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September 20, 2005
Air America: Goodfriend Says Piquant Strongarmed Him

The New York Sun's David Lombino continues to put his cross-town rivals to shame in covering the scandal at Air America. Today, he reveals that David Goodfriend has submitted an affadavit in the Metro lawsuit seeking $1.5 million in back fees from Piquant that states the former executive objected to the "fraudulent conveyance" of Progress Media's asset sale to Piquant, and received threats from Air America owners as a result:

A Clinton administration official who served as a top executive of Air America, the politically liberal radio network, says he was "sickened" to his core by the thought that the network was funded by money taken from a Bronx Boys & Girls Club.

The former White House official, David Goodfriend, said that Air America's investors created a new company soon after discovering the transfers. They were motivated, he said, in part by a desire to avoid the $875,000 liability to the Gloria Wise Boys & Girls Club. ...

Mr. Goodfriend said in the deposition that when investors found out about the money from the Boys & Girls Club, "They hear this and hear about other liabilities and conclude, I think we better just form a new company clean of any old liabilities."

Mr. Goodfriend, now a Washington based lawyer, said in the sworn deposition that he refused to sign an agreement that transferred ownership and assets of Air America to a new company, Piquant LLC, from Progress Media because he believed it constituted a "fraudulent conveyance."

Goodfriend, who worked as an assistant press secretary for the Clinton administration, also has a connection to the Gloria Wise Boys & Girls Club, from which Air America took $875,000 to keep the liberal netlet afloat. Evan Montvel Cohen arranged to have Goodfriend join the advisory board of the non-profit at the time Cohen started to bleed the charity of its funding. Goodfriend makes the third such connection between GW and AAR; former CFO Sinohe Terrero also worked at GW prior to the illegal transfers.

Goodfriend also testified in his affadavit that Charles Rosen approved the transfers to Progress Media. Why is that important?

Goodfriend discovered that Progress Media attempted to float other businesses at the same time that debt threatened to drown it altogether. Jacob Rosen, whose brother Charles ran Gloria Wise, wrote checks against Progress Media's bank accounts to fund a venture shortly after applying for and being denied a loan by GW's board. After Goodfriend left Progress and just before the asset sale to Piquant, Jacob Rosen told Goodfriend that Cohen had offered to invest in his businesses on behalf of Progress, but the checks had all bounced, and Rosen needed Progress to make good to save his ventures from failing; he wanted Goodfriend to intercede on his behalf.

What does this mean? It looks like Progress/Piquant wasn't the only shell game in town. Jacob Rosen goes to GW for a loan, and the board turns him down. His brother, who runs GW, then approves a massive "loan" to Progress Media/AAR, run by his friend Cohen. Cohen then agrees to "invest" in Jacob Rosen's businesses, but the money disappears. By May, Jacob wants his money, Cohen doesn't have it, and Goodfriend finds out about all of it. When the rest of the Progress ownership figures it out, they decide to pull an "asset sale" to distance themselves from the embezzlement at GW.

In order to do that, they have to have several of their internal creditors and executives sign off on the transaction. Al Franken, for instance, does so, as does a clueless Lizz Winstead. David Goodfriend refuses, and receives threats as a result:

Mr. Goodfriend said he was threatened with lawsuits when he refused to comply with the demands of several current investors, including entrepreneur Doug Kreeger and a Florida attorney who currently hosts a radio program on Air America, J. Michael Papantonio.

"I was told my life would be made very difficult if I didn't sign the document," Mr. Goodfriend testified. "I understood it to mean that they are all a lot richer and than I and could afford lawyers and could sue me whether they had a case or not. And that I would lose a lot of money as a result or that they would try to get the government to prosecute me or something of that nature."

The deeper one looks into this mess, the wider it becomes. Now we have two possible fraudulent conveyances of sorts, one involving Progress/Piquant and the other a money-laundering conspiracy involving the Rosen brothers and Evan Cohen. And yet, this still doesn't interest the New York Times at all.

Sphere It Digg! View blog reactions
Posted by Ed Morrissey at September 20, 2005 5:28 AM

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