A Clinton administration official who served as a top executive of Air America, the politically liberal radio network, says he was "sickened" to his core by the thought that the network was funded by money taken from a Bronx Boys & Girls Club.
The former White House official, David Goodfriend, said that Air America's investors created a new company soon after discovering the transfers. They were motivated, he said, in part by a desire to avoid the $875,000 liability to the Gloria Wise Boys & Girls Club.
Mr. Goodfriend's comments came under oath in a six-hour deposition conducted May 16, 2005, as part of a civil lawsuit by a creditor seeking to collect a New York State court judgment against Air America. A transcript of the deposition was obtained by The New York Sun from a source on condition of anonymity; it was confirmed as genuine by a lawyer, Randy Mastro of Gibson, Dunn & Crutcher, who represents the creditor suing Air America.
The deposition could boost Mr. Mastro's case in the $1.5 million suit against Air America.
Mr. Goodfriend said in the deposition that when investors found out about the money from the Boys & Girls Club, "They hear this and hear about other liabilities and conclude, I think we better just form a new company clean of any old liabilities."
Mr. Goodfriend, now a Washington based lawyer, said in the sworn deposition that he refused to sign an agreement that transferred ownership and assets of Air America to a new company, Piquant LLC, from Progress Media because he believed it constituted a "fraudulent conveyance."
A spokeswoman for Piquant has denied that the transfer of ownership was fraudulent.
Mr. Goodfriend, now 37, had met the founder of Air America, Evan Montvel Cohen, when they both attended Beloit College in Wisconsin. Mr. Goodfriend said in the deposition that he thought Mr. Cohen borrowed the Gloria Wise funds and disguised them as his own personal investment in the radio network.
"The notion that money left the Gloria Wise Boys & Girls Club so that Evan could pretend that he was investing in Air America sickened me to my core," Mr. Goodfriend said in the deposition.
Mr. Goodfriend said he was introduced to the Gloria Wise Boys & Girls Club by Mr. Cohen, who simultaneously served as chairman of Air America and development director for the Bronx nonprofit.
According to the deposition, Mr. Cohen had persuaded Mr. Goodfriend to join a Gloria Wise Boys & Girls Club advisory board and visit the facility in Coop City. Mr. Goodfriend testified that after he left the radio network he spoke several times to Charles Rosen, who served as executive director of the club, and that Mr. Rosen had approved the transfers of $875,000. Mr. Rosen did not return repeated phone messages left by the Sun at his home.
According to the deposition, sometime after Mr. Goodfriend left Air America in May 2004, he received a phone call from Charles Rosen's brother, Jacob, who said Mr. Cohen had offered to "invest" in his company.
"They had some small telecommunications startup that he wrote checks on the [Progress Media] account that were bounced for insufficient funds that led to the bankruptcy of their company. And they asked me for help to try to have some recourse," Mr. Goodfriend said in the deposition.
Mr. Goodfriend said he had been unaware that Progress Media was a vehicle for investment in ventures other than Air America. He said he learned of the transfers from the Boys & Girls Club in early May 2004 from Air America's vice president of finance, Sinohe Terrero, a former employee of the club who recently resigned from Air America.
The information about the Gloria Wise debt was passed on to Air America's investors in early May 2004, according to Mr. Goodfriend.
Charles Rosen resigned this summer as director of the club, which received million of dollars annually in city contracts and grants, amid a probe by the city's Department of Investigation into "inappropriate transactions" that included the transfer of $875,000 to Air America while the radio network was trying to get off the ground. Jacob Rosen could not be reached for comment.
Mr. Goodfriend said he was threatened with lawsuits when he refused to comply with the demands of several current investors, including entrepreneur Doug Kreeger and a Florida attorney who currently hosts a radio program on Air America, J. Michael Papantonio.
"I was told my life would be made very difficult if I didn't sign the document," Mr. Goodfriend testified. "I understood it to mean that they are all a lot richer and than I and could afford lawyers and could sue me whether they had a case or not. And that I would lose a lot of money as a result or that they would try to get the government to prosecute me or something of that nature."
Mr. Cohen said he would not comment on his interactions with Jacob Rosen or the Gloria Wise Boys & Girls Club. Previously, in an interview, he questioned whether Mr. Goodfriend was completely aware of his dealings with Gloria Wise and other entities.
"I am sorry David did not take a deep breath and try and ask me what was going on. He just got scared and created his own theories," Mr. Cohen said.
A spokeswoman for the city's Department of Investigation, Emily Gest, declined to comment.
A spokeswoman for the Gloria Wise Boys & Girls Club, Martta Rose, confirmed that Jacob Rosen had once approached the Gloria Wise board for a business loan, and that the board, at the direction of Charles Rosen, rejected the request.