Governor ousts Rogers, board at Georgia network

Originally published in Current, June 7, 1999
By Karen Everhart Bedford

Werner Rogers, executive director of Georgia Public Broadcasting for more than four years, and all the appointed members of his commission were forced to resign May 26 [1999], after a weeks-long scandal over financial mismanagement of the state-operated public television and radio network. He leaves GPB severely damaged in public esteem, carrying a $7 million accumulated deficit.

"The closer I look and the longer I look at Georgia Public Broadcasting, the more obvious it becomes that it needs far more than a quick fix," said Gov. Ray Barnes, in a May 26 statement that coincided with Rogers' resignation. "Nothing less than a thorough reexamination and retooling of the entire operation from the ground up is called for. And that is what's going to happen."

GPB, a network of nine TV and 14 radio stations, is generously funded by the state: in 1997, the state spent $17.3 million to support public TV, according to CPB. Housed in a brand-new 277,000-square-foot Atlanta facility with state-of-the-art equipment, the pubcaster has positioned itself as a leader in the DTV transition, an ambition that contributed to its current predicament.

Barnes' chief of staff on June 2 swore in a new chairman and five members of the Georgia Public Telecommunications Commission, At the governor's recommendation, the commission in turn named a new executive director: State Auditor Claude Vickers, whose investigation brought GPB's troubles to light.

"My first priority is to ensure a sound financial foundation for Georgia Public Broadcasting by implementing strong fiscal management practices, policies and procedures," Vickers said in a statement. Vickers served seven years as state auditor, an appointed public servant reponsible for auditing more than 400 state and local government organizations. He graduated from the University of Georgia with a degree in accounting and began a career in state government in 1967.

After his swearing in, Vickers named Jim Lyle, a senior official in the state's Department of Administrative Services, to replace Frank Bugg, GPB's longtime deputy director.

Observers noted that the GPB scandal was not politically motivated, as Rogers alleged at one point, but turned on genuine concerns about GPB's continued viability. "They moved into this enormously expensive building, and they just couldn't pay for this building and the super digital equipment that they put in it," said Phil Kloer, TV critic for the Atlanta Journal and Constitution. "That's what it comes down to."

News accounts detailed the lavishness of the state network's new $45 million facility, largely financed by the state. Among its features are three production studios with audience seating, a sky-lit atrium and a private shower in the executive director's office. Rogers acknowledged that the network was living beyond its means: "It's like moving into a bigger home with bigger bills, but your salary hasn't increased," he said.

Over the last four years, GPB's operating costs almost doubled as it expanded educational satellite services and moved into the new headquarters, according to Frank Bugg, former deputy executive director. Its budget now is roughly $31 million.

During the scandal, Rogers attributed the network's financial difficulties to its increased operating costs, which outpaced state funding, and a $2.6 million hike in Georgia Public TV's PBS dues, which went up when state funds for the new headquarters appeared in its annual revenues. Added to its costs were payments of nearly $2 million a year on a $10 million lease-purchase agreement that GPB negotiated to buy equipment.

Previous Gov. Zell Miller told GPB that he'd back funding of the debt service, according to Bugg, but he didn't, and Roger's decision to buy the equipment on credit came under criticism. "The General Assembly had perhaps been pound-foolish not to appropriate enough to make full use of GPB's new facility, but making a financial end run around the legislature was not the proper response," the Journal and Constitution editorialized May 14.

Hot checks

The auditors' investigation was requested by the new governor, a Democrat (like Rogers), who made a campaign promise to audit all state agencies. GPB had been operating at a deficit for two years and wrote $218,000 in bad checks last summer; the network "got his attention" very quickly, recalled one staff member who requested anonymity.

"The new governor ... caught wind of this and sent someone in to look, and it was bad," commented an Atlanta journalist.

The governor's office released a draft overview of the investigators' report before it had been shared with Rogers, according to the observer. "That was the first sign he was in trouble."

Among the investigators' findings, as published in a final report:

GPB spent as much as $4.5 million more than it earned last year, largely because it overestimated income to be generated from its new facility and equipment. Auditors' attributed this year's deficit, projected to total $1.7 million, to GPB overspending its budget for operating expenses, equipment purchases and contracts.
GPB subsidized the cost of providing a Japanese language distance learning course to 475 out-of-state students to the tune of $442,000. Only 106 Georgia students participate in the course.
Inadequate contracting procedures limited GPB's control over the costs of outside services. GPB paid more than $472,350 this fiscal year to a marketing firm with which it had no written contract. Auditors also cited an unfavorable contract with a firm that handles service calls and a teacher help desk for the PeachStar ITV service.
A number of GPB staff members "seem committed to the idea of providing the state with a first-class public broadcasting system," yet are "being adversely impacted by systemic management problems that have resulted in a lack of unity and teamwork throughout the organization."

Rogers pledged to address many of the criticisms raised by the audit, as well as to cut spending and increase revenues. But he also suggested that the state use lottery monies to ease GPB's crunch. Initially, he dismissed calls for him to step down.

When Rogers finally announced his resignation, he disputed the negative coverage: "GPB employees should be receiving accolades, rather than having their work targeted as wasteful or extravagant. The truth is that Georgia Public Broadcasting is doing far more right than we are doing wrong. Our programming is of the highest caliber; our staff is first-rate; our fundraising is setting records; and our facilities and equipment are what Georgia needs to enter the digital age."

GPB's managers proposed a 10 percent across-the-board budget cut and efforts to earn more revenues. "We basically want to save every nickel we can without interrupting the program service," said Bugg. Although Vickers had not been officially hired at Current's deadline, Bugg anticipated that GPB's new chief would "go at least that far or farther."

Financial irregularities at GPB are likely to get more attention during the trial of Richard Cramer, former c.f.o. for GPB, who's been indicted on earlier embezzling charges. Bugg said an assistant district attorney on the case indicated it would be moving toward trial soon. Cramer was indicted in April 1997 on 46 counts of theft by taking, theft by deception, and false statements. Bugg estimated that he is alleged to have stolen some $50,000.