Executive summary of the report by CPB's inspector general

Review of Alleged Actions Violating the Public Broadcasting Act of 1967, as Amended

Released by  CPB Nov. 15, 2005

The Corporation for Public Broadcasting, Office of Inspector General, has conducted a review of alleged violations of the Public Broadcasting Act of 1967, as amended.

We found evidence that the Corporation for Public Broadcasting (CPB) former Chairman violated statutory provisions and the Director’s Code of Ethics by dealing directly with one of the creators of a new public affairs program during negotiations with the Public Broadcasting Service (PBS) and the CPB over creating the show. Our review also found evidence that suggests “political tests” were a major criteria used by the former Chairman in recruiting a President/Chief Executive Officer (CEO) for CPB, which violated statutory prohibitions against such practices.

Our review of the hiring of a consultant to review program content for objectivity and balance showed that such reviews were consistent with Section 19(2)(B) of the Public Telecommunications Act of 1992, however problems occurred when the former Chairman initiated such actions without informing the Board and signed the contract without Board authorization. Further, CPB has never developed a policy for how such reviews should be conducted and what would be acceptable criteria for evaluating program content. Had a policy been established and developed in conjunction with the public broadcasting community, the community would have understood the purpose and use of such a review to ensure accountability to Congress and the American people, as envisioned by the statutory requirement.

Our review of the creation of the ombudsman function showed that by expanding the public’s ability to have issues of objectivity and balance addressed, CPB’s actions were consistent with their responsibilities under the Public Telecommunications Act of 1992.

Problems arose by the way the function was created. Our review of public concerns about White House officials’ involvement disclosed that a White House employee briefly did some work on the ombudsman press release and related talking points just prior to joining CPB. This work appeared to be advisory in nature and she did not provide the ombudsmen with guidelines on how to operate or interfere with their functioning.

Our review of the alleged hiring of lobbyists to assist CPB in addressing a proposed amendment to the reauthorization bill to change the composition of the Board found that the consultants provided only strategic advice to CPB about the legislative process and how to handle requests for information from committee staff. CPB’s actions to seek professional advice were consistent with their responsibilities; however executive management’s contracting for the consultant’s services was not handled in accordance with CPB’s contracting procedures.

While we believe the aforementioned violations were primarily the result of the former Chairman’s personal actions to accomplish his various initiatives, our review also identified serious weaknesses in the corporate governance system. CPB’s internal control mechanisms did not function to protect the CPB Board of Directors (Board) and the Corporation. Potential problems in procurement and new policy initiatives should have been raised up the chain-of-command to the former Chairman and the full Board.

Specifically, established procurement and contracting practices were bypassed in processing actions for consultant services initiated by the former Chairman and executive management (e.g., in contracting with a consultant to evaluate program content and to identify and select two ombudsmen candidates without competition).

Further, CPB management allowed consultants to begin work before contracts were executed and, in some instances, months before these activities were entered into the accounting system. In addition, the lack of formal personnel policies governing executive recruitment practices left CPB managers vulnerable to congressional criticism over hiring decisions.

Our review found an organizational environment that allowed the former Chairman and other CPB executives to operate without appropriate checks and balances. Many factors helped to create this environment, including:

  • the lack of specificity in CPB’s By-Laws regarding the roles and responsibilities of the Board and CPB management;
  • top management’s attitude towards internal controls; and
  • the lack of transparency in decision-making within the Board, leadership and the Board, and within CPB’s management structure.

The former Chairman told us that he relied on CPB management to ensure that established procurement practices were followed and he assumed proper procedures had been utilized.

Finally, our observations should not be generalized to the wide ranging activities conducted by CPB or their Community Service Grant making responsibilities. Our review had a very narrow scope, looking at selected consultant contracts and programming grants, as well as executive recruitment actions over the last 34 months.

In response to our report the CPB Board of Directors has made a serious commitment to update and improve the governance and operations of CPB. They will be implementing many of the recommendations in this report and will be studying others, as well as taking other steps beyond those contemplated in the report. The Board’s response is attached as Appendix B. At their request, we have provided comments received from the former Chairman as Appendix C and the former President/CEO as Appendix D.

RELATED LINKS

Complete text on CPB’s website (large PDF).

Complete text on Current‘s website.

Text of Public Broadcasting Act, which authorizes funding of CPB.

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