates content to over 180 affiliates. It invented listener-sponsored radio.

New Charges Filed Against Pacifica with California Attorney General

Whistleblower on Pacifica National Board Exposes Years of Fraud and Violations of FTC Rules at Pacifica Stations Across the Country.

by Ed Murray

Dateline: Sacramento, California

On February 20, 2016, Steve Brown, a member of the Pacifica National Board, filed a very serious complaint with the State of California Registry of Charitable Trusts. In his complaint, Mr. Brown asserts that there has been ” a continuing pattern of serious criminal activities at Pacifica (still going on) that has been condoned, abetted, and/or committed by members of Pacifica management and its board of directors during (at least) the past three years.”

Mr. Brown, after much agonizing, has decided to become a whistleblower, and expose the mail – order practices of several of the Pacifica radio stations and its management, who have chosen to look the other way and ignore Mr. Brown’s frequent demands that the practices stop. He outlines a consistant pattern of fraud at Los Angeles station KPFK, station WPFW in Washington D.C., and at WBAI in New York City.

The charges put forth by Mr. Brown relate to the millions of dollars these stations took in while promising the donors they would receive “premiums” in the mail, often they would be DVDs, or CDs. These charges have been ongoing in the internet media for some time. Other websites, such as www.PacificaInExile.com have also reported the anger of donors who did not receive product that they had ordered. These violations have amounted to thousands of dollars over the years, leaving angry donors.

Here is the complete text of the charges filed with the California Attorney General’s Office.

Julianne Mossler

Deputy Attorney General

State of California

Department of Justice

Registry of Charitable Trusts

P.O. Box 903447

Sacramento CA 94203-4470

February 20, 2016

Re: Pacifica Foundation Radio Complaint # CT011303

Dear Ms. Mossler:

I write to inform you of new and even more serious violations of civil and criminal statutes by the persons originally named in Complaint # CT011303. They make intervention by your office more critical than ever. It may be the last chance to save the Pacifica Foundation.

Complaint # CT011303 was filed by 8 former Pacifica board directors (with my approval and support as a current director) because the foundation’s executive director, Margy Wilkinson (and her successors) – together with the foundation’s corporate counsel, Dan Siegel, and the board majority faction they control – had been colluding in a pattern of illegal activities that could not be blocked by normal internal controls.

However, now the situation has worsened. Because your office has not yet taken action (perhaps because our foundation is too small?), those persons have been emboldened to behave even more recklessly – and illegally – thereby placing the assets and safety of the Pacifica Foundation at even greater risk.

For example, a lawsuit (civil action no: 1:16-cv-241, united states district court, eastern district of new york) has just been filed by Gary Null against the foundation and three of its executive directors for violations of the FTC Mail Order Rule (16 CFR Part 435) and violations of federal criminal statutes dealing with intellectual property theft.

Although the current and former executive director, and the majority board members of their faction, had been put on notice, numerous times, by myself and other minority directors, that illegal violations were occurring (and had been occurring for at least 2 years), they refused to stop these activities or fire those responsible, apparently because the violations increased foundation revenue. If the above-referenced lawsuit against the foundation and its officers and directors prevails (as I believe it will, because its causes of action are valid), the statutory fines and penalties that can be imposed on the foundation – especially by the FTC, Justice Department, and US Postal Service – could amount to tens of millions of dollars. This would absolutely destroy the foundation. That it is why it is so important that your office intervene.

Here are only a few recent violations of law that have been abetted and/or committed by Pacifica’s management and controlling board faction, which neither I nor the foundation’s minority directors have been able to block or roll back.

1. Violations of the FTC Mail Order Rule (16 CFR Part 435)

by Pacifica Radio Station KPFK

In a recent fund drive, Pacifica Radio Station KPFK solicited on-air donations of approximately $800,000 from about 7,500 California residents by promising to send them a variety of merchandise (value: $50 to $300) in return for their donations. The FTC Mail Order Rule https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/mail-internet-or-telephone-order requires that such merchandise be delivered within 30 days of receiving payment, unless otherwise stated in the solicitation; or, if it is known that delivery will take longer (but not more than 60 days), a specifically worded notice specifying when delivery will take place, or offering a refund, must be sent to each recipient.

However, the station did not deliver any of the merchandise within 30 or 60 days, nor did it send the required delay notices. Instead, the station manager privately informed her staff – and also let it be known to the foundation’s executive director and board – that she had already spent the money intended for acquisition of the promised (and paid-for) merchandise, and therefore would not deliver that merchandise until a year(!) past the order date (with a good chance that it would not be delivered at all). This violates 16 CFR Part 435 in numerous ways, for which the station can be fined as much as $16,000 per violation. These statutory fines apply even if the merchandise is eventually delivered. And each late and/or undelivered item of merchandise counts as a single violation, making Pacifica’s possible exposure $16,000 x 7,500 = $120,000,000.)

2. Violation of the FTC Mail Order Rule (16 CFR Part 435)

by Pacifica Radio Station WPFW

In a recent fund drive, Pacifica Radio Station WPFW solicited on-air donations of between $300-$400,000 from approximately 4,000 Washington, DC, resident by promising to deliver a variety of merchandise (value $50-$300) in return for their donations. In this case, it is my understanding that — not only was no merchandise delivered and no notices sent — but station management knew, in advance of solicitation, that it did not have the money to acquire that merchandise, and would probably never deliver it to any of those who had paid for it. Because this is a “knowing violation,” in addition to the statutory fines (of up to $64,000,000), the matter could be referred to the Justice Department for further prosecution and penalties.

3. Violation of the FTC Mail Order Rule (16 CFR Part 435)

by Pacifica Radio Station WBAI

In a recent fund drive, Pacifica Radio Station WBAI solicited approximately $500,000 in donations by promising to deliver a variety of merchandise (value $50-$300) to approximately 5,000 New York City Metro Area residents in return for their donations. However, only a fraction this merchandise was delivered, and that was long after the 30- or 60-day limit allowed by the FTC. Moreover, no FTC-mandated delay notices were sent, and the balance of the merchandise has not, to my knowledge, been delivered, and may not ever be.

Hundreds of complaints about non-delivery of merchandise by this station have been received personally by me and others, after the donors were unable to elicit a response from the station. To verify for myself the station’s illegal delivery practices, I sent $200 to WBAI on February 2, 2015, in response to one of its numerous on-air fundraising solicitations; in return for my donation it was promised that I would receive a book and a DVD by Webster Tarpley (approximate value $50). It is now one year later, but I have not received this merchandise, nor do I expect that I ever will.

I estimate that, in the last 12 months, at least 5,000 orders have been unfulfilled by this station, and many more fulfilled late, in violation of FTC regulations. Those 5,000 orders alone risk statutory fines of up to $16,000 x 5,000 = $80,000,000. If solicitations from the past 36 months are included, the number of unfilled orders – merely at WBAI alone — could rise to 15,000 or more, risking statutory fines of up to $240,000,000.

The only way to determine the exact number of delinquent orders is to examine the records at all 5 Pacifica stations. However, when I requested these records at WBAI – and by law, as a director, I am entitled to examine all foundation records without exception – my requests were ignored and the records withheld. Absent action by your office, these records will remain hidden, and the defrauding of tens of thousands of residents in the foundation’s five broadcasting areas – Los Angeles, San Francisco, Houston, Washington DC, and New York – will continue.

4. Violation of federal criminal statutes against intellectual

property theft by Pacifica Radio Station WBAI

Much of the merchandise used by Pacifica radio stations to solicit donations consists of commercially produced CDs and DVDs, mostly feature-length films, documentaries, and self-help videos. Normally, the stations would purchase these items from reputable vendors at wholesale prices ranging from about $10-$20 each, and then deliver them to donors. But at Radio Station WBAI, in some cases (I do not know how many, because records have been withheld) the station manager would purchase only a few copies from vendors, then illegally duplicate tens or hundreds or thousands more to fulfill the balance of orders. This has been going on at WBAI and other Pacifica stations for many years. Because the practice can save the foundation up to $100,000 or more a year, it is not stopped by the foundation’s officers or the board faction in control, no matter how often the practice is brought to their notice and protested. Not only does this break the law; it also cheats the donors by sending them fraudulent substandard copies instead of the genuine merchandise they were promised in return for their money.

I and two other minority directors have first-hand personal knowledge of illegal CD and DVD duplication at WBAI. I collected some of these fraudulent copies myself, and know of two specific vendors whose copyrighted products have been illegally duplicated in this way. One of them, Gary Null (whose lawsuit I referenced at the beginning of this letter), has acquired some of these illegal copies on his own and identified them as fakes. Intellectual property theft is one of the causes of action in his lawsuit. I understand that statutory fines for theft of intellectual property are $250,000 per violation, and include prison terms of 5 years for first offenders.

I do not know how many vendors have been defrauded, or how many illegal copies have been made. The documents and records that would reveal these numbers have, as I noted, been withheld from me — either with the acquiescence of foundation officers and board members, or their active cooperation.

5. Pacifica’s attorney provides deceptive and destructive

advice to management and staff members

In response to one of my frequent protests against Pacifica’s ongoing FTC violations and illegal duplication of copyrighted material, a staff member at KPFK said she would cease to solicit donations for the station because of the risk of civil or criminal penalties against her and/or the foundation. In response, the foundation’s attorney, Dan Siegel, issued an email announcement saying that she should continue her solicitations, because Pacifica was exempt from punishment under the FTC Mail Order Rule. This was false and misleading advice, which Siegel had reason to know – as an attorney – since the statute explicitly states that non-profits and charities such as Pacifica are not exempt.

Siegel is not an FTC lawyer; he is an employment lawyer. Had he exercised reasonable fiduciary diligence and called the FTC for a Staff Opinion, he would have quickly been told that Pacifica is not exempt, and that its practices are indeed actionable violations of FTC law. Nor is there any exemption for Pacifica from federal criminal statutes that prohibit the theft of copyrighted material.

Sadly, Dan Siegel’s deceptive and (what I must regard as) self-serving advice to foundation staff members carried great weight, because Siegel, in addition to being the foundation’s attorney, has also served as its executive director. This willingness to wink at or deliberately violate state and federal law seems to be just one example of the recklessness with which Siegel and his faction have been running (and running down) the foundation.

In the earlier filing of this complaint, it was noted that the goal of Dan Siegel and his faction was apparently to bankrupt the foundation, so that its licenses and assets (estimated to be worth $100 million or more) could be acquired by a shadow corporation named “KPFA Foundation,” which Siegel and another board member had created for this purpose 27 months ago. This shadow corporation, I might add, was created in secret, its existence deliberately withheld from the foundation’s executive director and board of directors. However, as our corporate attorney, was not Siegel legally obligated to disclose to the board (1) the existence of that corporation, (2) its purpose, which was inherently antithetical to the welfare of Pacifica, and (3) his controlling interest in that corporation? But he never did so, until its existence was uncovered, accidentally, 4 months ago, by the secretary of the Pacifica board, to her great astonishment.

After its discovery, Siegel then admitted that the purpose of his shadow corporation, whose legal address is that of the law firm he owns, was indeed to acquire the licenses and assets of the Pacifica Foundation, in the event that it went bankrupt (an event that he and his faction were uniquely placed to engineer, and towards which they have apparently been working). Therefore, the only way Siegel’s secret corporation could succeed, is if Pacifica were to fail. Is this not an unacceptable conflict of interest for Pacifica’s attorney, and a reason for him to be severed from the foundation? Yet because his faction controls the board, he is impossible to remove, and therefore continues to exert what seems to be a deliberately destabilizing influence on the health of the foundation.

Summary

Although I am not an attorney, I would think that if a corporation’s officers and board of directors are made aware of illegal activities under their control, but refuse to use their authority to stop those activities, they are in effect abetting those activities – and are therefore accessories after the fact. As such, do you think they are appropriate custodians in whom to entrust the care of such a valued public asset as Pacifica?

The fines and penalties that Pacifica might suffer due to the reckless and illegal behavior of its management would be a number with so many zeroes that it could not fit on the output screen of my calculator. It would mean the death of Pacifica. I hope your office will not stand by and allow the current management faction to wreck our foundation. I hope, as well, that if you decide to act, it will not be too late.

Sincerely,

Stephen M Brown

sbrown13@nyc.rr.com

Director, Pacifica National Board

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When contacted about this story Rachele Huennekens, Press Secretary of the Office of Attorney General Kamala D. Harris stated “We don’t comment on any potential or ongoing investigation, as a matter of law and policy.”

edmurray1955@aol.com