PacificaWatch

. . . is it really that difficult? . . .

Here are a few notes on the KPFA property tax debt, ~$487k. To be exact, it’s $486 750.86. It means an online public auction of the Pacifica building in Berkeley, at 1929 MLK Jr. Way, has been ordered for 20-23Mar – a building, one should add, that KPFA enjoys rent-free, so effectively receiving a subsidy, year after year, from the other four stations. Some thanks.

1) Almost half a million $$$? But aren’t charities exempt from this tax? Indeed: if a non-profit organisation is a registered charity, say, & the property in question is solely used for charitable purposes, then no tax is due, it’s exempt – but only if the organisation jumps thru the hoops set up by the taxwoman. Hoops such as annually applying for the exemption. Hoops such as providing the required evidences. OK, so administrative ABC, right? – or so one would think.

KPFA has to deal with the Alameda Co. taxwoman. As expected, the exemption’s on their website. It’s called the Welfare Exemption (it’s been around since 1944), & to apply the organisation needs an Organizational Clearance Certificate. The relevant introductory webpage even has this coaxing prompt, hypertexted: “Welfare Exemption for Non-Profit Organizations”. https://www.acgov.org/assessor/decreasetax/exemptions/other-exemption.htm

The powers that be have even gone to the trouble of writing a helpful booklet, explaining the rules & process: https://www.boe.ca.gov/proptaxes/pdf/pub149.pdf (Dec2018)

It even seems that unaudited financial statements are acceptable – which of course means they have to exist in the first place: https://www.boe.ca.gov/proptaxes/pdf/boe277.pdf

ABC. The basics. Basic admin. The sort of thing the average 14-year-old can do. If Pacifica had a Young Pioneers wing, they could have been charged with the responsibility. After all, kids have been known to run even more complicated things: https://en.wikipedia.org/wiki/Gyermekvas%C3%BAt.

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2) As of 29Jan this year, the last payment made to Alameda for 1929 MLK was 3Apr2013 – almost seven years ago. (Primary documents are linked at https://pacificainexile.org/.) The itemised bill has property tax due, to 30June2020, of ~$373k. But the debt is ~$487k? Yes: penalties, interest, & fees is the difference, ~$114k. $114 000. Oh.

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3) Is KPFA the only part of Pacifica paying – or not paying – property tax, when, on its face, there should always be an exemption? No. Consider, arbitrarily, the period since 1Oct2009, the start of Pacifica’s financial year 2010, FY2010. There are seven sets of audited figures, plus the financial statements in the FY2017 auditor’s report, statements which are not audited because the auditor, Rogers & Company, said they lacked sufficient evidence in order to express an opinion on the statements’ material accuracy. In the jargon, The Black Spot is a ‘disclaimer of opinion’. (As repeated Pacifica mtg. audios reveal, no delegate, even no director, seems to appreciate that the FY2017 statements, so all the figures in them, are effectively worthless. However, for prospective donors & lenders, & the Corporation for Public Broadcasting, they are not worthless but valuable: they are a bigger red flag than the one gracing Tiananmen Square, alerting anyone reading the auditor’s report that Pacifica is out of control, lacking even the basic financial controls.) https://pacificaradiowatch.home.blog/2019/07/19/fy2017-auditor-refuses-to-declare-that-the-statements-are-materially-accurate/

For these eight years, FY2010 thru FY2017, total charge for property tax = $502 187. Yes, talk again of half a million. Almost all of it was for KPFA: 91.9%, $461 334. (The others: KPFK, $23 624; KPFT, $15 126; & ‘National Division’, the auditor’s term, $2 103.)

Pacifica owns properties housing KPFA, KPFK, & KPFT. Not every station has been charged property tax each & every year. The annual charge for each station, & National Division, starting with FY2010, are:

• KPFA: $13 854, 0, 14 208, 13 036, 9 929, 14 354, 337 826 (sic), 58 127 (unaudited);
• KPFK: $0, 0, 0, 0, 0, 9 762, 9 202, 4 660 (unaudited);
• KPFT: $29 453, 14 354, 0, 0, refund of 28 686, 5 (sic), 0, 0 (unaudited); &
• National Division: all zero bar $2 103 (FY2014).

There’s a lot of explaining to be done here. Not least the KPFA FY2016 charge of ~$338k. Since the statements include National Division in their analysis, this figure can’t have anything to do with the Berkeley ‘Nakapon’ building, 1921-1925 MLK, that housed the national office. (Coincidently, that auditor’s report, by Regalia, is dated 31May2018, & it addressed a post-balance sheet event, the sale of that property. Please note, if the ~$338k charge were to largely refer to previous years, perhaps even to the sold property, then that would have been disclosed as an adjustment to the opening balances, with an explanatory note, not as a FY2016 expense.)

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4) Then there’s the Foundation for the Jewish Community, operating as FJC. Pacifica have to pay them $3.265m by 31Mar next year. A condition of the loan is paying all taxes when they fall due. A condition of the loan is getting FJC’s permission before any asset is sold. A condition of the loan is adhering to the conditions. FJC also have the legal right to sell on the loan, their asset, whenever it suits them. And this they have done in recent years, even of a loan comparable in size to Pacifica’s. And they don’t wait for a borrower to default; no, they sell it on when the loan is “potentially impaired”, as disclosed in any of their auditor’s reports. And we know who they sell it to: the Marty & Dorothy Silverman Foundation. Is this latest debacle the straw that finally breaks the camel’s back? https://pacificaradiowatch.home.blog/2019/07/20/has-fjc-sold-the-3-265m-loan-is-the-owner-the-marty-and-dorothy-silverman-foundation/ & https://pacificaradiowatch.home.blog/what-fjc-has-made-pacifica-do/ (this also has a link to the root contract, the ‘loan agreement’, signed 2Apr2018 by Pacifica ED Tom Livingston & FJC President Lorin Silverman)

If the Pacifica building in Berkeley is indeed sold, it better go for in excess of $1.5m because FJC will want their $1m or so. That’s because it’s collateralised against the loan, which was made on a 3:1 value-to-loan basis. If Pacifica loses an asset, FJC gets its corresponding cash back immediately. “Cash back, Ma’am?” — “Why, I’ll have a million plus, thank you, young lady” — “Have a nice day, y’all!”

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5) Money & debt aside, what about the politics of all this? Two democratic virtues are at stake: transparency & accountability.

A written public explanation must be provided by ED Lydia Brazon.

And who was responsible for this debacle? The KPFA GM, dear Quincy? The KPFA business manager, Maria Negret, who has exalted the financial performance of the station at every LSB mtg. she has graced? The KPFA treasurer, Sharon Adams? The KPFA Finance Cttee? What about the PNB as a whole, since 1Jan2014, say? Then there’s the current chair of the PNB Finance Cttee, Chris Cory, also on the KPFA LSB? The PNB Finance Cttee since 1Jan2014? The PNB Audit Cttee? And all the ED’s of the last six years? Indeed, whilst Breaker Bill Crosier was ED for almost a year, 2017-8, he supervised, by a continual act of omission, an increase in this property tax debt, including penalties, interest, & fees.

And, last but not least, what about Pacifica’s bookkeeper, accountant, & provider of the Chief Financial Officer since Sep2018, NETA, the expensive National Educational Telecommunications Association? How long did it take NETA in its early precautionary overview of Pacifica’s assets (& their attendant liabilities) & Pacifica’s aged creditors, to identify KPFA’s property tax debt, one accumulating since 2013??? A week? Two weeks? A month? When did NETA notify Pacifica’s ED of the seriousness of this debt? . . . this debt which, in the absence of contrary info, is an existential threat to KPFA?

So, besides the members & listeners, who will pay for this debacle? In neglecting the oft-cited fiduciary responsibility, who will pay the price? Is there evidence that GM Quincy McCoy continually disclosed & appealed to successive ED’s that KPFA was both living beyond its means & jeopardising a key asset of the Foundation? Is there? Or, as GM, does he deserve to pay the ultimate Pacifica price?

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