Tracing the Air America Scandal

What do you get when you cross a controversial liberal media outlet, the continuing fingerprints of its former director who resigned in disgrace, and hundreds of thousands of dollars apparently skimmed from a local non-profit that cares for disadvantaged youth and the elderly?

Well, one would think you would have a story with all the elements to at least make the business pages of the major dailies — but then, one would be wrong.

The blogosphere has been buzzing of late over $875,000 in “loans” from the New York-based Gloria Wise Boys and Girls Club that Evan Cohen, the former director of Air America Radio, directed to himself — at a time when he was still with AAR and when he was also development director at Gloria Wise.

Cohen — as we all saw this past April in HBO’s documentary “Left of the Dial” — was forced out shortly after Air America’s launch when it was learned that the network had in hand not the three years’ worth of funding that he was claiming, but only about three weeks’ worth.

After the funding debacle was straightened out and Cohen was tossed out early last year, Piquant LLC, an ownership group formed to take over the reins at Air America, stepped in and acquired the network from Progress Media.

But while Cohen is long gone, his shadow continues to loom large over the fortunes of Air America.

According to an August 1 story in the New York Sun, “[s]ome of the transfers, according to the president of the Bronx-based Gloria Wise Boys & Girls Club organization’s executive committee, Jeannette Graves, occurred when the development director, Evan Montvel Cohen, who for a time served simultaneously as the liberal radio network’s director, appealed to the organization for two loans worth $35,000. Another member of the executive committee said Mr. Cohen told the executive director of the organization that he needed the money to pay for chemotherapy for himself and other medical expenses for his ill father.”

The story went on to explain that “Ms. Graves said that Mr. Cohen also received another $213,000 loan for Air America in a check that was approved without her authorization and stamped with an imprint of her signature, and that the club wired more than $400,000 to him without her knowledge.” (Emphasis ours.)

If Cohen hadn’t already been revealed as a snake-in-the-grass in the HBO documentary, this latest development would be enough to seal the deal.

Piquant — which is not being investigated in the scandal — released a statement last week that emphasized that Progress, which has been defunct for over a year, was the owner at the time the Gloria Wise loans were made. Nonetheless, Piquant has committed to repaying the loans in their entirety.

The story began to come to light in June, when New York State Attorney General Eliot Spitzer began investigating questionable loans and falsified government filings made by Gloria Wise to a number of agencies — even as the New York City Department of Investigation (DOI) is also looking into the matter.

In the meantime, the DOI has recommended that Piquant place the disputed $875,000 in an escrow account, pending the outcome of the investigation. The first payment into escrow — of $50,000 — was made on August 5, which only caused city investigators to complain that they had recommended that the entire $875,000 be placed into the account, which no one could touch without their approval.

“Air America has not followed that recommendation,” Keith Schwam, a spokesman for the Department of Investigation, told the New York Post.

The Sun, the Post and some blogs have done a good job of exposing the case, but some questions remain — three of the most important being, when did Piquant find out about the shady loans; what did they do about it; and how much of this $875,000 actually made it to Air America?

It’s too early to jump to conclusions — no one knows at this point what the outcome of the investigations will be — but one thing is for sure: some very big names on the media beat are conspicuously missing the boat on what may well be a juicy story.

Paul McLeary

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Paul McLeary is senior editor of Defense Technology International magazine, and is a former CJR staffer.