The Air America radio network's biggest star, Al Franken, and its former chairman, Evan Montvel Cohen, were among the signers of a confidential agreement last November that said the network would repay $875,000 to a Bronx nonprofit organization, the Gloria Wise Boys & Girls Club.
Transfers to Air America from Gloria Wise, for which Mr. Cohen worked as a fund-raiser during the period when he helped launch the liberal network, have surfaced as part of the probe by the city's Department of Investigation and the state attorney general into "inappropriate transactions" by Gloria Wise. The city has frozen all grants and contracts with the organization, which had an annual budget of $20 million, and many of its programs have been reassigned to other Bronx organizations.
The November "settlement agreement" was also signed by the current owners of Air America, Piquant LLC, and Mr. Cohen's business partner, Rex Sorensen. In the 61-page document, obtained yesterday by The New York Sun, the parties indemnified each other from lawsuits.
Lawyers representing an owner of radio stations, Multicultural Radio Broadcasting, received the agreement after issuing subpoenas in connection with their pending lawsuit against Air America. Multicultural, represented by Gibson, Dunn & Crutcher, is suing Piquant and others for more than $1 million that it says it is owed, and the confidential settlement was quoted at length in its lawsuit.
Mr. Franken and Piquant have said the transfers to Gloria Wise were the work of Air America's former chairman, Mr. Cohen, and his now defunct Progress Media. Less than two months after the network's launch in May 2004, Piquant LLC acquired the radio network from Progress Media. Piquant has said Mr. Cohen has had no affiliation with Air America since May 2004.
In an interview with the Sun on August 1, Mr.Franken said he did not know anything about the transfers from the Gloria Wise Boys & Girls Club until late the previous month. He said he did not know whether the $875,000 was absorbed by the radio network or not, and he characterized the network's decision to pay back Gloria Wise as a "moral obligation."
Yesterday, Mr. Franken stood by his earlier statement. He said that, on the advice of his lawyer, Gunnar Erickson, he signed the agreement last fall that erased legal claims he had against Messrs. Cohen and Sorensen because they owed him money, but he said he did not see the list of liabilities that included the Gloria Wise transfers.
"I am not an investor, and I didn't see this thing," Mr. Franken, the comedian and best-selling author who hosts Air America's daily show "The O'Franken Factor," said.
The agreement details four separate transfers from Gloria Wise, of $80,000; $87,000; $218,000; and $490,000; between October 2, 2003, and March 14, 2004.
Mr. Cohen, previously unreachable, told the Sun yesterday that no one at the radio network knew about the transfers while they occurred, which the agreement said was between October 2003 and March 2004.
Mr. Cohen said, however, he would be "shocked" if Air America investors did not know of the transfers before November, when they signed the agreement, and he said he resented Air America's insinuation that it was repaying the Bronx nonprofit group out of a "moral obligation."
"It absolutely was a legal obligation on their behalf," he said, referring to the confidential settlement.
When asked if had remorse over the Gloria Wise transfers, Mr. Cohen said: "There are a lot things I would have done differently, but all you can do is learn from your mistakes and move forward." Mr. Cohen said he is proud of helping launch the liberal radio network but has some regrets.
"The irony is that I realize there was something significant done, but hindsight is 20/20 and I wish I had done it a different way," he said.
Mr. Cohen, 39, said the Gloria Wise transfers, which he termed "loans" that were to be paid back with no interest, was one of the things that he regretted.
"I'm saddened by my behavior in that realm," he said.
Mr. Cohen said he is in Honolulu on the way to Asia, where he said he manages investments.
"I'm doing just fine, much to the chagrin of many people," Mr. Cohen said.
Members of the Gloria Wise executive committee have described their organization's transfers to Air America to the Sun. They said Mr. Cohen asked for personal loans to help him finance chemotherapy that he said he needed because he suffered from brain cancer.
Mr. Cohen has denied ever using health as a reason to solicit money from Gloria Wise.
"Gloria Wise knew exactly where the money was going," he said, adding that at least one unnamed club official authorized the transfers. "There was no question, no backroom dealing. It was straight up: I'm borrowing this money, it's going here."
Correction from September 8, 2005:
A settlement agreement signed by Al Franken, Evan Montvel Cohen, and other parties acknowledged that the Gloria Wise Boys & Girls Club had claims totaling $875,000 against the Air America radio network, but did not commit any party to the payment of those claims. A front-page story in yesterday's New York Sun misstated the terms of the agreement. The name of Mr. Franken's radio program is "The Al Franken Show." Yesterday's story incorrectly cited a previous name for his program.