Christo steps aside at WBUR as licensee probes allegations
Jane Christo, celebrated but controversial leader of Boston University's WBUR-FM, resigned Oct. 15 , two weeks after the university said it was investigating her administration.
"[T]he present controversy regarding my leadership of WBUR has become too large a distraction," she said. "I have decided to step aside so that the focus of the staff and management at WBUR can be returned to providing our listeners with the very best in public radio news programming."
The university announced Oct. 1 that it would look into allegations concerning hiring and fiscal irregularities at the station and referred the case to the Massachusetts attorney general while investigating internally. Criticism of Christo's management had snowballed since the station announced unexpectedly that it would pull out of a six-year-old radio news service in Rhode Island and sell two radio stations there.
"I am confident that when concluded, the internal investigation will show that the allegations of improper conduct against me are baseless," Christo said. She declined Current's request for an interview.
Since assuming leadership of WBUR in 1979, Christo had built the station into one of the country's most successful public radio outlets, a pioneer in news programming years before the format's current popularity.
For much of her tenure the station's audience growth well outpaced that of the public radio system overall, and Christo decisively established the station's dominance over rival WGBH-FM.
WBUR also brought half a dozen programs, including The Connection and the blockbuster Car Talk, to a national stage.
But in recent years Christo ran into financial troubles. By the end of fiscal year 2004, the station had accumulated a deficit of almost $16 million.
"She deserves all the credit in the world for bringing WBUR to this point," says James Segel, chair of the station's advisory board. But "there was maybe just a wishful thinking that the revenues were going to catch up."
"It was as if it was Citizen Jane," says former WBUR talk show host Bruce Gellerman, referring to Orson Welles' flawed newspaper magnate. "She just overreached her ability."
Boston University moved quickly to appoint an interim g.m., choosing Peter Fiedler, a former TV exec who is an assistant v.p. at the school.
Tips spark investigation
The school's investigation of WBUR stems from two anonymous letters that the administration received Sept. 22, says spokeswoman Nancy Sterling. It is unclear whether the letters came from one or more senders.
The university delegated the investigation to its general counsel's office and internal auditors. It contacted the Massachusetts attorney general's office the day it received the letters. The office has declined to confirm or deny involvement.
Sterling would not divulge the letters' charges but noted that some of the alleged practices, if true, would violate stringent new university policies about disclosing familial relationships when hiring employees.
The Providence Journal and both Boston dailies, citing unidentified sources, said the allegations included charges regarding nepotism, travel expenses and misuse of donated funds.
Boston University has moved Zach Christo, Jane's son, out of a writing and editing job at the station and into a similar position elsewhere in the school, Sterling says. "We thought that it would be most comfortable and fair for everyone involved," she says.
Christo's troubles in the public eye began last month when she abruptly announced that WBUR would sell WRNI, its AM station in Providence, R.I., and a sister station in Westerly. The decision angered donors who had raised more than $3 million to start the Rhode Island service and sparked intensive coverage by Boston and Providence newspapers, drawing attention to the station's financial woes.
Mary Stohn, WBUR's spokeswoman for 25 years, said one reason she quit working for the station Sept. 12 was that she disagreed with the way the station was handling its Rhode Island announcement and "did not want to implement the plan."
The university postponed the sale of WRNI when Rhode Island's attorney general asked to see a pile of documents related to the creation and operation of the station. BU has delivered the documents and expects to meet with the attorney general at the end of the month, Sterling says.
Christo's resignation will not further delay the sale of WRNI, says a university spokesman, but backers of the Rhode Island station hope her departure will work in their favor.
"Jane, whether justly or unjustly, was perceived to have been setting the tone of this whole interchange, and she's out of the picture now," says Eugene Mihaly, president of the Ocean State Foundation for Public Radio, which helped bring WRNI to Rhode Island. "We hope to be talking shortly to the leadership at Boston University, and we'll see what comes of that."
Mihaly acknowledges that legal action will be an option, though he is unsure whether it would succeed. WRNI supporters will first wait to see what comes of the Rhode Island attorney general's review, he says.
"There's certainly a lot of equity on our side, in the sense that private individuals put a lot of money into this," he says. "Now, theoretically, this asset could be sold to a private party and the proceeds accrued to Boston University, and there's just a fundamental unfairness in that."
Mihaly and other Rhode Islanders met Oct. 7 with WGBH executives to discuss whether the Boston station could assist with the future operation of WRNI short of buying the station. The conversation was constructive and "a dialogue will continue," Mihaly says.
An investigation of management practices at WBUR-FM found improprieties that licensee Boston University is moving to correct, according to the school.
BU began a six-week investigation Oct. 1  after receiving anonymous letters accusing WBUR and General Manager Jane Christo of financial mismanagement and improper hiring practices.
Christo called the charges baseless but resigned Oct. 15, saying the controversy surrounding her management had become "too large a distraction" from the station's work. Her earlier decision to sell two news/talk AM stations in Rhode Island sparked a backlash and brought attention to WBUR's $15 million deficit.
The university said its general counsel's office and an internal audit team found no truth to allegations that WBUR misused grant money and abused tuition remission benefits. But it announced Nov. 8 that it did find problems in other areas:
Hiring: WBUR's hiring practices, though legal, "created the appearance of granting preferential hiring treatment to a small number of applicants." Recently adopted hiring policies that require disclosing familial relationships will prevent future problems, the university said.
Expenses: BU found no recurring abuse of reimbursements, but it did find that Christo used station funds to cover personal expenses, as Christo concedes.
Max Stern, the ex-manager's attorney, said Christo misspent $6,800. Personal expenses from 1999 accidentally covered by the station made up nearly half that sum, he said. The rest was spent on business-class flights without prior approval. Christo will repay the university, Stern said.
BU will start requiring more sign-offs on expenses and spending reviews by auditors, said university spokeswoman Nancy Sterling.
Contracts: WBUR awarded certain contracts on "an ongoing, no-bid basis," BU said. The practice has been discontinued.
Vehicles: Christo often drove a station car home, Stern said, which the university deems inappropriate use of a station-owned vehicle.
Travel packages: For years WBUR ran a travel program called Citizens of the World for station donors along with BBC and NPR news personalities. BU has ended the program, calling it "well-intentioned" but "neither successful nor effectively managed." Sterling declined to elaborate.
BU also announced that Grant Thornton, LLP, a management advisory firm, will review the station's business and management practices and may recommend changes to Peter Fiedler, WBUR's interim g.m. and an assistant v.p. at the university.
Stern put a positive spin on results of BU's investigation. The university "determined the allegations are without merit," he said, and Christo's management practices, "save for a couple of very minor exceptions, were compliant with existing University policy and done with the full knowledge of University officials."
BU announced earlier that it had referred the charges against WBUR to the Massachusetts attorney general. The attorney general's office declined to comment on whether it is also investigating.
Meanwhile, supporters of the news/talk stations in Rhode Island that WBUR is planning to sell are still fighting to keep the stations public. They recently had a "cordial and productive" meeting with BU's president, said Eugene Mihaly, president of the Ocean State Foundation for Public Radio.
Rhode Island Attorney General Patrick Lynch is continuing to review the WRNI situation and the state's options. Lynch looks forward to getting the full results of BU's investigation of WBUR, said a spokesman for the attorney general.
Report finds station “sound” but suggests focus, fewer managers
A consultant’s report on Boston’s WBUR-FM found the station “fundamentally sound” but said its “management structure and business systems have not kept pace with its growth in revenue.”
The report comes five months after the resignation of Jane Christo, WBUR’s longtime g.m. Christo set off a chain reaction of bad news in September when she unexpectedly announced plans to sell WBUR’s sister stations in Rhode Island. Ensuing media coverage made much of an accumulated deficit of almost $16 million, accusations of mismanagement and complaints from Rhode Island donors that WBUR was taking away the news outlets they had helped establish just six years earlier.
Boston-based Grant Thornton LLP, a business advisory firm, prepared the new evaluation of WBUR. Its report recommends that the station develop an “explicit written strategy,” pare senior management and work more closely with BU to save money and oversee staff.
“The former g.m. felt it was important that a total autonomy [from BU] be maintained,” says Peter Fiedler, WBUR’s interim g.m. and an assistant v.p. at the university. Grant Thornton recommended hiring a g.m. with “loyalty both to WBUR and the University.”
WBUR’s newsroom will retain editorial independence, Fiedler says. But the station could save money by using the university’s publications wing to print literature and its technology division to host its website.
BU will also handle WBUR’s human resources functions, heeding another Grant Thornton recommendation. Under Christo, the station retained its own personnel manager, who will leave in July.
In addition, consultants suggested that WBUR cut its senior managers from eight to three, retaining a program director and creating new positions of directors of development and administration. The change would reduce the g.m.’s involvement in everyday affairs, Fiedler says, allowing more time to focus on mission and raise funds.
BU recently began looking for a new g.m. Fiedler says he does not want the job.
The university has already cut WBUR’s spending, adjusting staffing and ending Citizens of the World, a travel program for station donors that BU’s investigation found to be ineffective and poorly managed.
Though WBUR will have accumulated a deficit of more than $19 million by the end of this fiscal year, Fiedler says, the hemorrhage is slowing. He expects station operations to show a $500,000 surplus next fiscal year. Much of the additional deficit comes from correcting past errors in putting vendor charges in the books, he says.
A BU investigation shortly after Christo’s departure found that the former g.m. had covered personal expenses with station funds and awarded some contracts on an ongoing, no-bid basis, among other improprieties. The university now plans to watch the station more closely and introduce financial and administrative controls, says BU spokeswoman Nancy Sterling.
The future of Boston’s Rhode Island stations, WRNI in Providence and a repeater in Westerly, is still unsettled. Patrick Lynch, the attorney general of Rhode Island, is investigating whether BU improperly used the money Rhode Islanders put up to launch the stations. BU has postponed the sale until the investigation ends, Fiedler says.
WRNI’s backers have been working to keep the station away from commercial buyers. They have retained Public Radio Capital and visited New Hampshire Public Radio to solicit advice on developing a business plan, says Eugene Mihaly, president of the Ocean State Foundation for Public Radio. Mihaly’s group helped raise more than $3 million to start WRNI.
Mihaly says WRNI’s supporters are exploring all options for keeping the station public, including running it themselves, operating it for BU or working with another institution.
CPB has asked Boston’s WBUR to return more than $176,000 after an audit found that the station claimed too much nonfederal financial support from fiscal years 2001 to 2003. The station is contesting CPB’s figures.
The amounts of stations’ CPB grants are based on their nonfederal support numbers.
The March 31 audit from CPB’s Office of the Inspector General said WBUR misreported almost $3 million in in-kind contributions as direct revenues and that almost $2.1 million of that amount did not qualify as in-kind. Proper accounting would have reduced the station’s Community Service Grants in those years.
The audit was routine but followed recent controversy over WBUR’s finances. The station’s efforts last fall to sell two AM stations in Rhode Island not only caused an uproar but drew increased attention to its deficit of almost $16 million.
CPB said WBUR also reported underwriting trades that no longer qualified as in-kind since a 1996 change to NFFS guidelines and that supporting documentation was lacking. Catering of a Friday lunch program was also inappropriately recorded as an in-kind contribution, the IG said.
WBUR has yet to return the CSG money because it disagreed with the IG’s finding. The station and the auditor are trying to resolve their differences.
CPB also found that WBUR inaccurately prepared annual financial reports and made errors in its financial records. It urged the station to improve its bookkeeping. WBUR pointed out that it has hired a new business manager and cited recent efforts to improve its administrative practices.
Finally, CPB found that WBUR closed board meetings without explanation and did not provide complete financial reports for public review. Both are required of CPB-funded stations. WBUR has since complied with those rules.
Web page posted Oct. 18, 2004, updated Feb. 22, 2005
Copyright 2004 by Current Publishing Committee