Boys and Girls Club under fire

WASHINGTON — Directors of the Atlanta-based Boys and Girls Clubs of America will vote next month on whether to strip a New York club of its membership following disclosures that the club improperly loaned $875,000 to Air America, the liberal radio network.

The staff of Boys and Girls Clubs is recommending the board drop the Gloria Wise Boys and Girls Club of the Bronx from the organization's ranks. The board will meet Sept. 20 in Washington.

"Dropping an organization from membership is not something that's done lightly," said Evan McElroy, vice president for communications at the Boys and Girls Clubs headquarters. "It's a very, very serious matter, an uncommon thing."

The Gloria Wise club is one of 1,165 Boys and Girls Clubs affiliates nationwide operating about 3,700 clubs. Problems came to light this summer when New York City investigators determined that $875,000 in club funds had been loaned to Progress Media, the parent company of Air America.

New York City has since canceled about $9 million in contracts it had awarded the Gloria Wise Club. A spokesman for the New York Department of Investigation said Wednesday that the investigation into the club's finances continues. It's uncertain when the department's final report will be complete.

The New York state attorney general's office also is investigating the club, which in addition to city money receives state and federal grants and contributions from individuals, foundations and corporations.

The loan allegedly was arranged by Evan M. Cohen, development director for the Gloria Wise club and a venture capitalist who was a stakeholder in Progress Media, parent company of Air America, the radio network known for its liberal views and hosts like comedian Al Franken. Cohen is no longer involved with Air America or the Bronx club.

Air America was sold in May 2004 to Piquant LLC, which posted a statement on Air America's Web site calling the loan deal "absolutely disgraceful."

"We're very disturbed that Air America Radio's good name could be associated with a reduction in services for young people," Piquant said in the statement. It said it had no financial responsibility for the loan made by Progress Media but would repay the $875,000 to the Gloria Wise club anyway.

The move has done little to quell attacks on Air America by a variety of conservative Web sites and Web logs, which included headlines such as "Air America: Stealing from Poor Kids?"

"This is a very serious and very unfortunate turn of events," McElroy said. "This individual who initially engineered all this is gone, and we're trying to do what we need to do here."

The Gloria Wise club never provided the national Boys and Girls Clubs of America with the financial audit it was required to file for 2004, which would have revealed the loan, McElroy said.

If the club were stripped of its Boys and Girls Clubs membership, it would be prevented from using the organization's name and logo and would no longer have access to program and training assistance or the funding now provided by the national organization.

With its 100th anniversary approaching next year, the national Boys and Girls Clubs organization has so far escaped any damage to its image, McElroy said.

"We haven't seen anything you would consider fallout," McElroy said. "At the same time, any organization like Boys and Girls Clubs depends on the public trust. And so when there's an isolated incident where an individual does something improper, sure, that can damage the reputation of an organization.

"So we have to work very hard to assure people that this was a very unusual thing, a very serious matter, and that we're cooperating fully with the authorities that are looking into this to ensure that justice is done in this case," McElroy said.

Bob Kemper writes for Cox News Service. E-mail: bkemper@coxnews.com