The May 25, 2007 hearing session continued the Rice County District Court hearing from April 13. A hearing on a SaveWCAL motion to Compel Production of documents was held on May 3.
The general mood of SaveWCAL supporters upon leaving session was that it had been "energizing" and "illuminating." As one supporter said, she left the courtroom with the sense that for the first time since August 2004, "we were heard!" Which is to say that the judge, despite his understandable preference to limit the evidence admitted to the question of the endowment (instead of considering evidence about the sale of WCAL charitable trust assets or about things not contained in St. Olaf College's petition), at least had picked up on some of the major themes that SaveWCAL has been trying to bring to the attention of the court during the course of this hearing—and to the attention of St. Olaf College since August 2004.
SaveWCAL reminds readers that the current Rice County District Court Petition regarding WCAL charitable trust assets was initiated and filed by St. Olaf College, not SaveWCAL. SaveWCAL attorney Michael McNabb received the permission of the court to participate in the hearing and the Minnesota Attorney General (who is charged with upholding charitable trusts) has no objection to McNabb's participation in the proceedings.
St. Olaf College has consistently been represented by two senior Gray Plant Mooty attorneys, Michael Cunningham and Robert Harding. Harding has barely spoken in any of the proceedings—save for less than five minutes at the end of the May 25 session. Their time, in and out of court, must surely be of considerable expense to the College. St. Olaf has also paid for the time of St. Olaf Treasurer Alan Norton, employee Jeffrey O'Donnell '02 and Director of Communications Amy Gage to be present in the courtroom at almost all of the sessions of the hearing. No small change.
It is also interesting to note that at each of the hearings, there have been two attorneys representing the Minnesota Attorney General, neither of whom has actively participated in proceedings. The AG has been a passive bystander during the course of the last few months. So much so, in fact, that the judge has had to understandably remind himself every now and then to ask the AG representative if she had any questions or comments.
On to the hearing…
The first witness recalled was St. Olaf College Treasurer Alan Norton. During his testimony, Norton admitted that he did not know the source of any of the particular assets of WCAL. Norton also admitted that he had done no further research on the source of WCAL assets after McNabb's Letter Brief of February 27, 2007 had been submitted to the court and the questioning at the previous hearing sessions.
There is compelling evidence easily available in the St. Olaf College archives that WCAL assets, including the Skifter Radio building and the Rosemount Tower, were built almost entirely out of donations to WCAL from individuals and foundations—and not by monies from St. Olaf College.
One of the key issues that McNabb was able to demonstrate with Norton's testimony was St. Olaf's amendment of their Original Petition. In the Original Petition St. Olaf dated October 6, 2006, but did not file with the court until December 28, 2007, St. Olaf clearly indicated that WCAL was a charitable trust and cited case law to prove its point.
However, as soon as McNabb filed his Letter Brief with the court on February 27, 2007, St. Olaf amended its petition on March 6, 2007, to remove crucial language regarding the trust and removing the case law that supported St. Olaf's original contention.
There is a straight line in the legal analysis from the starting point of the WCAL charitable trust to the conclusion that St. Olaf breached its fiduciary duty by creating the circumstances that rendered it impossible for St. Olaf to honor the intent of the WCAL donors. As soon as McNabb described this straight line in its letter brief of February 27, 2007, St. Olaf quickly and desperately amended its original petition on March 6, 2007, changed its legal analysis 180 degrees by now asserting that WCAL was not a charitable trust and attempted to block information from reaching the court that would show the true nature of the WCAL assets and endowment.
Jeffrey O'Donnell '02 was then recalled to the stand. O'Donnell is currently listed as the producer of the 30-minute sacred music program produced by St. Olaf College, "Sing for Joy." O'Donnell testified that the average hours of internet streaming of campus events currently provided by the college per week is between 3.5-6 hours per week. He also indicated that the college recently increased its streaming capability from a maximum of 80 to 100 people at a time to a capacity that he characterized as virtually unlimited. McNabb then confronted O'Donnell by first asking him if Streamguys was the company to whom St. Olaf was outsourcing their broadband streaming. O'Donnell was visibly taken aback that McNabb knew the name of the company. He answered in the affirmative. McNabb also questioned him further and O'Donnell admitted that the internet streaming was currently available for only between 200-800 listeners per event, which is far from "unlimited"–as McNabb rightfully pointed out.
Internet streaming of any kind–in today's technology–is always limited to a finite number (no matter how high) that is controlled by the number of connections available and the cost of those connections. Most smaller providers of internet streaming (such as colleges and universities) simply cannot afford to maintain large amounts of connections. The name of the company to whom St. Olaf outsources their streaming had been published in the St. Olaf student newspaper, Manitou Messenger, weeks before this hearing session. See also the entry for April 27, 2007, which includes information regarding the fact that St. Olaf has sold the rights to the Christmas Festival to Minnesota Public Radio.
A normal radio can be turned on in 3 seconds. By contrast, in takes at least 3 to 5 minutes to turn on and manipulate a computer until the internet program begins to play. That is, the average user has to: 1) turn on the computer, 2) wait for it to load all of its startup programs, 3) open the internet connection, 4) wait for the internet connection to activate, 5) go to the St. Olaf website, 6) find the correct area of the website that contains the program, 7) click on the program, 8) wait for the program to load and begin to play, etc. And, unless the user has further technological resources, listening/viewing the stream must be done at the desk where the computer is located. Contrast this with radio, which (depending upon size, electronics and power source) may be easily transported from room to room or to which an individual can listen to at home, in the car and then at the office–listening to the same station while using a variety commonplace radios.
There is currently no separate audio streaming of the events currently provided by St. Olaf College, which means that the internet streaming provided is only video streaming, requiring even more technology, broadband capability and technological knowledge to view properly. St. Olaf College apparently does not provide any storage of these streamed events or stream them at later times (in contrast to some WCAL broadcasts of St. Olaf events that were repeated or delayed to a more convenient time for listeners), so listeners/viewers must access them at the exact time they are streamed and they are not available for later download at a time that is convenient for the listener.
During one part of his questioning of O'Donnell, McNabb held up a small, inexpensive transistor radio. The radio was an actual "WCAL radio", given to station supporters during a WCAL pledge drive. It probably cost somewhere between $3-5 and, aside from a power source, was the only technology needed to listen to WCAL broadcasts. O'Donnell confirmed that the technology and expense required for internet streaming is very different than that needed to own and operate a simple FM/AM radio.
In contrast to a simple, inexpensive radio that can be used to listen to radio broadcasts, internet streaming requires a high-speed internet capable computer costs about $400-600, and the costs of high-speed internet connectivity, which can cost $360-800 on an annual basis and which must be paid on a regular basis (usually monthly) in order to have continued access.
When the WCAL radio service was still on the air, the FM radio signal reached a 60-mile diameter encompassing more than 3 million people in: the Twin Cities metro, Northfield, Rochester and southeastern Minnesota areas. The AM signal reached even further. WCAL broadcast its programming 24 hours a day, 7 days a week (168 total hours per week), week-in and week-out. The radio signal was provided at no cost to the listener and could be accessed by (truly) unlimited multiple radios with no limit on the number of listeners.
Yet now, the college provides only 3.5 to 6 hours total programming per week on the internet. Even worse, that very limited programming now reaches a total of just 200 to 800 computers/people at a time! The current Internet technology severely limits the total number of computers that can hook up to a streaming-type website at any given time. Although St. Olaf could consider trying to offer connections for more than 800 computers at a time, doing so would dramatically increase the monthly fees the college now pays to outsource its internet streaming.
Despite the failure of the college to provide even a fraction of the programming or the 24/7 service of WCAL radio over the internet, the college still argues that it is entitled to use more than a million dollars of WCAL restricted funds for other purposes. St. Olaf claims it is fully carrying on the mission of WCAL by continuing "WCAL core activities" that the college has defined after the demise of WCAL. In effect, the college is saying: "We will choose what we think is important and critical from WCAL's 80 year history and then boil it down to what we call 'WCAL core activities' and–since we (of course) meet our own definition of those activities–we should now have the right to use restricted WCAL radio endowment funds for purposes other than a radio station."
But the college's "core activities" definition fails to include the full scope of WCAL's mission and programming over the course of more than 80 years: its award-winning programming, staff, countless student interns, national and worldwide role as college ambassador, promotion of area musicians and the combined efforts of those that worked to build, support and expand the station and provide an amazing demonstration of the college motto: "Ideals to Action".
The flawed logic is obvious (as SaveWCAL attorney Michael McNabb has pointed out several times during the course of the hearing), St. Olaf is trying to argue that it can carry on all the activities of a radio station–without a radio station!
St. Olaf cannot possibly expect people to believe that a handful of events, such as "Sing for Joy", morning chapel services Monday through Friday , and some occasional lectures, concerts and recitals–totaling 3.5 to 6 hours a week and requiring an expensive Internet connection that only reaches a total of 200-800 computers at a time–actually represents the "core" of everything that WCAL radio used to do with dozens of unique programs, 168 hours a week, with a signal that reached an area of 3 million people!
O'Donnell hinted in his testimony at a previous hearing session that St. Olaf might not be able to carry on producing "Sing For Joy" without the availability of the WCAL endowment funds.
While St. Olaf is claiming that it needs the WCAL endowment in order to carry on the "core activities" and produce "Sing for Joy", it has neglected to mention that "Sing for Joy" has been a least partially underwritten for years by Sukup Manufacturing Co. and Sauder Manufacturing and Sauder Woodworking Co., which just installed all the new pews in Boe Chapel.
McNabb then called the Rev. Paul Peterson '56, former WCAL General Manager and WCAL employee from 1966-1999, as a witness. For former WCAL listeners in the courtroom, it was an unexpected treat to listen to Peterson's mellifluous voice emanate from the stand, remembering his significant vocal presence on WCAL over the years.
McNabb's questioning guided Peterson as he gave a historical overview of the station, and his testimony especially highlighted how the station and assets (including the WCAL/Skifter Radio building and subsequent additions and the Rosemount tower) were literally built with donations and bequests from listeners—that is, not from monies from St. Olaf College.
Peterson also pointed out how St. Olaf College, since the day the Studio A (Mission House) was constructed, made daily use of that space for recitals, classes, rehearsals and other events.
In fact, for many years a number of college offices were housed in the WCAL/Skifter building, including the Alumni Office and Nursing Department, as well as the studios of student radio station KSTO.
In this hearing, St. Olaf has attempted to claim that they need the funds from the WCAL endowment to "reimburse" the college for money it has spent supporting the station and for "donated facilities" (i.e., the WCAL/Skifter Building). In other words, St. Olaf is attempting to "charge" against the WCAL endowment funds for the use of a building built–not by monies from St. Olaf College–but by listener donations to WCAL and from which St. Olaf itself has benefited and continues to benefit from for it's own instructional and administrative purposes!
Perhaps St. Olaf College needs to consider reimbursing the WCAL endowment for the years of use that it received from a building that it did not build – but which it clearly sold to MPR in the Purchase Agreement [PDF, 21 pages].
See also Phil Voxland's September 24, 2004, letter to then St. Olaf College President Christopher Thomforde, "Analysis of WCAL Purchase Agreement Shows Frightening Lack of Details."
Indeed St. Olaf's position is that the only matter before the court is the remaining endowment funds from deceased donors. SaveWCAL is, of course, very much interested in the sale and the outcomes of the sale. Our line of reasoning is that proper outcome for the endowment cannot be separated from the sale of the station.
SaveWCAL maintains that it is conceivable that the sale itself could be voided either at the request of St. Olaf College or the Attorney General or by the judge. Failing that, the court could determine that the proceeds of the sale must inescapably be used for continuing the purposes of WCAL together with the remaining endowments. It has always been SaveWCAL's contention that the petition should not be dealt with separately, but as part of determining how to continue to meet the historical mission of WCAL as nearly as possible with the proceeds and endowments viewed as a whole.
The most portentous exchanges happened during the final 30 minutes or so of the session.
In his summation, McNabb clearly laid out the issues of the trust and the abdication of responsibility of duties to enforce charitable trusts by the Minnesota Attorney General's office.
Suddenly, it became apparent that the judge sees some of the issues involved. In fact, the judge said that he had some "hard questions" for the AG, although he did not elaborate at the time as to exactly what those questions would be.
Deputy Attorney General Ann Kinsella was the lead AG attorney present at this particular session and she stated that the AG wanted the opportunity to review the hearing transcripts and asked permission to submit a written response to the court.
When the court asked why the Attorney General had not taken an active in this proceeding, Deputy Attorney General Ann Kinsella, head of the AG charitable division, replied that she was waiting for St. Olaf to file with the Rice County District Court regarding its use of the proceeds of the sale.
She also again stated that the proceeds of the sale should be a matter for the court to review and indicated that the judge could bring that into consideration. The judge animatedly stated that isn't something judges do. In other words, what the AG is proposing is the responsibility of the AG, not the court.
Indeed, the judge pointed out that since St. Olaf College had not approached the court for permission to sell the WCAL assets and had not, thus far, filed with the court regarding its use of the funds received from the sale of assets, that St. Olaf might not be inclined to bring the matter of the sales proceeds before the court.
McNabb agreed with the judge and stated his opinion that surely St. Olaf would not bring the matter of the WCAL asset sale proceeds into court—an action that the AG ought to initiate. The AG representative then said "We will take that into consideration."
The only reason why the AG would be waiting for St. Olaf to file a petition regarding the proceeds of the sale is because the AG believes it has something relevant to say regarding the use of the proceeds. The only reason that the AG would believe it has something to relevant to say is because the AG has concluded that WCAL was a charitable trust.
It's important to note that the main reason the hearing was commenced was because St. Olaf claimed in its Original Petition that the WCAL endowment was a charitable trust. Once the College realized that this admission was going to get them a heap of problems trying to explain their handling of the assets of that trust, they quickly amended the petition to remove all references to WCAL as a charitable trust in an attempt to prevent the full story from reaching the court.
So now, at the end of the hearing, the St. Olaf attorney claimed that St. Olaf really had "no need" to come before the court for this particular issues (of repurposing the WCAL charitable endowment funds) because even though WCAL was "like a charitable trust—[it] is not."
WCAL was "like" a charitable trust, but actually wasn't?? All we can say is that if it looks like a duck, walks like a duck and quacks like a duck…
The St. Olaf attorney repeated time and again that the College was "not trying to deceive" the court and claimed that the College had come before the court because it was choosing to use an "abundance of caution" in this matter! Of course, St. Olaf's attorney neatly sidestepped the fact that the College came before this court claiming it was taking action regarding the WCAL charitable trust endowment, whose existence it now denies because it would then have to explain how it could sell major assets of said trust—thereby destroying a charitable trust without the permission of the court—which, of course, is exactly what St. Olaf College senior administrators and the Board of Regents did in 2004.
The judge then noted that he would hope that St. Olaf had used an "abundance of caution" when it sold the WCAL assets. Individuals in the gallery gasped and a number sadly shook their heads.
The Attorney General has asked to review the transcript and prepare a written response to the court. This is due on June 20, 2007.
Once the AG's response is submitted, St. Olaf College's attorney and SaveWCAL attorney Michael McNabb are allowed to file responses, due on July 9.
The AG then has the option to respond to those responses by July 17.
The result is that the petition will be "taken under advisement" by the judge on or around July 18, 2007. The judge then has 90 days to weigh the matter before issuing the court order.
{ 8 comments… read them below or add one }
We're all ears!
What happened? Pledge drive is upon us at MPR and now is the time for money to talk and the rest…well you know. It's all going to come out in the wash sooner or later.
It's pledge time at MPR, now is the time to voice and air this stuff. Once and for all to get the real truth out. I await that report.
Sing for Joy was owned for decades by Alvin Reuter and was funded by the aforementioned Sauder companies and by Sukkup Manufacturing and by Sing for Joy listeners. I believe the only St. Olaf attachment to the program was the use of the WCAL studios and equipment to produce the programs. It wasn't until a few years ago that St. Olaf bought Sing for Joy from Alvin Reuter when he decided to retire. Alvin Reuter was also one the thousands of people to sign the SaveWCAL petition a few years ago on the original SaveWCAL website. If St. Olaf discontinues Sing For Joy like they are apparently threatning to do then they better be prepared to sell the show……maybe back to it's original owner Alvin Reuter. From what I understand Sing For Joy is it's own seperate entity which just happens to be owned by St. Olaf College right now.
I am reading your write-up of the May 25th court hearing and it is just blasphemous what St. Olaf College is saying about Sing For Joy! When Alvin Reuter owned and operated Sing for Joy it was funded by Sauder Furniture, Sukkup Manufacturing and the listeners. The only thing St. Olaf College contributed to the program was the use of the building to tape the show. St. Olaf College is the one who bought the show from Alvin Reuter when he decided to retire. Does St. Olaf College really want another public relations disaster with their alumni and friends by discontinuing the show? Can they really afford another public relations nightmare? Keep up the good work on your blog.
Good job, this is all starting to make sense. The truth is hard to hide for long. Can we buy back the call letters? What about the record library?
Thank you for the update…you have always done such a tremendous job since SaveWCAL was founded. God Bless you.
When did St. Olaf realize that WCAL was a charitable trust? Did they know this all along? Are there memo's to support this inhouse?