Quiet Meltdown on Planet Pacifica

Two years ago it looked as if Pacifica Radio, the original listener-supported network, was on the road to reconciliation and renewed relevance after a decade of internal warfare. New national shows had been launched, the number of affiliates was increasing, a mood of collaboration and mutual respect was taking hold, and, in September 2006, the CFO reported the highest revenues in the organization’s 57-year history. A year later, the financial news was less encouraging, but Pacifica was about to hire a new Executive Director, Nicole Sawaya, returning to Pacifica after nine years with enthusiastic support from the Board and community.

Cut to September 2008. As Pacifica approaches its 60^th anniversary, it faces the most serious organizational and financial crisis in years. Sawaya has resigned – for the second time in ten months – effective September 30. Meanwhile, the network is considering budget cuts of more than $900,000, including at least 10 staff positions at stations and possible layoffs from the national staff.

Pacifica is also grappling with the need for multiple bylaw amendments and the high cost of lawsuits. The National Board is split down the middle, the Human Resources Director has left, a line of credit has been secured from Wells Fargo to cover recent expenses, based on a C.D. held by KPFA, and another loan is being sought.

Nevertheless, those waiting for an official announcement, especially concerning personnel changes, would be well-advised not hold their breath. Although critical of the mainstream media, Pacifica’s managers and Board are often late and consistently coy when the subject is their own internal activities. Concerned about the staffing implications and potential for panic, recent meetings of the National Finance Committee have been conducted in executive session. The term “transparency” is used frequently, but, in part due to the crisis, is being selectively applied.

As Sawaya’s predecessor, I’m not that shocked by recent developments. Things certainly weren’t easy or conflict free during my two years in the job. But the rapid pace of the decline does raise at least two questions: How could so much go wrong so fast? And, what do Pacifica’s leaders hope to do about it? The second question may be answered, at least in part, at the in-person meeting of the Pacifica National Board scheduled for next weekend, Sept. 19-21, in Washington, DC. But before digging into the financial, programming, and structural challenges confronting the organization, it may help to recap the last year.

Nicole Sawaya worked as General Manager of KPFA in the later 1990s, until she was abruptly dismissed during the struggle for the network. For years after that many people in the “Save Pacifica” movement eagerly looked forward to her return, certain that she had the radio know-how to give the organization what Pacifica historian Matthew Lasar called a “second chance.” The enthusiasm was so great that she was the only person interviewed face-to-face for the job last September, and quickly won both unanimous Board approval and a multi-year contract.

Complications arose almost immediately. Pacifica was in the midst of a Board election year – they happen two out of every three – and complaints emerged over how the National Election Supervisor and Interim CEO, who was also corporate counsel, handled disputes. Phasing in on a part-time basis, Sawaya meanwhile hit problems in the national office, particularly over control of finances. In early December, after only weeks on the job, she announced her resignation.

As negotiations proceeded to woo her back, Pacifica stations found it harder to keep pace with rising costs, particularly health insurance, legal fees, and governance. On-air fund drives, which bring in over 80 percent of the network’s income, weren’t meeting projected goals, most stations had meager cash reserves, and one – WBAI in New York – was both a half a million behind its target and mired in an internal power struggle that had been building for several years. After the elections, a lawsuit was filed by one faction at WBAI against the network and its representatives.

In early March 2008, Sawaya agreed to return. What changed her mind wasn’t revealed, but the fight over financial control did result in a Board decision to give her the right to directly supervise the national financial staff. Unfortunately, after a three month absence she faced a rapidly worsening picture, predicted by CFO Lonnie Hicks and me more than a year earlier. Like myself, Sawaya was frustrated by an organizational structure that was costly and often blocked change. She openly called the approach “unsustainable.”

One of her first major decisions, made with Hicks’ agreement, was to cut the budget for Free Speech Radio News (FSRN) by 25 percent. What shocked Pacificans wasn’t so much the cutback (about $11,000 per month) on an agreement to produce a half hour daily news show that some questioned, but the fact that it was done without prior discussion. Sawaya explained that the financial crunch required strong and immediate action, and the Board decided to let it stand. Her other big decision, the hiring of a new General Manager at KPFK in Los Angeles, was met with more enthusiasm.

The next surprises came in July, just as budgets for the next fiscal year were being developed. The National Board had voted to convene in person that month, but national office management failed to follow up and the meeting had to be cancelled. Then, without explanation, Hicks disappeared from the national office. The Board made no announcement, but news leaked out that he was on “paid leave to deal with family matters.” Later, there were rumors that an investigation of his activities was being pursued, and also that he might sue. Meanwhile, Sawaya assumed responsibility for budget development, pushing for staff and other budget cuts. Managers at some stations responded, others – most notably at WBAI – didn’t.

Sawaya announced her decision to leave again in early August, but asked those who knew not to say anything for a month. At meetings, she meanwhile tried to convince the Board and National Finance Committee that Pacifica needed to act like a network and “centralize” various functions, especially accounting and reporting. Directors listened, but not much changed.

As the national political conventions approached, she turned her attention to Pacifica’s coverage of those events. It had been a high priority for her from the start. But some were surprised by her decision to attend herself at a time when the main business of the network was resolving its financial crisis. What the public didn’t know was that Sawaya had already announced her decision to leave.

Before she went to Denver, another confrontation further intensified the situation. A volunteer programmer, allegedly “banned” from KPFA, showed up on August 20. The General Manager wasn’t around, but the Business Manager felt that something needed to be done. Calling the National Office next door, she asked for advice from Human Resources Director Dominga Estrada, who advised her to call the police. According to several witnesses, when the cops arrived excessive force was used, and Sawaya herself attempted to block videotaping of the event.

The response was dramatic and deepened the existing divide at the station. Management defended its decision but said it wasn’t responsible for the overreaction of the police. Dozens of volunteers, and some on the staff, saw it as another example of a management team that was out of step with Pacifica’s values and mission. A letter of no confidence in General Manager Lemlem Rijio has since been signed by about 24 people.

In late August, the Human Resources director also decided to leave for a new job elsewhere, effective September 5, and the National Board began to discuss what was being calling a “national office collapse.” Actually, the term referred to one of several options for how to address the overall problems. One alternative was to struggle on as is, a decision apt to leave a large budget deficit. Another was to cut a few national staff positions and the salaries of others. The third and most radical option was to lay off almost everyone, retaining only enough staff to pay the bills and keep the governance structure functioning. This is one of many decisions the national board will face when it meets in person.

It will also have to decide what to do about Pacifica’s leadership vacuum. Some hope to quickly recruit a new Executive Director. But this process usually takes months, and pending recommendations to re-expand the CFO’s authority and apply strict performance standards to all managers (more about that in the next installment) could get in the way.

Another possibility is that Hicks might be asked to step in upon his return, or that Siegel might again be tapped. But Siegel has been criticized for his handling of (and billing for) recent personnel and election-related lawsuits, which have allegedly cost the foundation hundreds of thousands. Hicks has his own critics, and may not even want the job. Another possibility is Ambrose Lane, who served as interim ED before I was hired. Finally, the Board could ask its Chair, Sherry Gendleman, to fill in. But she’s said to be less than enthusiastic about that prospect.

Even if a new chief executive can be found – and the Board overcomes its divisions to agree – there is still the biggest elephant in the room. Pacifica hasn’t figured out how to resolve its current financial crisis, and, even more difficult, restructure its programming and management to reverse a long-term decline in listenership and income.

Part Two: Budgeting for Triage

Part Three: The Price of Democracy

Update: Nicole Sawaya's Resignation

A Pacifica National Board teleconference scheduled for Friday, September 12 was postponed due to Hurricane Ike. To access archived recordings of Board and Committee Meetings, go to http://www.kpftx.org/. Sources for this article include meetings of the Pacifica National Board, National Finance Committee, Coordinating Committee, and Personnel Committee, LSB minutes, and members of the Pacifica community who provided information on condition of anonymity. Updated September 26, 2008.

Next: Finances, Programming, and the Bylaws