Heads Roll in Air America/Gloria Wise Scandal
By Leon H Wolf Posted in Elections — Comments (9) / Email this page » / Leave a comment »
The stonewall of MSM silence on the Air America scandal is slowly but surely showing some signs of wear. So far on the list of media outlets to cover the story (outside of the Post, Sun and Daily News):
The Arizona Republic, The Oregonian, Pittsburgh Tribune-Review, and the Washington Times (numerous). Those are the ones that I can find so far. As of yesterday, a reporter for a major newspaper on the Eastern seaboard was contacting Michelle, Brian and me (and perhaps others) for interviews. Thanks largely to blogger coverage of this, Raleigh News Observer editor Melanie Sill is pushing the AP to do a story covering this.
As I pointed out here, if there's one thing the media hates worse than Republicans, it's being left behind on a story that everyone else is covering. Once the momentum builds on a media swarm, you can bet that this is gonna snowball.
As far as the news of this story is concerned, Michelle has this story from the Post about how all of this is affecting the folks at Gloria Wise:
August 11, 2005 -- The Bronx social-services organization that made a controversial loan to the Air America radio network has been rocked by more high-level staff departures, sources said.
Just days after the executive director abruptly resigned following Post reports that the club had provided $875,000 in bizarre loans to Air America, two other top officials at the Gloria Wise Boys & Girls Club have quit.
Acting executive director Lorraine Corva — who took over after Charles Rosen suddenly resigned last week — will be leaving her job on Aug. 26, sources said.
Assistant executive director Jeff Aulenback also resigned, effective immediately, sources said.
Their departures from the embattled social-services agency are tied to the ongoing fallout from the highly unusual and possibly improper loan to Air America, as well as other dubious fiscal practices, sources said.
A spokesman for the club declined to comment on why the two were leaving.
Meanwhile, Air America would have us believe that they are telling the truth, and the DOI is lying:
"The [city] Department of Investigation advised Air America to repay $875,000 into an escrow account from which no money can be disbursed without our approval," said DOI spokeswoman Emily Gest.
"Air America has not followed that recommendation."
But an Air America official told The Post yesterday that both sides had agreed to a payment plan months ago and that they were on schedule with their payments.
Huh. <sarcasm>Well, the good folks at Air America have been so forthcoming and honest throughout this whole ordeal that I guess their word is to be trusted over the DOI's word</sarcasm>. But that's not all! Gloria Wise is also entering the fray:
That was news to the Boys & Girls Club. "Air America has agreed in principle to give the money, but nothing has been finalized yet," Grossman said yesterday.
"They haven't agreed how and when to do it."
Everyone else is lying, and Air America is telling the truth! If you don't believe it, just ask them!
There's also more in here about Eliot Spitzer:
Along with the DOI,state Attorney General Eliot Spitzer also opened an investigation into the case.
A representative from Spitzer's office visited the Boys & Girls Club last week, but so far Air America has not been contacted by the AG's Office, a network official said yesterday.
Why isn't Spitzer interested in speaking with some folks from Air America? Surely the man who involved the State Athletic Commission to go after a radio station for having a slapping competition isn't having trouble finding jurisdiction in this case? Perhaps he just needs to put a little more creative effort into this investigation.
Meanwhile, Brian takes apart Franken's on-air statement on this scandal. I would, however, remain cautious about going out on a limb over what Franken says. I don't really expect that Sean Hannity would be an authority on the finances of Disney, and I am highly skeptical that Franken has a clue what he is talking about when it comes to the details of the financial arrangements involved.
Of course, if it is true that he stopped receiving a paycheck three weeks in (update: a very nice commenter confirmed that this is, in fact, an old "joke" of Franken's. We still have no idea whether it's actually true), then he probably does have a good idea that the company is struggling, financially. But as for his Mr. Subliminal remark about the funds "probably" being used for the operations of Air America, I believe that he is speaking from his nether regions. Of course, I could be wrong, time will tell.
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Heads Roll in Air America/Gloria Wise Scandal 9 Comments (0 topical, 9 editorial, 0 hidden) Post a comment »
You read correctly that no heads have yet rolled at Air America or Piquant. However, much of the rest of your statement outlines a number of things that are very much in dispute.
What did the rest of the investors in Progress Media know, and when did they know it? Did the proceeds from the fraudulent loan go into the operations coffeur of Air America, or to pay for Cohen's cancer treatments?
Regarding the repayment - according to Franken, they found out about this loan about 15 months ago. They just made their first payment within the last week - after this scandal had been plastered all over the internet. Even in their method of repayment, they defied the DOI and only payed $50,000 into an escrow account controlled by their own lawyer, rather than putting the whole $875,000 into an escrow controlled by the DOI (this was the DOI's recommendation).
So, they've known about this money for 15 months and have done nothing. Only when subjected to political pressure have they done a thing, and then their response has been tepid. They also lied about making arrangements to pay back the money, and lied about why they hadn't made any payment before now.
So no, Air America is not in the clear on this story.
Regarding the repayment - according to Franken, they found out about this loan about 15 months ago. They just made their first payment within the last week - after this scandal had been plastered all over the internet. Even in their method of repayment, they defied the DOI and only payed $50,000 into an escrow account controlled by their own lawyer, rather than putting the whole $875,000 into an escrow controlled by the DOI (this was the DOI's recommendation).
So, they've known about this money for 15 months and have done nothing. Only when subjected to political pressure have they done a thing, and then their response has been tepid.
This point is too true... I guess in my cynical nature I almost except modern corporations to not put the cookies back in the cookie jar until pressure is applied, either legally or through the internet, or whatever.
I almost certainly expect Cohen to be prosecuted at the end of this, and I hope he, and all white collar crime crooked executives like him, get whatever the law can throw at him. Who knows about everybody else so far, but it looks like he won't be the only one.
There's a word for the phase we're entering - "deniability". And we're only entering that phase, given the comments in cd6's post - all very sensible, rational, and worth pursuing, and may well end up true, but all from the point of view of deniability.
Another phase to watch for is "moonbattery". We'll be there when Karl Rove is mentioned.
- A spokesman for the club declined to comment on why the two were leaving.
There are two reasons:
- The Board of Directors is furious that this 20-year-old non-profit with a good reputation has had this happen. They are trying to figure out how Rosen and Cohen moved all this money out of the institution without them knowing about it. Chances are they had been given Balance Sheets showing the money as a "short term investment," and Rosen was passing it off as if he had put the funds in a money-market account or something like that. That Rosen had agreed to loan this grant money to a startup venture headed by Cohen would never have gotten by them... if they had known.
So now they are on a witch hunt to find out who else knew.
Curiously missing from the ranks of the dead is John C. Mullen, who is listed on their web site as the Chief Financial Officer. He goes too; it just hasn't happened yet, or I missed the announcement. - Ritual sacrifice: In order to get back in the good graces of the city, some requisite number of sacrificial heads must roll just so everybody is satisfied that they "cleaned house" and the Bad Guys are all gone. This stuff happens from time to time... it's not that big a deal, but they have to throw some virgins into the volcano and even then they will spend 2 or 3 years in the Penalty Box getting smaller grants than they used to get.
If I were with the City, that CFO has to be one of the heads that rolls. My guess is that the guy is 90 years old and asleep most of the time. But even if he isn't, if this got by him, he doesn't have very good systems in place.
Air America WAS Karl Rove's idea. It was one of Rove's most brilliantly fiendish, underhanded, dirty rotten strokes of genius, sowing discord, confusion, and financial chaos among the Liberals and their fellow travelers. So don't blow Rove's cover, for gosh sakes!
On the left, the ends always justify the means. Always.
I am sure Rosen and Cohen will start their speaking tours shortly, then get faculty positions at Brandeis. Their noble attempt to thwart the vast right-wing conspiracy will give them hero status in their little circle soon enough, and it's just too bad the politically motivated investigators / bloggers / media will soon shut the Boys and Girls Club down.
So, if I'm reading this right, a number of people working for Gloria Wise are gone or going... anybody at Air America? Or Piquant (or however its spelled?)
I mean, it sounds like all the monetary shenanigans went on at Gloria Wise, at this point. And some of them, including Evan Cohen, who isn't mentioned in your story here but who we all know about, decided to give money improperly/illegally to Air America. Doesn't that mean that like 98% of Air America employees didn't know where it came from?
It looks to me like all Air America is guilty of is accepting a bad loan - but one they didn't know was bad since Cohen, an executive high in the company, was getting it. They haven't repaid it yet, but I assume they'll get around to it.
It sounds like most of the wrongdoing came out of GW... and that jobs have already been lost. Go ahead and fire/prosecute the people who broke the rules/law, but other than that I think there are bigger fishes to fry in the realm of scandals around the country.