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Pacifica $4.8 Million in Debt: Coughlin
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Progressive Portal
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Feb 07, 2002 00:21 PST
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[from http://www.savepacifica.net -- This is an excerpt of a longer
report available at
<http://www.savepacifica.net/20020206_financial_crisis.html>]
COUGHLIN SAYS PACIFICA $4.8 MILLION IN DEBT
IN WORST FINANCIAL CRISIS EVER
Pacifica's old administration left the network saddled with $4.8 million
in debt, more than anyone had expected, according to auditors who have
examined the books since dissidents regained control of the network last
December.
Interim executive director Dan Coughlin made the figures public Feb. 6,
2002 in an interview with Kris Welch on KPFA's Living Room broadcast.
Coughlin said that the full report will be posted on the Pacifica Web
site <http://www.pacifica.org> within a day or two.
"It's the worst financial situation we have ever faced," Coughlin said.
"Some of the conclusions [reached by the auditors] are shocking. We will
have to hunker down, listeners and staff, because the crisis is deep."
A new budget for the current fiscal year projects a further deficit of
$1 million.
Coughlin and KPFA general manager Jim Bennett, who also appeared on the
show, said that the network would conduct national fundraising efforts
attached to individual station drives. KPFA will start a new drive on
Feb. 13.
Coughlin also stated:
* The new Pacifica regime is working to resolve differences peacefully
with station staffs upset over the new direction the network is taking.
Except for the general managers who have been replaced at KPFK, KPFT,
WPFW and WBAI, "we have not fired or banned one person, and we are
trying to respect everyone's rights," he said. "We are going to resolve
our differences peacefully."
* He doubts that members of the former Pacifica National Board majority
will be successful in challenging Pacifica's licenses over changes being
made by the new board.
* He strongly supports moving the national office of Pacifica back to
Berkeley. It was taken to Washington by former executive director Lynn
Chadwick after the KPFA protests against the firing of Nicole Sawaya
erupted three years ago. " I think it's imperative that the national
office move back to Berkeley, its historic home, where Pacifica was
born," Coughlin said.
* No decision has been made on the "hot button" issue of Pacifica
Network News and the former PNN reporters who have reorganized as the
Free Speech Radio Network, mostly because of unresolved financial
issues.
* Pacifica is trying to figure out a "bare bones" way of bringing Larry
Bensky back to national programming. Bensky now is heard on Sunday Salon
over KPFA, and is paid by KPFA.
* Pacifica may have to cut back on staff and salaries. "We have to make
tough decisions around the network to restore financial stability," he
said. "That means cutbacks. We are working with staff and unions to
identify where we can pull back and tighten our belts." He has cut his
own salary 25 percent, Coughlin said.
The financial audit was conducted by a team of accountants paid by an
anonymous donor to go over the Pacifica books. They found, Coughlin
said, that where Pacifica had a surplus of $600,000 at the close of its
fiscal year on Sept. 30, 2000, the network was $3.5 million in debt a
year later, on Sept. 30, 2001. Further, he said, another $1.8 million in
debt had been added by Dec. 31, 2001, just after the new interim board
took power.
"Our main task is to stop the financial hemorrhaging," Coughlin said.
There are three main sources of debt:
* Around $500,000 for a rash of lavish severance packages handed out by
the old administration to themselves before leaving office.
* $2.5 million in bills from law firms, public relations firms, and
security companies hired over the past year and a half. These bills
include $410,000 to Epstein, Becker and Green, the law firm that employs
former Pacifica director John Murdock, in addition to $750,000 already
paid to the firm; $462,000 to Williams and Connolly, another Beltway law
firm; $303,000 to Mitchell, Silberberg and Knupp in Los Angeles, in
addition to $250,000 already paid; $214,000 to Decision Strategies, a
"litigation intelligence" firm in Washington; $250,000 to the legal firm
of Fulbright and Jaworski; and $284,000 to Westhill Partners, a public
relations firm.
* $2 million in bills for general operations, such as telephones and
electricity, that had not been paid because the money went to lawyers
and PR firms.
Coughlin said that Pacifica is not paying the severance packages, which
it considers improper and possibly illegal. It is also considering
challenges to some of the other bills, such as the ones from EB&G.
Some of the other cases, he said bordered on misfeasance. In one case,
he said, he had been called by a car rental company reporting that a car
that had been rented by a Pacifica executive who had left last year was
still being charged to a Pacifica credit card. The card had been shut
down and the police have been notified to find the car.
"The national office created these problems," Coughlin said. "We have to
'fence off' this old debt and look at the needs of the local stations
first."
Among the most pressing of those needs, he said, was the installation of
a new transmitter for KPFK, which has been limping along on 30 percent
of its rated power for months, the money already raised and earmarked
for the transmitter replacement having been drained off by the old
administration and spent elsewhere.
About $100,000 is needed to complete the transmitter project, Coughlin
said.
"We have new leadership -- we need a decisive break with the past
policies that failed Pacifica over the past three years. New general
managers are in place working hard to rebuild the network. In addition,
we managed to reintegrate the old fired and banned staff at WBAI -- more
than two dozen staff were fired and banned last year arbitrarily. We are
trying to restore that station to stability," he said.
Houston station manager Garland Ganter -- who presided over the shutdown
of KPFA in 19998 -- and six others at KPFT have stepped aside
voluntarily, Coughlin said. Some of these are looking for spots
elsewhere in Pacifica.
In Washington, he said, there was "consternation in the listener
community" about the direction the station had been taking. The new
interim general manager, Tony Regusters, is well known in the capital
and has been welcomed by the staff. Regusters has worked as a producer
with Bensky and Amy Goodman, and is experienced in television and radio.
He is a former press secretary to Rep. Maxine Waters (D-L.A.).
In both Houston and Washington, he said, the big issues concern what
kind of public affairs programs will be broadcast.
"We are letting local communities organize and develop their own
programming; there will be local control in terms of finances and local
policy decisions," Coughlin said.
In Los Angeles, where Steven Starr of Indy Media has been named general
manager of KPFK, staff and community are sharply divided, Coughlin said.
"The station's paid staff is divided from the LAB and from the community
that has supported the station for decades. We are working with station
staff to reintroduce the LAB into the life of station. Many staff sealed
themselves off from the LAB, because the LAB and the local community
were launching lawsuits," Coughlin said.
Although Pacifica is deeply in debt, it is not penniless, Coughlin said.
"If we sold all our assets except the licenses, we would have a $1
million surplus."
Although he professed to be unworried about possible legal challenges
from disgruntled members of the new board minority, Coughlin warned that
the network still faces serious political challenges.
Both current iPNB member James Ferguson, in a broadcast on NPR, and
former board member John Murdock, quoted in Newsday, have threatened
challenges to Pacifica licenses because of the changes being made by
Coughlin and the new board.
"We all have to remember that there are serious forces opposed to
restoring Pacifica to the community," Coughlin said. "This is not a game
we are playing. ... We have to understand we will be challenged as we
try to democratize net and restore to original mission."
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