Network Playing Defense On Franken Lie

DEFENDING FRANKEN

AAR Skirts Issues, Attorney Still Controls Escrow Account!



How would you defend liberal talk host Al Franken's lies if your company's future was at stake?

After weeks of ignoring our Air America Radio scandal coverage, they're increasingly reactive to news developments. While the company refuses to respond to Michelle Malkin and myself directly, they're talking to others who publish follow-ups and news summaries.

Their key tactic: outright issue deflection.

Not only that, but there are serious questions today about Air America's new public relations push on the Gloria Wise Boys & Girls Club repayment issue, where $875,000 in taxpayer funds were apparently diverted to the liberal talk radio network.

Air America's attorney still has full control over the account, while investigators don't! Scroll down for exclusive details.

Air America simply won't acknowlege Franken's lie regarding when he first knew of the Boys & Girls Club "loans". He claimed to first hear of it in August, 2005.

Yet we've published a document drafted in November 2004 that Franken signed. It discusses the Gloria Wise issue.

Franken also claimed the company engaged in "forensic accounting" to learn about the Boys & Girls club ripoff, but the settlement agreement makes it clear they were well aware of the situation last year.

Here's a new published report where Air America's management uses this deflection tactic:


In response to reports yesterday that Air America host Al Franken was a signee of a settlement agreement last year that included the loans as part of the network's liabilities, Goldberg said, "Al Franken does not have, and never had, any responsibility for this loan.

His role at Air America was then, and remains today, as an on-air talent." Goldberg says the settlement agreement signed by Franken in November 2004 was "not an agreement to which the Boys and Girls Club was a party."

He further explained that settlement letters between current AAR ownership Piquant and the Boys and Girls Club were exchanged "several months later in March of 2005 and Franken was not involved with any of those discussions or decisions."


Note the complete lack of balance, there's nothing other than Air America's perspective. The story came from a radio trade publication which heavily depends on syndication advertising.

If you think the New York Times is a tough nut to crack, it's no match for the conflicts of interest that regularly distort trade coverage.

This above ad has recently begun to appear on broadcast trade websites.


Our second example of the deflection tactic comes from a snarky piece in today's Minneapolis Star-Tribune:


Between October 2003 and March 2004, Evan Montvel Cohen, who was simultaneously a board member for the Gloria Wise Boys & Girls Club and head of the firm that was trying to get Air America started, borrowed $875,000 from the club. Franken has called Cohen a "crook" on the air and said he didn't know whether Cohen put the club's money into Air America.

New Investors

Air America launched, with Franken as its star attraction, in May 2004. Cohen was soon forced out. Franken said Cohen did not have the financial resources he had promised to get the network going and had failed to pay Franken and others their full salaries.

New investors, operating as Piquant LLC, acquired the network and still own it.

In November, the Cohen group and the Piquant group finalized the takeover with a 61-page document. Franken was not an investor in either group but signed the document to relinquish his own claim for back pay that Cohen's group owed him.

Towards the end of the document is a list of Air America liabilities, including the $875,000 claimed by the Boys & Girls Club.

Franken said he had read only portions that pertained to him and that his lawyer, who had reviewed the document, recommended he sign. "The list of other assets and liabilities did not pertain to me because I was not an investor," he said.

In a statement posted on the network's website, Danny Goldberg, CEO of Air America Radio, said: "Al Franken does not and never had any responsibility for the loan."


That's great-- I never believed Franken was personally responsible for the loan. Again skirting the real issue: Franken knew about the mess earlier than he's stated.


Thank goodness for the guys at Powerline, they've been waiting an eternity for the "Strib" to run a local Air America story. Scott Johnson had lightning-fast reactions here:


Tomorrow's Star Tribune takes note of the Air Ameriscam story that has been owned by Michelle Malkin and Brian Maloney together with the New York Sun's David Lombino over the past month.

The local angle involves Al Franken, the network's star and Minnesota's prospective Democratic Senate candidate. The Star Tribune's noncoverage of the story has been pathetic, and Eric Black's article is, well, perfunctory at best...

...Nice of Black to plug the show at the end of the article. We wouldn't want to be left in any doubt about Black's rooting interest in Franken and his show. In an update to her post today, Michelle adds the following statement from the New York City Department of Investigations...


After Johnson's analysis, I sent him this email:


The (Strib) story ignores our primary point: Franken claimed on the air in August he'd heard about the Gloria Wise payments just a week earlier. We have the transcript.

But he signed the document last November which discusses the Gloria Wise "loans".

Now he tries to use carelessness as an excuse, while AAR diverts attention to the loan repayment responsibility issue.

Radio trade publications, partly dependent on Air America's advertising, are eating it up. What kind of attorney doesn't go over the full details of a legal settlement agreement with the client before recommending a signature?

Franken could've been signing his life away. Are we really to believe he is that foolish?

And from where did the Strib reporter come to this conclusion:


In November, the Cohen group and the Piquant group finalized the takeover with a 61-page document. Franken was not an investor in either group but signed the document to relinquish his own claim for back pay that Cohen's group owed him.


None of our documentation points to this. In fact, we're increasingly unsure whether Franken went unpaid during any of this period, contrary to media reports dating to last year.

Signs now point to Franken's participation relating to other issues, such as his public comments about Cohen in the 2004 Wall Street Journal piece and elsewhere. Franken may have been included to eliminate potential liability for false public statements that might have been made.


Thursday afternoon, Michelle Malkin's site included the latest New York City Department of Investigation press release on the matter:


FOR IMMEDIATE RELEASE

CONTACT: EMILY GEST 212-825-5931
THURSDAY, SEPTEMBER 8, 2005

STATEMENT FROM DOI REGARDING AIR AMERICA'S REPAYMENT OF $875,000

During the course of DOI's investigation into allegations that officials at Gloria Wise Boys & Girls Club had falsified documents submitted to various City agencies and had approved significant inappropriate transactions, DOI discovered that Gloria Wise had transferred $875,000 to Air America.

DOI asked Air America to repay the $875,000 to an escrow account controlled by DOI. Thereafter, Air America repaid only $50,000 to an escrow account that is not controlled by DOI. DOI is pleased that Piquant LLC, the current owner of Air America, has agreed to DOI's request that, in lieu of making $50,000 quarterly payments, Piquant transfer the full $875,000 to the escrow account.

While the total reimbursement reportedly has been made, DOI does not control the escrow account, although Air America's attorneys have represented that the money will only be disbursed with DOI's authorization. DOI's investigation is ongoing.

DOI is one of the oldest law-enforcement agencies in the country. The agency investigates and refers for prosecution City employees and contractors engaged in corrupt or fraudulent activities or unethical conduct. Investigations may involve any agency, officer, elected official or employee of the City, as well as those who do business with or receive benefits from the City.


Note the second-to-final paragraph. Has anything really changed since the company previously placed in it $50,000, or is it just another public relations stunt?

Air America/Piquant attorney Bill Schaap controls the J P Morgan Chase account, held at the 204 W 4th Street branch in New York City.

In fact, it's named the "William H Schaap Attorney Escrow Account IOLA" (Interest On Lawyer Account).

Is all of the money really there, today?

If so, will it remain there, or be used for short-term expenses and later replenished?

It's a fair question as the company is low on cash.

Look what New York State statutes say in part about IOLA accounts:


(b) The decision as to whether funds are nominal in amount or expected to be held for a short period of time rests exclusively in the sound judgment of the lawyer or law firm. Ordinarily, in determining the type of account into which to deposit particular funds held for a client, a lawyer or law firm shall take into consideration the following factors:

(i) the amount of interest the funds would earn during the period they are expected to be deposited;

(ii) the cost of establishing and administering the account, including the cost of the lawyer or law firm`s services;

(iii) the capability of the banking institution, through subaccounting, to calculate and pay interest earned by each client`s funds, net of any transaction costs, to the individual client.

(c) All qualified funds shall be deposited in an IOLA account unless they are deposited in:

(i) a separate interest bearing account for the particular client or client`s matter on which the interest will be paid to the client; or

(ii) an interest bearing trust account at a banking institution with provision by the bank or by the depositing lawyer or law firm for computation of interest earned by each client`s funds and the payment thereof to the client.

(d) Notwithstanding the deposit requirements of this subdivision, no attorney or law firm shall be liable in damages nor held to answer for a charge of professional misconduct for failure to deposit qualified funds in an IOLA account.

5. No attorney or law firm shall be liable in damages nor held to answer for a charge of professional misconduct because of a deposit of moneys to an IOLA account pursuant to a judgment in good faith that such moneys were qualified funds.



Note New York City investigators said "reportedly" in their press release. Clearly the DOI is hedging their bets so they don't later end up red-faced.

I'd take nothing for granted when dealing with Air America if working at the DOI. The former's previous actions have made this need quite clear.

Schaap seems to believe he can turn the tide of public criticism away from the network. Who can blame him, that's what I would do in his shoes.

Unfortunately Schaap entered the picture rather late, recently stepping in for damage control purposes.

With decades of experience, Schaap's approach is blunt and no-nonsense, a seemingly sharp contrast from Air America's Latham & Watkins representation.


Also today:


--- Wizbang has an analysis of our reporting here.

--- A Free Republic participant wonders if Google provides Air America with special treatment.

--- There's a movement underway to transcribe more of Randi Rhodes's rantings. More soon, meanwhile, here's a link to recent activity on this front.

--- Tom at BizzyBlog wonders how AAR can survive, citing the example of Salon.com, which has already burned through an estimated $90 million, yet remains in business (corrected from earlier error on my part, not Tom's).

--- Expect heavy follow-through from us on these issues in coming days and weeks.



AAR Scandal graphic by Darleen Click. Franken Will Work by IMAO.us.

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