The Corruption In Air America, Update


Looks like Air America has issued a second statement that starts to backtrack a bit on their first “it wasn’t me” statement:

If the allegations of mismanagement and corruption at Gloria Wise Boys and Girls Club are true, it is absolutely disgraceful

As reported in the Wall Street Journal and the HBO Documentary, Left of the Dial? the company that the Gloria Wise Boys & Girls Club officials gave money to, Progress Media, has been defunct since May 2004. That company was run at the time by Evan Cohen who has not had any involvement in Air America Radio since May 2004.

The current owners of Air America Radio have no obligation to Progress Media?s business activities. We are very disturbed that Air America Radio’s good name could be associated with a reduction in services for young people, which is why we agreed months ago to fully compensate the Gloria Wise Boys & Girls Club as a result of this transaction.

We at Air America Radio strongly believe in the mission of Boys and Girls Clubs to provide a safe and nurturing place for young people to learn and grow. As a result, we recently allowed the same club, Gloria Wise Boys & Girls Club, to use our name in a fundraising effort for a summer camp for children in their community.

The funding for Camp Air America was raised and collected entirely by the Gloria Wise Boys & Girls Club, and Air America promoted the camp on air and urged support for it. A link on our web site sent those interested in contributing to the camp to the Gloria Wise web site. Regrettably, the camp did not survive the closure of the Gloria Wise organization. We have offered any individuals who contributed to the camp as a result of Air America’s promotion the option of a refund paid for by Air America Radio and the Club offered the alternative option of having their donation redirected to Kip’s Bay Boys and Girls Club.

The part that should stand out is the fact that they agreed to compensate the club months ago. So why issue the first statement which does not spell this out at all? After the blogswarm they then admit their knowledge of the whole thing. Sounds fishy.

What gets even more interesting is the legal mumbo jumbo involved. Macho Nachos has a post up explaining the legalities involved:

Generally, if you buy a company, that company can still get sued to the extent of its own assets, but you – the parent – don’t assume vicarious liability and thus if the sub runs out of money, its victims can’t sue you and win (but they WILL sue you 100% of the time). Principle of corporate separateness, limited liability and all. But things can get dicier depending on the extent to which (1) he was known to be acting at the time on behalf of Air America, and thus could be seen as an agent for Air America, (2) the extent to which Air America formed some relationship of trust and confidence directly with the clubs, and thus owed them a direct fiduciary duty, or (3) the extent to which AA knew that they were receiving stolen funds and not providing fair value to the sub in return, which could raise fraudulent transfer or abuse of the corporate form issues.

So basically if it can be proven that Piquant knew about this shady deal then they can be held accountable. This fact remains to be seen but so far we have Piquant buying Air America on May 24th, 2004 but they started their advertising the following month:

It begs the question, then, of why, on June 14, 2004, Air America was promoting this camp run by the Boys and Girls club in question and even went so far as to solicit donations on their behalf:

We’ll be talking about why for the next few weeks. Your donations (click on the “Camp Air America” ad to the left) have already started coming in. When we’re done, we’ll fill you in on what you’ve made possible. I hope you’ll be a part of it.

I’m not a lawyer, but this certainly looks on the surface to be some pretty damning evidence of continued collusion between Air America and some of the folks at Gloria wise even after the transfer to Piquant LLC.

Seems even more fishy.

Finally you have the expected lefties coming out of the wood work, as Brian at The Radio Equalizer has information that the webmaster of the Air America website visiting the Daily Kos and posting this:

Hey folks, I’m the webmaster over at Air America and there has been some discussion in the right wing blogosphere, basically accusing AAR of stealing from poor kids. BlatherWatch has the rundown.

For a full explanation of what REALLY happened, here is Air America Radio’s official statement.

So as you can imagine the DummiesU crowd is in the comments section hooting and hollaring, I am expecting that crowd to tell us that Karl Rove was behind this at any moment.


The Corruption In Air America

Check out Michelle Malkin, The Blue State Conservative, Red State Rant, & Captains Quarters for more.

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