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 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.
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posted Nov. 15, 2005