Korn continues to defy BBG committee on financial questions

BBG Watch Commentary

Steven Korn, President and Chief Executive Officer, Radio Free Europe and Radio Liberty

Steven Korn

Steven Korn continues to refuse providing financial information to the Broadcasting Board of Governors (BBG) Strategy and Budget Committee as questions about unauthorized expenses, waste and mismanagement mar his last days as president and CEO of Radio Free Europe/Radio Liberty (RFE/RL), sources told BBG Watch. Korn leaves on January 25.

Living high on the hog may soon end for top executives, as BBG members will try to obtain more information from the next RFE/RL president Kevin Klose and look to him to put a stop to extravagant and unauthorized spending.

According to sources, Korn and his top deputies continue to withhold information from the BBG Strategy and Budget Committee on the salary and housing allowance for the new Russian Service director Masha Gessen who is based in Moscow. Ultimately they will have to provide it. Sources said that she is paid $145,000 in salary and $55,000 in housing allowance, more than any other service director in RFE/RL’s history.

At their scheduled January 29 meeting, the BBG Audit Committee will also discuss allegations whether Korn and his top deputies Julia Ragona and Dale Cohen have violated the Fly America Act by flying business class.

Ragona and Cohen were reported to have flown business class on a recent trip from Prague to Washington. If business class travel was not allowed under the very few exceptions in the Fly America Act, RFE/RL executives would have to refund the difference in price between business and economy class tickets. The issue here may be lack of controls or willful disregard of the law. Radio Free Asia (RFA), which also get a BBG grant of taxpayers’ money, flies its employees economy class to Asia.

Extravagant spending on representation, hiring of limousines and possibly even a yacht, will also be looked into by the BBG. Some of the money spent by RFE/RL’s top executives came from firing dozens of journalists and reducing the 13th month bonus for Czech employees, a traditional employee benefit in the Czech Republic where RFE/RL has its headquarters. Korn and his executives have been dismissive toward critics in the part of the world reached by RFE/RL broadcasts, including such prominent human rights and political leaders like Lyudmila Alexeeva and Mikhail Gorbachev. Their criticism focused on personnel and programming decisions affecting the Radio Liberty’s Russian Service.

Kevin Klose is expected to deal with the concequenses of these decisions, particularly in Putin’s Russia, where Korn and his deputies fired dozens of experienced human rights journalists and replaced them with largely unknown friends and associates of Masha Gessen who is being boycotted by human rights and democratic opposition leaders. Klose will have to decide how to incorporate the fired journalists back into Radio Liberty and save the station’s reputation in Russia.

At the same time, the BBG will be looking at possible financial irregularities, which were missed during previous inspections. RFE/RL raised housing allowance for Korn from $3500 a month to $4200 a month (20 percent increase) without the RFE/RL corporate board’s knowlege or approval, as required. Sources told BBG Watch that the increase happened at the beginning of Korn’s tenure at RFE/RL. Korn then spent half of his time in the U.S., not in Prague, sources told us. Korn also granted himself the authority to set housing allowances for his top executives.

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  1. Unprofessional OIG reports on BBG and RFE/RL part of a larger pattern « BBG Watch
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