This once proud progressive network is a mere shell of itself, doing a disservice to those who aspire to a better world. At the present time, there are nearly 40,000 members of the network, compared to well over 120,000 prior to 2008. The station in New York, the country’s largest media market, with a potential audience of 20 million, does not even have 7,000 listener donors. The numbers are similar at the other stations, which is scandalous for a network with its history of broadcasting progressive voices for the past 70 years.
Pacifica is in an existential crisis. Pacifica could be off the air within 8 months. It is quite possible that Pacifica’s studios could be sold and the staff severely downsized.
The loan that will drown Pacifica
Current and past Pacifica board members have shown themselves to be conflicted and incapable of governing. Against the advice of their then CFO, Executive Director and legal counsel, they took out a 3.25 million dollar loan in 2017 to bail out the failing NY Pacifica station, WBAI, without any plan to repay the loan that is coming due in April of 2021. Instead, the Board allowed the lender to insist on using all of Pacifica’s buildings as collateral for the loan. The current Board of Directors is now seriously considering selling off some of Pacifica’s assets to pay off this noxious loan.
This is not a rumor; it is stated in the independent audit for 2018 released in July 2020. The auditor stated that Pacifica management has acknowledged that it is considering a number of cost-cutting measures “including the lease or sale of certain properties to provide sufficient cash flows to properly service the debt” of $3.25 million loan “and provide sufficient working capital to satisfy ongoing operational expenditures and related commitments (such as payroll and related benefits).” See the FY2018 Pacifica audit, Note 13 “Substantial Doubt About an Entity’s Ability to Continue as a Going Concern”, page 26 (page 28 of the pdf).
So how will Pacifica repay the loan? Simple, they have indicated they are willing to sell off assets, like the KPFA and KPFK buildings, to do so. Why do we think this is a real possibility? Well, they already sold another KPFA building last year that members like you funded to house the national office, giving no money to KPFA for it, rather using it for repayment of the WBAI debt incurred through terrible fiscal mismanagement. For more on the loan see this link.
Loss of Federal Support
The recent Pacifica audit states successful completion of audits through fiscal year ’19 will coincide with efforts to align Pacifica with the Corporation for Public Broadcasting community service grant requirements. This is factually incorrect. CPB formally severed Pacifica’s grant qualification status in May of this year for failure to re-pay $137,000 in overpayments uncovered in a 2013 CPB audit, as well as other compliance violations. It is highly unlikely, given its history and the current CPB qualifications requirements, that Pacifica will ever see federal money again. Pacifica has lost about $12 million dollars in federal support during the last 7 years as a result of its failure to comply with CPB regulations. Worse yet, Pacifica lost its ability to legally play copyrighted music over the air under the CPB blanket coverage. You can read more about some of Pacifica’s troubles directly from CPB’s Ombudsman and also this followup.
Cooking the books
The Pacifica Board recently altered the accounting books, reassigning KPFA assets, paid for by donors like you, creating the illusion that KPFA is in deficit mode, and wiped millions of dollars of debt from WBAI liabilities. It ignored the pleas of its financial oversight managers, NETA (National Educational Telecommunications Association) to not do so. This was knowingly done in violation of Security and Exchange Commission SEC-GAAP regulations.
Abandoning the Mission
These same Board of Directors use the weaknesses of the current bylaws to run programming that violates Pacifica’s founding mission statement, featuring snake-oil salesmen, quackery-based health cures and beauty product programs, and even hate/conspiracy promoters. They are looking to expand this reprehensible content across the network. Read more about hate speech and snake oil on Pacifica airwaves.
Pacifica’s “Democracy” Funded by Millionaires and Dark Money 501(c)(4)’s
Much like the current dysfunction of U.S. politics, two dark money 501(c)(4) groups controlled by multimillionaires fund the vast majority of election slate cards that Pacifica donor members receive. These fat cats control a slight majority of the Pacifica national board through these money donations. They also protect many of the producers who personally profit from broadcasting highly questionable programming on our nonprofit stations. Their collaborators use social media platforms to disseminate a fantasy picture of the state of the foundation, ignoring independent auditors and attorneys who have repeatedly warned that the future of the network is not viable. They intimidate and personally attack the professional staff that are charged with running the network. Utilizing Goebbels tactics and Scientology-inspired methods, they viciously attack the staff or anyone that gets in their way. Like some right-wing groups, they hide behind the banner of “free speech” to support hate speech, fringe conspiracies and quack cures. Read more…
Pension Plan Delinquency
In 2018, responding to a complaint, the US Department of Labor notified Pacifica they were in violation of Federal law for failing to make pension payments for staff for over four years, triggering an investigation by the DOL. This is yet another example of the malfeasance of the Board of Directors and the senior management it has hired from within its own ranks.
Property Tax Delinquency
Earlier this year, Pacifica was notified that KPFA would lose its building because of Pacifica’s failure to pay property taxes for almost 5 years. The foundation had failed to update a corporate name change 5 years ago, which triggered the loss of the tax-exempt status of the KPFA building. The board scrambled to hire several different law firms to prevent this from happening, and billed KPFA almost $50,000 for those legal fees.
Failure to fulfill their Fiduciary Duty
Pacifica is a California non-profit educational organization regulated by the Attorney General’s Office for Charitable Trusts. The CA AG’s office warned Pacifica in 2017 that Pacifica would lose its tax-exempt status if it did not correct serious compliance deficiencies. They demanded that Pacifica come up with a plan within 30 days as to how it would correct the deficiencies. The Interim Executive Director and CFO of Pacifica wrote a Financial Recovery and Stabilization Plan to correct the deficiencies and submitted it to the AG’s office as a cure, and it was accepted. That plan included measures to deal with the chronic problems at the NY station, WBAI. In Dec. 2017, Julianne Mossler, the Deputy Attorney General gave a serious verbal warning to the Pacifica National Board about its fiduciary responsibilities but that warning did not seem to have much effect. In 2019, the interim Executive Director attempted to implement the plan that was accepted by the AG’s office, and was terminated for doing so.
The Board has continued to fail in carrying out that plan, and things have only become worse. They have failed to make any changes at WBAI. It continues to run deficits that now threaten the network’s survival, continuing to ignore WBAI’s chronic failures to meet payroll and other obligations, loss of equipment, its questionable bookkeeping, member complaints about “unlistenable” programming, a minuscule and declining listening audience, and the failure to follow the mission of Pacifica.
At the center of this debacle are a set of bylaws that have crippled Pacifica’s governance for the last 18 years. It has directly contributed to the revolving door management with over 16 Executive Directors in less than 10 years. These bylaws have enabled sectarian splinter groups to take control of local station boards. For a detailed explanation please read the recent article by one of the main writers of those bylaws.
The information presented here is based on documents from the California attorney general’s office, from the previous General Counsel of Pacifica, audits of the Pacifica Foundation, as well as other historical documents and recordings. We encourage you to explore the links on this site to learn more about how we got to where we are today.
We need your help to raise money to support and legally protect Pacifica from the reckless and incompetent members of its Board of Directors. The California AG’s office doesn’t have the resources in a time of Trump, Covid19 and fires to investigate this complicated case. If we produce the information needed, we believe they will investigate any wrongdoing of the people in charge. We have found experienced counsel and a forensic accounting firm that will help us trace the money and get to the bottom of any conflict of interest on the national board.
We have a good chance of succeeding if we act decisively now. Can you please donate in whatever amount you feel you are capable of? Please visit our donation page.
Thank you so much for your interest in preserving and protecting Pacifica.