FJC getting award from Marc Hand – one year ago

FJC gets award from Marc Hand, Pacifica’s fixer for the FJC deal (Mark Cohen; Erin Moran)

On 2Apr2018, Tom Livingston & Lorin Silverman signed the $3.7m loan contract between Pacifica (legally the Pacifica Foundation, Inc.) & the Foundation for the Jewish Community (legally FJC). Pacifica’s broker was Public Media Company (PMC), which had put Chief Executive Officer Marc Hand on the case.

A few months later, the July issue of FJC Quarterly showed what happens when business goes well. The joyous occasion was attended by Marc, of course, together with Mark C Cohen, FJC’s Chief Legal Officer (& Assistant Secretary), & Erin Moran, PMC’s Chief Financial Officer. There was talk of FJC, of course, & of PMC, & some gift-giving & -receiving – but no mention of Pacifica. Even so, a one-year anniversary deserves celebration, don’t you think? http://fjc.org/uploads/newsletters/0047-july-2018-newsletter.pdf

And business did go well. PMC earnt their origination fee. OK, only 1.5% you may say, but that is $55 500 (the loan agreement, Section 3.1(2); page 6). And that payment came from Pacifica listeners: Pacifica has agreed to pay all costs arising from the contract – “[to] pay legal and other loan related fees” (Recital B; p. 1), & “at Borrower’s cost and expense, each in form and content satisfactory to the Lender” (Sec. 3.1(1)-(11); pp. 6-7). https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g?b0IBlaiR

And FJC, just by sitting there, earnt its own consideration (benefit), but decided to forego its origination fee, instead plumbing for underwriting credits of 1% of the loan amount, so $37k (Sec. 3.1(2); pp. 6-7; & p. 25). So, rather than take money directly from the listeners, they chose to make Pacifica enter into an advertising contract. (That suited Pacifica financially, if not politically – please see link at the end.)

Pacifica’s advertising contract is to be with F.Y. Eye, Inc. (Exhibit B; pp. 25-7), an advertising broker in NYC. I wondered why FJC didn’t take cash from Pacifica, for the benefit of the FJC account holders funding the loan. Now I know why – and I’ll give the answer in the next post on these matters.

(The circuit made by the advertising credits is described here: https://pacificaradiowatch.home.blog/2019/07/21/underwriting-section-of-fjc-loan-contract-drives-pacificas-urgency-for-an-advertising-policy/.)

[AN ASIDE: Note that Pacifica’s interest rate falls by 0.25 percentage points, to 8.25% a year, from tomorrow, Th1Aug. The change was made today by a Federal Reserve cttee that decides a rate that prime & others are tied to. The saving is smaller than you think: $8 162.50 a year (1% is $32 650). But mustn’t grumble. https://www.jpmorganchase.com/corporate/About-JPMC/historical-prime-rate.htm ]

John Carlo Vernile, Pacifica’s new corporate careerist ED – & previous premiums vendor to KPFK

The man on the left (well, standing there, at least) . . . then a fit, spritely 51-year-old, a Rebel Without a Tie; in 2010, then Vice-President, EMI Music North America, with Ma. Ve.

So the new Pacifica executive director is John Carlo Vernile. So not /Farneal/, as pronounced by Chair & current ED, Grace Aaron, in her unintended leak at Monday’s Strategic Planning Cttee. That faux pas was revealed by this blog, as was Pacifica’s bungled, failed coverup. The Pacifica ‘leadership’ is so inept it can’t even deceive properly. Persons unknown engineered to excise that part of the audiofile of the meeting, thereby violating a Federal Communications Commission rule that exists to help make decision-makers accountable. Thing is, it had already been livestreamed. Oh, dear. https://pacificaradiowatch.home.blog/2019/07/22/grace-aaron-leaks-name-of-new-ied-john-farneal-sp-then-pacifica-splices-the-audiofile-in-failed-coverup/

Maxie Jackson was hired as ED in very late Sep2018, after a lengthy search by the recruitment firm of the then ED, Tom Livingston. Nine months later the PNB majority, & their staff allies, had made Maxie’s life unbearable, pushing him out. That was done at the private Tu2July PNB meeting. That Friday he removed his labels from inside the fridge.

PNB Chair Grace Aaron became ED. The ‘recruitment search’ for her own replacement never existed: Mr Vernile was already lined up. Maybe the Personnel Cttee was never involved: chopping up Maxie had worn them out. So by the weekend everything was sorted. Then Grace blurted his name out at Tuesday’s Finance Cttee – she thinks every meeting she’s in is secret. Importantly, she also said he won’t be coming any time soon, indicating no sense of urgency, even that he won’t be hanging around all that long; maybe in a particular month he’ll be here, maybe he won’t:

“John Vernile will be giving input, er, well, within a matter of weeks, or a month or two [interrupted by Chair Alex Steinberg]” 0:34, https://upload.cat/b7d888611c2d5295 (1:43, 2.2 MB)

Having waited over a decade to have the chance to become executive director, Grace won’t be dislodged that easily. In fact, there’s every chance she pushed through Vernile’s temporary appointment because he’s happy to be a silent partner, with Grace doing the work . . . lento . . . lento . . . even largo . . .

But this tardiness is contradicted by the announcement of his appointment in yesterday’s Pacifica press statement, now on its homepage, https://pacifica.org/; the linked PDF just adds a blurb, https://pacifica.org/documents/press_vernile_190724.pdf

That paints quite a different picture, of a myriad of superhuman efforts about to be unleashed upon the Pacifica Foundation:

“I will be focused on activity that engages audiences, expands opportunities for financial support and stabilizes national operations […] I will assist our General Managers and staff to develop resources that help our stations and affiliate network better serve our communities […] the critical mission of making great radio first and foremost” (my emphases)

After reading that, I think we all need to take in a deep breath, a really deep breath . . .

Once we’ve restored our composure, & digested the presso’s platitudes & generalities, we can consider a few specifics about Super John, ones that are quite easy to find.

Basically, Super John is a corporate careerist, mostly with Sony Music: a salesman, a promoter. No evidence, whatsoever, that he’s had any experience of turning round a basket-case like Pacifica. There is no evidence that he’s suited for the ED task that needs to be carried out in the next six months. Note that the necessary enabling conditions for this period were being patiently put into place not by Super John but under the direction of Maxie Jackson.

Pacifica: out of the frying pan, into the fire.

Everything under Heaven is in utter chaos, the situation is excellent – as a librarian once said.

Specifics about Super John:

corporate careerist, mostly with Sony Music, “at Sony Classical, Columbia and Legacy, ending up as SVP of Artist & Catalog Development” (below interview). Also VP, EMI Music North America.

the premiums supplier to KPFK https://www.forestincentives.com/about

retired from Forest Incentives, Ltd. as president in 2017, replaced by Greg Dumont, when the Pennsylvania company re-structured, registering also in California & New York https://www.corporationwiki.com/p/2z4s61/john-vernile

he started Forest Music Express https://current.org/2014/08/new-service-gives-station-donors-choice-of-digital-music-premiums/

a firm he set up https://publicmediaservice.com (yup, single webpage – for the whole site; just a contact page – maybe that’s why he was glad to take this very temporary Pacifica gig . . . maybe this is how Grace contacted him)

an interview, published July2014; the most informative of the material, in a way (fave band is The Clash, apparently) https://www.allaccess.com/triple-a/10-questions/archive/19586/10-questions-with-john-vernile

when Vice-President for Promotions, Sony Classical, 2007 https://www.npr.org/templates/story/story.php?storyId=10947973&t=1564073222321


Maxie Jackson, Pacifica, & the politics of technique – a tragedy for both

[This is a comment published by Ken Mills at his blog, Spark News, on Tu23July, remarking upon his post the day before, ‘Pacifica alert: Maxie Jackson is out & Grace Aaron has taken over’ https://acrnewsfeed.blogspot.com/2019/07/pacifica-alert-maxie-jackson-is-out.html. Mr Mills also published a two-part comment I made F19July, the same length as this one, & mostly included in the ‘Welcome!’ post starting this blog; it was a response to his report that Maxie had left. https://acrnewsfeed.blogspot.com/2019/07/maxie-jackson-out-as-pacifica-executive.html]

Most of the Th18July Grace Aaron statement that you carry at the top of your article, & published in your Friday piece, re-appeared on Pacifica’s homepage, in a statement dated Sa20July. https://pacifica.org/

‘Most’ because there was crucial new info: “[t]he PNB has agreed to hire a media professional as interim Executive Director. His name will be made public when the contract between him and the Pacifica Foundation has been fully executed.” Executed. Ms Aaron just couldn’t stop the non-conscious word association, the effervescence, here spilling out as ink onto the page – red ink.

The speed of this new appointment process shows two things. First, the successor was already chosen. Second, the Pacifica National Board is much more politically homogeneous than a year ago: nothing has replaced the largely timed-out group spearheaded by Casenave-Diaz-Heerwagen-Lark. For quite a few months, ED Tom Livingston had used his recruitment firm to do an ED search, placing Maxie on a shortlist. Why bother to replicate that when it’s obvious who’s best for the job? 

The Saturday statement was another missed opportunity to explain why Maxie Jackson left. The PNB majority, even with upcoming elections, feel so impregnable that they act as unaccountable to no-one, least of all to Pacifica listeners & Pacifica staff, least of all to Pacifica members. Their arrogance & contempt seems to know no bounds. In their view, all that listeners are good for is to be milked for cash.

Crucially, what Maxie Jackson stumbled into wasn’t just a vipers’ nest but the politics of technique. In the case of Pacifica there were two main expressions, one ordinary, the other extraordinary: how to diffuse technical competence within an organisation; how to tailor technique to valued peculiarities of Pacifica. Maxie came across far too often, abstractly, as a management consultant, &, concretely, as an agent of NPR-lite. That’s what happens when a technician speaks to those who fundamentally fear what they’re hearing. Even in a communications industry, communication is less about what one says than how one is heard.

For far too many Pacificans the messenger was an interloper, a foreign body, an ideologue of the ‘soft’ MSM, the mainstream media of NPR, of MSNBC, of CNN on a pinko day. Morning Maxie would have brought in strip programming, kicking the quiltpatch programming out of the Pacifica playpen. That cherished one hour a week would have been liquidised into a predictable thematic schedule, perhaps even standardised across the five-station network, promoting the Pacifica brand, not the station. This was revolution – & Maxie is no Sanderista Bernie Bro. The messenger had to go.

Technique. Technical competence is the basis of substantively rational human organisation, of the attempt to satisfy needs & perceived wants. Ends are one thing, but the means have to be not just compatible but efficacious. It means that what one wants to achieve politically can only spring rationally from sound foundations. Maxie was fully aware of this, as illustrated by the final words of his presentation to the KPFK Local Station Board, in LA, Su23June, his very last LSB recording. Remember, nine days later he supposedly resigned: bunkum. No, he was ousted:

“[b]est practices need not keep you from your mission, OK. Just because we employ best practices does not mean we can’t be the most radical, progressive, liberal, whatever you want to call yourself, content creators in the system. It just means that we’re applying proven methods to attract audience & keep ’em.” (2:34:56, https://kpftx.org/archives/pnb/kpfk/190623/kpfk190623a.mp3)

By contrast, far too many in Pacifica, & throughout the so-called left, fail to understand this. They fail to understand not just the utility but the necessity for competence, even expertise – and that this requires a great deal of learning, of effort, of dedication. A requirement is that one is aware of one’s lack, of one’s ignorance. It requires humility.

Maxie had been misunderstood. There is a fundamental difference between a technocratic approach & a technical one: the first is a mode of ruling, the second is competent performance & its enabling conditions. Unfortunately, all too often it is those who haven’t mastered an organised set of skills, a competence, who fail to recognise what is lacking in current endeavours. Ignorance is bliss. Pervasive wishful thinking only helps those who have brought us all to this place, it protects them from justifiable criticism of their irresponsibility.

But far too many incumbents resent the suggestion that they need to improve, to change their ways. And as the tensions intensify within the organisation, rather than face reality, rather than engage with the pain of change, it’s always much easier to get rid of the irritant, to get rid of the messenger.

The ousting of Maxie is a tragedy for Pacifica, a tragedy very few are aware of.

Finally, note that ‘interim’ – interim ED, interim CFO – is meaningless in PacificaWorld. As Eugen Leviné said in a different context, at his final trial in Munich, “wir Kommunisten sind alle Tote auf Urlaub”, ‘dead men walking’. (‘Auf Urlaub’, ‘on holiday’ as the martial ‘on leave’.)

Grace Aaron leaks name of new iED, John Farneal (sp.) – then Pacifica splices the audiofile in failed coverup

This was published, with very minor alterations, Tu23July, by the San Francisco Bay Area Independent Media Center (Indybay), part of the worldwide Indymedia project: https://www.indybay.org/newsitems/2019/07/23/18824944.php

Maxie threw her the football & she promptly dropped it. Where’s the surprise? At this evening’s PNB Strategic Planning Cttee, Grace Aaron, Chair of the Board & now Executive Director, leaked to the public the name of her successor. It’s John Farneal (spelling).

Then, person or persons unknown at Pacifica attempted a coverup – but it failed. By law, decision-making meetings of charities have to be public, but because Pacifica use national conference calls they post the proceedings online. This recording was available within an hour or so at the Pacifica meetings archive, https://kpftx.org/archive.php – but as two audiofiles. You’ve guessed it, the most interesting part of the meeting had spilt all over the cutting-room floor. But don’t worry . . . it’s now in the clouds. For ever. The coverup failed.

Guess Grace is so used to private meetings, rarely speaking to the public, that she was in default secrecy mode. The Pacifica secrecy culture really is that entrenched & pervasive. The public are simply an inconvenient, annoying intrusion – except when they’re to be milked for cash.

Audioclip of the leak, the pre-censored portion of the public broadcast: https://upload.cat/b7d888611c2d5295 (1:43, 2.2 MB)

And for comparison, the adulterated posting: https://kpftx.org/archives/pnb/pnbstratcomm/190722/pnbstratcomm190722a.mp3 (58:07) & https://kpftx.org/archives/pnb/pnbstratcomm/190722/pnbstratcomm190722b.mp3 (38:52)

Obviously the Federal Communications Commission will have to be informed, more so given the systemic unaccountability & the stymying of reform within Pacifica. This is a serious attempt to prevent the public hearing a meeting that they’re entitled, by law, to hear in full – to hear without censorship. It’s imperative that those doing work for Pacifica can be trusted, trusted to post recordings unadulterated – especially as they never have the integrity, & good manners, to explicitly explain on the archive website instances of the contrary.

The Pacifica National Board must open an inquiry conducted by lay members into this serious attempted coverup. The Pacifica members, staff, & listeners deserve to know who was practising non-Pacifica values. Censorship by the powerful must be opposed wherever it raises its ugly head. Those in Pacifica too, must be held to account.

It’s unusual for Pacifica to splice such a short recording, here 1:36:59. For example, Grace Aaron is a delegate to her Local Station Board, that of KPFK in LA. Their latest publicly available recording is Su23June, & it lasted 3:03:26 and it’s on the website, in all its glory – as a single audiofile. https://kpftx.org/archives/pnb/kpfk/190623/kpfk190623a.mp3 (Maxie Jackson gave them a fascinating presentation and Q&A, his last recorded LSB appearance, just after 1:38:00; nine days later he supposedly resigned: bunkum)

Underwriting section of FJC loan contract drives Pacifica’s urgency for an advertising policy

A puzzle of Pacifica proceedings in recent months is why this focus on underwriting, the needless euphemism for advertising? Longstanding Pacifica discursive culture is officially vehemently anti-advertising, whilst the practical culture accepts it, even promotes it as an invaluable income stream. Hypocrisy in action. Again, what’s new?

The late departed ED Maxie Jackson, & various directors, spoke at PNB meetings explaining the need for Pacifica to have, supposedly for the first time, a written advertising policy. Individual stations, & their producers, could take up the opportunities circumscribed by the policy, or not. The policy would simply be used to regulate what is already happening within the network.

This was always presented as a necessary first step in preventing, or ending, violations of rules held dear by the Federal Communications Commission (FCC) & the Corporation for Public Broadcasting (CPB). But that’s not new – unlike something more pressing: the loan contract with the Foundation for the Jewish Community (FJC).

Instead of Pacifica giving FJC money just for the privilege of paying FJC interest, for having a loan in the first place, what’s known in the trade as an origination fee, an expression of the powerlessness of the borrower, FJC has required Pacifica to enter into an advertising contract (pages 6-7 of the FJC loan contract). Pacifica has accepted contractually that the advertising contract is not for mutual benefit but for FJC’s benefit, what in Legalese is termed its consideration: “the Underwriting Agreement [is] for the benefit of Lender, as amended from time-to-time” (the introductory list of the contract’s definitions, Section 1.1(30); p. 4). The other pages in the loan contract explicitly on the topic of advertising are 6-7 & 25-7, & these will now be considered. https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g?b0IBlaiR (no need to download the PDF: click the three horizontal dots, then ‘preview’)

It is not known publicly why on earth FJC has done this. [Please see the postscript, where a reason is given.] It’s particularly odd because FJC is the manager of the charitable funds of donors, towards whom FJC is obviously in a relationship of trust, exercising a fiduciary responsibility. So rather than maximising the investment income of the donors’ accounts, by dividing the origination fee amongst them, FJC has pursued its own organisational goal.

Legally the accounts are not owned by the donors but by FJC. What a donor has is influence, the right to recommend to FJC the recipients of FJC money. That’s the law, the theory. In practice, for FJC to maintain, even increase its market share, it needs a good reputation, & that would be harmed if donors told others that their recommendations had not been carried out. So, as so often, capitalist law is one thing, capitalist life is another.

FJC has made Pacifica take advertising, $37 000-worth, 1% of the borrowed money, the $3.7m: “PACIFICA is obliged to provide underwriting credits on its Stations in the amount of 1% of the Loan Amount (the ‘Underwriting Credits’) to facilitate the placement of underwriting on the Stations.” (the FJC-Pacifica loan contract, Exhibit B: Underwriting Agreement, original capitalisation & bold; p. 25)

This is how it works. FJC receives no money; Pacifica receives no money, but bears the cost of the exercise. The exercise is Pacifica carrying adverts. An advertising broker, F. Y. Eye, Inc. (“a not-for-profit organization”, apparently – p. 25), acts as FJC’s agent, & is reimbursed for its expenses (“at Borrower’s cost and expense” – Sec. 3.1; p. 6), & the rest goes as credits to advertisers, “non-profit organizations mutually agreed upon by Borrower and Lender” (p. 7). But this doesn’t start as soon as the loan begins: “credits will be provided as Borrower develops the capacity over the term of the Loan. At such time, Borrower and Lender shall enter into an Underwriting Agreement substantially in the form of Exhibit B attached hereto [pp. 25-7].” (p. 7). This time is when “PACIFICA establishes an underwriting program at its radio stations.” (p. 25, original capitalisation).

To repeat: Pacifica contracted with FJC on 2Apr2018, for the sole benefit of FJC, to bring advertising to the radio stations. The PNB agreed to this without public discussion or debate on advertising. The PNB went behind the backs of the listeners, the members, the staff. The PNB deceived them all. It committed a crime.

Furthermore, but not surprisingly, this was not disclosed in the spurious loan summary distributed Sa16June2018 by then Chair Nancy Sorden, on the authority of the Pacifica National Board. This is what it said on the topic, in full:

“[a]n initial draft of the Underwriting Agreement would have required Pacifica, in lieu of an origination fee to LENDER, to pay 1% of the loan proceeds to a non-profit organization called F.Y. Eye, Inc. (FYEYE). That organization would, in turn, have made grants to non-profits who would then purchase underwriting credits to be aired on Pacifica stations. A revised version of the Underwriting Agreement does not require an initial set aside by Pacifica, but reserves LENDER’s right to propose underwriting credits for non-profits ‘as Pacifica develops the capacity over the term of the Loan.'” [original capitalisation, p. 3; https://mega.nz/#!vyBjgaSC!UQVkLUfLfLXuZHjQguWWaQSuJ2HAuEPJ0fK74_IGlvg (no need to download the PDF: click the magnifying glass symbol)]

No, this isn’t what the contract says. It doesn’t speak of “the LENDER’s right to propose underwriting credits for non-profits ‘as Pacifica develops the capacity over the term of the Loan'” (the spurious summary, my italics & bold), a slippery word because its implied meaning is simply to do with possibility, rather than the right to have advertising content as satisfaction of consideration, for having foregone an origination fee. The following is what’s in the contract signed by Pacifica ED Tom Livingston & FJC President Lorin Silverman: “the Underwriting Agreement [is] for the benefit of Lender” (p. 4), & “there is no origination fee due to Lender. However, in lieu thereof, the Borrower agrees that Lender will receive underwriting credits” (pp. 6-7, my italics & bold). Will, not propose. The matter is one of consideration & its satisfaction. It’s not plausible to believe that two experienced businesspeople would each sign a contract that doesn’t exist. Within the PNB, the deceivers are also cowards.

~~~~~~~~~~~~~~~~~~~~

Postscript . . . F.Y. Eye, Inc. – a corporation founded by its president, Lorin Silverman . . . yes, the President & Treasurer of FJC, and President & Treasurer of the Marty & Dorothy Silverman Foundation, which buys FJC loans that are “potentially impaired”, not even in default (FJC policy, disclosed in any of their auditor’s reports & IRS form 990’s – the latest: pp. 10-11, pp. 12-13 of the PDF, http://fjc.org/uploads/user-uploads/image/FJC%203-31-18%20FINAL.pdf; & Schedule O, p. 90 of the PDF, http://fjc.org/uploads/user-uploads/image/file/990%20FY17%20-%20For%20Distribution.pdf). And, yes, it was Lorin’s signature that lent the money to Pacifica. https://www.fyeye.org/about-us/our-team/

Pacifica COULD have, & CAN publish the FJC loan contract: the confidentiality clause only consists in FJC’s name & street address!

The loan contract with the Foundation for the Jewish Community (FJC) has a two-sentence clause on what confidentiality binds the parties. This is the relevant, second sentence, in full:

“[b]orrower shall not publicly disclose the identity of the Lender, except with the Lender’s written approval” (Article 10 Miscellaneous, Section 10.16 Promotional Material, my emphasis & italicisation; page 18 – https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g?b0IBlaiR (can be read without downloading: just click on the three horizontal dots, then ‘preview’))

Identity. So no name, no street name. The rest can become public property – all that has to be surmounted is a not inconsiderable obstacle, a key feature of Pacifica, its entrenched & pervasive secrecy culture at the top. The top. What textbooks call the leadership. Those who direct; who exercise imagination & creativity; who take responsibility; who set an example; who inspire; who fulfil their legal, moral, & political duties.

Is it any wonder that people become so frustrated that they leak documents? Is it?

But maybe one’s being unfair, maybe there was a gentleman’s agreement between FJC & Pacifica? Well, the contract is explicit & unambiguous on the degree of legal force held by what is believed to be an oral understanding or agreement: none, in a word. The wording used:

“[t]his Agreement and the other Loan Documents embody the entire agreement and understanding between Lender and Borrower and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof. Accordingly, the Loan Documents may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties” (Article 10 Miscellaneous, Section 10.21 Entire Agreement, my emphases & italicisation; p. 18)

The topic of the importance of getting an agreement in writing came up at the M15July Audit Cttee meeting, with a question asked by Polina Vasiliev (KPFK staff delegate). Please see this post: https://pacificaradiowatch.home.blog/2019/07/20/why-may-the-marty-dorothy-silverman-foundation-be-buying-pacificas-3-265m-loan/.

Has FJC sold the $3.265m loan? Is the owner the Marty & Dorothy Silverman Foundation – or have they in turn sold it on?

charities as capital, M-M´ . . . richer charities (non-profits, of course) making money out of poorer ones

The questions arise because of the secrecy culture that Pacifica is notorious for. Pacifica office-holders, since the end of last summer, have consistently chosen not to utter the word ‘FJC’, the Foundation for the Jewish Community which lent Pacifica $3.7m on M2Apr2018. At that time Pacifica proudly issued a press statement, & not only named FJC but devoted a paragraph to their activities. The websites of Pacifica stations proudly carried it, two of them to this very day. (The word ‘FJC’ also appears in two other publicly available documents, ones that Pacifica paid for – more precisely, have been invoiced for: the auditor’s reports for FY2016, dated 31May2018, & FY2017, dated 27June2019.)

https://www.kpfk.org/blogs/kpfk-and-pacifica-news/post/pacifica-announces-settlement-with-empire-state-building-and-empire-state-realty-trust/; https://www.wbai.org/articles.php?article=3570; https://pacifica.org/documents/financial/audit_2016.pdf (p. 19; p. 23 of the PDF); https://pacifica.org/documents/financial/2017/PACIFICA-17-FS_Final.pdf (p. 13; p. 15 of the PDF – lazily cut-&-pasted (!) by the new auditors from their predecessor’s page just mentioned)

Given this, it’s reasonable, & diligent, to ask whether FJC still own the loan.

The Marty & Dorothy Silverman Foundation (MDSF) was almost wholly responsible for creating in 1995 the Foundation for the Jewish Community (FJC). The president of FJC is Lorin Silverman, the son. FJC has a policy, declared in their auditor’s reports, of not going to court when a borrower defaults. No, no, nothing as unsavoury as that. Bad publicity too. Money-men pursuing charities. That wouldn’t do. No. Best keep things quiet, keep everything civil. Instead, FJC sells to MDSF, at no discount, the loans they assess as being only “potentially impaired”, the phrase used in their auditor’s reports; this is the latest one, year-end 31Mar2018, dated 22Aug2018: http://fjc.org/uploads/user-uploads/image/FJC%203-31-18%20FINAL.pdf (pages 10 & 11, pp. 12 & 13 of the PDF)

It was disclosed at the M15July Audit Cttee that, quite remarkably, Pacifica has nothing in writing from FJC (or whoever is now the lender) permitting Pacifica to be currently violating the loan conditions. Oh. That’s quite different from when the loan started on 2Apr2018: ED Tom Livingston said in an Apr2018 email, kindly sent to me by Grace Aaron, that “[t]he Board has been told it has a 6 month waiver of the loan covenants.” (Bear in mind, he didn’t say ‘has received a written waiver’ – only “told”.) So that ran out 1Oct2018. It is important to note that in no publicly available document or audiofile has there been mention of this topic – until the 15July meeting.

At this meeting was George Walter, a Senior Controller at NETA, the National Educational Telecommunications Association, which since Sep2018 has done Pacifica’s bookkeeping & accounting. Also present was Jorge Diaz, a Principal Auditor at Rogers & Co., which did the FY2017 audit & are currently doing the 2018. The George & Jorge Show. And they both take a nice pic, yes? https://www.netaonline.org/OurStaff (last Controller pic) & https://www.rogerspllc.com/about/leadership/jorge-diaz-cpa/

George, when asked by Marilyn Vogt-Downey (WBAI listener delegate) about the submission of Pacifica documents within 120 days to the lender of “the $3.2m loan”, replied, “we’re, we’re off, but they know, & they’re urgh, urgh, they’re, they’re content” (16:45, https://kpftx.org/archives/pnb/audit/190715/audit190715a.mp3). Not surprisingly he was pushed further – and, for recent Audit Cttee meetings, it was in a totally unexpected direction. Polina Vasiliev (KPFK staff delegate) asked about “our New York lender” being OK with the loan condition violations: “do we have that in writing?” (21:39). George was as decisive as ever: “[pause] um, [pause] no, urgh, that’s my, urgh knowledge” (22:04).

Then Audit Chair Eileen Rosin dived in, prompting the witness. Tut-tut. Auditor Jorge then tried to assist. Polina persisted, & George, to his great credit said, “[r]ight, & so, t-to my knowledge there’s no, no written waiver. Um, urgh-urgh, it’s very possible that we’ll, urgh, urgh, get one” (23:05). Which only raises the question, why hasn’t a request for a written waiver been made?!? Why has this situation been allowed to arise, & to persist? And was there a written waiver for 2Apr-1Oct2018? And a written waiver for 2Oct2018-1Apr2019? There’s something not quite right here. Something fishy . . . Oh. So, nothing in writing. Oh. And the annual default interest rate is the lesser of either 18% or the maximum legal rate (clause §1.1(10) of the FJC loan contract). https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g?b0IBlaiR (no need to download the PDF: click the three horizontal dots, then ‘preview’)

One could have done a separate post on the Eileen & George Double Act that followed, doing a spiel with such gems such as, “the lender is actually a non-profit lender, it’s not like any ordinary bank, I guess […] I’m guessing they would tend to be a bit more lenient than, you know – more willing to work with their clients” (Eileen, 24:14), & “it doesn’t help them to er, to er, to, to threaten default on the loan […] that would be, urgh, not in their interest” (George, 24:44). And FJC’s fiduciary duty towards the donors whose money (& other assets) it now manages? Get real. That’s why FJC’s dodgy & troublesome loans, when they’re simply “potentially impaired”, not even defaulting, are sold on to the Marty & Dorothy Silverman Foundation.

Lastly, Marilyn reminded everyone (25:11), that it had been said, mistakenly, that Pacifica had been promised orally by Empire State Realty Trust that they didn’t have to pay all the monthly rent for housing the WBAI transmitter (Marilyn could have been explicit, saying that the determination of this belief as false was by the court). But to return to the main matter: why won’t people be upfront, & speak of FJC’s business relationship with the Marty & Dorothy Silverman Foundation?

Recorded Pacifica public meetings – less so the very few published Pacifica documents – have been full of misdescriptions, being misleading, false, even what can only be deemed deliberate falsehoods, intended to reassure, placate, obscure, confuse, & mislead. From the naive to the wilful. This sorry state of affairs refers to both the $3.265m loan conditions & FJC.

Just in case one may think ‘a nod & a wink’ will suffice, just check the FJC contract. It’s explicit & unambiguous on the degree of legal force held by what is believed to be an oral understanding or agreement: none, in a word. The pertinent passage:

“[t]his Agreement and the other Loan Documents embody the entire agreement and understanding between Lender and Borrower and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof. Accordingly, the Loan Documents may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties” (Article 10 Miscellaneous, Section 10.21 Entire Agreement, my italics & bold; p. 18) https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g?b0IBlaiR

A final, crucial point which will be addressed later. Except when the loan was taken out, those in the know have consistently never said who owns the loan FJC may have sold it on. It may have already been sold to the Marty & Dorothy Silverman Foundation. Indeed, that foundation may even have sold it on. We simply don’t know. Secrecy culture breeds suspicion. It corrodes trust. It undermines the organisation. It’s simply destructive.

Was the 2Apr-1Oct2018 waiver in writing? If not, why? Was there a written waiver for 2Oct2018-1Apr2019? If not, why? Why hasn’t there been a written waiver for 2Apr-1Oct2019? Why did NETA, Pacifica’s supposed competent accountant, not tell ED Maxie Jackson that one was needed? Why didn’t Jackson insist on one? Why didn’t the Pacifica directors do likewise?

The Pacifica National Board needs to disclose who owns the $3.265m loan. Is it still FJC?

Or, if names are not to be named, has Pacifica’s lender changed, & if so, how many times?

The Maxie Jackson Mystery

Maxie Jackson came. Then he was gone. No-one said a word. No-one raised an eyebrow. Most of all, no-one asked questions. Loose talk is more than dangerous. It’s terminal. And when the Head Honcho is disappeared, who wants to join him? So everyone plays along. Waiting for The Dear Leader to make it all official. To make the unsayable sayable. To know how to phrase things, with the right intensity. The Dear Leader sets the tone. The rest follow obediently. Everyone knows their place. The best of all possible worlds. Pangloss in Pacifica.

The end began with the Personnel Cttee being awoken from its slumber. In PacificaWorld it’s known as Madame. Madame Guillotine. An oft-used device to provide an invaluable service on behalf of the praetorian guard of the organisation: to terminate with extreme prejudice, as the CIA say.

This time it conducted a delayed six-month evaluation of the executive director, Maxie Jackson. It identified 79 parties to offer their opinion on Mr Jackson. Yes. So I repeat: 79. Only nine replied, but that was no problem, in fact it saved a lot of work. All that was needed was the right evidence to support the right conclusion (Robin Collier, Tu28May Personnel Cttee, 2:23 https://kpftx.org/archives/pnb/personnel/190528/personnel190528a.mp3).

Ken Mills reported the appointment of Maxie. Now that of his departure. On M22July he gives his own view: http://acrnewsfeed.blogspot.com/2018/10/maxie-jackson-is-pacificas-new.html & http://acrnewsfeed.blogspot.com/2019/07/maxie-jackson-out-as-pacifica-executive.html [His view: https://acrnewsfeed.blogspot.com/2019/07/pacifica-alert-maxie-jackson-is-out.html ]

FY2017 auditor refuses to declare that the statements are materially accurate

The auditors of the FY2017 financial statements, Rogers & Company, presented their report, in person, to the M24June Audit Cttee & to the Th27June PNB. The Audit Cttee recommended its acceptance to the PNB, which duly obliged. The published report is dated Th27June. https://pacifica.org/documents/financial/2017/PACIFICA-17-FS_Final.pdf

No member of either the Audit Cttee or the PNB displayed any awareness of how harmful to Pacifica’s fundraising is the decision of the FY2017 auditors to offer no opinion on the material accuracy of the financial statements presented to them. I explained this harm in a piece written 26June (please see the link at the end).

The auditors started their work, then realised that Pacifica was finding it impossible to reconstruct & provide sufficient evidence, both quantity & quality, in support of the figures in the financial statements. Pacifica could have spent another six, nine months on the task, with no guarantee they’d come up with enough of what the auditors needed.

Also, fundamentally, no-one on the Audit Cttee & PNB displayed any awareness of how serious it is that the auditor’s opinion had deteriorated from the FY2016’s “qualified opinion” (also termed a ‘scope limitation’), Pacifica’s first, to FY2017’s “disclaimer of opinion”, again, a Pacifica first. (The third kind of ‘modified opinion’ is an ‘adverse opinion’.) So, no-one displayed knowledge of what’s made plain, made explicit, by AU-C section 705, the auditing clarification re ‘modifications to the opinion in the independent auditor’s report’: https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-c-00705.pdf

The FY2017 financial statements presented by NETA, on behalf of Pacifica, were rejected by the auditor – not because they judged them materially inaccurate (in that case, according to auditing rules, they would have publicly issued an ‘adverse opinion’) but because there was insufficient supporting documentation to allow them to make a judgment (hence the refusal to issue an opinion; in the obscuring ‘diplomatic’ jargon of the profession, they publicly issued a ‘disclaimer of opinion’).

In plain language, not disclaiming, but refusal & hence rejection.

The auditors refused to validate the financial statements, refused to validate them to even the slightest degree.

The statements remain unvalidated. For all the money spent by Pacifica’s listeners, paying NETA to prepare them, and Rogers & Co. to audit them, what are they worth?

The auditors were saying, in effect, three things:

  • take these financial statements as you find them – because they have inadequate support;
  • rationally, one can only take them on faith; &
  • so, how strong is your faith in Pacifica, both in 2016-7 & now?

My three-page discussion, originally sent to Chris Albertson’s blog: http://www.mediafire.com/file/rw9nofuwsbnr3k1/FY2017_Auditors%2527_Disclaimer_of_Opinion_W26Jun19_3pp.pdf/file

Leak of $3.7m loan contract with the Foundation for the Jewish Community, FJC

The Pacifica advocates of the loan from the Foundation for the Jewish Community, FJC, have presented it as a good Samaritan, doing it out of the kindness of its heart. In fact, FJC is in a competitive market as a manager of donor-advised funds, a sector of the charity industry. One of its money-making operations is running a fund that lends at prime-plus, the Agency Loan Fund, ALF. Donors to FJC can lodge money with ALF, as can outsiders, all hungry for those extra percentage points of interest earnt.

FJC had been having problems finding borrowers for these prime-plus loans: only 46% of ALF had been converted into loans at 31Mar2018, the very time of the 2Apr Pacifica loan (its latest auditor’s report, year-end 31Mar2018, page 20; page 22 of the PDF). So, of course, Pacifica was welcomed with open arms. Sentiment this was not. http://fjc.org/uploads/user-uploads/image/FJC%203-31-18%20FINAL.pdf

The greatest aid to Pacifica transparency, on this or any matter, has not come from the National Board, the PNB. No, this came with the documents leaked W26June2019 on a Facebook group, then co-moderated & -administered by Grace Aaron. She was then, as now, Chair of the Pacifica Foundation. Most of the documents concern the loan from FJC. https://www.facebook.com/groups/PacificaRadiowaves/permalink/1264765520345396/

There are 18 unique documents (one is a copy):

https://www.mediafire.com/folder/e1lo0t30pd4wc/ (the original drop)

https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g (convenient one-click download of the folder; also ‘preview’ allows reading online)

The ‘root’ contract, called the “loan agreement”, 2Apr2018, signed by Pacifica Interim Executive Director Tom Livingston & FJC President Lorin Silverman: https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g?b0IBlaiR

There’s also an advertising (underwriting) contract as part of the loan, signed 23Mar2018 by iED Livingston; please see below.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The $3.7m loan was reduced to $3.265m loan when Pacifica was unable to collateralise the KPFK transmitter site lease, at Mount Wilson. This was because it’s federal land administered by the Dept. of Agriculture Forest Service, & they wouldn’t give the necessary permissions. (The documentary evidence is contrary to the story being told in 2018 by Grace Aaron et al. that the attempt was to collateralise the transmitter, not the site lease – please see the loan agreement, Sec. 2.1(d); p. 5.)

What did the Pacifica National Board (PNB) commit the members to when it accepted FJC’s offer of the money?

  • the signed loan agreement is dated 2Apr2018, & it has a three-year term;
  • significantly, Pacifica directors agreed to a contract that details only two ways to pay the principal by 2Apr2021: selling as many broadcasting licences & station buildings as it takes: “a swap or sale of one or more radio licenses or a sale of other Pacifica owned assets” (Recital B; page 1);
  • annual interest at three percentage points above US prime rate (Section 2.2; p. 5). (So, an annual 7.75% when the loan started; 8%, effective 14June; 8.25%, 27Sep; 8.5%, 20Dec2018. [UPDATE: 8.25%, effective Th1Aug2019.] The three-year interest charge, with the coming recession dragging down the rate, will be less than $800k.);
  • the default rate, such as after a late payment – not least the paying of the principal on time (Sec. 8.1; p. 13) – is the lower of either 18% a year or the maximum under law (Sec. 1.1(10); p. 2);
  • Pacifica directors, with no public discussion, agreed to carry advertising, & on 23Mar2018 signed a contract with an advertising broker, F. Y. Eye, Inc.; FJC chose to make Pacifica do this “in lieu” of its “origination fee” (Sec. 3.1(2); pp. 6-7), & you may wonder why – details below; &
  • FJC never waits for a loan to default: it sells the loan on when it’s only “potentially impaired”, to the Marty & Dorothy Silverman Foundation; details below.

https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g?b0IBlaiR

Pacifica’s immediate future is structured more by this contract than anything else.

As part of the FJC contract, on 23Mar2018 iED Tom Livingston signed an underwriting contract on behalf of Pacifica, for it to carry advertising. This hasn’t been acknowledged publicly by any Pacifica body, not least the Pacifica National Board (PNB). The details now follow.

Appended to the loan agreement, signed by Pacifica & FJC, is an unsigned underwriting contract (pp. 25-7). It is “substantially in the form” that Pacifica has agreed to sign with the NYC advertising broker, F.Y. Eye, Inc. (Sec. 3.1(2); pp. 6-7 & 25-7) – a corporation founded by its president, Lorin Silverman . . . yes, the President & Treasurer of FJC, and President & Treasurer of the Marty & Dorothy Silverman Foundation, which buys FJC loans that are “potentially impaired”, not even in default (FJC policy, disclosed in any of their auditor’s reports & IRS form 990’s – the latest: pp. 10-11, pp. 12-13 of the PDF, http://fjc.org/uploads/user-uploads/image/FJC%203-31-18%20FINAL.pdf; & Schedule O, p. 90 of the PDF, http://fjc.org/uploads/user-uploads/image/file/990%20FY17%20-%20For%20Distribution.pdf). And, yes, it was Lorin’s signature that lent the money to Pacifica.

It should be noted that the chronology in the loan agreement, the talk of ‘Pacifica has agreed to sign’, has to be juxtaposed with the fact that this advertising agreement was actually signed just over a week earlier, on 23Mar2018. It was done by iED Tom Livingston, a contract with F. Y. Eye, Inc., dated 2Apr2018 (linked below). Signing for the latter was its President, Lorin Silverman (yes, a busy guy). Pacifica has publicly issued no document demonstrating that Livingston had been authorised by the PNB to do this. Likewise, there is no public Pacifica document showing that the PNB had agreed to advertising via the FJC loan. Such is the life of a secret society – moreover, one funded directly by the members, members who were never consulted on this matter. Moreover, members who have never shown any evidence, at any time in Pacifica’s 73 year history, of being enamoured to advertising on the Pacifica airwaves. Such is the anti-democratic disposition of the PNB majority. Shameless authoritarians. Eat yer heart out, Lew. https://mega.nz/#F!PloCiSqJ!9rLejSkttE7gCVCCq3q86g?qkxynCxQ