Given the suspension of Community Business – a segment I have been doing on Flashpoints on Wednesday night with Dennis Bernstein, I thought I would take a look at KPFA Radio’s financial information.
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KPFA 94.1 FM Berkeley: Listener Sponsored Free Speech Radio
KPFA is part of the Pacifica Radio network (also see Pacifica at Wikipedia) which is headquartered next to KPFA radio in Berkeley California, near the University of California Berkeley campus and across the bay from San Francisco.
Dennis and I have been talking about the ethics and financial soundness of banking relationships as well as investment in large government and corporate institutions.
The Solari principle of financial intimacy encourages people and organizations to only invest in people and activities we or those we trust know to be financially sound and ethical.
As I am confident that Community Business will be reinstated, I hope to do more fundraising for them this year. This incident reminds me of my responsibility of doing some due diligence on KPFA’s/Pacifica’s banking and investment activities to see:
• if KPFA/Pacifica’s finances are aligned with their stated mission and values; and
• if issues that Dennis and I are addressing in Community Business could create any management conflicts between financial needs and free speech.
Below is a series of links to provide an overview of KFPA Radio and the Pacifica Network of which they are a part as well as a review of their publicly available financial information.
My preliminary questions are:
#1: Where does KPFA/Pacifica bank?
Pacifica’s 2007 financial statements indicate that they had $2.4 million of cash as of September 30, 2007. In their notes to the financial statements, they define cash and cash equivalents as follows:
“For purposes of the statements of cash flows, the Organization considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents.”
Note 1 says:
“Pacifica Foundation maintains several bank accounts at one bank. Accounts at an institution are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $100,000. Cash at these institutions exceeded federally insured limits. The amount in excess of the FDIC limit totaled $2,187,356 as of September 30, 2007.”
#2: Has the discussion on the Community Business show regarding banks and the banking system impacted KPFA/Pacifica’s banking relationship or possible donations from this bank and/or from banking industry employees and shareholders who are listeners?
In the process of raising approximately $45,000 this year with Solari Audio Seminars, including “Where Would Jesus Bank? (And other good folks too)” Dennis agreed on air to move his personal banking business from Wells Fargo and move to a local credit union. In the process, we reviewed the lawsuits against Wells Fargo and other large banks for predatory lending practices as part of the subprime mortgage crisis.
Community Business – Banking Locally
We have also discussed:
• Risks of maintaining uninsured deposits in the banking system at this time in connection with the IndyMac takeover by FDIC;
• How to identify and find a well managed local bank; and
• Fundamental flaws in the Federal Reserve System, including actions related to the manipulation of the commodities (including gold) and financial markets.
I have been particularly critical of actions and plans (The Paulson Plan) to increase Federal Reserve authority, lending and regulatory and enforcement powers.
The San Francisco Federal Reserve is an important part of the Federal Reserve system, handling all of California, Oregon, Washington, Idaho, Utah, Nevada, Arizona, Alaska and Hawaii.
If, for example, Pacifica is banking at Wells Fargo, they are a leading member of the San Francisco Federal Reserve.
#3: Where does KPFA/Pacifica maintain brokerage accounts?
Note 1 of the financial statements also states:
“The Foundation also maintains accounts with stock brokerage firms. The accounts contain cash and securities. Balances are insured up to $500,000 (with a limit of $100,000 for cash) by the Securities Investor Protection Corp. There were no amounts in excess of the insured limits with brokers at September 30, 2007.”
Note 2 states as follows:
“Investments, stated at fair market value as of September 30, 2007 consist of the following:
Market Value
Money market (Brokerage accounts) $28,397
Government bonds 150,265
Corporate bonds 75,384
Corporate marketable securities 436,743
Total $690,789
#4: What is a specific breakdown of current securities and any other financial assets held in brokerage accounts as well as gains or losses for the year?
In particular, is KPFA/Pacifica investing in the banks and other private interests we have discussed during Community Business? For example, is KPFA/Pacifica investing (whether through brokerage or bank accounts and whether directly or through money market or other mutual funds or other types of pooled vehicles) in stocks, CDs, notes, bonds, or mortgage securities of Freddie Mac, Fannie Mae, JP Morgan Chase, Wells Fargo, Ginnie Mae, Lehman Brothers, Goldman Sachs, the US Treasury, IndyMac, Countrywide or Bear Stearns? In addition, has KPFA/Pacifica invested in auction rate securities during this period?
#5: Has the discussion on the Community Business show regarding criminal and unethical behavior in the financial community impacted KPFA/Pacifica’s brokerage relationships or possible donations from their brokers or brokerage industry employees and shareholders who are listeners?
#6: Pacifica, including KPFA, received $1.7 million from the Corporation for Public Broadcasting and $275,953 from charitable foundations, NEA and other for the year ended September 30, 2007. Did Community Business coverage impact KPFA/Pacifica relationships with the CPB or with any key Congressmen or Senators, including from the Bay Area?
The Corporation for Public Broadcasting channels Congressional appropriations to public radio stations. The very day that Community Business was knocked off the air, Congress was attempting to debate and pass a bail out bill for Fannie Mae and Freddie Mac that would significantly increase Federal Reserve powers. Fitts is a former Assistant Secretary of Housing/FHA Commissioner; a former advisory board member of Fannie Mae and a former board member of a government sponsored enterprise, Sallie Mae, and could be expected to be critical of the bail out.
#7: Does KPFA/Pacifica receive donations from Fannie Mae, Freddie Mac or any other financial institutions mentioned on Community Business, including their affiliates, employees and major shareholders?
#8: Who provides KPFA and Pacifica’s Insurance, including any E&O or director’s Insurance?
Appendix – Notes on KPFA/Pacifica Financial Disclosure
Key financial disclosure for non-profits such as Pacifica and KPFA typically includes budgets, audited financial statements as well as the last three years of IRS filings. KPFA’s and Pacifica’s both have financial information available on their websites:
KPFA – Our Financial Information
Pacifica Foundation – Financial Information
The last tax filing (Form 990) for Pacifica available is for the tax year ending 9/30/06. It shows total revenue of $17,772,445 broken down as follows:
• direct public support $14,728,663
• government contributions 1,973,507
• tape library sales 248,594
• net income from special events 210,925
• interest on savings
and temporary cash investments 28,171
• dividends and interest
from securities 14,054
• rental income 11,575
• gain on $395,874 of securities 6,310
• program related income 550,646
Total expenses for the year were $16.1 million, resulting in an addition to assets of $1,654,241.
On the balance sheet, total assets for fund balances at the end of the year were $7,524,550, with the primary investment being in real estate and equipment. Of this amount $2.3 million was in cash.
Pacifica Foundation’s audited financial statements are available for the year ending September 30, 2007. For this year total revenue was $17 million and expenses were $17.2 million with a resulting deficit of $(217,848).
The investment footnote to the financial statment indicates that as of September 30, 2007, Pacifica’s investments included $497,035 in its endowment account and $181,062 in its investment account for a total of invested assets of $623,147.
These were invested as follows:
Money market (brokerage accounts) $28,397
Government bonds 150,265
Corporate bonds 75,384
Corporate marketable securities 436,743
