Wednesday, July 30, 2008

KPFA Takes Financial Guru off the Air

Charges of censorship are being leveled at KPFA, flagship station of the Pacifica Radio network, in the wake of a decision by station management to prohibit on-air appearances by financial expert Catherine Austin Fitts, a former Assistant Secretary of Housing in the Bush I administration and president of Solari, Inc., an investment advising company. According to Fitts, a frequent guest on KPFA’s Flashpoints, her latest scheduled appearance was abruptly cancelled without discussion due to a critical email received by the station.


Peter Byrne, a journalist who sent the email, subsequently wrote that he didn’t intend to create an uproar, but was expressing “concerns about financial advisors appearing regularly on news programs if business-related conflicts are not disclosed.” In a July 23 e-mail under the subject line, “Fitts is a wolf in sheep’s clothing,” Byrne called her a “Wall Street speculator” and “gold broker” who uses access to alternative media to “keep the [gold] bubble up for as long as possible, taking oodles of profit in their own investment pools while selling seminars that tell people one thing: invest in gold, oil and precious metals.”


In response, Fitts wrote that she does sometimes recommend gold as a safe haven, but “with caveats that it is not for everyone and should not be used unless it is understood.”


On the same day that KPFA received Byrne’s email, Interim Program Director Sasha Lilley informed Flashpoints that due to “some potentially very serious conflicts of interest” Fitts should not appear on the show until “we have a chance to investigate them further.” The notice came only hours before a scheduled talk with Fitts during Flashpoints’ “Community Business” segment. A CD by Fitts to be used as a premium for on-air fundraising was also pulled.


Fitts posted a public response to Lilley and Interim Station Manager Lemlem Rijio on her website, Solari Real Channel. “I have been doing Flashpoints because I have great respect for Dennis [Bernstein] and his team,” she wrote on July 25. “Consequently, I would appreciate knowing precisely what your specific concerns are and on what facts and documentation you base them. I would also welcome knowing why you have not communicated them to me before the Community Business show was censored.” Thus far, no additional explanation has been offered.


The next day Fitts followed up on her website with a look at Pacifica’s financial and banking relationships. In an article titled, “How Does the Money Work at KPFA Radio and the Pacifica Network?,” she noted that the “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.”


She also posed a series of provocative questions. For example, “Is KPFA/Pacifica investing in the banks and other private interests we have discussed during Community Business?” And, “Did Community Business coverage impact KPFA/Pacifica relationships with the CPB or with any key Congressmen or Senators, including from the Bay Area?”


She then noted that the Corporation for Public Broadcasting channels Congressional appropriations to public radio stations, and that, on the same 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.


Writing in the third person, Fitts noted that, as a former Assistant Secretary of Housing/FHA Commissioner, former advisory board member of Fannie Mae and former board member of a government sponsored enterprise, Sallie Mae, she “could be expected to be critical of the bail out.”


Fitts examination of Pacifica’s finances could also make waves. Due primarily to rising costs and shortfalls in fundraising, a financial austerity plan is being developed. The National Board has reportedly been unable to meet in person due to a cash crunch, and some payments have been delayed. The Board recently voted to give Executive Director Nicole Sawaya control over Pacifica’s national office accounts, and rumors are circulating about the absence of CFO Lonnie Hicks.


Fitts says that her current conflict with Pacifica “reminds me of my responsibility of doing some due diligence on KPFA’s/Pacifica’s banking and investment activities,” yet she expressed confidence that her Community Business appearances will resume once “some mysterious investigation finishes looking into some mysterious allegations.”


Commenting on the situation his email set in motion, Byrne wrote, “I do not know what the internal politics of KPFA are, but they appear to be brutal, and not based on trust and professionalism.”

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