Some glasnost at KCTS, but is it enough?

Originally published in Current, May 12, 2003
By Karen Everhart

The KCTS Board responded to public and staff outcries over the troubled leadership of longtime President Burnhill Clark by moving quickly to replace him with an outside interim c.e.o.

Friends of the station continue to press for greater accountability and openness about finances. KCTS's "period of glasnost has barely started," commented Sturges Dorrance, a retired commercial broadcaster and KCTS advisory board member who has questioned KCTS leadership. "The pressure must continue if public trust is to be restored."

"Frankly, I think that what we have done in the last 10 days to bring a strong interim c.e.o. on board" and meet one-on-one with employees "really addresses the concerns of the staff," said KCTS Board Chairman Douglas Beighle. The board delayed a staff reduction that Clark planned to impose this month.

"We want it done with a scalpel, not with a broad axe," said Beighle, a retired Boeing executive. The board doesn't want to balance its 2004 budget "just by continuing to cut people," he explained. "We want to take a balanced, thorough and intelligent approach."

Interim president: outsider who knows public TV

Bill Mohler, retired president of Bates Technical College in nearby Tacoma, started work as interim president May 5. The college operates KBTC, a smaller public TV station in the market.

For the next three weeks, Mohler and a board member will meet privately with each staff member to hear their concerns.

"Because of the turmoil here at the station, we felt that it would further the healing and focus us on moving forward if we brought in someone with no baggage here at the station," said Beighle.

"My immediate challenge is to calm the waters of the employees that we have," said Mohler. "Ninety-five percent of the solutions to the troubles faced by the organization are in the heads of the people here."

Mohler led Bates Technical College through its split from the Tacoma school district and conversion into a community college. The change "created a lot of disruption and insecurity among the staff," he recalled, but he won their confidence through shared decision-making with employees and attention to union concerns. "It was all wrapped around trust and communication," he said.

Mohler serves as a lay rep on the APTS Board, so he brings an "in-depth background and understanding of public TV," said Beighle. His compensation will be based on his performance in operating KCTS in the black, achieving marked improvement in employee morale and rebuilding KCTS community relations.

When the Seattle Times revealed the tangle of problems at KCTS last month, Clark said initially he would shape up the station before retiring in October. Within six days he announced he'd leave by June 30. In the meantime, critics turned their attention to the board's responsibility for the problems. Speakers at a public meeting last month called for reforms of the board itself and an independent investigation of station financing and business deals.

"The board is trying hard to open up and listen to us," said Jean Walkinshaw, a veteran KCTS producer who publicly called on Clark to step aside for the good of the station. Beighle met with KCTS staff in late April and "took a real beating," she recalled. "A lot of people are angry because they see jobs being lost."

“There’s still quite a lot to be looked into,” Walkinshaw added. “There are so many rumors that it’s hard to know what is true and what’s not at this point. A lot of us are being careful not to pass on ugly rumors.”

Secrecy about KCTS finances, punctuated by layoffs and unfulfilled promises of new revenues, left the staff baffled about KCTS accounting practices, she said. “So many of us haven’t been able to understand what the budget truly is.”

Walkinshaw called for an investigation into a production financing deal with Canadian venture capitalists once affiliated with Omnicorp Financial Group. The group owned a troubled offshore bank and its relationship with KCTS hasn’t been fully explained to staff.

"There are lots of questions that need to be answered before the station can really move on, let alone attract a suitable long-term manager," said Dorrance, former g.m. of the city's dominant TV station, KING. Station donors, staff and the public need answers to lingering questions about the station's debts, uses of restricted funds, and alleged accounting improprieties, he said in an e-mail to Current (text).

"There's been conversation among the [KCTS] diasporas to figure out if there's some way to assist," Dorrance said during an interview. "We’re concerned that it might be viewed as hostile, but that's not our intent." The television board doesn't respond well to outside criticism, he said. Those who "don't follow the party line" are viewed as unpatriotic.

"I want to put this to bed"

Beighle defended the board, asserting that it acted promptly to stem the station’s financial losses this year. KCTS now expects to end fiscal 2003 with a cash surplus of $400,000, the first positive balance since 1999. “That would not have happened if the board had not gotten very involved by demanding that expenses be brought in line with revenues," the chairman said.

Details about KCTS production financing will be shared with major contributors, but not the public, he said. Donors to the Fund for Programming Excellence, a restricted fund that lends money to KCTS productions, will receive reports on how those monies were spent. "Some of the program expenses are proprietary and you wouldn’t want them to be made public,” he explained.

"There will be an independent outside review of [the restricted fund] to make sure it was properly charged against the programs," Beighle added. "Not to say that I have concerns at all, but I want to put this to bed."

KCTS’s relationship with Omnicorp, which operated a controversial West Indies bank with a high-risk investment strategy, has ended, and the business contract was acquired by a company called Solara Ventures, Beighle said. “We are dealing with the people who own those assets. . . . It is their fund.”
“If any of the staff have concerns about it, they need to communicate that to us,” he said of the Canadian financing. “As far as I know, it’s been above-board and there is no need for an independent review.”

Beighle said expanding the 15-member KCTS Board or strengthening its ties to the larger advisory board are options "we're already committed to look at."

As a gesture of its new openness to public scrutiny, KCTS released its audited financial statements for fiscal 2002. KCTS recorded a $2.1 million deficit in its unrestricted accounts on June 30, 2002. It operated on a $30.8 million budget last fiscal year but carried debts totaling $4.3 million.

In fiscal year 2004, scheduled debt payments will exceed $1 million.

CPB's inspector general's office was reviewing the financial report last week and weighing whether to launch its own audit of KCTS. CPB withheld a $750,000 community service grant payment until KCTS delivered its audited statements.

"There's been no decision made" on the CPB audit, said David Tanner, deputy inspector general. The inspector general's review would be limited to financing related to CPB grant requirements, and probably not include the offshore banking deal.

"I can assure you that if we decide to go, we would deal with the appropriate protocols and probably stop talking to the press as a professional courtesy to KCTS," Tanner said.

Web page posted May 13, 2003
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