BBG Watch Commentary
BBG Watch has learned that the Radio Free Europe/Radio Liberty (RFE/RL) Corporate Board Chairman and Broadcasting Board of Governors (BBG) member Dennis Mulhaupt has called for a meeting of the RFE/RL Audit Committee in Washington, DC on January 29. There has been no official announcement. Mulhaupt, who is also the chairman of the Audit Committee called the meeting a few days after RFE/RL President and CEO Steven Korn leaves his post on January 25, as announced in his resignation letter.
This spares Korn the embarrassment of having to answer questions from the Audit Committee but also prevents the BBG from learning about why extravagant spending on travel, representation and entertainment was allowed. One BBG Watch source told us that one of Masha Gessen’s deputies who traveled from Moscow to Prague was not satisfied with taxis and hired a limousine. The Audit Committee might want to look into this report to see if it’s true. We were not able to confirm it.
According to one source, extravagant spending by RFE/RL on representation and entertainment included hiring a yacht for a special event. We also could not verify this information, but the Audit Committee may want to look into it.
There is also the issue of reported business class plane travel by Korn’s deputies, Julia Ragona and Dale Cohen. The Audit Committee may want to check whether there was any justification for buying business class tickets, usually not allowed by U.S. law for travel paid by U.S. taxpayers.
The Audit Committee may want to look into all recent travel by RFE/RL executives to see if it is in compliance with the Fly America Act. If any travel violated the Fly America Act, U.S. taxpayers should get their money back and the difference should not be calculated from the price of a full Y-Class economy ticket but from discounted prices for coach tickets available to travelers on the Internet. U.S. taxpayers should not be penalized if rules were violated by RFE/RL executives.
READ: Business class plane travel and housing allowances for Korn’s favorites at RFE/RL raise questions
The Audit Committee may also take a look at housing allowances for Korn’s top deputies. Did the RFE/RL Board give him the authority to determine on his own the amount of housing allowance for his senior staff? This looks to us like a typical slush fund. By how much did he raise their housing allowance? How was it justified? How did Korn justify the reported $55,000 annual housing allowance for Masha Gessen in Moscow? Do corporate and U.S. government regulations permit such payments under these circumstances? Is her salary and housing allowance in compliance with the legislation governing the BBG and RFE/RL?
Another question to be asked is whether the RFE/RL Board approved Korn’s reported housing allowance of $4200 a month in Prague, which was $3500 when he was hired in 2011 and somehow increased by $700 a month or $8400 a year to $50,400 annually during his tenure? Internal regulations require that the RFE/RL Board be informed of such increases and must give its approval. Was such approval granted?
There is also the issue of what to do with $25,000 worth of furniture bought for Korn’s apartment in Prague.
But the biggest issue, of course, is not travel, yachts, limousines, furniture and housing allowances but the damage done to RFE/RL’s mission and reputation by Korn and his deputies.
Will RFE/RL Board Chairman and Audit Committee Chairman Dennis Mulhaupt conduct a full an thorough review?
We hope so.