The Discerning Texan
All that is necessary for evil to triumph, is for good men to do nothing.
-- Edmund Burke
-- Edmund Burke
Saturday, July 30, 2005
The Air America scandal: White hot...but where is the mainstream on this story?
This Air America story is not going to go away, despite the fact that no major news outlets have picked it up yet. Because this one stinks to the high heavens, and some heavy blogosphere hitters are onto this now:
Michelle Malkin has a high-level round up of the story: Air America - Stealing from Poor Kids. And Captain's Quarters has this update:
Brian at Radio Equalizer, who first broke the story on Air America's grasping of funds meant for poor children and Alzheimers patients, now posts the official response from the liberal talk-radio network on the scandal:
"On MAY 24, 2004 the newly formed PIQUANT LLC acquired the principal assets of AIR AMERICA RADIO from the prior ownership entities. PIQUANT has owned and operated AIR AMERICA RADIO since that time. The company that had run AIR AMERICA RADIO till then no longer had anything to do with the network.
"PIQUANT had no involvement whatsoever with funds from GLORIA WISE BOYS &GIRLS CLUB. PIQUANT neither received nor expended any of the sums that are the subject of the City's investigation of the CLUB.
"PIQUANT is not being investigated by the City, which is investigating a transaction that took place before PIQUANT existed."
Unfortunately for Piquant, when they bought Air America, they bought its liabilities along with it. They may not have broken any laws themselves, unless they've managed to keep Evan Cohen hidden from view, which given his popularity even at AA seems highly unlikely. However, if Air America did take money from Gloria Wise Boys and Girls Club illegally -- by having its chief executive officer transfer specially-earmarked funds from a non-profit on which he sat as a board member -- then Air America has to return that money.
Has it done so? One would presume that Piquant would have disclosed that in its statement if it did. Therefore, one can safely presume that Piquant hasn't returned the funds.
How long does Air America intend on keeping money from poor kids and Alzheimers patients? And exactly how does that fit in with their liberal political positions? And while we're asking, why did Air America start promoting Gloria Wise after getting this loan? I'm not an expert at FCC law, but that kind of undisclosed financial transaction sounds an awful lot like payola to me, as Michelle Malkin notes.
If Piquant thinks that it can wash its hands of the mess Evan Cohen left behind, they're very much mistaken. As long as they hang onto that money and leave the poor kids in Brooklyn holding the bag, their leftist pap about taking care of the little guy will sound even more hollow than ever.
UPDATE: Hey, Al Franken's alter ego noticed Captain's Quarters! (Yes, this is a joke ...)
And that's not the half of it. A great deal of the heavy lifting on this story so far has been done by fellow Texan Macho Nachos, who I linked to yesterday. He has been following this story from the beginning, and he has now uncovered the fact that the "previous" owners are (pretty much) the same people as the "current" owners:
I've been hearing from a lot of folks that Progressive Media and Piquant LLC aren't as disconnected as they'd have you to believe. Remember, the essential defense of Piquant LLC through this story has been, "Don't blame us, blame the company that ran the show before us." The more information we dig up, the more it looks like the New Company is just the same as the Old Company.
First, Streiff at RedState dug this old Professor Bainbride article (June 30, 2004)out, which says, in part:
The assets of Air America are reported to be sold to a new corporate entity, leaving creditors of its existing corporate parents, Progress Media and Radio Free America, high and dry. According to the Chicago Tribune article, the new owner will be an outfit called Piquant, LLC, controlled by the original founders of the mini-net, Sheldon and Anita Drobney. Supposedly, millions are owed by the current corporate parents
Further, a check of the always-handy Wikipedia yields this:
As part of a reorganization, investors in Progress Media bought the assets of that company, creating its current owner, Piquant LLC.
Professor Bainbridge seems to be saying here that this legal two-step served to shield the new owners of Piquant LLC (the old owners of Progressive Media) from debts incurred by Progressive Media - and further that the corporate entity Piquant LLC was specifically formed to screw the creditors of Progressive Media. One of which, we now know, was the Gloria Wise Boys and Girls Club.
It might be legal, but it's certainly slimy as heck. And the statement by Piquant LLC that "this all happened before we got here," is looking more and more suspect by the minute.
A commenter here suggested that the board of Piquant LLC was the exact same roster as Progressive Media's, minus Cohen and Rosen. An enterprising person could verify this information with about ten minutes and ten bucks, and then share that information with the rest of us. I think it would be interesting.
An earlier post from the very same Macho Nachos, lays out in great detail the legalities (or lack thereof...) for the layperson:
Air America Made Easier/More Interesting
I've been getting a lot of email from a lot of different people about some of the legal analysis provided by my "lawyer-in-the-know". I'm sorry to say that I've confused Paul from Wizbang, and so it's probably time to boil it down with a little more simplicity.
Let's just say that Company X is a very shady company, very much like, say, Progressive Media. Let's say further, in this hypothetical, that the CEO of this Company X also happens to be on the board of a charitable organization that we'll call, hypothetically, Gloria Wise Boys and Girls club. And in this hypothetical, said CEO (we'll ascribe a random name to him, like "Cohen") bilks about $500,000 from his charity into the treasury of Company X.
Now, in this hypothetical, instead of paying the salary of Al Franken and buying a bunch of radio equipment, they use that $500,000 to build a local Subway Restaurants franchise. Later, MachoNachos comes along and buys said Subway Restaurants franchise from Company X (for a legitimate price). When it later comes to light that the Subway Restaurants franchise in question was bought and established through fraudulent means, the government can't now come after me for the $500,000. And I think that's pretty much fair.
Now, there are a couple of scenarios in which that changes - if, for example, I bought the Subway Restauarants franchise for, say, $20, then a prosecutor could make a pretty ironclad case that Company X was in reality diverting assets to avoid having to pay back the money, and they'd probably go ahead and confiscate the franchise from me to make the payment. However, if they determine that I did, in fact, pay full value of what the assets were worth, then it becomes a legitimate transaction and the government leaves me alone. Again, this seems fair.
Now, what is less clear (to me) is what the legal ramifications are if I had full knowledge before the transaction that the franchise in question was paid for with fraudulent funds. Lawyer-in-the-know says that this "could raise fraudulent transfer or abuse of the corporate form issues."
Of course, we have no way of knowing at this time whether Piquant LLC had any knolwedge of Cohen's previous activity, but they certainly got on the ball quickly with the B&GC promo, which took place about a month after the transfer of the company. Given that (I'm assuming) these things take some time to put together, it certainly seems that the new ownership was aware posthaste about the matter, if not prior to the sale of the company itself. These are questions that still need to be answered.
Indeed. So...am I just being naaive in asking: WHERE THE HELL IS THE MAINSTREAM MEDIA ON THIS STORY?? Hello? CNN? NBC? CBS? New York Times? LA Times? Washington Post? Is anyone home?
Michelle Malkin has a high-level round up of the story: Air America - Stealing from Poor Kids. And Captain's Quarters has this update:
Brian at Radio Equalizer, who first broke the story on Air America's grasping of funds meant for poor children and Alzheimers patients, now posts the official response from the liberal talk-radio network on the scandal:
"On MAY 24, 2004 the newly formed PIQUANT LLC acquired the principal assets of AIR AMERICA RADIO from the prior ownership entities. PIQUANT has owned and operated AIR AMERICA RADIO since that time. The company that had run AIR AMERICA RADIO till then no longer had anything to do with the network.
"PIQUANT had no involvement whatsoever with funds from GLORIA WISE BOYS &GIRLS CLUB. PIQUANT neither received nor expended any of the sums that are the subject of the City's investigation of the CLUB.
"PIQUANT is not being investigated by the City, which is investigating a transaction that took place before PIQUANT existed."
Unfortunately for Piquant, when they bought Air America, they bought its liabilities along with it. They may not have broken any laws themselves, unless they've managed to keep Evan Cohen hidden from view, which given his popularity even at AA seems highly unlikely. However, if Air America did take money from Gloria Wise Boys and Girls Club illegally -- by having its chief executive officer transfer specially-earmarked funds from a non-profit on which he sat as a board member -- then Air America has to return that money.
Has it done so? One would presume that Piquant would have disclosed that in its statement if it did. Therefore, one can safely presume that Piquant hasn't returned the funds.
How long does Air America intend on keeping money from poor kids and Alzheimers patients? And exactly how does that fit in with their liberal political positions? And while we're asking, why did Air America start promoting Gloria Wise after getting this loan? I'm not an expert at FCC law, but that kind of undisclosed financial transaction sounds an awful lot like payola to me, as Michelle Malkin notes.
If Piquant thinks that it can wash its hands of the mess Evan Cohen left behind, they're very much mistaken. As long as they hang onto that money and leave the poor kids in Brooklyn holding the bag, their leftist pap about taking care of the little guy will sound even more hollow than ever.
UPDATE: Hey, Al Franken's alter ego noticed Captain's Quarters! (Yes, this is a joke ...)
And that's not the half of it. A great deal of the heavy lifting on this story so far has been done by fellow Texan Macho Nachos, who I linked to yesterday. He has been following this story from the beginning, and he has now uncovered the fact that the "previous" owners are (pretty much) the same people as the "current" owners:
I've been hearing from a lot of folks that Progressive Media and Piquant LLC aren't as disconnected as they'd have you to believe. Remember, the essential defense of Piquant LLC through this story has been, "Don't blame us, blame the company that ran the show before us." The more information we dig up, the more it looks like the New Company is just the same as the Old Company.
First, Streiff at RedState dug this old Professor Bainbride article (June 30, 2004)out, which says, in part:
The assets of Air America are reported to be sold to a new corporate entity, leaving creditors of its existing corporate parents, Progress Media and Radio Free America, high and dry. According to the Chicago Tribune article, the new owner will be an outfit called Piquant, LLC, controlled by the original founders of the mini-net, Sheldon and Anita Drobney. Supposedly, millions are owed by the current corporate parents
Further, a check of the always-handy Wikipedia yields this:
As part of a reorganization, investors in Progress Media bought the assets of that company, creating its current owner, Piquant LLC.
Professor Bainbridge seems to be saying here that this legal two-step served to shield the new owners of Piquant LLC (the old owners of Progressive Media) from debts incurred by Progressive Media - and further that the corporate entity Piquant LLC was specifically formed to screw the creditors of Progressive Media. One of which, we now know, was the Gloria Wise Boys and Girls Club.
It might be legal, but it's certainly slimy as heck. And the statement by Piquant LLC that "this all happened before we got here," is looking more and more suspect by the minute.
A commenter here suggested that the board of Piquant LLC was the exact same roster as Progressive Media's, minus Cohen and Rosen. An enterprising person could verify this information with about ten minutes and ten bucks, and then share that information with the rest of us. I think it would be interesting.
An earlier post from the very same Macho Nachos, lays out in great detail the legalities (or lack thereof...) for the layperson:
Air America Made Easier/More Interesting
I've been getting a lot of email from a lot of different people about some of the legal analysis provided by my "lawyer-in-the-know". I'm sorry to say that I've confused Paul from Wizbang, and so it's probably time to boil it down with a little more simplicity.
Let's just say that Company X is a very shady company, very much like, say, Progressive Media. Let's say further, in this hypothetical, that the CEO of this Company X also happens to be on the board of a charitable organization that we'll call, hypothetically, Gloria Wise Boys and Girls club. And in this hypothetical, said CEO (we'll ascribe a random name to him, like "Cohen") bilks about $500,000 from his charity into the treasury of Company X.
Now, in this hypothetical, instead of paying the salary of Al Franken and buying a bunch of radio equipment, they use that $500,000 to build a local Subway Restaurants franchise. Later, MachoNachos comes along and buys said Subway Restaurants franchise from Company X (for a legitimate price). When it later comes to light that the Subway Restaurants franchise in question was bought and established through fraudulent means, the government can't now come after me for the $500,000. And I think that's pretty much fair.
Now, there are a couple of scenarios in which that changes - if, for example, I bought the Subway Restauarants franchise for, say, $20, then a prosecutor could make a pretty ironclad case that Company X was in reality diverting assets to avoid having to pay back the money, and they'd probably go ahead and confiscate the franchise from me to make the payment. However, if they determine that I did, in fact, pay full value of what the assets were worth, then it becomes a legitimate transaction and the government leaves me alone. Again, this seems fair.
Now, what is less clear (to me) is what the legal ramifications are if I had full knowledge before the transaction that the franchise in question was paid for with fraudulent funds. Lawyer-in-the-know says that this "could raise fraudulent transfer or abuse of the corporate form issues."
Of course, we have no way of knowing at this time whether Piquant LLC had any knolwedge of Cohen's previous activity, but they certainly got on the ball quickly with the B&GC promo, which took place about a month after the transfer of the company. Given that (I'm assuming) these things take some time to put together, it certainly seems that the new ownership was aware posthaste about the matter, if not prior to the sale of the company itself. These are questions that still need to be answered.
Indeed. So...am I just being naaive in asking: WHERE THE HELL IS THE MAINSTREAM MEDIA ON THIS STORY?? Hello? CNN? NBC? CBS? New York Times? LA Times? Washington Post? Is anyone home?
