Brief Overview

Below is an overview of the WCAL story and SaveWCAL's efforts. You may also follow the various tracks of this complex story by clicking on the links in the "Follow the Tracks" section. Note: The links on this page lead to blog entries with additional details regarding the events and, in some cases, downloadable PDFs of relevant documents.

• In 1924, St. Olaf College accepted donations specificaly for the support of WCAL, the fledgling radio station located on campus. Without these donations, the college would have lost the federal license for the station. By accepting donations for the express purpose of supporting the station a charitable trust was created (according to Minnesota state law) and St. Olaf College became the trustee (not the owner) of a non-commercial / educational federal license for a frequency of the public airwaves. From 1924 to the 1960s, donations to the station provided 100% of the station's budget. During that time, WCAL donors also built a building on the St. Olaf campus for WCAL. Later the donors also paid 100% of the funds for the construction of the Rosemount tower. During WCAL's entire existence, St. Olaf College donated (like all the other donors to the station) a small fraction of the funds needed for the station's operation.

• In August 2004 St. Olaf College suddenly announced that its Board of Regents had decided to sell the 100K watt C-1 license and Rosemount broadcasting tower of WCAL 89.3 FM radio station — the first listener-supported radio station in the USA — and its translator station, Rochester's KMSE 88.7, to Minnesota Public Radio (MPR) for a reported $10.5 million. In spite of strong opposition, including a petition to St. Olaf with more than 5,000 signatures, an equivalent — if not superior — offer from WCAL donors to buy the station, and unsuccessful pleadings before the FCC, the station was sold to MPR and ceased broadcasting as WCAL/KMSE on November 21, 2004 — just three days after the 82nd anniversary of the station's official founding. St. Olaf announced its intent to use the proceeds from the sale for its own purposes — completely unrelated to the purposes of the WCAL trust.

• At the time, St. Olaf College was holding at least $2.9 million in endowment funds specifically for the benefit of the WCAL radio station.

• On December 28, 2006 St. Olaf College filed their Original Petition in Rice County (Minn.) District Court seeking a release of all restrictions on two categories of gifts in what the college called the "WCAL charitable trust endowment" that it now classified as the restricted non-endowment gifts and the undocumented gifts. When the gifts were originally made, the College placed the gifts in both categories in the WCAL endowment.
  • St. Olaf asserted in its Petition that the donors of the gifts in the first category did not specifically direct St. Olaf to place their gifts in the WCAL endowment.
  • As for the second category, St. Olaf claimed that it was not able to find documents to explain the decision the College made to place the gifts in the WCAL endowment.
  • The College asserted that total market value of the gifts in both categories as of April 30, 2006 was approximately $961,000.00.  (This leaves at least $1,939,000 of the WCAL charitable trust endowment funds listed in 2004 still unaccounted for.)

• On February 27, 2007 SaveWCAL attorney Michael McNabb sent a five page Letter Memorandum to the Rice County District Court to inform the Court of issues related to the Petition filed by St. Olaf. The letter stated:

"A thorough investigation will reveal that the court has the facts and the law to declare that the assignment of the license for 89.3 FM to MPR is void on the grounds that (1) it was a breach of its fiduciary duty as trustee for St. Olaf to create the circumstances which rendered it impossible to honor the intention of the donors and (2) St. Olaf failed to obtain the authorization of the court to terminate the charitable trust as required under Minn. Stat. 501B.41 subd. 2 and therefore St. Olaf did not have the lawful authority to assign or sell the assets of the WCAL charitable trust. In the alternative, the court could declare that the WCAL endowment fund (all $2.9 million) and the $10.5 million received from MPR constitute part of a continuing charitable trust and that pursuant to Minn. Stat. 501B.31 subd. 2 the trust must be administered to accomplish as nearly as possible the intention of the donors. "

• On March 6, 2007, just seven days after McNabb sent his Letter Memorandum to the Rice County District Court, St. Olaf College suddenly submitted an Amended Petition which completely removed St. Olaf's previous assertions of the WCAL charitable trust funds as a "charitable trust". Also removed was one exhibit previously submitted by St. Olaf after an heir of the donor notified the Attorney General and Court that what St. Olaf had presented in its Petition was not the wishes of the donor.

• SaveWCAL attorney McNabb received the permission of the court to participate in the hearing on March 8, 2007. Additional hearing sessions were held.

• On October 16, 2007 Rice County District Court Judge Gerald J. Wolf issued two Orders. The first Order and Memorandum indicated that the Judge is reserving a decision on the St. Olaf Amended Petition pending the result of a full investigation by a Special Master appointed by the second Order to, among other things, "investigate and determine the amount of assets and donations that are attributable to WCAL…" without limitation. The order also confirmed the legal standing of SaveWCAL as a representative of the WCAL donors. SaveWCAL was the only party in the case to request that a special master be appointed and that a full investigation take place.

• On October 22, 2007 Judge Gary Meyer (ret.) accepted the appointment of Judge Gerald Wolf as Special Master for the St. Olaf College Petition. The Special Master was instructed to report his findings and his recommendation to the Court within 60 days of his appointment and instructed that he could request additional time in order to complete the investigation.

• On December 7, 2007 St. Olaf College refused SaveWCAL unrestricted access the college archives in an attempt to obstruct information from reaching the Special Master and the court. Until the spring of 2007, there had never been any issues raised by St. Olaf College about this access. Suddenly, in the midst of the Rice County District Court hearing on the St. Olaf College Original Petition (including St. Olaf's Amended Petition), as factual information regarding St. Olaf College's handling of the WCAL charitable trust began to be a part of the public record, St. Olaf College moved to limit access to the college archives and to information about the WCAL charitable trust.

• On December 17, 2007 Judge Gerald Wolf issued an Order extending the deadline for the Special Master to submit his report and recommendations to February 15, 2008. On February 15, 2008 Wolf signed another Order extending the deadline to March 15, 2008.

• Finally, on March 7, 2007 the Special Master filed the result of his investigation with the court. On the same day, SaveWCAL released all the public documents submitted to the Special Master by the various parties (Minnesota Attorney General, St. Olaf College and SaveWCAL). The Special Master's Report, contained more than 130 separate Findings of Fact and making Recommended Conclusions of Law on the subject of the Petition and Amended Petition filed by St. Olaf College regarding the WCAL charitable trust. The report recognized that the WCAL donors created a charitable trust throughout more than 80 years of support to the station. It also found that the assets that currently comprise the trust are far greater than what St. Olaf College had represented to the court.

• On June 10, 2008, Judge Gerald Wolf issued the Order in the case, including a strongly worded Introduction to the Legal Analysis that included remarks castigating the Minnesota Attorney General's office for their lack of action in the case. The Introduction included the following:

…it is almost impossible to discuss the issues raised by St. Olaf's Petition without first discussing the sale of WCAL and its aftermath. St. Olaf sold WCAL over the objections of a group of donors (hereafter call SaveWCAL) and without first obtaining Court approval. The sales aftermath has created a host of problems for St. Olaf regarding what can the college do with the restricted donations given to support WCAL and its activities when it no longer owns WCAL. St. Olaf continues to assert that the donated restricted funds it holds are endowments. However, under the applicable law, these donated restricted funds are actually a trust and St. Olaf is the trustee of the trust. Therefore, St. Olaf will need to comply with the legal requirements to which it is held as the trustee of the funds gifted to it for use by WCAL, regardless of the fact that St. Olaf no longer owns WCAL.

The Minnesota Attorney General is the watchdog of all trusts throughout the state of Minnesota. Deplorably, when St. Olaf made the decision to sell WCAL, no one from the Attorney General's Office intervened to safeguard the trust. The Attorney General's Office was notified by SaveWCAL of the pending sale yet they failed to do anything. The undersigned is absolutely mystified as to why the State Attorney General did not become involved in a sale of trust assets valued at $12 million when it is its statutory obligation to do so. Let's hope this type of activity never happens again. …

Regardless of who was serving as Minnesota Attorney General at the time of the sale, the office as an institution has a duty to the people of Minnesota to serve as guardian of all trusts created and operated in this state. The Minnesota Attorney General's Office failed in its duty in this case.

The only watchdog looking out for the interests of the trust in this case was the Respondent, the non-profit organization SaveWCAL. SaveWCAL raised the alarm when they first learned of the sale of WCAL by St. Olaf, but neither St. Olaf nor the Minnesota Attorney General's Office paid any heed to SaveWCAL's warning. [Emphasis added by SaveWCAL]

Among the items that St. Olaf College did not include in its Original Petition and its Amended Petition — but which was uncovered by the Special Master Investigation — was a $1 million gift by St. Olaf Senior Regent (and former Regent Chair) Leonard Hoeft. St. Olaf had withdrawn $1.6 million from the WCAL endowment between November 2004 and December 2006 and planned to use those funds for any purpose it desired. The college represented to the Court that it had obtained the consent of the living donors, including Hoeft, to withdraw those funds. Hoeft submitted information to the court that he had neither been contacted nor given his consent for the College to do this. On his own, Judge Wolf included the Hoeft gift in his Court Order and restricted the use of it to the "core activities" (a fictional term created by St. Olaf) of WCAL.

• On June 12 and June 17, SaveWCAL again urged the Minnesota Attorney General to do her duty as the Court had indicated.

• On September 24, 2008 SaveWCAL filed a Petition To Redress Breach Of Trust in Rice County District Court in which the Court is asked directly to (1) void the sale, (2) determine the complete value of the WCAL trust and (3) remove St. Olaf College as the trustee of the trust. The WCAL trust may include any and all of the following: WCAL license, Rosemount tower and KMSE translater station (or the proceeds from the sale of these assets), Skifter Radio building, the full WCAL endowment. It is possible that the total value of the endowment, when fully determined by the court, may be $15-20 million or more.

• An initial hearing was held on October 24, 2008 in spite of attempts by St. Olaf and MPR to avoid it. Opposing Motions to Dismiss were filed by both St. Olaf College and Minnesota Public Radio (MPR)

• On November 20, 2008 Memoranda of Law in support of their Motions to Dismiss were filed by Minnesota Public Radio (MPR) and St. Olaf College.

• On December 9, 2008 SaveWCAL filed a Memorandum of Law in support of the Petition To Redress Breach Of Trust. If Minnesota law is followed, SaveWCAL will prevail. On the same day, the Minnesota AG also submitted a Memorandum stating that the law prohibits St. Olaf from diverting the assets of the WCAL Charitable Trust from the use intended by the donors.

• A hearing was held on Thursday, December 18 at 9 a.m. at the Rice County Courthouse in Faribault, MN.  The full text  of SaveWCAL attorney Michael McNabb's closing remarks, a scant page and half, double spaced, is available in a separate posting, "SaveWCAL's Closing Remarks at Rice County District Court Hearing".

• On February 26, 2009 Rice County District Court Judge Bernard Borene issued his Order [PDF, 21 pages] in which he ruled against SaveWCAL on all points. The ruling of Judge Borene is in direct contradiction to the charitable trust principles used and decisions made by Rice County District Court Judge Gerald Wolf (ret.) in the preceeding case.

• On April 20, 2009, SaveWCAL filed a Notice of Appeal with the Minnesota Court of Appeals. The Appeal Brief was filed days later.

• The Minnesota Court of Appeals heard the case on Tuesday, October 27. The Court will make a decision, based upon the Statement of Facts, within 90 days.

Throughout this entire period, SaveWCAL has continually tried to reach out to the College leadership with good faith efforts to engage them in a constructive dialogue about the sale and possible ways to avoid the situation that exists. These efforts have been consistently rebuffed by the St. Olaf leadership.

The case has possible repercussions for public radio stations, institutions of higher education, charitable trusts and their donors, among others. You can read more about the national significance of the case here. The story continues. Stay tuned . . .

# # # #

SaveWCAL is a 501(c)(3) non-profit organization that grew out of St. Olaf College's decision by the Board of Regents to sell essential and irreplaceable assets of the WCAL charitable trust, thus destroying the first listener supported public radio station in the USA—a founding member station of National Public Radio (NPR) and a leading member of AMPERS (now Minnesota Independent Public Radio).

Since 2004, St. Olaf has been attempting to dismantle the trust and repurpose millions of dollars in funds given to the WCAL charitable trust by tens of thousands of donors over the course of more than 80 years.

SaveWCAL is made up of WCAL donors and listeners, St. Olaf College students, alumni, staff, faculty, parents and friends who care deeply about the station and its service to the college and the community.

Our intention has always been to save the station to benefit the college—spiritually, historically, financially and educationally. More than 5,000 individuals signed the SaveWCAL petition in 2004. For further information, see http://SaveWCAL.net