October 8, 1997

Following the money

Is the alternative press wire service compromised by secret foundation support?

By Ron Curran

Fighting the foundations: Jeffrey Blankfort and Maria Gilardin of Take Back KPFA have seen their arguements against corporate and foundation influence rejected by KPFA, KQED--and the Institute for Alternative Journalism.

ABOUT THREE YEARS AGO, after a press trip to South Africa, Bruce B. Brugmann, the Bay Guardian's editor and publisher, made a rather modest proposal to the Institute for Alternative Journalism, a nonprofit organization set up to promote the editorial goals and ideals of alternative newspapers. Brugmann was a founder of the organization and a member of its board. His proposal: IAJ should spend a few thousand dollars on a program to bring some reporters and editors from South Africa's fledging alternative press to the United States for a training conference.

The idea was shot down almost immediately -- not because anyone on the IAJ board didn't like it, but because it "wasn't fundable."

In other words, the plan wouldn't appeal to any of the foundations that IAJ was increasingly looking toward to pay for its growing operations. IAJ executive director Don Hazen later told the board that he was "positioning IAJ for the funders."

That goal has turned IAJ into a case study of the problems that occur when progressive organizations and media become so reliant on foundation funding that they allow the foundations to set their political and journalistic agenda. It has undermined the credibility of IAJ -- and put the credibility of alternative newspapers around the county at risk.

Brugmann resigned from IAJ in November 1996 over policy differences with the institute and with Hazen.

IAJ was founded in 1983 primarily to serve as a syndication service for alternative papers. At the time, most alternative papers were still relatively small and had little extra money, so IAJ was set up as a nonprofit in the hope that it could attract a few modest grants to get off the ground.

That it did. Today, IAJ has a million-dollar-a-year budget and puts on high-profile events like the annual Media and Democracy Congress. But over the past decade, the organization's primary purpose -- selecting and disseminating stories through an AP-style wire called Alternet -- has been subsumed by a much wider political agenda, one determined largely by the desires of foundation funders.

The impact has been highly visible -- and highly disturbing. For example:

* The Bay Guardian news staff has been complaining for years to Hazen and his staff about IAJ's policy of systematically excluding Bay Guardian stories dealing with public power, the selling of the Presidio, energy deregulation, the privatization of public resources, and other items on the progressive agenda from the syndication wire, which is sent out to alternative newspapers around the country. Hazen could never provide a satisfactory answer.

However, a review of internal IAJ records and foundation records shows that IAJ has been soliciting money since at least 1991 from the Tides Foundation, which has become the central clearinghouse and demonstration project for Presidio privatization (see "Anatomy of a Scandal," page 18) and which recently moved into a cushy, no-rent office out at the Presidio. Administrative director Cynthia Sharpe acknowledges that Tides gave two grants totaling $2,500 to IAJ in the past three years. IAJ internal records show that in 1993 IAJ received $16,000 from the Threshold Foundation, a Tides subsidiary, and has regularly solicited Tides for years, but both Tides and IAJ refuse to disclose the amounts and details.

IAJ used to hold its board meetings in the offices of the Pew-created Energy Foundation, which helped fund Presidio privatization planning and later moved into Presidio offices.

* IAJ is closely connected to the New World Foundation. Hazen is on New World's board and was at one point board secretary. New World, a major funder of IAJ (having contributed $180,000 since 1991), is a link to other progressive foundations. Among other things, New World has put at least $450,000 through Tides.

* The foundation money has engendered a climate of secrecy at IAJ that's in direct conflict with IAJ's role as a progressive media organization -- and that is infuriating many alternative newspaper editors.

According to IAJ's Form 990s, "gifts, grants, and contributions received" increased tenfold in just one year as Hazen began aggressively pursuing a foundation strategy, rising from $37,903 in 1990 to $364,207 in 1991; they dipped a bit during 1992 and 1993 but rebounded to $245,985 in 1994, $293,400 in 1995. Hazen still refuses to tell us who gave him the money, from whom the funders got the money to give him, or on what programs he ultimately spent those big bucks.

And there were probably even more revenues that we'll never know about. In 1994 and 1995, IAJ (which relocated to San Francisco from Washington, D.C., in late 1994) told the IRS it needed an extension to fully fill out its 990s -- but has denied our request to review the supplemental forms that may have documented the addition of even more unsourced bucks to their coffers.

Hazen declined to provide the Bay Guardian with details of IAJ's foundation revenues because, according to an Aug. 26 letter from his assistant, Christine Triano, "it is the policy of the IAJ board of directors that financial records will not be provided to outside organizations."

When informed that IAJ, as a nonprofit, must release its Form 990 tax reports to anyone who asks, I was reluctantly told I could come to the office and pick up copies. After being buzzed into IAJ's loftlike offices at 77 Federal Street in trendy South Park, the first thing I saw was a prominently displayed poster for the Pew Research Center for the People and the Press, one of several journalism-related projects of the Pew Charitable Trusts (see "Buying the News," page 43).

Sharpe refused to release the list of foundations IAJ has solicited and received money from. "The board hasn't authorized my releasing that information," she said.

When I asked to talk to Hazen about whether IAJ had received Pew funding -- especially since 1994 and 1995 tax statements were noted as incomplete and we were told the amendments were not going to be publicly released -- she said he wasn't available. "The best way is to go through Pew," she said.

When asked about the Pew poster in the office, she said, "We put it up solely for information purposes."

About four hours later, Sharpe left messages on both my office E-mail and my home voice mail. "I want to let you know that we have never applied to the Pew, and so have never received money from the Pew," she said.

But Pew routinely uses the Tides Foundation to redirect grants to journalism groups, and IAJ has received at least $18,500 from Tides and its subsidiaries in recent years. And as long as IAJ won't open its records to "outside organizations" -- even an alternative newspaper that was among IAJ's founders and that is a dues-paying member of the Association of Alternative Newsweeklies, the industry trade group based in Washington, D.C., which subsidizes IAJ to the tune of $33,000 a year -- there's no way to find out who is really paying the organization's bills.

In fact, Sharpe admitted in an interview that she didn't know who had given Tides the money earmarked for IAJ.

Patricia Calhoun, editor of Denver alternative paper Westword and a former member of the IAJ board, said the lack of disclosure at IAJ was disgraceful.

"Let's face it," Calhoun told the Bay Guardian, "no one screams louder for full disclosure than the alternative press."

Calhoun said that "grants are always problematic. They make for a slippery slope. When you're a media organization, you should always err on the side of disclosing information."

James Preston Allen, publisher of the alternative paper Random Lengths News in San Pedro, echoed Calhoun on the need for IAJ to open its books.

"Any money that looks like it might influence any editorial choices should be revealed," he said. "Any group founded by the press, especially the alternative press, not only has that obligation -- it should meet an even higher standard."

We called and wrote to Ron Williams, IAJ president and publisher of the Detroit Metro Times, and Safir Ahmed, IAJ vice-president and editor of Riverfront Times, to ask why we can't find out who is paying for IAJ's operations. They never responded. We've also called every member of the IAJ board, but none could give us an answer.

* IAJ has become the target of anger and hostility among some progressive media activists, who say the organization is way too close to other grant-hungry institutions like KPFA and KQED.

KQED and KPFA, both of which constantly hype their noncommercial status, rely heavily on the kindness of foundation benefactors (see "Buying the News," page 43).

The intertwined relationships between the organizations' leaders are disturbingly incestuous. Pacifica national program director Gail Christian is on IAJ's board, as is KQED news director Raul Ramirez.

Former Pacifica director David Salniker is now president of the Tides Center, which is affiliated with the Tides Foundation (see "Tax-Exempt Secrecy," page 24). This year he brought KPFA station manager Marci Lockwood over to run Tides's Internet service provider.

IAJ director Don Hazen awarded Pacifica executive director Pat Scott his Media Hero Award last year at the first Media and Democracy Congress in San Francisco in 1996.

At the same conference, Hazen froze out KQED and KPFA reformers who had wanted to raise the issue of corporate and foundation money driving programming at the two stations. KQED board member Sasha Futran and KPFA activist Maria Gilardin had come to Hazen at IAJ to have their issues aired on a conference panel. Hazen had called the conference to bring together as many progressive political and media voices as possible to discuss such issues as media monopoly, openness and accountability in the media, and the progressive media agenda.

"I called on behalf of five organizations involved in trying to save public radio and television from corporate control and who were all concerned that there wasn't even a panel dealing with the issue," Futran said. "The apologists were being rewarded, but there were no critical voices. We had ideas for a panel and wanted to suggest either ourselves or others who could provide critical analysis of how corporate and foundation funding was influencing and at times controlling programming. After many discussions, Hazen eventually agreed to add a workshop on the crisis in public broadcasting."

However, Futran was to be the only public-broadcasting voice on the panel and Gilardin -- a former fundraiser for KPFA and a leader in the movement to reform the station and Pacifica -- wasn't allowed to speak. Futran said that at the last minute, IAJ replaced the panel with a discussion of pirate radio.

Gilardin and Futran also learned, to their surprise, that Hazen had given an award to Pacifica executive director Pat Scott.

Gilardin appeared in the IAJ office before the next board meeting and asked to present the reform issues to the board. Hazen rudely brushed her off and threatened to call the police unless she left immediately, according to a complaint Gilardin later filed with the board. Futran and Gilardin made further complaints to the board by mail and phone but were rebuffed in their attempts to get a hearing or a panel at the second Media and Democracy Congress, to be held Oct. 16-19 in New York City. (There will, however, be a panel on Pacifica, on which Pat Scott will speak, according to a conference member.)

The upshot: IAJ, according to Futran, "became the only progressive media organization I know of to side with Pat Scott on the transformation of KPFA." Of course, not one of the numerous Bay Guardian stories on the KPFA battle made it on the Alternet wire either.

A few months later, the IAJ board met at KQED during the period that the KQED board was meeting to consider the Robert Mondavi documentary. (The wine baron's foundation was funding a documentary on him that KQED was producing. The project was ultimately scrapped due to pressure from Futran and other journalists, as well as more than 50 stories in the local and national media. Although the Bay Guardian broke the story, IAJ never put a word on the wire.)

During the controversy, IAJ imposed a new level of secrecy. Phyllis Orrick, then managing editor of the SF Weekly, came to KQED to cover the IAJ board meeting there. But the board refused to allow her to enter the room. Hazen later argued that IAJ did not have to allow "nonmembers" to attend meetings or inspect records.

* The Media and Democracy Congress, IAJ's signature annual event, has been so taken over by the funders that private corporations willing to make donations have been promised a role in the program.

On Feb. 28, 1997, Hazen sent Anita Roddick, founder of the Body Shop cosmetics chain, a solicitation to become a featured speaker at the second annual congress.

After running down a laundry list of vaguely progressive topics, such as "additional diversity challenges," "coalition building," and ironically, "battling even more commercialization," Hazen began his thinly veiled setup in bold type.

"We would be honored to have you be one of our announced speakers at the Congress," he wrote. "We will, of course, cover travel and/or accommodation expenses."

Two months later, in an April 22 letter from IAJ assistant Robin Templeton to Roddick aide Rob Cotter, Hazen came through with the follow-up come-on.

"I appreciate your willingness to pass on to Anita this request regarding the Body Shop's potential sponsorship of the Congress," Templeton wrote. "And again, we at IAJ are honored that she is interested in speaking at this year's Media and Democracy Congress."

Jon Entine is an Emmy-winning writer and producer who is also one of America's most outspoken critics of "greenwashing." He is also the author of an article for Business Ethics magazine criticizing the Body Shop's practices and politics. He wrote to Hazen asking about the presence of the head of a big corporation on a panel at the congress. Hazen sent him an E-mail, a copy of which Entine provided to the Bay Guardian.

In the July 29, 1997, message, Hazen states that "we made some inquiries about sponsorships for the Congress to a bunch of companies like Netscape, Working Assets, Body Shop, etc. and Body Shop was among those who responded. Then apparently Roddick got interested and wanted to speak."

Roddick spokesperson Cotter told the Bay Guardian that Roddick was asked to be on a panel first -- then Hazen hit her up for money.

Entine says big businesses have been brought into the congress just to raise money. "IAJ is promoting Anita Roddick, which gives you some idea of how [IAJ is] whoring for money," he told the Bay Guardian.

Many journalists in the alternative press ask at what price to independence and credibility these deals come.

The alternative press in 1997 is prosperous enough to fund its own syndication service without foundation support. That's why there's a move within the Association of Alternative Newsweeklies to take Alternet back from IAJ and restore control of the editorial product -- the industry's most important asset -- to an independent agency that has no outside foundation agenda.

But the history of IAJ is a lesson for progressive groups of all sorts: when "positioning [the organization] for the funders" becomes the most important goal, when organizations follow the money, the progressive agenda inevitably suffers and the entire culture of the institution can be seriously corrupted.

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Special 31st Anniversary Issue

Privatizing the public agenda
By Tim Redmond

The private energy elite
How the Energy Foundation has abandoned environmentalists and used big money to greenwash the private utility industry.
By Savannah Blackwell

Anatomy of a sellout
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By Martin Espinoza

Who's living in the park?
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Buying the news
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By Ron Curran

Following the money
Is the alternative press wire service compromised by secret foundation support?
By Ron Curran

The new power brokers
Private foundations are bursting with money and influence -- and very little trickles down.
By Eileen Ecklund

Sleeping with the enemy
They say that all's fair in love and war. But it still hurts when you find out your non-profit is sleeping with your worst enemy.
By Martin Espinoza

Tax-exempt secrecy
Obscuring where millions in tax-exempt dollars are coming from and how they are really being used.
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Anatomy of a Heist
Audio Files
Legal Action