Pacifica Foundation National Office
1929 Martin Luther King Jr. Way
Berkeley, CA 94704

Mr. Alan Sagner
Chair, Board of Directors
Corporation for Public Broadcasting
901 E Street, N.W.
Washington, D.C. 20004-2037

Re: Audit Report 97-01

Dr. Mr. Sagner:

On April 21, 1997, the Pacifica Foundation received a copy of the Compliance Audit Report ("Report") prepared by the Corporation for Public Broadcasting's current Inspector General ("IG"), Armando J. Arvizu. This report addresses a complaint raised in a July 11, 1996 letter by a group called "Take Back KPFA." That complaint essentially accused Pacifica's Board of Directors of holding "retreats" in lieu of open meetings as required by the Communications Act. The Report clears Pacifica of that allegation by unequivocally concluding that "Pacifica classified their planning sessions properly as retreats." Report, p. 16.

Had the Report confined itself to this conclusion, there would be no need for this letter. Because the Report goes on to address numerous other issues that have consequences not only for Pacifica but for other CPB-funded stations and CPB itself, I feel compelled to point out a number of factual and legal errors.

The most serious of these errors is the Report's finding that "all Board sessions were being held in closed session, with the exception of one hour for public comments." This finding -- which pervades the report--is simply untrue. Although Pacifica closed much of the Board meeting held September 30- October 1, 1995, it abandoned this practice after seeking advice of counsel. As fully explained both to the IG in person and to his predecessors in correspondence regarding the Take Back KPFA complaints, the Friday and Saturday retreats of the Pacifica Board were followed by Sunday board meetings completely open to the public. Board deliberations and action took place in these open meetings. One hour of these meetings was explicitly set aside for comment by the public. Thus, in addition to being able to observe the entire meeting of the Board, the public was given the opportunity to criticize Board actions and comment on Pacifica policies. The IG erroneously concludes that this public comment period, which goes far beyond any requirements of the Communications Act, was the public's only opportunity to observe the deliberations of the Pacific Board. The fundamental error taints the entire report. See Report. pp 1, 2, 7, 8, and 10.

The Report also states conclusions that are unsupported by, or contrary to, law. For example, although the IG concedes that "the Communications Act does not address the release of Governing Board minutes to the public" (Report, p.9), he nonetheless concludes that such releases would be "beneficial." If Congress had intended for minutes to be made available to the public, it would have required governing boards to keep minutes of their meetings and to place copies of such minutes in their public inspection file, the repository of all documents which CPB-funded stations must make public. See Section 396(k)(B)(VI)(5) of the Communications Act. Congress imposed no such requirements.

Nor did Congress require, as the IG would, that separate minutes should be taken for open and closed sessions, that minutes note starting and adjourning times, that they indicate which portion of the meetings are set aside for public comment, and that they be provided to advisory boards. See Report, p.9. The IG similarly opines that station personnel should serve on local advisory boards (Report p. 15), that advisory boards should make formal, written reports to the governing board (Report p. 15). None of these requirements can be found in the Communications Act. CPB should be extremely reluctant to impose on Pacifica, and on all other CPB-funded stations, legal requirements that have no basis other than the IG's preferences as to what would be "beneficial."

The IG's penchant for legislating rather than investigating, and for inventing new legal requirements as he goes along, infects all his conclusions with respect to advisory boards. Although the IG acknowledges in one paragraph that the Communication Act requires that "the role of the advisory boards is to be solely advisory in nature," he criticizes Pacifica in the next paragraph for not permitting its advisory boards to participate in the "decision making of the station" Report p. 12. He strongly implies that no licensee should make any changes in specific radio programs without the express consent of its advisory board. See Report pp. 12-13. Contrary to the explicit language of the Communications Act, the IG believes that advisory boards must be allowed "autonomy to serve as an effective way for the public to participate in the planning and decision making." (Report p.12) The IG's view of advisory boards as autonomous entities designed to be interjected into, and to exercise virtual veto power over, all the planning and decision making processes of the governing board must not be sustained. As the Communications Act makes clear, the sole function of advisory boards is to provide the governing board with information about the cultural and educational needs of the community served by the station and to carry out other responsibilities "delegated to the board by the governing body of the station." See Section 396(k)(8) of the Communications Act.

The IG's misconceptions of the role of advisory boards is a grave mistake with far-reaching implications for Pacifica and other CPB-funded stations.

Clearly, advisory boards have an extremely important role in advising our stations and Board of Directors about programming and community needs. However, an unprecedented expansion of advisory board responsibilities, as asserted by the IG's audit, runs counter to the guidelines contained in the Communications Act and would undermine Pacifica's efforts to clarify its governance structure.

Pacifica accepts the IG's characterization that its February 10, 1997 letter from the Executive Committee of the Board of Directors was sharp in tone (Report p. 14). However, the IG obviously did not understand the full context in which the letter was sent -- specifically, that confusion about the duties of the advisory boards had been used in the past at some stations to countermand policy decisions of the governing board, lobby for personal interests of advisory board members, and prevent necessary programming changes.

The Executive Committee's letter was consistent with its continuing efforts to convey to advisory boards the requirements of the Communication Act: that advisory boards are advisory in nature and not substitutes for the Board of Directors, and that the advisory board is to work collegially with the general manager of the station and the Board of Directors. Pacifica's Board of Directors has sought to focus advisory boards on their unique responsibilities to ascertain the station's program service to its community in terms of its mission -- and away from roles and duties reserved for the governing board.

The IG's grasp of procedural law is no greater than his grasp of substance. After agreeing with Pacifica on the scope of his inquiry, and the documents needed for review, the IG arrived at Pacifia's offices, camped there for five days, persistently demanded to examine documents completely unrelated to his inquiry, and conducted unscheduled late-evening telephone interviews with Pacifica board members. See Report, p.3. The Report remains padded with the IG's speculations about such extraneous issues as whether particular Pacifica stations will meet CPB's proposed funding criteria. Report, p.4.

The high-handed manner in which the IG conducted his investigation is perhaps best illustrated by the April 18, 1997 letter transmitting his Report to Pacifica. That letter announced that his Report had already been issued to the CPB Board and Management and would be released to "other interested groups" on April 21. Neither Pacifica nor CPB was given any opportunity to correct the Report's blatant factual and legal errors before it was released to the public. Such procedures should certainly not become the model for future station audits, as the IG suggests in his April 18 letter to Pacifica.

The foregoing highlights some of the misinformation and misunderstanding in the IG's report, but there are other inaccuracies I have not had the space to address in this letter. I expect that Corporation for Public Broadcasting management will correct the misinterpretations of the Communications Act and the IG's penchant for inventing new legal requirements.

I would like to formally request an opportunity to meet with the CPB Board at its regularly scheduled meeting May 19, 1997, in Washington, D.C., to correct the errors and misinformation in the IG's report.

In summary, while the Inspector General's report correctly concludes that retreats held by the Pacifica Board are not "meetings" required to be open to the public, its other conclusions are either based upon outright factual error or are so colored by the IG's own views as to be unreliable. Adoption of the proposed conclusions and recommendations of the Report would be an injustice to Pacifica and to other CPB-funded stations, and a disservice to CPB.

Sincerely yours,

Patricia Scott
Executive Director
Pacifica Foundation
Berkeley, CA

CC: The Honorable Richard W. Carlson
Mr. Robert T. Coonrod
Mr. Frank H. Cruz
Lillian Fernandez, Esq.

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