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August 6, 2005
Air America: Spitzer's Difference

Today's New York Post reports that New York's headline-grabbing Attorney General Eliot Spitzer has finally decided to look into the shady business dealings between Gloria Wise Boys & Girls Club and Air America. For jurisdictional purposes, the focus of Spitzer's investigation will start with Gloria Wise, but if allegations of fraud and forgery prove true, Spitzer will no doubt have to expand the scope of his probe:

State Attorney General Eliot Spitzer yesterday opened an investigation into the Bronx social-services agency that made $875,000 in bizarre loans to Air America radio, The Post has learned.

"We are looking into it in consultation with the city's Department of Investigation," Spitzer spokesman Darren Dopp revealed.

The highly unusual loans to the left-wing radio network were made by the Gloria Wise Boys & Girls Club which was visited by one of Spitzer's investigators yesterday, officials said.

Dopp said Spitzer's probe is examining "the conduct of the board of [the] charitable not-for-profit organization. The question is: Was their action appropriate?"

As CQ's legal analyst Eric Costello noted a few days ago, Spitzer's absence from this investigation seemed rather strange. Spitzer made himself a national name by conducting high-profile investigations into the disbursements from 9/11 charities, and due to his political ambitions, routinely plays for the bleachers whenever he can show himself a defender of the downtrodden in his oversight of charities in New York. In this case, not only did $900,000 disappear from programs earmarked for poor Bronx children and Alzheimer's patients, but the irregularities caused by the disappearance forced Gloria Wise to lose $10 million in further funding for its charitable operations.

That should have made headlines, but the New York Times appears much more interested in digging for dirt on John Roberts' two toddlers than they are in reporting on potential corruption at Gloria Wise and Air America involving city and state grant money. Up to now, it looked like without those headlines, Spitzer had no interest in doing his job. So what happened to change his mind?

After the Air America scandal erupted last month, Internet bloggers and Republican critics began pounding Spitzer for not intervening.

Holding the powerful accountable -- that sounds like what the media claims as its mission. The New York Sun and the New York Post do that, but the Paper of Record makes that mission conditional on whose power is in question. Not a word of Spitzer's investigation into Gloria Wise makes it into the Gray Lady today.

The Post has a couple of other tidbits in the story which prove rather interesting. Rather than serving as a member of the board, which usually means a voluntary position for most charities (not all), Air America founder Evan Cohen actually held a salaried position at Gloria Wise. Cohen was GW's "development director" and earned a $74,000 annual salary. The Post does not describe the specific job duties of that position, but generically a development director would have responsibility for creating new programs and services for an organization, with officer-level access to the money.

Remember the Camp Air America project? That sounds like a handy bit of promotion, doesn't it? It also explains why so much of GW's funding could disappear so quickly and wind up at Air America. Just being a single member on the board would not give Cohen that kind of access -- but a development director could easily cut checks, if not so easily provide the explanations later.

Another suspicious development reported by the Post is the nature of the payments Air America will make to GW. Air America made its first $50,000 payment yesterday. However, DOI officials expressed dismay that the payment went into an escrow account that Air America's attorneys control, rather than one that the DOI would supervise. The DOI wants to supervise disbursements of the returned funds -- but the way the escrow works, Air America attorneys can approve any kind of disbursements it wants. In effect, it amounts to no repayment at all. The netlet only segregated $50K of its money into another of its own accounts.

Can Air America do anything honestly? As long as the bulk of the media continues to ignore this scandal, they probably feel no need to do so.

Keep up with the latest on Air America's scandal at Michelle Malkin and Radio Equalizer.

Sphere It Digg! View blog reactions
Posted by Ed Morrissey at August 6, 2005 8:10 AM

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