Federal Funds Diverted To Air America
Air America's Dirty Dough
Media Cover-Up, Bronx Community Programs Nearly Shut
What happens when the mainstream media, after years of seething over conservative talk radio's success, discover its alternative got diverted public funds, earmarked instead for inner-city youth and seniors?
The answer, with one key exception: they pretend it didn't happen.
Yes, only because of a New York Daily News tidbit do we know that Bronx-based Gloria Wise Boys and Girls Club nearly shut down major programs recently, because almost $500,000 in governmental grant money was instead diverted to Air America's liberal radio network.
It's taken a mad scramble by area politicians, including Rep. Joe Crowley (D-Bronx) to find a way to keep several programs for disadvantaged children and seniors from disappearing.
What's the connection between Air America and Gloria Wise Boys and Girls Club?
How has this stayed out of the papers for the last month, even when community activists have been aware of the Air America connection since early July?
And how has the liberal talk network managed to avoid even the slightest bit of public scrutiny over the matter?
It begins with former Air America CEO Evan Cohen, who resigned last year from the network after some of its more infamous early debacles. You might remember Cohen was a key part of an HBO documentary, detailing its first days.
Cohen also happened to serve on Gloria Wise's board and convinced club leader and community activist Charles Rosen to "invest" at least $480,000 in the upstart political talk network.
Rosen has recently resigned from the board, according to New York Nonprofit Press.
The money, intended as a loan to be repaid with interest, was agreed to by Rosen after being sold on the idea of stretching their grant money further, according to one account. Part of the deal included promotional consideration of Gloria Wise's activities on Air America's programs.
Did that ever occur? If so, what was the benefit to Gloria Wise?
More importantly, has Air America paid back any of the money to date?
There are many more questions than answers at this point, but New York City's Department Of Investigation (DOI) is leading the effort to find out where the money went. Will indictments follow?
So far, the activity programs have been saved as other non-profit agencies scrambled to pick up the slack, while investigators look at Gloria Wise's records.
Cohen may be long-gone from Air America, but who else still at the network might have knowledge of this "investment"?
Has there been a media cover-up? In the Radio Equalizer's view, yes.
Why? Because Bronx activists and community journalists have known about the Air America connection for some time, while major publications have been ignoring the story.
Radio trade publications, even after the New York Daily News story, failed to mention the scandal, without exception, on Tuesday (if that changes on Wednesday, we'll update it here).
On July 5, for example, a community newspaper called the Gotham Gazette published a story by Michael Horowitz that laid out the evolving scandal in detail. Why wasn't this on the AP wire straightaway?
Horowitz's story named Air America and Cohen, as well as providing specific information about why the money was loaned and its origin. Why did major publications ignore it?
A June 28 Daily News story on the scandal left Air America out of the picture, but did mention Cohen. Of course, what reader would be able to make the connection to his time at Air America?
Both Daily News stories have appeared in the "Boroughs" section of the paper, which is sliced out of the national edition the rest of us see on newsstands.
What does Air America have to say about this? So far, nothing, look for yourself here. They have plenty to say about Karl Rove, though, they want him "fired". And Mike Malloy is busy ranting about the "Bush Crime Family", according to their site.
Can it really be dismissed by the network as something to be blamed only on the long-departed Cohen?
Again, was any of the money repaid to Gloria Wise and do any current Air America staffers or managers have knowledge of this diverted federal money?
If it was repaid, why the governmental investigation? It seems authorities are attempting to account for the missing funds now.
Are the network's hosts, such as Al Franken and Janeane Garofalo, willing to apologize for the severe damage done to community programs for inner-city youth and seniors, as a result of this sleazy scandal?
Syndicated radio host Rusty Humphries asked me just a short while ago whether I thought Franken, or the other hosts, were aware of the network's questionable funding source. I'd like to believe they didn't, but shouldn't they publicly speak to the issue anyway?
Thanks to tipster "FYI" who alerted me to this whole mess. Can we really let Air America get away without answering tough questions about their involvement in this scandal?
Update: whether the funding was from federal or local sources seems unclear. Sometimes, this type of funding originates with the feds, goes to cities and is distributed from there to area nonprofits. That may be the case here, based on the reports I've seen.
Update: Michelle Malkin wonders what excuses liberals will use. Read my comments section below, they've already begun. Do you think they have an action plan in place for these occasions?
Meanwhile, Michelle has added additional details this morning to her report.
Update: Talk radio reporter Perry M Simon of entertainment industry trade publication All Access indicates Air America will have an official response to our articles later today.
He wrote a piece on the controversy for today's edition. Other radio/ entertainment trades have so far ignored it.
Here's Simon's story:
A report in the NEW YORK DAILY NEWS raises the allegation that AIR AMERICA RADIO received NEW YORK CITY taxpayer funds diverted from programs for disadvantaged youth and seniors.
The Department of Investigation cut off city contracts with the GLORIA WISE BOYS AND GIRLS CLUB and affiliate PATHWAYS FOR YOUTH in the BRONX, necessitating quick replacement with deals with outside agencies to save several programs administered by the GLORIA WISE club. The allegations apparently involve WISE club founder and former Exec. Dir. CHARLES ROSEN diverting the city contract funding to AIR AMERICA as a loan instead of the social programs; the DAILY NEWS notes that former AIR AMERICA chairman EVAN COHEN served as the WISE club's Dir./Development.
The story has been picked up by conservative syndicated columnist MICHELLE MALKIN and "RADIO EQUALIZER" blogger and talk host BRIAN MALONEY. MALKIN notes that MALONEY caught the tidbit at the bottom of the DAILY NEWS story but that the story has been in the open since JULY 5, when the BRONX NEWS ran a story with specifics including how the diverted funds ($480,000, according to that paper's source) were structured as a loan to the radio network (to be paid back with interest) and that the network agreed to publicize the club's programs.
A comment from AIR AMERICA on this story is pending.
Read the BRONX NEWS report by clicking here, and MALONEY's reporting on the issue here.
Once Air America's released its statement, can the rest of the media really continue to ignore this story?
Update: just heard from Michelle Malkin, she did an interview on Seattle's KVI-AM this morning, where a caller pointed out how the Gloria Wise center is involved in this "Camp Air America" program for Bronx youth. Here's another link showing their connection.
I'm doing more radio interviews on the subject, as is Malkin, hear me on SIRIUS's conservative talk channel with Cam Edwards at 4.20pm today.
Update: Air America's statement has arrived. They're not denying it, but simply pin it all on the previous owners:
"On MAY 24, 2004 the newly formed PIQUANT LLC acquired the principal assets of AIR AMERICA RADIO from the prior ownership entities. PIQUANT has owned and operated AIR AMERICA RADIO since that time. The company that had run AIR AMERICA RADIO till then no longer had anything to do with the network.
"PIQUANT had no involvement whatsoever with funds from GLORIA WISE BOYS &GIRLS CLUB. PIQUANT neither received nor expended any of the sums that are the subject of the City's investigation of the CLUB.
"PIQUANT is not being investigated by the City, which is investigating a
transaction that took place before PIQUANT existed."
So this means Air America can wash its hands of the scandal, simply because new owners took over? Where'd the money go, was any of it repaid? Not a word here.
Doesn't Piquant see any legal or moral obligation to return the funds? Didn't that money benefit Air America?
Did all ties to Gloria Wise sever after May, 2004? What about Camp Air America?
Note the statement does not contain any denials that Air America received the funds destined for Gloria Wise. No doubt the statement was written by Air America's lawyers, but it fails to take into account public perception of their actions.
Note: Michelle Malkin is working with me on this story. Check her site for the latest, as she looks to uncover additional details. Here's her story.
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Maybe Michael "where's my food?" Moore can do a "documentary on Air America & their scandals?
Air America missed its last payroll. Hopefully the end is near.
Staffers Worried About AAR's Future
A Close Call
Most Recent Air America Payroll Days Late
Just how bad are workplace conditions for Air America staffers?
Perhaps far worse than we'd previously thought.
It's bad enough the company is generating fresh bad publicity almost daily, over the diverted $875,000 in taxpayer funds intended for a Bronx-based community service organization.
Now, to make matters worse, an internal memo obtained by the Radio Equalizer indicates Air America Radio employees faced late paychecks just over a week ago.
They were apparently stunned to receive a last-minute notice sent at 5:09pm Thursday, July 28th, indicating direct deposits would not be made Friday, as expected.
Written by company Vice President/Finance Sinohe Terrero (this article confims Terrero's corporate role), it implied the payroll processing company was to blame:
We have been advised by ADP that Direct Deposit will probably not post until Monday. We apologize for any inconvenience this may cost (sic). If you have any questions please feel free to call me.
Was it really a foul-up at ADP, the nation's largest payroll processing company?
Have you ever known ADP to delay direct deposits, due to its own negligence?
I thought not.
Worried insiders think the real problem may be something far more alarming: a lack of ready cash to make payroll on Friday, July 29th.
According to sources, it was a race against the clock to pay staffers that day, one that failed. An expected cash infusion arrived late, causing the mad scramble.
What a miserable weekend that must have been for the network's shafted workers, wondering about the fate of their next paychecks.
Since Air America employees face non-disclosure policy agreements, they've been speaking on condition of anonymity.
The sense of real trouble ahead compels them to divulge information. And maybe they're just tired of the hassles.
It doesn't appear many AAR staffers were fooled by the suggestion ADP might be responsible. Perhaps they've heard it all before, while the company assumes they're gullible?
Here's the kicker: could this mean the reported $13 million Air America received in March is already used up?
How could that be?
(new update) Since the new loan is said to be for a mere $2.5 million, it would not seem to be enough to cover AAR's huge overhead for long.
If $13 million didn't last six months, could $2.5 million cover more than say, six weeks?
That means more nail-biting for staffers this summer, with no stated concessions by Franken regarding his enormous salary. It seems that paying him is more important than kids, seniors, Air America staffers and whether the network even remains on the air.
And how's the revenue picture shaping up?
If there were a significant number of national advertisers paying top dollar before (unlikely given the low ratings), it's hard to believe that agencies would be buying Air America at all now, in light of this growing scandal.
If you're GM, a mobile phone company, or a food industry giant, do you want your good corporate name tarnished by an association with Air America?
No wonder the company wants a lengthy, interest-free installment plan to repay Gloria Wise Boys and Girls Club. Everything it does have is going to fund bloated salaries for Franken and other hosts, who appear to make far more than industry norms.
Why doesn't Franken volunteer for a substantial pay cut, so the network might be saved and inner-city children can have their Boys and Girls Club fully operational, once again?
Air America killed by Al Franken (in more ways than one).
they didn't rip off a charity, a liberal leaning charity ripped off taxpayers
I am Jack's complete lack of surprise.
It's Bush's fault!
And I am loving it!
I'm suprised they've lasted this long. Oh, I get it. They did it it by stealing my money.
Raven, Thank you for posting all this info.
I REALLY appreciate it.
I can just imagine what DU says when Air America goes off the air. See, the media is all corporate pawns and free speech has been killed by Bush.