Naked Capitalism: PBS Scrabbling After Money

PBS Pimps Itself Out to Billionaire Who Campaigns Against Pensions for Gov’t Employees to Produce Scaremongering Series About Government Pensions

Posted on February 13, 2014 by

Now we know how much it takes to buy PBS programming: $3.5 million. It might even be less, but $3.5 million is a proven amount that will induce the soi disant public broadcasting network to fall all over itself and violate multiple written, supposedly sacrosanct policies, to produce shows with a story line consistent with the express aims of a right wing foundation.

And the ugliest part is that it was PBS that sought out and proposed this arrangement.

David Sirota reports in must-read piece at PandoDaily that a two-year (!!!) PBS series called Pension Peril which has as its biggest funder none other than than the Laura and John Arnold Foundation, that of former Enron trader John Arnold. And quelle surprise, the story line of the series just happens to fit exactly with the mission of Arnold’s foundation, that of ending pensions for government workers.

Here’s Sirota’s description of Arnold’s political campaign:

In recent years, Arnold has been using massive contributions to politicians, Super PACs, ballot initiative efforts, think tanks and local front groups to finance a nationwide political campaign aimed at slashing public employees’ retirement benefits. His foundation which backs his efforts employs top Republican political operatives, including the former chief of staff to GOP House Majority Leader Dick Armey (TX). According to its own promotional materials, the Arnold Foundation is pushing lawmakers in states across the country “to stop promising a (retirement) benefit” to public employees.

It’s important to understand that the the idea that there is some sort of crisis in public pension funds is a canard. There are particular pension systems that are in terrible shape, but that’s due to deliberate underfunding compounded by mismanagement. The worst is New Jersey, where Christie Todd Whitman started the shell game in 1995 by paying less that the actuarially required amount. And then after more than a decade of underfunding, Orin Kramer (who also happens to be a big Democratic party bundler) who was then Chairman of the New Jersey State Investment Council, pushed to put a large portion of the state’s $72 billion in pension assets with private money managers, as opposed to state employees. The money was allocated to risky strategies, and a lot wound up in investments in subprime plays, and even worse. $115 million invested in Lehman itself. And New Jersey also has the dubious distinction of being the only state ever sanctioned by the SEC for pension mismanagement.

So the understandable media interest in pension train wrecks obscures the general picture. As Sirota stresses:

Whether or not the foundation has direct editorial control of PBS news content, the series still appears to violate PBS’s rules against “pre-ordained” conclusions.

For example, the series’ title – Pension Peril - is the oft-repeated ideological buzzphrase of anti-pension campaigners. It also inherently pre-ordains the Arnold Foundation’s conclusion that public pension shortfalls are an imminent emergency (“peril”), even though data prove that is not the case. To the contrary, as the Center for Economic and Policy Research notes, the shortfalls are “less than 0.2 percent of projected gross state product over the next 30 years” and “even in the cases of the states with the largest shortfalls, the gap is less than 0.5 percent of projected state product.” That’s far less than the amount state and local governments are spending on corporate subsidies. As McClatchy Newspapers has noted: “There’s simply no evidence that state pensions are the current burden to public finances that their critics claim.”

Similarly, in each episode of the Arnold/PBS series that has aired, the reporting has followed the Arnold Foundation’s rhetorical lead by forwarding the idea that pension benefit cuts should be the primary policy solution to public budget problems. It does this by promoting the need for cuts to guaranteed retirement incomes and/or by refusing to mention that pension shortfalls are dwarfed by the amount state and local governments collectively spend each year on corporate subsidies (many of which do not create jobs).

Moreover, as this section suggests, this deal, which allowed Arnold to lever his spending with taxpayer dollars, violated numerous PBS policies. Here is Sirota on the policy on accepting funding from groups with clear policy agendas:

PBS seems to be defying its own rules and regulations about conflicts of interest….Along with barring editorial control and program financing from funders who want to “pre-ordain” conclusions, PBS’s rules also state that “when there exists a clear and direct connection between the interests… of a proposed funder and the subject matter of the program, the proposed funding will be deemed unacceptable regardless of the funder’s actual compliance with the editorial control provisions.”

As one example, PBS says “a series of documentaries, interviews, and commentary on the subject of drug abuse would not be accepted if funded by a special purpose nonprofit corporation whose principal mission is to foster the understanding of drug-related community programs.” As another example, PBS says “a nonprofit organization whose mission is to eradicate heart disease or to raise money for leukemia research could not fund a program designed to educate the public about these respective illnesses.”

Hhm, looks like a pretty flagrant violation, no?

In addition, PBS’s rules and FCC guidelines stipulate that “All underwriters must be identified in video by their name and/or logo,” and programs on controversial subjects require even more disclosure. But Sirota tells us:

Despite those rules and regulations, though, Pando could find no explicit disclosure in any PBS “Pension Peril” episodes that the series is directly financed by the Laura and John Arnold Foundation, much less that the foundation’s benefactor, John Arnold, is one of the nation’s biggest financiers of the ongoing legislative push to slash public pension benefits.

The only notification that Arnold supports PBS comes “occasionally” in a lengthy list of supporters at the end of PBS News Hour and in another long list of donors of flagship station WNET, which is producing the series.

Finally, remember that PBS conceived of and pitched this deal:

…the Arnold Foundation spokesperson tells Pando that it was PBS officials who first initiated contact with Arnold in the Spring of 2013. She says those officials actively solicited Arnold to finance the broadcaster’s proposal for a new pension-focused series. According to the spokesperson, they solicited Arnold’s support based specifically on their knowledge of his push to slash pension benefits for public employees.

And an indignant statement released by the foundation, which fails to dispute any facts in the article while trying to depict it as inaccurate, and provides further support for how Sirota depicted the relationship. From the foundation’s letter:

The agreement with WNET is in all respects our standard grant agreement, which LJAF has signed with virtually all of our grantees (for a list of such grantees, see http://www.arnoldfoundation.org/grants). As we explained to Mr. Sirota, that standard grant agreement provides LJAF with the ability to stop funding in the event of extraordinary circumstances, such as fraud or the change of leadership of a grantee.

The stated purpose of the grant, as set forth in our grant agreement with WNET, was to “educate millions of Americans on the implications of looming debt and the tough choices ahead as these unfunded liabilities threaten to crowd out funding for education, public safety and other essential public services.” The project sought to “raise awareness of which cities and states are in the direst situations and how further crisis and/or bankruptcy might be averted, with a special focus on leaders confronting the issue head-on, proposed solutions and models of reform.”

The fact that the money was given in the form of a grant means it was expressly to further the objectives of the foundation. And most grants are structured to provide for periodic payments, based on progress of the grantee in fulfilling the statement of work. Thus, while Sirota was originally told that the the foundation had the right to halt funding in the event of extraordinary circumstances such as fraud, it’s almost certain that the grant itself contains provisions that allow funding to be halted for nonperformance. Given that the purpose of the grant was narrow, to “educate…..on the implications of looming debt and the tough choices ahead as these unfunded liabilities threaten to crowd out funding for education, public safety and other essential public services” deviation from this message would count as nonperformance. No wonder PBS and the foundation are continuing to refuse to release the text of the agreement.

PBS is following in the footsteps of other established, once highly revered organizations like Demos in the UK and the Roosevelt Institute here, having conservative parasites gaining control of once-liberal hosts. These organizations are highly prized targets, since loyal audiences accept what their trusted source tells them and finds it hard to believe that their interests are being betrayed. But anyone who is still regularly listening to PBS is either wishful or not paying attention. Its new CEO Gary Knell is a heavyweight conservative propagandist, having been a financial services industry lobbyist, patron of conservative think tanks, and Republican donor.

If you watch or listen to PBS, you need to stop. Now. If you’ve ever given money to them, you need to tell them they are never getting a dime from you again. And send this post to all your family members and colleagues who still might be consuming this toxic-to-ordinary-Americans product.

* * *

Then there’s more here, in an article entitled “The Wolf of Sesame Street: Revealing the secret corruption inside PBS’s news division.” Here’s the art:

bathtub

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