This kicks it up a notch. As I have said, the story, to me, is not Air America or the charity. It's how long the NYT can keep it spiked, and how they will handle it. If they don't cover it now, they REALLY look bad. Malkin's comments first, then the Post story.
AIR ENRON: SPITZER STEPS IN
By malkin
This morning's New York Post is reporting that New York State Attorney General Eliot Spitzer has launched an investigation into the shady $875,000 loan from Gloria Wise Boys & Girls Club to Air America.
Spitzer's inquiry is focusing on the conduct of Gloria Wise's board of directors. "The question is: Was their action appropriate?," Spitzer spokesman Darren Dopp told the Post.
That focus probably makes sense given Spitzer's oversight of charities in the state, but it doesn't necessarily mean Air America is off the hook. One of Air America's former officers, Evan Cohen, has been accused of embezzling the loan money. Air America's current managers did not proactively disclose the questionable loan to law enforcement officials despite having known about it for more than a year. Air America still hasn't said whether Cohen stole the money or relayed it to the network's coffers.
The New York Post article also reports that Air America has begun repaying the loan, but is not complying with a recommendation by the city's Department of Investigations regarding how it should be repaid:
The first payment of $50,000 was made yesterday, and it was deposited into an escrow account controlled by Air America's lawyer.
That unsettled city investigators, who had recommended that the entire $875,000 be placed into an escrow account that no one could touch without their approval.
Hugh Hewitt has been pursuing the nonprofit angle for more than a week. In one post, he presciently asked, "Where is Elliot Spitzer[?]"
According to Bore America's scandal clock, it has now been 10 days since the story first broke. "Air America" is currently the fifth most frequently searched term at Technorati. How much longer will Air America's cheerleaders at the New York Times remain silent?
New York Post
STATE PROBES 'KID' LOAN TO LEFTY RADIO
By DAVID SEIFMAN in New York and FREDRIC U. DICKER in Albany
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?"
Spitzer has jurisdiction because his office oversees charities in the state.
Hillel Valentine, a longtime member of the executive board of Gloria Wise — almost entirely funded by government contracts and grants — told The Post that "a gentleman from the Attorney General's Office" had visited the organization yesterday.
"I expect that," said Valentine, 80, a former assistant chief in the New York Transit Police Department. "That's their job. I would do the same thing myself."
He referred all other questions to a public-relations firm retained by Gloria Wise, which said it could provide no further information.
Valentine has previously said Evan Montvel Cohen, Air America's founder who was working as a $74,000-a-year development director at Gloria Wise, pushed through the loan by "conning" everyone on the board.
Cohen sold his interest in Air America to Piquant LLC, which agreed to repay the loan in installments to Gloria Wise even though it claimed no legal obligation to do so.
The first payment of $50,000 was made yesterday, and it was deposited into an escrow account controlled by Air America's lawyer.
That unsettled city investigators, who had recommended that the entire $875,000 be placed into an escrow account that no one could touch without their approval.
"Air America has not followed that recommendation," said Keith Schwam, a spokesman for the Department of Investigation.
"DOI was informed today that Air America's check for $50,000 was deposited into Air America attorney's escrow account. No provision has been made for DOI to approve disbursements from that account."
Until its downfall, Gloria Wise and an associated agency, Pathways for Youth, had grown into one of the largest social-service providers in The Bronx with an annual budget of $10 million.
It provides a wide spectrum of services, from senior centers to after-school activities.
All of its city contracts were yanked once the loan to Air America was uncovered.
Gloria Wise is now struggling to stay afloat with a reduced schedule of programs. It is also searching for a new executive director to replace Charles Rosen, who resigned abruptly on June 30.
After the Air America scandal erupted last month, Internet bloggers and Republican critics began pounding Spitzer for not intervening. |
