9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
Before the
Federal Communications Commission 
Washington, D.C. 20554
MM Docket No. 90-418
In re Applications of
Q PRIME INC. File No. BPH-890411MA
SMITH BROADCASTING. File No. BPH-890412MC
INC.
COLUMBIA RIVER 
WIRELESS, INC.
File No. BPH-890412MF
FLORINDA J. WEAGANT File No. BPH-890412MI
McCOY COMMUNICATIONS File No. BPH-890413MA 
LIMITED PARTNERSHIP
KLRK, INC. 
THOMAS M. EELLS
File No. BPH-890413MC 
File No. BPH-890413MH
CLARK BROADCASTING File No. BPH-890413MJ 
LIMITED PARTNERSHIP
COLUMBIA FM , File No. BPH-890413NH 
LIMITED PARTNERSHIP
ANDREW L. BROWN & File No. BPH-890413NL 
  LESTER M. FRIEDMAN 
d/b/a TRANS-COLUMBIA 
COMMUNICATIONS
For Construction Permit for a 
New FM Station on Channel 290C2 
in Vancouver, Washington
Appearances
Howard M. Liberman, Esquire, Gerald Steve ns-Kittner, Es 
quire, Daniel Piliero, Esquire, and Peter H. Doyle, Esquire, 
on behalf of Q Prime Inc.; Peter A. Casciato, Esquire, J. 
Dominic Monahan, Esquire, and Margaret L. Miller, Esquire, 
on behalf of Smith Broadcasting, Inc.: Matthew H. 
McCormick, Esquire, and Andrew S. Kersting, Esquire, on 
behalf of Columbia River Wireless, Inc.; David D. 
Oxenford, Esquire, Gregory L. Masters, Esquire, and Lester 
W. Spillane, Esquire, on behalf of Florinda J. Weagant; 
David E. Honig, Esquire, and Ronda R. Robinson, Esquire, 
on behalf of McCoy Communications Limited Partnership: 
/. Geoffrey Bentley, Esquire, Debra A. Jezouit, Esquire, and 
Jesse A. Halvorsen, Esquire, on behalf of KLRK, Inc.; 
Thomas M. Eells, pro se; Lewis /. Paper, Esquire, and Peter 
L. Scher, Esquire, on behalf of Clark Broadcasting Limited 
Partnership; Stephen Diaz Gavin, Esquire, and /. Jeffrey
Craven, Esquire, on behalf of Columbia FM Limited Part 
nership; William E. Kennard, Esquire, and Michael E. Better, 
Esquire, on behalf of Trans-Columbia Communications; 
Robert A. Zauner, Esquire, on behalf of the Chief, Mass 
Media Bureau, Federal Communications Commission; and 
Daniel F. Van Horn, Esquire, on behalf of witness Ragan A. 
Henry.
INITIAL DECISION OF ADMINISTRATIVE 
LAW JUDGE ARTHUR I. STEINBERG
Issued: December 6, 1993; Released: December 27, 1993
TABLE OF CONTENTS
Paragraph
1Preliminary Statement 
Findings of Fact 
Standard Comparative Issue 
Q Prime Inc.
Structure and Integration 7 
Diversification 8 
Auxiliary Power 9 
Smith Broadcasting, Inc.
Structure and Integration 10 
Formation of the Applicant 
and the Preparation and
Prosecution of the Application 16 
Diversification 28 
Auxiliary Power 29 
Columbia River Wireless, Inc.
Structure and Integration 30 
Formation of the Applicant 
and the Preparation and
Prosecution of the Application 36 
Diversification 49 
Auxiliary Power 50 
Florinda J. Weagant
Structure and Integration 51 
Diversification 58 
Auxiliary Power 59 
McCoy Communications Limited Partnership 
Structure and Integration 60 
Formation of the Applicant 
and the Preparation and
Prosecution of the Application 70 
Diversification 89 
Auxiliary Power 90 
KLRK, Inc.
Structure and Integration 91 
Formation of the Applicant 
and the Preparation and
Prosecution of the Application 108 
Diversification 126 
Auxiliary Power 127
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
Thomas M. Eells
Structure and Integration 128 
Diversification 129 
Auxiliary Power 130 
Clark Broadcasting Limited Partnership 
Structure and Integration 131 
Formation of the Applicant 
and the Preparation and
Prosecution of the Application 137 
Diversification 152 
Auxiliary Power 154 
Columbia FM Limited Partnership 
Structure and Integration 155 
Formation of the Applicant 
and the Preparation and
Prosecution of the Application 160 
Diversification 178 
Auxiliary Power 179 
Trans-Columbia Communications 
Structure and Integration 180 
Diversification 190 
Auxiliary Power 191 
Basic Qualifications Issues
Issue 4 -- Financial Issue Against Clark 192 
Issue 8 -- Misrepresentation/Lack of
Candor Issue Against CFMLP 212 
Issue 9 -- Financial Issue Against CFMLP 226 
Issue 14 - Financial Issue Against MCLP 253 
The BIA Appraisals 259 
The Washington and Richmond Stations 262 
The Memphis Stations 264 
The Detroit Station 271 
Funds Available to Mr. Henry 
from Sales of the Memphis 
and Detroit Stations 276 
Tables 1 and 2 276 
Tables 3 through 8 277 
Conclusions of Law
Basic Qualifications Issues 278 
Financial Issue Against Clark 279 
Misrepresentation/Lack of
Candor Issue Against CFMLP 284
Financial Issue Against CFMLP 286
Financial Issue Against MCLP 293
Standard Comparative Issue 312
Auxiliary Power 313
Diversification 314 
Integration
Q Prime Inc. and Thomas M. Eells 320
Smith Broadcasting, Inc. 321
Columbia River Wireless, Inc. 328
Florinda J. Weagant 337
KLRK, Inc. 345
Trans-Columbia Communications 361
Ultimate Conclusion 368
PRELIMINARY STATEMENT
1. By Hearing Designation Order, 5 FCC Red 7160 (1990) 
("HDO"), the Assistant Chief. Audio Services Division, 
designated for consolidated hearing the mutually exclusive 
applications of Q Prime Inc. ("Q Prime"). Smith Broad 
casting, Inc. ("SBI"), Columbia River Wireless, Inc. 
("Wireless"), Florinda J. Weagant ("Weagant"), McCoy 
Communications Limited Partnership ("MCLP"), KLRK, 
Inc. ("KLRK"), Thomas M. Eells ("Eells"), Clark Broad 
casting Limited Partnership ("Clark"). Columbia FM 
Limited Partnership ("CFMLP"), and Andrew L. Brown & 
Lester M. Friedman d/b/a Trans-Columbia Communica 
tions ("Trans-Columbia") for a construction permit for a 
new FM station on Channel 290C2 (Channel 105.9 MHz) 
in Vancouver. Washington. 1 The hearing issues specified in 
the HDO, as subsequently modified, are as follows. 2
2. If a final environmental impact statement is issued 
with respect to KRIZ, Fort. Atwater. Wireless, KLRK, 
Group, and/or CRBC in which it is concluded that 
the proposed facilities are likely to have an adverse 
effect on the quality of the environment, to deter 
mine whether the proposal is consistent with the 
National Environmental Policy Act. as implemented 
by 47 C.F.R.  1.1301-1319.
1 Also designated for hearing were the applications of KRIZ 
Broadcasting, Inc. ("KRIZ"), Fort Vancouver Broadcasting, Inc. 
("Fort"), Atwater Kent Communications. Inc. ("Atwater"). Van 
couver Communications Co. ("VCC"), Gregory Winston ("Win- 
ston"), Turnbeaugh Communications, L.P. ("Turnbeaugh"), 
Bernard V. Foster ("Foster"), Vancouver FM Broadcasters 
Limited Partnership ("Vancouver FM"), Linda and Jack Sexton 
("Sexton"), The Vancouver Radio Group, Inc. ("Group"), Co- 
lumbia-Willamette Limited Partnership ("CWLP"), Vancouver- 
Portland Broadcasting Corporation ("VPBC"), James A. 
Gammon d/b/a Reunion Broadcasting Service ("Reunion"), 
John O. Hearne d/b/a Point Broadcasting Company ("Point"), 
Cascade Broadcasting of Vancouver Limited Partnership ("Cas 
cade"), Shabaz Communications, Inc. ("Shabaz"), Vancouver 
USA Broadcasters, Inc. ("Broadcasters"), and Columbia River 
Broadcasting Company ("CRBC"). On the Presiding Judge's
own motion, by Order. FCC 91M-I44, released January 14. 1991, 
the following applications were dismissed with prejudice: Fort, 
VCC, Winston, Turnbeaugh, Sexton. Group, VPBC, Reunion, 
Point, Cascade, Shabaz, Broadcasters, and CRBC. Each of those 
applicants failed to file the required notice of appearance, pay 
the hearing fee, or file an integration and diversification state 
ment. The following applications were dismissed with prejudice 
pursuant to the request of the applicant: KRIZ by Order. FCC 
91M-147, released January 14, 1991; CWLP by Order. FCC 91M- 
1621, released May 14, 19 1; Atwater by Order. FCC 91M-1633, 
released May 15, 1991; Vancouver FM by Order, FCC 92M-5IJ, 
released January 13, 1992; and Foster by Order. FCC 92M-273, 
released March 3, 1992.
2 Issue 1 was a site availability issue specified against Sexton. 
As discussed in note 1, supra, Sexton's application was dis 
missed.
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
3. To determine whether there is a reasonable pos 
sibility that the tower heights and/or locations pro 
posed by KRIZ, Atwater, Wireless, Weagant. KLRK. 
Broadcasters. Trans-Columbia, Foster, and CFMLP 
would constitute a hazard to air navigation.3
4. To determine with respect to Clark and Shabaz 
whether either applicant is financially qualified.4
5. To determine which of the proposals would, on a 
comparative basis, best serve the public interest.
6. To determine, in light of the evidence adduced 
pursuant to the specified issues, which of the applica 
tions should be granted, if any.
2. By Memorandum Opinion and Order, FCC 91M-2687. 
released September 4. 1991, and Memorandum Opinion and 
Order, FCC 91M-3079, released October 15. L991. the fol 
lowing issues were added to this proceeding.5
8. To determine the facts and circumstances sur 
rounding CFMLP's failure to notify the Commission 
until May 29. 1991, of the FAA's June 14. 1989. 
letter and. in light of the evidence adduced, whether 
CFMLP misrepresented facts and/or lacked candor 
with the Commission.
9. To determine whether CFMLP is financially quali 
fied to construct and operate its proposed FM station.
14. To determine whether Ragan Henry had the abil 
ity to fulfill his financial commitment to McCoy 
Communications Limited Partnership, as well as his 
then-outstanding financial commitments to other 
broadcast applicants and. if not. the effect thereof on 
the financial qualifications of McCoy Communica 
tions Limited Partnership.
The burden of proceeding on Issue 8 was assigned to 
KLRK and the burden of proof on that issue was assigned 
to CFMLP. Both the burden of proceeding and the burden 
of proof on Issue 9 were assigned to CFMLP. Likewise, 
both burdens on Issue 14 were assigned to MCLP.
3. No further resolution of Issue 2 is required. Issue 2 is 
an environmental issue specified against KRIZ. Fort. 
Atwater, Wireless, KLRK. Group, and CRBC. As discussed
in note 1, supra, the applications of KRIZ, Fort, Atwater, 
Group, and CRBC were dismissed. By Memorandum Opin 
ion and Order, FCC 91M-2043, released July 3, 1991, Issue 
2 was deleted with respect to Wireless, subject to the im 
position of a condition should that application be granted. 
In addition, by Memorandum Opinion and Order, FCC 
91M-2319. released July 29. 1991. Issue 2 was deleted with 
respect to KLRK, since that applicant no longer proposes 
to use the transmitter site that was the subject of the issue.
4. Similarly, no further resolution of Issue 3 is necessary. 
Issue 3 is an air hazard issue specified against KRIZ, 
Atwater. Wireless, Weagant, KLRK, Broadcasters, Trans- 
Columbia. Foster, and CFMLP. As indicated in note 1, 
supra, the applications of KRIZ, Atwater. Broadcasters, and 
Foster were dismissed. Further, by Memorandum Opinions 
and Orders, FCC 91M-817. released March 4, 1991, FCC 
91M-818. released March 4. 1991. FCC 91M-1816. released 
June 6, 1991. FCC 91M-2142, released July 11. 1991, and 
FCC 91M-3379. released December 4. 1991, Issue 3 was 
resolved by summary decision in favor of Wireless, 
Weagant. Trans-Columbia. KLRK, and CFMLP. respective 
ly. Conditions were imposed upon Wireless and CFMLP, 
should either applicant prevail in this proceeding."
5. Prehearing or hearing conferences in this proceeding 
were held on January 29. 1991. October 21, 1991, and 
March 16. 1992. Hearings were held in Washington, D.C., 
on June 25. 1991. July 9, 10, 11, 12. 15. 16. and 17. 1991, 
March 10. 12, 19, 1992. April 16. 1992, and May 19, 1992. 
The record was closed by Memorandum Opinion and Order, 
FCC 92M-684, released June 17, 1992.
6. Proposed findings of fact and conclusions of law were 
filed by Eells on July 7, 1992, by Q Prime. SBI, Wireless, 
Weagant. KLRK. Clark, CFMLP, and Trans-Columbia on 
July 13. 1992. and by MCLP on July 14. 1992. 7 Reply 
findings were filed by Eells on July 23, 1992. and by all the 
remaining applicants, with the exception of Q Prime, on 
August 7. 1992.
FINDINGS OF FACT 
Standard Comparative Issue
Q Prime Inc.
7. Structure and Integration. Q Prime is a corporation 
organized under the laws of the State of New Jersey. The 
ownership of Q Prime is divided equally between Clifford 
N. Burnstein and Peter D. Mensch, the sole directors, each 
of whom holds 50 percent of the issued and outstanding
J By Memorandum Opinion and Order. FCC 91M-1467. re 
leased April 26, 1991. and Memorandum Opinion and Order, 
FCC 91M-2687, released September 4. 1991. Issue 3 was modified 
to include Foster and CFMLP, respectively.
4 As discussed in note 1, supra, the application of Shabaz was 
dismissed.
5 Issues 7 and 10 were added against Foster by Memorandum 
Opinion and Order. FCC P1M-1522, released May 2, 1991, and 
Memorandum Opinion and Order. FCC 91M-2688, released Sep 
tember 4, 1991. respectively. Issues 11, 12, and 13 were added 
against Vancouver FM by Memorandum Opinion and Order, 
FCC 91M-2690, released September 4, 1991. As discussed in note 
1, supra, the Foster and Vancouver FM applications were dis 
missed pursuant to the request of each applicant. 
6 Trans-Columbia contends in its proposed Findings and con 
clusions, at paras. 91-96. that Q Prime, Eells, Clark and MCLP
should be disqualified because they have not obtained Federal 
Aviation Administration approval of their proposed sites. Trans- 
Columbia's contentions come far too late in this proceeding to 
be considered. See Section 1.229 of the Commission's Rules. 
Trans-Columbia also argues, at paras. 97-98. that the condition 
imposed on Wireless and CFMLP renders their technical pro 
posals comparatively inferior because they are potentially 
unworkable and could require a reduction in power causing a 
violation of the Commission's rules. This argument is rejected 
as it is totally speculative.
7 Eells filed an Erratum on July 29, 1992. SBI filed Errata on 
August 19. 1992. KLRK filed Errata on July 15, 1992. Clark filed 
an Erratum on July 31. 1992. MCLP's proposed findings and 
conclusions were accepted nunc pro tune by Order. FCC 92M- 
828. released July 30, 1992. MCLP filed an Erratum on July 31, 
1992.
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
common stock. There are no other classes of stock. 
Burnstein is the Co-President and Treasurer of Q Prime. 
Mensch is the Co-President and Secretary of the corpora 
tion. (Q Prime Ex. 1.) Q Prime does not propose any 
full-time or part-time integration of ownership into the 
management of its proposed station. (Q Prime Ex. 2.)
8. Diversification. Through various other corporations 
and limited partnerships. Burnstein and Mensch hold con 
struction permits for stations KQKX(FM), Woodlake. Cali 
fornia, and KSEA(FM), Greenfield, California, and licenses 
for stations KSTT-FM, Los Osos-Baywood Park. California, 
and KRAB(FM), Green Acres, California. Q Prime does 
not commit to divest any of the media interests held by it 
or its principals in the event its Vancouver, Washington, 
application is granted. (Q Prime Ex. 3.)
9. Auxiliary Power. Q Prime will install and maintain 
auxiliary power generating facilities at both its main studio 
and its transmitter site. (Q Prime Ex. 4.)
Smith Broadcasting, Inc.
10. Structure and Integration. SBI is an Oregon corpora 
tion with two classes of common stock. Class A voting 
stock and Class B nonvoting convertible stock. Gregory D. 
Smith, an African American, holds 100 percent of the 
voting stock (250 shares), and Columbia Investments, Ltd. 
("Columbia") holds 100 percent of the nonvoting stock 
(750 shares). Columbia is an Oregon corporation wholly 
owned by Peter Stott. Smith paid $2,500 for his voting 
stock and Columbia paid $7.500 for its nonvoting stock. 
Columbia has the right to convert its stock to Class A 
common voting stock three years after SBI's station 
commences operation under program test authority. (Smith 
Ex. 2, p. 1.) However, Columbia must provide SBI with 
written notice of its intent to convert. (Clark Ex. 9, p. 2.)
11. Smith is President, Chairman, and a Director of SBI. 
His wife. Gwen Ozaki-Smith, is Secretary, Treasurer, and a 
Director of SBI. Mark Ail is SBI's third Director. Ozaki- 
Smith is employed by KATU-TV, Portland. Oregon, as a 
Sales Account Executive. (Smith Ex. 2, p. 1.)
12. If the SBI application is granted, Smith will work at 
the station as its General Manager on a full-time basis, at 
least 40 hours per week. As General Manager. Smith will 
assume overall responsibility for the management and op 
eration of the station, will set personnel policies, make all 
hiring and firing decisions, set programming and commer 
cial policies, and supervise all of the station's personnel 
either directly or through the selection and supervision of 
department managers. To effectuate his commitment, upon 
final grant of the SBI application and prior to the time the 
station is ready to commence operations with program test 
authority, Smith will resign and terminate his present em 
ployment position as National Sales Manager of radio sta 
tions KGON/KFXX(AM), Portland. Oregon. (Smith Ex. 3. 
p. 1-)
13. Smith has resided within the 1.0 mV/m contour of 
SBI's proposed station since 1989. From 1972 to 1989. 
Smith resided within the 3.16 mV/m contour of the pro 
posed station. Smith will move to and reside in Vancouver, 
Washington, should SBI's application be granted. (Smith 
Ex. 3, pp. 1-2.)
14. Smith has volunteered in the following civic or 
ganizations located within the service area of SBI's pro 
posed station (Smith Ex. 3. pp. 2-3):
a. Commissioner, Portland Exposition Recreation 
Commission ("ERC") (1985-90)
Chairman (1988-89) 
Co-Chairman (1987-88) 
Chairman, Civic Stadium Task Force 
Secretary/Treasurer (1986-87)
Member: Convention Trade Spectator 
Arena Study/Management Committee
Member: Committee for the selection of 
the architectural firm to design the Con 
vention Center
b. Chairman, Black Republican Council of Oregon 
(1984-86)
c. Volunteer, Boys' Club of America Olympic Torch 
Relay, Portland, Oregon (1984)
d. Health Link, Board Member a.k.a. Legacy (Visiting 
Nurses Association) (1978-89)
e. President, Project Pride (1983-85)
f. Member, Sixth Man Foundation (1986-Present)
President (1987-Present) 
g. Volunteer, Police Activity League (PAL) (1990)
h. Volunteer Committee, Multnomah County District 
Attorney's Office (1989-90)
i. Sub-committee to build a new arena in Portland 
(an extension of Metro ERC) (1990-Present)
j. Member of the Dome Team committee to study the 
plausibility of a domed stadium in Portland 
(1990-Present)
k. Conducted the Youth Basketball Association Clin 
ic in Vancouver, Washington (1979)
1. Coached Special Olympics Basketball in S.W. 
Beaverton (1984-85)
15. Smith is employed as National Sales Manager, 
Ackerly Communications. Inc., licensee of radio stations 
KGON/KFXX(AM), Portland, Oregon.8 He has held this 
position since April 1989. From February 1976 to April 
1989, Smith was employed as a Sales Account Executive 
for King Broadcasting, licensee of station KGW, Portland, 
Oregon. (Smith Ex. 3. pp. 1, 3.)
16. Formation of the Applicant and the Preparation and 
Prosecution of the Application. Peter Casciato, SBI's com 
munications counsel, telephoned Smith in early 1989 and 
informed him of the availability of the Vancouver FM 
station. (Tr. 364-65.) Casciato had previously served as 
attorney for TS-3 Communications. Inc. ("TS-3"), a 1982 
applicant for a new UHF television station on Channel 40 
in Portland, Oregon. (Tr. 363-65.) Smith indicated that he 
would be interested in applying for the Vancouver alloca 
tion but would need a financial backer. Smith and Casciato
8 SBI's reliance in its proposed findings and conclusions on 
Smith's additional duties as Local Sales Manager of Station 
KFXX is misplaced. Such duties were undertaken after the "B"
cut-off date in this proceeding. (Tr. 362.) In any event, such 
additional duties do not enhance SBI's comparative position in 
any material respect and are decisionally insignificant.
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
agreed that Casciato would contact former TS-3 sharehold 
ers to see if they were interested. (Tr. 367.) Casciato con 
tacted Roger Krage, a Portland attorney who represents 
Stott's companies, including Columbia. Krage also serves as 
an officer and director of Columbia. (Tr. 367-69.) Smith, 
Krage, and Stott all held voting stock in TS-3. (Tr. 363-64, 
367.)
17. Krage was the individual who initially spoke to Stott 
about becoming involved in the SBI application for the 
Vancouver facility. (Tr. 371.) Smith never spoke to Stott 
prior to the filing of SBI's application. If Smith wanted to 
communicate with either Stott or Columbia, he did so 
through Krage because Smith saw Krage as representing 
Columbia. (Tr. 371-72.) Smith considered Stott a business 
acquaintance, not a close personal friend. (Tr. 364.)
18. Smith hired Casciato as SBI's communications coun 
sel and Bob McClanathan as SBI's consulting engineer. 
(Smith Ex. 2, p. 1; Tr. 436.) Smith established a checking 
account for SBI for which he is the only signatory and 
from which he pays all the corporation's expenses. (Smith 
Ex. 2, pp. 1-2.)
19. Smith found SBI's original transmitter site and ob 
tained written assurance of the availability of that site. With 
McClanathan's help, Smith selected SBI's current transmit 
ter site and obtained written assurance of its availability. 
Smith prepared cost estimates for construction and opera 
tion of the station for three months without revenue. With 
Casciato's aid, Smith prepared SBI's FCC application, and 
undertook to have notice of the filing of the application 
published. Smith established and maintained SBI's public 
file. (Smith Ex. 2, p. 2.)
20. Krage and Casciato established SBI's corporate struc 
ture. In doing so, Casciato had input from Smith and acted 
on behalf of Smith: Krage represented Columbia. (Tr. 
378-79.) Krage has also acted as SBI's corporate counsel 
and prepared some of the applicant's corporate documents 
(Tr. 384, 440), including: SBI stock certificates for Smith 
and Columbia, both dated March 6, 1989 (Clark Exs. 9 and 
13: Tr. 394); SBI's Articles of Incorporation, dated April 5. 
1989 (Clark Ex. 10; Tr. 385-86, 394): a Consent to Cor 
porate Action in Lieu of an Organizational Meeting of the 
Shareholders and Board of Directors of SBI. dated March 
6, 1989 (Clark Ex. 11: Tr. 394); the Bylaws of SBI. dated 
"effective March 29. 1988 [sic)" (Clark Ex. 12; Tr. 394); 
and the Minutes of the 1990 Annual Meeting of the Share 
holders and Directors of SBI. dated "effective March 29, 
1990" (Clark Ex. 17; Tr. 421-22). Krage also acted as the 
incorporator of SBI and serves as its registered agent. 
(Clark Ex. 10, pp. 1, 3; Tr. 385-86.) Smith has received and 
paid bills from Krage for the legal work he has done for 
SBI. (Tr. 384.)
21. Krage and Casciato agreed on an arrangement where 
by Columbia could convert its nonvoting stock to Class A 
common voting stock three years after SBI's station 
commences operation under program test authority. (Clark 
Ex. 9, p. 2; Clark Ex. 10, p. 1; Tr. 376. 380.) Smith never 
discussed the stock conversion feature with Stott. and has 
not discussed with anyone the circumstances under which 
Columbia would exercise its option. Smith has no under 
standing as to the circumstances under which Columbia 
will exercise its conversion rights except for the fact that it 
has to be three years after the program test authority date. 
(Tr. 376, 380-81.)
22. Columbia agreed to provide the funds for the pros 
ecution of SBI's application. Smith was informed of this 
arrangement during a conversation with Casciato and
Krage during the spring of 1989. (Tr. 372-73.) However, 
the written Loan Agreement by which Columbia agreed to 
finance the prosecution of SBI's application was not re 
duced to writing until on or about December 5, 1990. 
(Clark Ex. 8: Tr. 373-75.) Paragraph 4a of the Loan Agree 
ment between SBI and Columbia obligates Smith to begin 
to repay the funds advanced under the agreement seven 
months after the commencement of regular station opera 
tion or at such time thereafter as the station may operate at 
a profit, whichever is later. (Clark Ex. 8. p. 1.) Paragraph 
4b provides, inter alia, that if SBI's application is not 
granted, SBI shall nevertheless be obligated to repay the 
principal and accrued interest over a five-year period com 
mencing one year after the Commission's denial of the SBI 
application becomes final. (Id.) Smith testified, however, 
that if SBI does not receive a grant, he has no obligation to 
repay either Stott or Columbia any of the funds which 
have been advanced for the prosecution of the application. 
(Tr. 432.) SBI receives funds in the form of checks from 
Columbia to pay the costs of prosecuting the application. 
These checks are signed by Stott; Krage has never signed 
those checks. (Tr. 442.)
23. In 1989, both SBI's and Columbia's corporate offices 
were located at 1500 Southwest First Avenue in Portland, 
the same address as Krage's office. (Tr. 386-88.) At that 
time, Krage's office was located in the same building and 
on the same floor as Stott's office. (Tr. 388. 434.) Since the 
spring of 1989, Krage, Columbia, and Stott have all 
relocated their offices to 121 Southwest Morrison Street in 
Portland. Krage's and Stott's offices are again on the same 
floor of the same building. (Tr. 388, 434.) SBI's corporate 
office is no longer located at Krage's office, but is now at 
Smith's home in Beaverton, Oregon. (Tr. 388-89.)
24. SBI is relying upon an April 4. 1989. bank commit 
ment letter for $500,000 from First Interstate Bank of 
Oregon ("FIBO") to provide the financing for the con 
struction and initial operation of its station. (Clark Ex. 15; 
Tr. 403. 424.) Krage selected FIBO because it is one of the 
banks used by Columbia. (Tr. 403.) Krage made the initial 
contact with the bank and arranged for Smith to meet with 
Stephen L. Hammond, Assistant Vice President of FIBO. to 
discuss SBI's application. (Tr. 403. 407-08.) In early March 
1989. Smith met with Hammond and discussed with him 
SBI's application and needs. Smith later returned to the 
bank and picked up the letter from Hammond. (Tr.
407-08.) A portion of the bank letter states (Clark Ex. 15. 
p. 1):
As security for the loan, we would require the per 
sonal guarantees of stockholders, specifically Greg B. 
[sic| Smith, Columbia Investments Ltd.. and Peter W. 
Stott individually, and a security interest in the com 
pany's assets, all of which you have indicated you 
will provide.
Smith did not tell the bank that Stott would personally 
guarantee the loan, nor could he recall Krage ever inform 
ing him that Stott had agreed to personally guarantee the 
loan. (Tr. 404-05.) Smith assumed that Stott had informed 
someone he would provide his personal guarantee. (Tr.
408-09.) Smith believed that he would not have received 
the bank letter had Stott not told someone he agreed to 
personally guarantee the loan. (Tr. 409.)
25. In the spring of 1989. Smith arranged to lease space 
for SBI's transmitter on a tower owned by the licensee of 
Channel 49. (Tr. 405, 410.) Smith provided Casciato and
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
Krage with a copy of the documents concerning the pro 
posed lease. Smith gave a copy to Krage because Krage 
represented Columbia, and Smith wanted Columbia to 
know what was occurring with the lease of the tower space. 
(Tr. 410-12.) After SBI's engineer suggested that SBI move 
its transmitter to a new site in order to resolve an FAA 
problem, Smith discussed with Krage the possibility of 
moving SBI's transmitter to Livingston Mountain. (Tr. 
412-13; Clark Ex. 16.) Smith assumed Krage would pass 
the information on to Stott. (Tr. 413.) Smith spoke to 
Krage as a representative of Columbia, and not as SBI's 
corporate counsel. (Tr. 416.) Smith also understood that 
when he spoke to Krage in his capacity as an officer and 
attorney for Columbia, Krage was representing Stott's inter 
ests. (Tr. 418-19.) On May 19, 1989. McClanathan wrote to 
Smith regarding the number of applicants for the proposed 
facility and their respective transmitter sites. (Clark Ex. 7.) 
Smith sent a copy of this letter to Krage and assumed 
Krage would forward it to Stott. (Tr. 370-71.) Smith also 
regularly provides Krage with copies of bills he receives 
from Casciato and McClanathan. (Tr. 435-36.)
26. SBI held an annual meeting in March 1990 at the 
office of Columbia on Southwest Morrison Street. (Tr. 
419.) Krage acted as secretary of the meeting and took the 
minutes. Smith's wife, Gwen Ozaki-Smith, also took min 
utes of the meeting. Krage's minutes were typed and pre 
pared in his office. (Clark Ex. 17. p. 1; Tr. 420-22.) Krage 
attended the annual meeting both as one of SBI's attorneys, 
and as a representative of Columbia. (Tr. 422.)
27. Smith has contacted Krage and apprised him of the 
status of the SBI application about once a month. (Tr. 
443.) Smith anticipated that, after the SBI application was 
granted, he would continue to have periodic discussions 
with Columbia to keep it advised of SBI's progress. Specifi 
cally. Smith said he would probably want to "confer" with 
Columbia on equipment purchases, promotions, and regu 
lar board meetings. By "confer," Smith meant that he 
would talk with Columbia "out of respect" and courtesy to 
them as investors in SBI. Smith did not believe he had an 
obligation to speak with Columbia about these matters. (Tr. 
426-32.) In this connection, Smith has not sought approval 
from Columbia, Krage, or Stott with regard to any action 
he has taken on behalf of SBI in this proceeding, including 
the change of transmitter site and the development of a 
new budget in 1991. Nor has Smith contacted Krage or 
Stott on a day-to-day basis concerning the prosecution of 
the SBI application. Should SBI's application be granted, 
Smith does not intend to seek Columbia's approval prior 
to taking any management actions, and he does not intend 
to communicate with Columbia on a day-to-day basis con 
cerning the management or operation of the station. (Tr. 
441-43, 446-47.)
28. Diversification. Smith is employed as National Sales 
Manager. Ackerly Communications. Inc.. licensee of radio 
stations KGON/KFXX(AM), Portland. Oregon. If SBI's ap 
plication is granted, Smith will resign and terminate his 
present employment prior to receiving program test au 
thority. (Smith Ex. 3, pp. 1, 3.) Neither SBI nor any of its 
voting shareholders hold any ownership interest in or vo 
ting control over any medium of mass communications. 
(Smith Ex. I.)9
29. Auxiliary Power. SBI will install auxiliary power 
facilities at both its studio and transmitter site locations. 
(Smith Ex. 4.)
Columbia River Wireless, Inc.
30. Structure and Integration. Wireless is a Washington 
State corporation authorized to issue 47,500 shares of com 
mon voting stock and 52,500 shares of common nonvoting 
stock. Margaret R. McCormick holds all of the voting stock 
and serves as President, Vice President, Treasurer, and sole 
director of the corporation. Kelly Puntney is Secretary of 
the corporation. He is neither a director nor a stockholder 
of Wireless. Emmett McCormick ("Emmett"), 10 Ms. 
McCormick's uncle, holds 2,500 shares of common 
nonvoting stock and has subscribed to an additional 25,000 
shares of common nonvoting stock. Brad L. Skinner and 
Marie B. Skinner jointly hold 2,500 shares of common 
nonvoting stock and have subscribed to an additional 
22,500 shares of common nonvoting stock. Marie B. 
Skinner is Ms. McCormick's daughter; Brad L. Skinner is 
Marie's spouse. (Wireless Ex. 1, p. 1.)
31. If the Wireless application is granted, Ms. 
McCormick will serve on a full-time basis (a minimum of 
40 hours per week) as General Manager of the proposed 
station. As General Manager, Ms. McCormick will hire and 
supervise all staff members, establish and implement the 
station's policies and program format, and direct the sales, 
promotional, business and public service operations of the 
station. No nonvoting stockholder of Wireless will be in 
volved in the management or operation of the proposed 
station. To effectuate her integration commitment, Ms. 
McCormick will withdraw fully from her present employ 
ment with the Metropolitan Parks District of Tacoma 
(Washington), and will not engage in any other time-con 
suming business pursuits. (Wireless Ex. 1, p. 5.)
32. Ms. McCormick resided in Vancouver, Washington, 
during the following periods: from approximately 1937-39: 
during the 1940-41 school year; and from December 1969 
through October 1985. In the event Wireless' application is 
granted, Ms. McCormick will move back to Vancouver 
prior to the commencement of the operation of the station. 
(Wireless Ex. 1, p. 5.)
33. Ms. McCormick was involved in the following civic 
activities within the city of Vancouver (Wireless Ex. 1, pp. 
5-7, and transcript pages cited):
a. Fort Vancouver Fourth of July Committee 
Member (1969 through 1985) 
President (1982 and 1983) 
Volunteer (1989 and 1990)
9 In its proposed findings and conclusions, at paras. 72-73, 
Trans-Columbia contends that Mark Ail, a director of SBI, is 
also national advertising and account development manager for 
The Columbian, Vancouver, Washington's only daily general 
circulation newspaper, and that this warrants the imposition of 
a diversification demerit against SBI. First, the facts relied on 
are not of record in this proceeding and there is no request for
official notice thereof. Second, and more significantly, Trans- 
Columbia's contentions are without merit for the reasons re 
cited by SBI at pages 12 and 13 of its reply findings and 
conclusions.
10 At the time of the hearing on the comparative issue, 
Emmett was 78 years old. (Tr. 489.)
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
While serving on the committee, Ms. 
McCormick participated in the day-long 
July 4th celebration by adding entertain 
ment, an arts and crafts fair, demonstra 
tions and other activities. She also 
initiated a corporate fundraising project 
for the annual celebration. During her 
membership, Ms. McCormick attended 
weekly meetings throughout the year to 
plan the $400.000 annual event. Her in 
volvement as a volunteer consisted of 
working at the celebration on the day of 
the event. (Tr. 468.)
b. Fort Vancouver Days Committee (1981-84) 
Co-Chair (1982)
c. Southwest Washington Health District Board (1978)
d. CETA Board (Clark County) (1976-79)
e. Clark County Committee on Aging (1970-76) 
f. Cooperative Arts Council, Vancouver, Washington 
Charter Member (1980-82)
The Council helped organize various arts 
groups in the community with the inten 
tion of expanding the availability of art. 
The Council provided the impetus be 
hind the establishment of the Columbia 
Arts Center, and presently operates as a 
focal point for the visual and performing 
arts in Vancouver. Ms. McCormick could 
not recall precisely when in 1980 this 
activity began and when in 1982 it end 
ed. (Tr. 468-69.)
g. Slocum House Theater Board. Vancouver, Wash 
ington (1984-85)
h. Women-In-Action, Vancouver. Washington 
Charter Member (1980-Fall 1985)
This professional women's group was 
organized as a result of a county commis 
sioner's statement that the county could 
not find any qualified women to serve on 
its boards. The organization is active in 
local government and presently has sev 
eral hundred members. (Tr. 469.)
i. Smith Reynolds American Legion Post, Vancouver, 
Washington
Honorary Member (1986)
j. Guest Speaker, Officers' Row Arboretum Memorial 
Service, Vancouver. Washington (1990)
k. Guest Speaker. Rotary Club, Inn at the Quay. 
Vancouver. Washington (March 1991)
34. In connection with her employment with the Parks 
and Recreation Department of the City of Vancouver." Ms. 
McCormick was involved in the following local activities 
(Wireless Ex. 1, pp. 7-12):
a. Retired Senior Volunteer Program ("RSVP"). In 
August 1972 Ms. McCormick directed the establish 
ment of the program which was one of the initial 
RSVP's in the country. In addition to writing the 
RSVP proposal for the city and meeting with federal 
officials regarding funding for the project. Ms. 
McCormick hired and supervised the staff, and was 
responsible for evaluating the program and seeing 
that it continued to receive funding. Through the 
program, which is still functioning, older persons 
serve as volunteers for over 30 agencies in a variety 
of functions.
b. In the mid-1970s. Ms. McCormick wrote proposals 
and secured funding for a city volunteer bureau 
through which volunteers (other than senior citizens) 
provided services to various city departments.
c. Under the direction of the City Manager, Ms. 
McCormick formulated and executed a pilot project 
in 1981 to establish a Visitors Service Division for 
the city. The program was eventually incorporated 
into the Chamber of Commerce and has become a 
Visitors Convention Bureau.
d. In the mid-1970s, Ms. McCormick initiated a con 
cert series in cooperation with the local musicians 
union and SWIFT (a community charitable organiza 
tion). Ms. McCormick solicited funds, selected con 
cert locations and performers, and arranged publicity.
e. In 1974. Ms. McCormick was active in initiating a 
senior nutrition program in Vancouver. She was re 
quested by the State Office on Aging to design a 
model program. As appropriations became available, 
the senior meal program was expanded to five loca 
tions within Clark County. Ms. McCormick also par 
ticipated in the establishment of a "Meals on Wheels" 
program which provided meals to elderly shut-ins. In 
addition, Ms. McCormick obtained corporate dona 
tions of freeze-dried foods so shut-ins would have 
adequate nutrition if severe weather interfered with 
meal deliveries.
f. In 1974-75. Ms. McCormick. in coordination with 
community volunteers, initiated the establishment of 
a community garden program for city residents who 
did not have access to garden plots. In the late 1970s, 
after the initial success of that program. Ms. 
McCormick initiated and coordinated a program for 
handicapped persons where the garden beds were 
raised so that persons in wheelchairs could also par 
ticipate in gardening.
g. In the late 1970s or early 1980s. Ms. McCormick 
initiated, wrote grant proposals, secured funding, and 
supervised a summer lunch program. The program 
was essentially a summertime extension of the Fed 
eral School Lunch Program and provided lunches 
throughout the summer to children from low-income 
areas.
11 From December L969 through January 1979. Ms. 
McCormick was a Recreation Supervisor in charge of the Park 
Department's Social/Cultural Division. From January 1979 to
October 1985, Ms. McCormick was a Recreation Manager of the 
Parks and Recreation Department. (Wireless Ex. 1. p. 7.)
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
h. In the late 1970s, Ms. McCormick spearheaded the 
establishment of an annual motorcycle safety course 
offered by the City of Vancouver, which was one of 
the first motorcycle safety courses sponsored by a 
public agency in the State of Washington.
i. In the early 1970s, Ms. McCormick initiated, or 
ganized and supervised the Senior Trip Program, a 
travel program for older people which used older 
people as tour guides. She made arrangements for 
transportation, accommodations, entertainment, and 
sight-seeing excursions. The trips lasted from one to 
twenty days, and were held both in and outside the 
country. Ms. McCormick directly supervised the pro 
gram until the end of 1978.
j. In 1973, Ms. McCormick started The Messenger, a 
Parks and Recreation Department newspaper for the 
elderly. She secured funding for the project by writ 
ing proposals, hired the staff, and, supervised the 
publication, printing and distribution of the news 
paper. The Messenger, which is still being published, 
is intended to provide older citizens with news affect 
ing their lives that may not be available through the 
local daily newspaper.
k. Throughout her employment with the Parks and 
Recreation Department of the City of Vancouver, Ms. 
McCormick was a member of the Washington 
Recreation and Parks Association ("WRPA") and 
served in the following positions: President (1984-85); 
Legislative Committee member (1982); Chair, Host 
City Committee for the State Conference (1981); and 
District Representative (1983). Ms. McCormick's in 
volvement with WRPA resulted in the association 
holding its first state and regional meetings in Van 
couver. Her participation in this organization enabled 
her to spotlight Vancouver's accomplishments in the 
field of parks and recreation. In 1975, the city was 
awarded a gold medal (first place award) for ex 
cellence in parks and recreation management from 
the National Recreation and Parks Association.
1. In 1975-76, Ms. McCormick was actively involved 
in the production of "70 Girls 70," a full-scale musi 
cal which featured a cast of older persons. Ms. 
McCormick secured funding, hired a professional di 
rector, coordinated publicity and ticket sales, and was 
responsible for monitoring expenses. The program, 
which was funded by the State of Washington. Clark 
County, and the City of Vancouver, demonstrated the 
talents of many older people and their ability to 
provide quality entertainment.
m. In 1971, Ms. McCormick started the Marshall 
Center Orchestra and Chorus. From its four original 
members (two pianists, a clarinetist, and a drummer), 
the orchestra has expanded and now tours as the 
Vancouver Pops Orchestra. The chorus expanded 
from a core group of six individuals, and currently 
performs throughout the area.
35. After accepting a position with the Metropolitan 
Parks District of Tacoma, Washington, Ms. McCormick was 
honored by an editorial appearing in The Columbian on 
September 30, 1985. (Wireless Ex. 1, p. 12.) 12 The editorial 
reads in part (id., at p. 34):
Vancouver won't have much trouble hiring or pro 
moting somebody to sit at her desk, of course. Re 
placing her will be a far more difficult if not 
impossible-task. Such a combination of talent, intel 
ligence, determination, ingenuity and energy happens 
but rarely. Had she gone into business rather than 
municipal recreation she might be a wealthy captain 
of industry by now.
Vancouver is lucky Bostwick resisted the outside 
blandishments as long as she did. The recreation 
program she built will persist awhile even if her 
successor is a hunkered-down bureaucrat of the 
blandest sort. The Fourth of July festivities, her most 
public crusade, will continue thanks to the core sup 
port group she helped to fashion.
At best, she will be remembered fondly; at worst 
Vancouver will learn all too soon that the commu 
nity could not afford to lose her.
36. Formation of the Applicant and the Preparation and 
Prosecution of the Application. Ms. McCormick directed the 
effort to form Wireless and to prepare and file its applica 
tion. After Ms. McCormick learned the FCC had adopted 
the proposal to allot a new FM frequency to Vancouver, 
she decided to go forward with an application for the new 
station. She discussed the application process with her 
brother, Matthew H. McCormick ("Matthew"), who is a 
communications attorney with the firm of Reddy, Begley 
and Martin. She also contacted Bill Coleman, a long-time 
acquaintance, and former air personality at station 
KVAN(AM), Vancouver. Over a number of years, Ms. 
McCormick and Coleman had discussed the possibility of 
the two of them applying for a radio station together. They 
had discussed the possibility of applying for the Vancouver 
station even before the channel was allotted. However, a 
few weeks after the channel was allotted, Coleman told Ms. 
McCormick that he did not want to take the financial risks 
involved in pursuing the project. Ms. McCormick decided 
that she still wanted to go forward. (Wireless Ex. 1, pp. 
1-2.)
37. Ms. McCormick retained Linda Johnson, a friend 
who is an attorney in Vancouver, to be her local counsel. 
Johnson, however, was about to go on maternity leave. For 
that reason, William Dudley, another attorney in her firm, 
handled most of the work in connection with the prepara 
tion of Wireless' articles of incorporation and other cor 
porate matters. Ms. McCormick also retained her brother, 
Matthew, and his firm to serve as her communications 
counsel. Matthew had recommended that she retain an 
other communications firm to avoid undisclosed principal 
allegations, but she decided, despite his misgivings, that she 
wanted him and his firm to represent her in connection 
with her Vancouver application. Matthew does not hold 
any ownership interest in Wireless, nor will he hold any 
such interest in the future. (Wireless Ex. 1. pp. 2-3.)
12 While residing in Vancouver, Ms. McCormick was known as 
Margaret Bostwick. In 1988, she formally changed back to her
maiden name, Margaret McCormick. (Wireless Ex. 1, p. 12.)
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
38. Ms. McCormick contacted several consulting engi 
neers. Among them were Harold Munn, Don Markley, 
Robert McClanathan, Jim Hatfield, George Frese, Ken Wil 
liams, and Peter Gureckis. Several of the engineers con 
tacted already had clients lined up for the Vancouver 
proceeding. Gureckis. however, did not and Ms. 
McCormick eventually retained him to prepare the ap 
plication. (Wireless Ex. 1, p. 3; Tr. 461.)
39. Gureckis identified several existing towers in the 
Portland/Vancouver area that might be used for the Van 
couver station, including that of KMJK(FM) (now KMXI) 
located on Mount Scott in Portland, and that of KPDX(TV) 
in Portland. Ms. McCormick contacted KPDX and received 
a draft lease agreement from Jack Matranga. She also con 
tacted James Boyd, the chief engineer of KMJK. Boyd 
indicated that space was available. Ms. McCormick chose to 
go with the KMJK tower. She received a letter dated March 
31, 1989, from Dave McDonald, General Manager of 
KMJK, confirming the availability of the site. (Wireless Ex. 
1. p. 3.)
40. Ms. McCormick also prepared estimates of the costs 
to construct the proposed station and operate it for three 
months. Included in those estimates was the cost to change 
the frequencies of stations KFAT(FM), Corvallis, Oregon, 
and KYNG-FM, Coos Bay, Oregon. Ms. McCormick has 
been advised that those frequency changes are necessary to 
permit operation of the Vancouver station. Reddy, Begley 
and Martin provided Ms. McCormick with a set of sample 
cost estimates, and she revised them on the basis of discus 
sions with her brother and others. Ms. McCormick also 
obtained equipment cost estimates from Varian Continental 
Electronics and Broadcast Supply West. (Wireless Ex. 1. 
pp. 3-4.)
41. On the basis of consultation with both local counsel 
and communications counsel, Ms. McCormick decided on 
the structure of the applicant. Initially, she had contem 
plated having several members of her family invest in the 
application. Upon consultation with her local counsel, she 
determined that it would be better to limit the number of 
investors to those with sufficient financial means to take 
the kind of risks involved in a project such as this. (Wire 
less Ex. 1. p. 4; Tr. 476.)
42. As indicated above, Ms. McCormick holds all of the 
voting stock of the corporation. While she is the promoter 
and sole voting principal of the corporation, her financial 
investment in the corporation is limited to certain out- 
of-pocket expenses. (Wireless Ex. 1, p. 4.) Ms. McCormick 
has paid no money for her stock. (Tr. 504-05.) Rather, the 
services she has provided in organizing Wireless and pre 
paring its FCC application constituted consideration for 
her shares. (Vancouver FM Ex. 7.) The bulk of the finan 
cial investment in Wireless will come from the nonvoting 
stockholders. The terms of their investment are set forth in 
Stock Purchase and Subscription Agreements. (Wireless Ex. 
1, pp. 4, 20-33.) The portions of the Agreement relating to 
corporate matters were put together by Dudley's office, and 
the portions dealing with FCC matters were drafted by 
Matthew's office. (Tr. 480, 487, 491.)
43. Ms. McCormick discussed the Stock Purchase and 
Subscription Agreement with Emmett several times. (Tr. 
479, 486, 487-88.) In an undated 13 letter, Ms. McCormick
transmitted the Agreement to Emmett, requesting that he 
sign it and then call her at her brother's office or home to 
advise her that he had signed it. (Vancouver FM Ex. 6; Tr. 
482-83.) Emmett signed the Agreement and called to say 
that he had done so. (Wireless Ex. 1, p. 26; Tr. 485.) The 
Agreement was also signed by Margaret M. McCormick, 
Ms. McCormick's aunt. (Wireless Ex. 1, p. 26; Tr. 479.) 
However, her aunt signed on the wrong line, so Ms. 
McCormick added her own signature to the bottom of the 
- document after conferring with her brother. (Wireless Ex. 
1, p. 26; Tr. 480-81.)
44. Emmett has agreed to lend Wireless up to $375,000 
for the prosecution of the Wireless application, for pre- 
operational expenses, and for the construction and opera 
tion of the station. (Wireless Ex. 1, p. 21.) He is the sole 
source for the construction costs. (Tr. 489.) His Stock 
Purchase and Subscription Agreement details the terms of 
the loan, and provides that a "definitive loan agreement" 
will be executed prior to the loan being made. (Wireless 
Ex. 1, pp. 21-22.) No such loan agreement has been ex-, 
ecuted because Emmett has not as yet loaned any money to 
Wireless. (Tr. 488.) He is not obligated to lend funds to 
Wireless until a grant of the Wireless application has be 
come final. (Wireless Ex. 1, p. 11; Tr. 498, 526.)
45. Ms. McCormick picked up the Stock Purchase and 
Subscription Agreement of the Skinners from her brother, 
and personally brought it to her daughter and son-in-law 
for signature. (Tr. 490, 492.) Ms. McCormick did not know 
whether her daughter or son-in-law had seen the Agree 
ment before signing it; she believed they had not seen it. 
(Tr. 491.) Nor did Ms. McCormick recall whether she saw 
the Skinners' Agreement before taking it to them for signa 
ture. (Id.) Ms. McCormick had discussed the Agreement 
with her attorneys and trusted that they would carry out 
her guidelines in drafting the language of the Agreement. 
(Id.) Ms. McCormick and the Skinners had discussed how 
the deal was to go together, but there was no "jockeying 
around for a better deal." (Tr. 492-94, 522-23.)
46. The Skinners have agreed to lend to Wireless up to 
$37,750 for pre-operational and prosecution expenses of 
the application. (Wireless Ex. 1, p. 28; Tr. 465.) Ms. 
McCormick calculated how much money would be needed 
to get to the construction phase and came up with the 
figure reflected in the Skinners' Agreement. The Skinners 
accepted that figure without any negotiation. (Tr. 493.) The 
terms of the loan are detailed in the Stock Purchase and 
Subscription Agreement. (Id.) Those terms were presented 
to the Skinners and were accepted. (Tr. 522-23.) The 
Agreement further provides for the execution of a "defini 
tive loan agreement" prior to the loan being made. (Wire 
less Ex. 1, p. 28.) Although Brad Skinner has loaned 
Wireless in excess of $6,760, no loan agreement has been 
executed. (Tr. 493-94, 501-02.)
47. Ms. McCormick met with her brother in Washing 
ton, D.C., to complete the application form. The final draft 
of the application was prepared shortly before filing. After 
she reviewed and signed the final draft, Ms. McCormick 
personally went to the FCC with her brother to file it. 
(Wireless Ex. 1, p. 4.)
13 The transmittal letter bears the date of "4/10/84" in Ms. 
McCormick's handwriting. (Vancouver FM Ex. 6; Tr. 484.) Ms.
McCormick could not recall when she entered this date but 
believed it was sometime after the letter was sent. (Tr. 484.)
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
48. After the application was filed, Ms. McCormick es 
tablished the public inspection file for Wireless at a Van 
couver public library. She also arranged for publication in 
a daily newspaper in Vancouver of the required public 
notice regarding the filing of the application. After the 
competing Vancouver applications were designated for 
hearing, Ms. McCormick arranged for publication of an 
other required public notice in a Vancouver public daily 
newspaper. (Wireless Ex. 1, pp. 4-5.)
49. Diversification. With the possible exception of a very 
small (less than 1 percent) holding in a publicly traded 
corporation, neither Wireless nor any of its stockholders 
has any ownership interest in, or position with any broad 
cast station, newspaper or other mass media outlet. (Wire 
less Ex. 1, p. 13.)
50. Auxiliary Power. Wireless will install auxiliary power 
facilities in order to permit its station to remain on the air 
even in the event of a power outage. (Wireless Ex. 1, p. 
13.)
Florinda J. Weagant
51. Structure and Integration. Weagant is an individual 
applicant. In the event her application is granted, Weagant 
will be integrated in the day-to-day management of the 
proposed station on a full-time basis (at least 40 hours per 
week), as General Manager. As the station's sole owner- 
manager, Weagant will supervise all aspects of the opera 
tion of the station including hiring and firing of employees 
and setting personnel policies, establishment and imple 
mentation of public affairs and other programming, finan-. 
cial planning, sales, promotion and public relations, and 
general administration. (Weagant Ex. 1, p. 1: Tr. 555, 595, 
604.)
52. From 1964 to late 1989 Weagant resided at 1315 S.E. 
97th Avenue, Vancouver, Washington. This is in a residen 
tial area radiating out from downtown Vancouver in which 
there are no markings to indicate boundaries. The particu 
lar address, however, is two blocks outside of the legal city 
limits of Vancouver. Since late 1989, Weagant has resided 
at 13114 N.W. llth Place, Vancouver, Washington. This 
residence, too, is located outside the legal city limits of 
Vancouver. Both residences are within the 3.16 mV/m 
("city grade") contour of the proposed station. (Weagant 
Ex. 1, p. 2.)
53. Weagant has been active in Vancouver, Clark Coun 
ty, and nearby metropolitan area community affairs as 
follows (Weagant Ex. 1. pp. 3-4, and transcript pages cited):
a. Member, Oregon and Southwest Washington Oc 
cupational Therapy Association, Portland, Oregon 14 (1963-72) 15
Weagant's participation in this organiza 
tion consisted of attending monthly 
meetings which were generally held dur 
ing the winter. As a member of this or 
ganization, she was also asked to speak at 
and participate in local conferences,
school career days, health fairs, and semi 
nars. Some of these are separately listed 
below. (Tr. 565-67.)
b. Keynote Speaker, Western International Confer 
ence of Occupational and Physical Therapists, Port 
land. Oregon (1963) (Tr. 568.)
c. Speaker, American Heart Association Conference 
designed to teach Nursing Home Personnel Stroke 
Rehabilitation (1972)
d. Annual Health Fair, Rudy Leutke Senior Center, 
Vancouver, Washington (year or years not specified)
Weagant showed senior citizens how to 
remain independent in their homes de 
spite their limitations.
e. Member. Alpha Phi Fraternity, Vancouver Alumni 
Chapter (1964-66)
Through her participation in this organi 
zation, Weagant was appointed to the 
Board of Directors of the Vancouver- 
Clark County chapter of the American 
Heart Association and held this position 
during 1964. (Tr. 570.)
f. Kindergarten Room Mother. Mill Plain Elementary 
School (1964-65)
Mill Plain Elementary School is located 
right outside of Vancouver. Weagant had 
children attending the school during the 
time she served as a room mother. (Tr.
571.)
g. Campfire Girls and Boy Scout Leader (1967-71)
Weagant had children in these programs 
during the time she participated in these 
activities. (Tr. 571.)
h. Founder and Volunteer. "I Care" tutorial program 
for children with learning problems. Evergreen 
School District (1975)
i. Volunteer. St. Joseph School. Vancouver. Washing 
ton (1980-82)
Weagant estimated she spent approxi 
mately four hours per week volunteering 
at the school. She provided transporta 
tion for field trips, monitored the lunch 
room and playground, and worked with 
the school's reading specialist. One of 
her children attended St. Joseph's during 
this time period. (Tr. 571-72.)
j. Member, Stroke Team (1983-87)
Through Southwest Washington Hospi 
tals. Weagant served as a volunteer mem 
ber of this organization which met 
weekly to review neurological cases.
k. Member. Women-In-Action (Fall 1988-present)
14 Although located in Portland, this organization serves the 
Portland metropolitan area, "[w|hether on one side of the river 
or the other." (Tr. 565-66.)
15 Weagant was an occupational therapist from 1963 until 1987.
Although she was not always employed during these years, she 
was an on-call therapist at Portland hospitals and was also the 
Director of Therapy at Columbia Ridge Nursing Home in Van 
couver. (Tr. 566.)
10
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
This organization is a group of Clark 
County women whose objectives are to 
promote and further women's civic in 
volvement in the area. Weagant became a 
member in the fall of 1988 and attended 
monthly meetings. She became less in 
volved in 1990, and has attended meet 
ings only infrequently since then. (Tr. 
572-73.)
1. Executive East Chapter, American Business Wom 
en's Association
Charter Member (1988) 
Woman of the Year (1990) 
Guest Speaker (1989-present)
Weagant also helped with and publicized 
the Vancouver area food drive, conduct 
ed a seminar on Women in Business, and 
participated in a membership drive at the 
Office Products Show.
m. Guest Speaker, Fort Vancouver Lions Club (1989 
to present)
54. Weagant was also involved in the following activities 
during 1987: (a) speaking at support group meetings for 
the local Stroke Club, Arthritis Foundation, and Lung 
Association; (b) participating in downtown Vancouver 
Clean-Up Day: (c) participating and appearing as an hon 
ored guest at a "Walk-a-Thon/Roll-a-Thon" for CoHo, a 
local group concerned with the handicapped which en 
courages independent living; (d) assisting in fundraising for 
bone marrow transplant patients: (e) volunteering at the 
Salvation Army Thanksgiving Day Feast: and (f) through 
the Fort Vancouver Historical Society, participating in the 
opening day festivities for the Washington State Bicenten 
nial. (Weagant Ex. 1, p. 4.)
55. Weagant has been the sole owner of AM station 
KKEY, Portland, Oregon, since 1987. (Tr. 534-35.) 
Weagant has used KKEY to "promote and aid" the follow 
ing Vancouver-area community organizations: (a) Clark 
County Sheriff's Office; (b) The Greater Mt. Calvary 
Church of God: (c) Network Employment Training (Van 
couver); (d) Southwest Washington Health District; (e) Of 
ficers' Row (George C. Marshall House in Vancouver); (f) 
Clark County Department of Community Services (which 
provides assistance to low income families); (g) Vancouver 
Child Abuse Prevention Center: and (h) Fort Vancouver 
Lions Club. (Weagant Ex. 1. pp. 4-5.)
56. With respect to these efforts, KKEY has assisted the 
Clark County Sheriffs Office by hosting sheriffs on talk 
programs to promote their crime prevention program, such 
as ways to protect homes. Weagant did not host any of 
these programs, but coordinated the activities. (Tr. 573-74.) 
The Greater Mt. Calvary Church of God has a live pro 
gram every Sunday on KKEY which is paid for by the 
church. In addition, Weagant donated a freezer to this 
church to help their program for indigent and low income 
people. KKEY permits community church groups and 
churches to advertise and promote their activities as a 
public service. (Tr. 574-75.) KKEY has also had representa 
tives from the Southwest Washington Health District on 
the air to promote their clean needle program to help with 
the AIDS situation. (Tr 575.) KKEY has promoted the 
George C. Marshall House's annual 4th of July celebration, 
and Weagant herself conducted a remote broadcast from
the House during the bicentennial celebration. (Tr. 
575-76.) Weagant explained that representatives from each 
of these organizations have appeared on talk-show pro 
grams as part of station KKEY's partial talk-show format. 
(Tr. 577.) Weagant considered this programming to be part 
of the station's public affairs obligations to the community. 
(Tr. 576.)
57. When her husband, who then owned station KKEY, 
had open-heart surgery in 1972, Weagant took over the 
management of the station on a full-time basis for six 
months. Thereafter, aware of his vulnerable health con 
dition, she maintained an active part-time involvement, 
visiting the station on a weekly basis and consulting regu 
larly with her husband about station business. During this 
period she was referred to as the station's Vice President, 
even though the licensee of the station was not then incor 
porated. Upon her husband's death in May 1987, she 
became General Manager of KKEY(AM). She has contin 
ued as such, on a full-time basis, ever since, with respon 
sibility for all aspects of day-to-day station operation. 
(Weagant Ex. 1, p. 2.)
58. Diversification. As noted above, Weagant is the sole 
owner of AM station KKEY, Portland, Oregon. If her 
application is granted, Weagant will divest her interest in 
station KKEY and sever all ties thereto prior to the com 
mencement of program tests at the proposed station. 
Weagant has no other interest in, or connection with, any 
medium of mass communication. (Weagant Ex. 1, p. 5; Tr. 
544-45, 553-54.) With respect to her understanding of the 
Commission's divestiture policy, Weagant testified as fol 
lows on cross-examination (Tr. 549):
Q: Why are you selling the AM station as part of 
your commitment in your case?
A: Because of the diversification requirement.
Q: What is your understanding of the diversification 
requirement?
A: My understanding and this I don't understand -- 
(General laughter.)
THE WITNESS: I really don't understand, is that I 
do have to diversify and sell my interest. I really 
don't understand, because then I could turn around 
the next day and purchase another AM station and it 
has confused me [to] no end.
JUDGE STEINBERG: Let me ask you. If you get the 
permit in this case and sell the AM station, do you 
have it in your own mind presently an idea that you 
might want to [b]uy it back or buy another AM 
station in that area?
THE WITNESS: I don't know.
Weagant further testified on redirect examination (Tr. 
596-97):
Q: Do you have any concrete plans to buy KKEY or 
any other AM station back after you receive a grant 
of this FM permit and have divested yourself of 
KKEY?
A: No.
Q: Have you ever had any discussions with anyone, 
prior to this afternoon's testimony, about ever buying 
back an AM station, after you divested KKEY?
11
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
A: No.
59. Auxiliary Power. Weagant will construct and main 
tain auxiliary power facilities so as to assure that the station 
will be operational in the event of power failure. (Weagant 
Ex. 1, p. 5.)
McCoy Communications Limited Partnership
60. Structure and Integration. MCLP is a limited partner 
ship organized under the laws of the State of Oregon. 
(McCoy Ex. 5, pp. 1-47.) Paul McCoy, an African Ameri 
can, is the sole general partner of MCLP, holding a 25 
percent equity interest therein. (McCoy Ex. 1, p. 1; McCoy 
Ex. 3, p. 1.) Waldron Broadcasting Company, Inc. 
("Waldron"), was the initial limited partner of MCLP. 
holding a 75 percent equity interest therein. Waldron has 
two classes of stock, voting and nonvoting. H. Patrick 
Swygert held 24 percent of the stock of Waldron, represent 
ing all of the voting shares. 16 The nonvoting shares of 
Waldron are held as follows: Regina A. Brower Henry 
("Mrs. Henry"), 41 percent of the stock of Waldron: Larry 
Wexler, 23 percent; David Schaller, 2 percent; Helen Stone 
Scott, 2 percent; Nancy Woodward, 1.5 percent; Ronald J. 
Hussey, 1.5 percent; Phillis Silver, 1.5 percent: Patricia 
Hughes, 1.5 percent; Linda Fiore, 1 percent; and Margaret 
J. Berry, 1 percent. (McCoy Ex. 1, p. 1.)
61. Waldron was formed in 1989 for the purpose of 
owning and operating a group of radio stations throughout 
the United States. (Weagant Ex. 6, p. 3.) According to a 
"Funding Proposal" dated July 1989, Waldron "had its 
genesis in certain discussions which Regina A. Henry held 
with her husband, Ragan A. Henry, over a long period of 
time in 1987-88." (Id. at p. 13; Tr. 1209.) Swygert, how 
ever, testified that he decided to organize Waldron as a 
result of discussions between himself and Mrs. Henry. (Tr. 
1154.) Mrs. Henry did not attend any meetings to discuss 
Waldron business. (Tr. 1139, 1141.) At the time Waldron 
decided to become a limited partner in MCLP, it was 
proposing to acquire the following stations: WWKI-FM. 
Kokomo, Indiana; WJAD-AM/WMGR-AM, Albany. Geor 
gia; WKMI-AM/WKRF-FM, Kalamazoo, Michigan; WKKY- 
FM, Moss Point, Mississippi; KVKI-AM/FM. Shreveport, 
Louisiana; KBFM-FM, Edinburg, Texas; and KFAN-FM, 
San Antonio, Texas. (Weagant Ex. 6, p. 2; Tr. 1209-10.)
62. Mrs. Henry could only hold nonvoting stock in 
Waldron because her husband, Ragan A. Henry ("Mr. Hen 
ry"), controlled the maximum number of stations allowed 
by the FCC, and if she held voting shares in Waldron, her 
interest would be attributed to Mr. Henry. (Tr. 1129-30; 
Weagant Ex. 6, pp. 4, 14.) In addition to his broadcast 
interests, Mr. Henry is a partner in the law firm of Wolf, 
Block, Schorr and Solis-Cohen. (Tr. 1086.)
63. A number of Waldron's nonvoting shareholders or 
their spouses have connections with Mr. Henry. Specifi 
cally, Schaller used to work for Mr. Henry's broadcast 
company (Tr. 1122), Woodward's husband manages one of 
Mr. Henry's radio stations (Tr. 1124-25), Hussey"s wife 
works for Mr. Henry as his head of finance (Tr. 1125), 
Silver was Mr. Henry's secretary at the law firm (id.), and 
Hughes' husband is the head of media enterprises for Mr. 
Henry's companies (Tr. 1126-27).
64. Waldron leased space in the offices of one of Mr. 
Henry's media companies. (Tr. 1133-34. 1188-90.) Mr. 
Henry put up letters of credit or other financing docu 
ments for about three of the acquisitions proposed by 
Waldron. (Tr. 1204-05.) Mrs. Henry contributed funds to 
the operating capital to pay for the expenses of Waldron; 
Mr. Henry did not make such contributions. (Tr. 1206.)
65. On March 23, 1991, Waldron was replaced as 
MCLP's limited partner by United Communications. Inc. 
("UCI"), which succeeded to Waldron's 75 percent equity 
interest. (McCoy Ex. 1, p. 1: McCoy Ex. 3. p. 1.)
66. MCLP general partner McCoy proposes to work at 
the station on a full-time basis (at least 40 hours per week) 
as General Manager. In that position. McCoy will ulti 
mately be responsible for all management, administrative, 
budgetary, and programming decisions relating to the op 
eration of the station. In the event MCLP is awarded the 
construction permit for the Vancouver station. McCoy will 
resign from any full or part-time employment as he might 
then hold, and will devote himself exclusively to the con 
struction and operation of the station. (McCoy Ex. 3, p. 
I.) 1 ' At the time of the hearing, McCoy was working as an 
assistant to his father. Oregon State Senator Bill McCoy. 
(Tr. 1252, 1306.)
16 At the time of his testimony (July 15, 1991), Swygert was 
the President of the State University of New York at Albany. 
(Tr. 1151.) Swygert has also served as Executive Vice President, 
Temple University (1988-90); as Vice President for University 
Administration, Temple University (1982-88); and as Assistant 
Professor of Law and Professor of Law, Temple University 
School of Law (1972-90). Swygert was a Visiting Professor, Tel 
Aviv Faculty of Law (summers of 1980-83 and 1985); was ap 
pointed Special Counsel to the President of Temple University 
(1980-82); was on the Board of Directors, New Community 
Development Corporation, Department of Housing and Urban 
Development (1980-82); was appointed Special Counsel, U. S. 
Merit Systems Protection Board (1974-79); served as General 
Counsel, U. S. Civil Service Commission (1977-79); and was a 
Visiting Professor, University of Ghana Faculty of Law, Ghana, 
West Africa (summers of 1975 and 1976). (McCoy Ex. 17, pp. 
1-2; Tr. 1151-52.) Swygert has been the recipient of a large 
number of honors and awards, many of which related to his 
service to the African American community. (McCoy Ex. 17, 
pp. 4-5.)
Part of Swygert's responsibilities as Vice President of Temple 
University included direct control over the management of the 
University's non-commercial radio station. WRTI-FM, as well 
as some of the supervision of that facility. (Tr. 1153.) Swygert 
also served on the Board of Directors of a public television 
station and an FM station (1987-90). (McCoy Ex. 17, p. 2.) In 
addition, Swygert was part of a group that unsuccessfully sought 
a cable television franchise in Philadelphia. (Tr. 1153.) 
17 In an amendment to its application, MCLP reported, inter 
alia, that McCoy had become a candidate for a full-time, com 
pensated, public office in Multnomah County, Oregon; that if 
McCoy wins election to this position he will not seek reelection, 
but will resign on or about November 9, 1994; that in the event 
MCLP is awarded the construction permit in this proceeding by 
an order which becomes final before McCoy's term of office 
ends, McCoy will work part-time to supervise the construction 
of the station, devoting at least 10 hours per week to that task; 
and that upon the conclusion of his term of office McCoy will 
devote himself full-time to signing on and operating the station,
12
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
67. At the time of the June 18, 1991, exhibit exchange 
date in this proceeding, 18 and at the time of the July 15, 
1991, hearing session, McCoy was a resident of Portland, 
Oregon. His residence lies within the 1 mV/tn contour of 
the proposed station. (McCoy Ex. 3, p. 1; Tr. 1351.) How 
ever, the record does not reflect the precise length of his 
residency in Portland. 19 As an assistant to his father, Mc 
Coy spends six months out of every two years in Salem, 
Oregon, during the legislative session. (Tr. 1252-53.) 
Should MCLP obtain the construction permit, McCoy will 
move to Vancouver to construct and operate the proposed 
station. (McCoy Ex. 3, p. 1.)
68. McCoy has participated in the following civic or 
ganizations, the territorial jurisdiction of which includes 
Vancouver and/or other communities within the proposed 
station's service area (McCoy Ex. 3, p. 2):
a. Founder and President, Community Professionals 
(May 1978 to February 1981) (10 hours per week)
Community based organization estab 
lished to promote community youth in 
the arts, music, public speaking, and aca 
demics. Sponsored events, annual activi 
ties, and provided. a talent showcase for 
local minority youth.
b. Publicity Chair, NAACP ACT-SO (January-June 
1979) (10 hours per week)
Responsible for all promotional, schedul 
ing, and media information both inter 
nally and public regarding this 
youth-oriented program. Spoke to par 
ents and participants, scheduled guest 
speakers, and coordinated special events.
c. Member, Oregon Assembly for Black Affairs 
(March 1985-Present) (5 hours per month; not cur 
rently active)
Established to promote Black concerns 
throughout Oregon. Served on Publicity 
Committee, and Annual Convention 
Committee.
d. Member, North/Northeast Portland Boosters (Feb 
ruary-August 1986) (2 hours per month; not cur 
rently active)
Established to promote business interests 
in North and Northeast Portland.
e. Special Assistant to President, NAACP (January 
1988-December 1989) (3 hours per month)
Chair of Publicity Committee, Member 
of Youth Committee and ACT-SO Com 
mittee.
f. Vice Chair, Piedmont Neighborhood Association 
(April 1988-December 1989) (5 hours per week; not 
currently active)
Co-Chair of all standing committees. This 
100-year-old organization represents 
4,000 residents in the Piedmont neigh 
borhood in all matters concerning state 
and local government. Sponsors neigh 
borhood events, schedules and holds reg 
ular meetings, and provides a forum for 
residents to express their concerns.
g. Co-Chair, Piedmont Improvement Association 
(August-December 1989) (2 hours per week)
As a subsidiary organization of the parent 
Piedmont Neighborhood Association, this 
organization was formed to develop and 
coordinate special economic develop 
ment projects, building and construction 
projects within neighborhood bound 
aries. Responsibilities include working 
with public and private organizations to 
monitor activities within the neighbor 
hood and report to neighborhood associ 
ation. Also empowered to use 
neighborhood funds to develop promo 
tional material and to enter into joint 
ventures with outside agencies.
h. Honorary Member, Black Professional Network 
(March 1987-Present) (2 hours per month; not cur 
rently active)
Established to provide a network associ 
ation of minority professionals 
throughout the State of Oregon.
i. Member, Jenkins House Community Round Table 
(February 1988-Present) (2 hours per month)
Members from the local minority busi 
ness community come together to discuss 
with local banks and government officials 
community improvements and how they 
affect Black-owned businesses. Provides 
an informal gathering for minority 
businesses, community activists, and fi 
nancial institutions to meet and discuss 
various ideas and projects.
j. Member of Board of Directors. Habitat for Human 
ity (October 1988-December 1989) (10 hours per 
month)
Member of Publicity Committee, Annual 
Walk Committee, and Fund Raising 
Committee. Co-Convener Habitat Port 
land/West Committee. Organization co 
ordinated all mutual activities between 
Habitat Portland Chapter and Habitat 
West Side Chapter.
69. From 1977 to 1979, McCoy was a volunteer Public 
Affairs Director, Assistant to Community Affairs Director, 
Producer, Writer, Disk-Jockey, and Trainer at KBOO Ra-
or to the completion of construction. Petition for Leave to
Amend and Amendment, filed on June 16, 1993, by MCLP.
(Official notice taken.)
'8 Order, FCC.91M-361, released January 31, 1991. (Officialnotice taken.)
19 MCLP attempts to cure this gap in the record by citing to
McCoy's "resumes and his Portland broadcast and community 
activities." See MCLP's proposed findings and conclusions, at 
para. 39. However, none of the material cited establishes any 
continuity to McCoy's local residence, and the evidence of 
McCoy's broadcast experience and civic activities does not estab 
lish where he actually lived.
13
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
dio, working 5 hours per week. In 1980. McCoy worked 40 
hours per week at KGW-TV on a 6-month internship from 
Portland State University as a volunteer Assistant Weather 
Producer. From 1981 to 1984, McCoy worked 40 hours per 
week at KECH 22 TV as a paid Public Affairs Director. In 
1984, McCoy worked 40 hours per week at KOIN-TV as a 
paid Assistant News Director. From 1985 to 1986. McCoy 
worked 40 hours per week at Rogers Cable TV as a paid 
Sales Representative. (McCoy Ex. 3, p. 3.)
70. Formation of the Applicant and the Preparation and 
Prosecution of the Application. Paul McCoy heard of the 
Vancouver FM allocation through David Honig, MCLP's 
FCC attorney, who had sent an information packet to the 
local NAACP chapter seeking an applicant for the channel. 
McCoy, who was then on the Board of the NAACP, and 
was Communications Chair, sought people to apply. He 
himself was not initially interested in filing for the chan 
nel. (Tr. 1253-54.)
71. McCoy eventually decided that he would himself 
apply for the channel. (Tr. 1254.) He attempted to find 
local investors or partners to assist him in the application 
but was not successful. (Tr. 1255.) He told Honig he could 
not find local investors or partners and, several weeks later. 
Honig identified Swygert as a potential partner. (Tr. 
1255-56.) Honig gave McCoy a telephone number at which 
to reach Swygert. (Tr. 1259.) McCoy believed that Swygert 
was expecting his call, as a specific time for the call had 
been set up in advance. (Tr. 1260.) McCoy telephoned 
Swygert at the home of Ragan and Regina Henry, first 
getting Mrs. Henry at that number, and then speaking with 
Swygert. (Tr. 1082, 1259-60.)
72. Swygert testified that he was not expecting McCoy's 
telephone call, and that his first knowledge of the Vancou 
ver frequency came from this call. (Tr. 1160-61.) Swygert 
could not remember where he received this first phone 
call, speculating that it may have been at his home or his 
office. (Tr. 1160-61.) However, both McCoy and Mrs. Hen 
ry testified that McCoy called the Henry house, that Mrs. 
Henry first answered the phone, and that McCoy then 
spoke to Swygert.20 (Tr. 1082, 1259-60.)
73. During this initial telephone conversation. McCoy 
introduced himself, indicated that he was interested in 
pursuing a license that might become available in Vancou 
ver, and expressed an interest in Waldron investing as a 
limited partner. In the course of introducing himself, Mc 
Coy told Swygert about some persons they both knew. 
Swygert indicated his interest in investing, and asked Mc 
Coy to send him some information. McCoy sent Swygert a 
package of information relative to himself and to the area, 
"financial pro formas," and other information. (Tr. 
1161-62, 1261-63.) Included in that material was informa 
tion about McCoy's personal financial position and a 
23-page "Outline of Financial Plan for Construction of 
New Station" which contained McCoy's resume. (Tr. 1162, 
1236-39; Wireless Ex. 8; McCoy Ex. 15.) This material 
showed that McCoy had a negative personal net worth. 
(Wireless Ex. 8.) After Swygert received this material, he
asked for some additional information. Shortly thereafter, 
Swygert made the decision to invest and to become a 
limited partner. (Tr. 1163.)
74. At the time of McCoy's initial telephone call to 
Swygert. Waldron was pursuing a number of broadcast 
acquisitions. (Tr. 1158-59. 1197-98. 1209-10: Weagant Ex. 6. 
p. 2.) In connection with each such acquisition, Swygert 
visited the market and reviewed station financial state 
ments. (Tr. 1159.) After being approached about the poten 
tial Vancouver investment, Swygert did not visit 
Vancouver. (Tr. 1163.) Swygert's decision not to visit Van 
couver was based upon his reliance on "the judgment and 
the reputation of the general partner." (Tr. 1240-41.) Al 
though Swygert and McCoy had not met prior to the time 
of Swygert's testimony on July 15. 1991 (Tr. 1222, 
1317-18), Swygert had spoken about McCoy with both 
Honig and Alphonso Deal, who was then the president of 
the Philadelphia NAACP and a member of the Board of 
Trustees of Temple University (Tr. 1222-24). Deal had 
heard of McCoy and had met him at NAACP conventions, 
but did not have a close personal relationship with him. 
(Tr. 1223-24.) Swygert knew of Honig's reputation and the 
work he had done on behalf of the NAACP (Tr. 1223), and 
believed that Honig had done legal work for Waldron in 
the past (Tr. 1239-40. 1244). 21
75. McCoy retained a local attorney, William Holmes, to 
represent him in negotiations relating to MCLP's forma 
tion. (Tr. 1275.) Swygert conducted the partnership nego 
tiations on Waldron's behalf. Mr. Henry and his partners, 
as Waldron's attorneys, may have reviewed some of the 
partnership documents and offered advice. (Tr. 1165-66.) 
Swygert recalled that one of the items negotiated was the 
capital contributions expected of the limited partner. (Tr. 
1167.)
76. The MCLP partnership agreement was prepared by 
Honig and sent on April 3, 1989. to McCoy or Holmes, his 
local counsel, and to either Swygert or Mr, Henry. 
(Weagant Ex. 5. p. 1, Item 2: Tr. 1263-64.) Several changes 
in the partnership agreement were made by Holmes and 
Honig between April 7 and April 11, 1989. (Weagant Ex. 5, 
pp. 2-3. Items 5. 6. 7, 10. 15.) The agreement was signed by 
both McCoy and Swygert on April 12. 1989. (McCoy Ex. 5, 
pp. 47-48.)
77. McCoy asked Honig to refer to him a Black en 
gineer. Honig suggested Lechman & Johnson, which subse 
quently transferred the matter to Charles Smith. Smith 
suggested to McCoy that Shaffer Associates be retained to 
locate a transmitter site, and McCoy retained that firm. (Tr. 
1296-98.)
78. Honig sent McCoy a blank FCC Form 301 and 
McCoy prepared a handwritten draft of most of the ap 
plication, checking the appropriate boxes. McCoy sent the 
draft to Honig, who prepared the form which was filed 
with the Commission. (Tr. 1324-25.) MCLP's application 
contains an exhibit entitled "Proposed Programming." 
(Weagant Ex. 8.) This exhibit appears to be substantially 
similar to the "Proposed Programming" exhibit in the ap-
20 In subsequent testimony, Swygert remembered taking a call 
from McCoy at the Henry home, although he could not remem 
ber when it took place, or any of the specifics of the call. 
Swygert believed that Mr. Henry and/or Honig was on the
phone with him and McCoy during that call. (Tr. 1225-26.) The 
record is unclear as to whether this call was the first, or a later, 
call from McCoy.
21 Honig, however, stated that, with the possible exception of 
the work he performed for MCLP, he had not performed any 
legal services of any kind at any time for Waldron. (Tr. 1250.)
14
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
plication of Fahlda Broadcasting Company L.P. ("Fahlda") 
filed on November 10, 1987. (Weagant Ex. 7.) Honig repre 
sented Fahlda. (Id.) McCoy testified that he was sent the 
application exhibits and made minor editorial changes to 
them; McCoy was assured that the language in the pro 
gramming exhibit was "boilerplate." (Tr. 1328-19.)
79. Honig suggested CVC Capital Corporation ("CVC") 
as the principal source for financing the construction and 
operation of the proposed station, and McCoy made con 
tact with them. (Tr. 1280-81.) McCoy had about two or 
three "rather lengthy" conversations with CVC's President, 
Joerg G. Klebe, and several shorter conversations with 
Klebe prior to the filing of the MCLP application. (Tr. 
1281-82.)
80. By letter to McCoy dated April 11, 1989, CVC pro 
vided MCLP with "reasonable assurance of the availability 
of $550,000 in financing for; the construction and opera 
tion" of the proposed station, subject to certain conditions. 
One of the conditions required McCoy and the other part 
ners of MCLP to contribute collectively "up to $80,000" to 
the capital of MCLP. (Wireless Ex. 11.) Ragan Henry 
agreed to lend this $80,000 to MCLP in order to satisfy 
CVC's condition, and wrote a letter to Klebe, dated April 
12, 1989, informing him of that fact. (Wireless Ex. 6.) A 
copy of Mr. Henry's letter was sent to McCoy. (Id.) This 
letter took McCoy by surprise (Tr. 1287); McCoy had not 
asked Mr. Henry to lend funds to MCLP (Tr. 1283). Nei 
ther Swygert, Waldron nor McCoy had ever dealt with 
CVC previously. (Tr. 1187, 1280-81.) McCoy understood 
that Mr. Henry had had previous dealings with CVC. (Tr. 
1315-16.)
81. In addition to this $80,000, Mrs. Henry pledged 
$40,000 toward the prosecution of the MCLP application, 
intending to obtain all of the money, i.e., $120,000. from 
Mr. Henry. (Wireless Exs. 5 and 10.) Mr. Henry had agreed 
to provide these funds at Mrs. Henry's request. (Tr. 
1094-95, 1099-1100, 1101-02, 1283-84.) Mrs. Henry ar 
ranged this financing at the request of Swygert. (Tr. 
1087-88, 1090-91.)
82. At the time these commitments were made, Mrs. 
Henry had seen no business plan for the venture, had not 
seen McCoy's resume or financial statement, and had not 
discussed the Vancouver application with Waldron's coun 
sel, Elliot Gershing, with Honig, or with Mr. Henry. (Tr. 
1091-93.) When she asked her husband for the money, she 
did not provide him with any information regarding the 
proposed station. (Tr. 1095.) Mrs. Henry, in essence, agreed 
to lend the money because of her knowledge of Swygert's 
position at Temple University, including his oversight of 
the University's radio station, and her long-standing friend 
ship with him and faith in his business judgment. (Tr. 
1096-99.) Mrs. Henry had known Swygert for 30 to 35 
years and was a childhood friend. (Tr. 1143-44.) She had 
served with Swygert on the Board of Directors of a bank. 
(Tr. 1144-45.) However, Swygert had never previously rec 
ommended to Mrs. Henry other projects in which to invest 
money; MCLP was the only one. (Tr. 1099.)
83. McCoy had no direct personal knowledge as to why 
Mr. Henry would agree to lend funds to MCLP. McCoy 
speculated that Mr. Henry was willing to lend his money 
because both McCoy and Mr. Henry are Black, there are 
very few financial resources available for Black persons 
when opportunities such as the Vancouver allocation come 
around, and Mr. Henry probably thought this was a good 
way to put some money in and make some money. (Tr. 
1288-89.)
84. Waldron withdrew as a limited partner of MCLP 
effective March 23, 1991. (Tr. 1104: McCoy Ex. 5, pp. 
56-58.) Swygert testified that Waldron withdrew because 
there was no interest on their part to continue with MCLP. 
Waldron's attempts to buy stations had not succeeded and 
Swygert felt it better to turn to matters, closer to home. In 
addition, Swygert believed the application process was just 
going "on and on" and he thought Waldron's energies 
would be better focused elsewhere. Further, Swygert had 
relocated from Philadelphia to Albany. New York. (Tr. 
1195-97, 1221-22.) Swygert was the individual who in 
formed Mrs. Henry of Waldron's withdrawal from MCLP. 
(Tr. 1103-04.) Swygert had spoken to McCoy once or twice 
subsequent to the filing of the MCLP application. In one of 
those post-filing conversations, Swygert informed McCoy of 
his decision to withdraw. (Tr. 1221-22.)
85. Up to the time of its withdrawal. Waldron had 
contributed to MCLP a total of $9.000 in the form of 
capital contributions. At the time of its withdrawal, 
Waldron's capital contributions were converted into a 
MCLP debt. If MCLP either wins the construction permit 
or receives a settlement in exchange for the dismissal of its 
application, the $9,000 will be repaid to Waldron together 
with a "bonus" of $4,500 "representing a fair valuation of 
the risk assumed by Waldron" as MCLP's initial limited 
partner. (McCoy Ex. 5, pp. 56-57: Tr. 1184, 1229-30. 1232.)
86. McCoy looked for a substitute limited partner, but 
was unsuccessful. Honig suggested UCI. (Tr. 1299.) Honig 
advised McCoy that he had done business with the presi 
dent of UCI, Lawrence P. Doss, and explained the 
individuals comprising UCI "were basically limited part 
ners for radio station applications." (Tr. 1300: McCoy Ex. 
1, p. 2.) McCoy and Doss negotiated the terms of the 
arrangement between MCLP and UCI. (Tr. 1305-06.) Effec 
tive March 23, 1991, UCI became MCLP's limited partner 
and succeeded to Waldron's 75 percent equity interest 
therein. (McCoy Ex. 5, pp. 50-55. 59-62.)
87. UCI has agreed to contribute up to $53.000 towards 
MCLP's prosecution expenses and to lend an additional 
$80.000 to MCLP for its construction and operation costs. 
(McCoy Ex. 13; Tr. 1300.) The $80.000 loan is for the 
purpose of satisfying one of the requirements of the CVC 
"reasonable assurance" letter. (Tr. 1304.) As of the date of 
McCoy's testimony (July 15. 1991). UCI had made a $9.000 
capital contribution to MCLP. and had loaned the ap 
plicant an additional $6,000. (Tr. 1300. 1303.) Any further 
contributions by UCI could be in the form of either loans 
or capital contributions, and UCI has requested that such 
sums be treated as loans. (Tr. 1304-05.)
88. As of the date of his testimony. McCoy had expended 
very close to $10,000 of his own funds on the MCLP 
application. (Tr. 1278.)
89. Diversification. Neither McCoy. Waldron. nor UCI 
has any attributable interest in any medium of mass com 
munications. (McCoy Ex. 2.)
90. Auxiliary Power. MCLP proposes to install auxiliary 
generators at the studio and transmitter sites in order to 
supply power in the event of a power failure. (McCoy Ex. 
4.)
KLRK, Inc.
91. Structure and Integration. KLRK is a Washington 
corporation with 1,250 shares of issued and outstanding 
stock. Karen Peck Wilson ("K. Wilson") holds 600 shares 
(48 percent) of KLRK's voting stock, Duane D. Wilson
15
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
("D. Wilson") holds 325 shares (26 percent) of KLRK's 
voting stock, and Tracy S. Wilson ("T. Wilson") holds 325 
shares (26 percent) of KLRK's voting stock. (KLRK Ex. 1, 
p. 1.) T. Wilson is D. Wilson's son, and K. Wilson is D. 
Wilson's wife. (Tr. 639.) All of KLRK's outstanding voting 
stock was paid for by D. Wilson. (Tr. 662-63, 703, 740.) D. 
Wilson is President and a director of KLRK, T. Wilson is 
Vice President and a director of KLRK, and K. Wilson is 
Secretary-Treasurer and a director of KLRK. (KLRK Ex. 1, 
p. 1.)
92. If the KLRK application is granted, D. Wilson will 
serve full time (not less than 40 hours per week) as Chief 
Executive Officer ("CEO") and Chief Financial Officer 
("CFO") of the proposed station. He will perform the 
"customary duties" of a CEO and CFO, with responsibility 
for formulating and instituting the business policy and 
organizational structure of the station, as well as formulat 
ing, implementing, and managing the station's financial 
operation and long-term financial strategy. (KLRK Ex. 2, p. 
1; Tr. 629-30.) In this capacity, D. Wilson would have the 
authority to fire both K. Wilson and T. Wilson. (Tr. 637.)
93. D. Wilson acknowledged that formulating the busi 
ness policy would be done before the station went on the 
air and would take a relatively short period of time to do. 
Similarly, he testified that instituting the business policy 
would be done before the station went on the air, but 
would entail "continuous revisions." (Tr. 630-31.) He ex 
pected T. Wilson and K. Wilson to carry out his directions 
as to instituting the business policy. (Tr. 632.) He acknowl 
edged that formulating and instituting the organizational 
structure had already been done. (Tr. 632-33.) He further 
acknowledged that securing financing and deciding wheth 
er to use cash or borrow money would be done before the 
station goes on the air. (Tr. 634.) He had already estab 
lished budgets for cash flow and expenses, but these would 
be ongoing once the station commences operation. (Tr. 
634-35.) Revenue generation would be the responsibility of 
T. Wilson, not D. Wilson. (Tr. 635.)
94. In describing how his duties would be different from 
those of the General Manager, D. Wilson testified he would 
avoid "as much as possible" the day-to-day management of 
the station staff. He also testified that he has not set any 
hours for when he is going to be present at the station on a 
regular basis. Thus, he will not necessarily be at the station 
at a certain time each morning to manage the station and 
staff because he expected that the General Manager would 
assume that responsibility. (Tr. 635-36.)
95. In response to a question regarding the types of 
functions he would perform to occupy 40 hours per week 
at the station, D. Wilson admitted that the description of 
his position made it hard to believe he would be working 
more than a couple of hours each day. He indicated, 
however, that he would be involved in a lot of "peripheral 
things." For example, although he will not be the Sales 
Manager, he may go out and visit certain customers and, if 
things are not going well, he would go and find out why. 
(Tr. 681.) D. Wilson was also asked whether, if things were 
going well at the station within a year or two after it went 
on the air, he would reduce the amount of hours he was 
working and assign his duties to others. D. Wilson 
"guessed" that he would retain his main duties for "quite 
some time" and delegate some of his "peripheral duties" to 
someone else. (Tr. 692.) He foresaw that at some point 
"down the road," he would not have to work at the station 
every day. (Tr. 637.)
96. D. Wilson is President and Chairman of the Board of 
DeWils Industries, Inc. ("DeWils"), but no longer assumes 
day-to-day corporate responsibilities. He intends to with 
draw from his current employment and/or business pur 
suits to the extent necessary to devote the minimum of 40 
hours or more per week to fulfill his responsibilities as the 
station's CEO and CFO. If KLRK's application is granted, 
another of D. Wilson's sons, Randy Wilson, the head of the 
production department of DeWils, will assume the position 
of President of DeWils. (KLRK Ex. 2, p. 1.)
97. If the KLRK application is granted. T. Wilson will 
serve full time (not less than 40 hours per week) as the 
Sales Manager of the proposed station. In that capacity, T. 
Wilson will perform the "customary duties" of a Sales 
Manager with the responsibility for the day-to-day oper 
ations of the Sales Department, hiring and supervision of 
the sales staff, formulation and review of sales policies and 
goals, and supervision of the billing of advertisers. Along 
with other station management, T. Wilson will also ensure 
implementation of the station's affirmative action policy. 
(KLRK Ex. 3, p. I.) T. Wilson will be supervised at the 
proposed station by both D. Wilson and K. Wilson. (Tr. 
718.)
98. T. Wilson has been employed by DeWils since 1981, 
and became the Chief Executive Officer of DeWils in 1989. 
His responsibilities do not require him to be involved in 
company business on a daily basis. T. Wilson intends to 
withdraw from his current employment and/or business 
pursuits to the extent necessary to devote 40 hours per 
week or more as required to fulfill his responsibilities as 
Sales Manager of the proposed station. (KLRK Ex. 3, p. 1.)
99. If the KLRK application is granted. K. Wilson will 
serve full time (not less than 40 hours per week) as the 
General Manager of the proposed station. In this capacity, 
she will be responsible for the day-to-day operations of the 
station, including supervision of the other members of the 
station's management team, implementation of the station's 
affirmative action policy, adoption and implementation of 
the station's community service policy, and the hiring of 
station personnel. (KLRK Ex. 4. p. 1.) She stated that she 
would make sure the bills get paid, oversee revenue genera 
tion, make sure the station adheres to its budget, ensure 
that KLRK's organizational structure is implemented prop 
erly, ensure that the long-term business strategy is imple 
mented properly, and make sure that the finances of the 
station are managed properly. (Tr. 752-53.) In her position 
as General Manager, she will be supervised by her hus 
band, D. Wilson. (Tr. 777.)
100. K. Wilson is not employed or otherwise active in 
any business endeavor. She intends to withdraw from her 
civic activities to the extent necessary to devote full time to 
her position as the station's General Manager. (KLRK Ex. 
4. p. 1.)
101. For approximately three years ending in January 
1989, K. Wilson owned and operated PS & Company, Ltd., 
a corporation located in Vancouver. Washington, which 
employed consultants to show and sell a line of decorating 
items. She and one other shareholder owned the business 
and supervised up to 28 employees. From approximately 
1978 to 1983, K. Wilson owned and operated a grocery 
store in Camas, Washington. She worked at the grocery 
store on a full-time basis and supervised approximately 
seven employees. (KLRK Ex. 4, p. 1.)
102. D. Wilson is a life-long resident of Vancouver, 
Washington, with the exception of the years 1944-45. He 
resides at 11101-A S.E. Evergreen Highway. Vancouver,
16
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
Washington, which is approximately one and one-quarter 
miles outside the Vancouver city limits. He has resided at 
this address since February 1989. D. Wilson claimed his 
current residence is contiguous to the city of Vancouver 
and is in an unincorporated area of Clark County that is 
"closely associated" with the city of Vancouver. From 1971 
to 1989 D. Wilson resided at 7905 69th Street, Vancouver, 
approximately one mile outside the Vancouver city limits. 
From 1969 to 1971, he lived within the community of 
license at 2000 Laurel Place, Vancouver. From 1961 to 
1969, D. Wilson resided on Royal Oaks Drive. Vancouver, 
which also is approximately one mile outside the city 
limits. All of D. Wilson's residences have either been with 
in the community of license or the service area of KLRK's 
proposed station. D. Wilson proposes "future residence in 
the service area" of the station. (KLRK Ex. 2, p. 2.)
103. D. Wilson was involved in the following civic activi 
ties (KLRK Ex. 2, pp. 2-3, and transcript pages cited):
a. Vancouver Chamber of Commerce
D. Wilson has been a member of this 
organization for 16 years, with his cur 
rent uninterrupted membership extend 
ing from 1984 to 1991. His participation 
in the Chamber is in the name of 
DeWils. His membership activities con 
sisted of "go[ing] to the meetings kind of 
when I feel like it ... ." (Tr. 651-52, 
671.)
b. Timber Operators Council 
Member (1966-91) 
Executive Committee (1974-Present) 
Board of Directors (1966-Present) 
Chairman of the Board (1988 and 1989) 
President (1986 and 1987)
The Timber Operators Council was an 
association of people in timber-related 
businesses in Washington, Oregon, and 
Northern California who assist similar 
businesses in negotiating labor contracts, 
providing OSHA assistance, and helping 
to ensure compliance with the ERISA 
and affirmative action laws. To be as 
sisted by the Council, one must be a 
member. (Tr. 654.)
c. Orchards Business Association 
Member (1961-65) 
President (1962)
While a member of this organization, D. 
Wilson helped to bring street lighting to 
Orchards, an unincorporated area contig 
uous to the city of Vancouver.
d. United Methodist Church of Vancouver 
Board of Directors (1961-65)
104. T. Wilson is a life-long resident of Vancouver, 
Washington, with the exception of the years from 1978 to 
1981 when he attended college in Boise, Idaho. He resides
approximately one mile outside the Vancouver city limits 
at 8108 N.E. 96th Street. Vancouver. T. Wilson has resided 
at this address since 1986. T. Wilson claimed his current 
residence is contiguous to the city of Vancouver and is in 
an unincorporated area of Clark County that is "closely 
associated" with the city of Vancouver. From 1981 to 1986, 
he resided at 13418 S.E. McGillivray Boulevard, Vancou 
ver. All of T. Wilson's residences have been within the 
service area of KLRK's proposed station. T. Wilson intends 
to continue residing in Vancouver. (KLRK Ex. 3. p. 2.)
105. T. Wilson was involved in the following civic activi 
ties (KLRK Ex. 3, pp. 2-3, and transcript pages cited):
a. Vancouver Chamber of Commerce 
Member (1985-Present) 
Board of Directors (1988-Present)
T. Wilson's membership is in the name 
of DeWils: T. Wilson is DeWils' repre 
sentative to the Chamber. (Tr. 725-26.)
b. Evergreen Partnership 
Member (1987-91) 
Director (1989-Present)
This is an organization created by the 
Commissioner of Public Lands of the 
State of Washington to promote trade be 
tween Washington State businesses and 
Japan.
T. Wilson's membership is in the name 
of DeWils; T. Wilson is DeWils' repre 
sentative to the Partnership. (Tr. 725-26.) 
In order to benefit from the work of the 
Partnership, one must be "in the wood 
products field." However, members of 
the Partnership would derive the most 
benefit from the Partnership's activities. 
(Tr. 716-17.)
c. Columbia River Economic Development Council 
Member (1988-91) 
Director (January 1991-Present)
The Council is a Clark County organiza 
tion which was created to encourage the 
economic development of Clark County. 
It holds meetings in Vancouver, Wash 
ington.
d. Washington State Job Training Coordinating 
Council
Member (1990-Present)
The Job Training Council has approxi 
mately 30 members who advise the gov 
ernor of Washington on job-training
17
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
issues. The Council holds quarterly meet 
ings in various cities throughout the 
state, including Vancouver.22
106. K. Wilson has resided within the service area of 
KLRK's proposed station since 1956. She resides approxi 
mately one and one-quarter miles outside the Vancouver 
city limits at 11101-A S.E. Evergreen Highway, Vancouver. 
Washington. She has resided at this address since February 
1989. She claimed her current residence address is contig 
uous to the city of Vancouver and is in an unincorporated 
area of Clark County that is "closely associated" with the 
city of Vancouver. She lived in Camas. Washington, for 10 
years, but resumed her residence in Vancouver in 1984. 
Camas is within 10 miles of Vancouver and is within the 
service area of the proposed station. She intends to con 
tinue to reside in Vancouver. (KLRK Ex. 4. p. 2.)
107. K. Wilson has served on the Fundraising Committee 
of the Coalition of Handicapped Organizations ("CoHo"). 
She has been active on this Committee since 1987, and 
became a member of its Board of Directors on June 10. 
1991. CoHo is a state-funded organization based in the city 
of Vancouver which holds approximately four fundraising 
events each year. All of CoHo's fundraising efforts take 
place in Vancouver. (KLRK Ex. 4, pp. 2-3.)
108. Formation of the Applicant and the Preparation and 
Prosecution of the Application. D. Wilson first learned of 
the availability of the Vancouver allocation from Dick 
Schwary, who heard about it from J. Geoffrey Bentley, 
who became KLRK's communications counsel. (Tr. 
694-95.) D. Wilson and Schwary have known each other 
for 30 years and are friends. (Tr. 674.) D. Wilson and 
Schwary were principals of KMAS Broadcasting Company 
("KBC"), permittee of an FM station in Camas, Washing 
ton. (McCoy Ex. 7, p. 3: Tr. 619. 625, 665. 683.) As noted 
above, Camas is located within 10 miles of Vancouver and 
is within the service area of KLRK's proposed station. 
(KLRK Ex. 4. p. 2.) KBC filed its application on March 10, 
1988. D. Wilson held nonvoting stock in KBC. was not 
proposed for integration, and withdrew from the applicant 
on or about April 12. 1989. (McCoy Ex. 7. p. 3: Tr. 666.) 
According to D. Wilson. Schwary was the impetus behind 
the Camas applicant. Bentley served as counsel for KBC. 
(Tr. 683.) Wilson was also a principal of KLRK Broadcast 
ing Corporation, an applicant formed in 1978 to apply for 
a new UHF television station on Channel 49 in Vancouver, 
Washington. KLRK Broadcasting Corporation received the 
construction permit but sold its interest in the license over 
time and was dissolved in 1985. (McCoy Ex. 7. p. 3; Tr. 
657-60.)
109. Schwary was the first person D. Wilson spoke to 
regarding the Vancouver FM station. (Tr. 694-95.) After 
speaking with Schwary, D. Wilson decided to apply for the 
Vancouver facility in the form of a corporation. (Tr. 619.) 
He selected his friend, Robert O'Dell. to serve as corporate 
counsel, and went by himself to see O'Dell about forming 
a corporation. (Tr. 620, 702.) D. Wilson was also responsi 
ble for selecting KLRK's communications counsel, Bentley. 
and its consulting engineer. Robert McClanathan. (Tr. 625. 
628-29, 701.)
110. KLRK was incorporated on April 12, 1989. (KLRK 
Ex. 1, p. 8.) D. Wilson selected the name of the applicant 
and acted as the incorporator. (Id. at p. 7; Tr. 620, 702-03.) 
He keeps KLRK's corporate documents at his office. (Tr. 
642. 687.) D. Wilson and O'Dell were the only individuals 
present at KLRK's preliminary organizational meeting. 
(Foster Ex. 9; Tr. 621-22.) At the time of that meeting, D. 
Wilson had already determined that his son, T. Wilson, 
would hold 50 percent of KLRK's stock. (Tr. 622.)
111. With Schwary's assistance. D. Wilson prepared and 
completed KLRK's Form 301 application. (Tr. 625-26.) He 
drafted the Program Service Statement, completed KLRK's 
Equal Employment Opportunity ("EEO") program, made 
the determination to certify KLRK's financial qualifica 
tions, and signed all application certifications including the 
site certification. (Tr. 626-28. 638. 709-10.) The financial 
certification was made solely on the basis of D. Wilson's 
finances. (Tr. 638-39.) Schwary was asked to assist because 
he had previously been involved in an application and was 
able to answer D. Wilson's questions. (Tr. 626. 675.)
112. KLRK's initial transmitter site was owned by a Mr. 
Clapp. D. Wilson had Schwary negotiate with Clapp for the 
use of that site. Schwary handled the negotiations because 
he at one time picked that site for the use of KBC. but it 
was not used by that permittee. KLRK later amended its 
application to specify another site. D. Wilson directed 
KLRK's engineer, McClanathan, to negotiate with the own 
er of the second tower site. (Tr. 628-29.) D. Wilson also 
obtained equipment cost estimates from McClanathan. and 
had Schwary assist him in preparing an operating budget. 
(Tr. 705-06.)
113. At the request of D. Wilson. Schwary arranged for 
the issuance of a cashier's check to pay the filing fee for 
KLRK's application. D. Wilson later reimbursed Schwary. 
(Tr. 624-25.) Schwary also attended the depositions of all 
KLRK principals and. with D. Wilson's prior knowledge, 
participated in settlement discussions on behalf of KLRK 
with two other applicants. (Tr. 675, 683-85, 722. 754.) 
According to D. Wilson, Schwary attended the depositions 
because he had a lot of free time and is "an inquisitive 
person." Schwary gave no advice in connection with the 
depositions. (Tr. 675.)
114. After D. Wilson began to consult Schwary concern 
ing KLRK's application, he told Schwary to keep a record 
of his time and KLRK would pay him for his services. (Tr. 
675.) T. Wilson believed that Schwary's consulting arrange 
ment was based on a rate of $25 per hour. (Tr. 727.) As of 
the hearing, Schwary had not been paid for his services. 
(Tr. 714.) D. Wilson testified that Schwary will not be 
involved in the operation of KLRK's proposed station "be 
cause his expertise doesn't go that far." (Tr. 674.)
115. D. Wilson was responsible for establishing and 
maintaining KLRK's bank account. He made the deter 
mination that the corporate account would be located at 
the Northwest National Bank where he serves as a member 
of its Board of Directors. Although D. Wilson has never 
served as the Secretary or Treasurer of KLRK, he keeps the 
corporate checkbook at his office and has signed all of the 
checks written on KLRK's corporate bank account. (Tr. 
623-24, 680.) D. Wilson was also responsible for establish 
ing KLRK's public inspection file. (Tr. 710.)
22 Credit is also claimed for T. Wilson's service on the Board 
of Trustees of the Health and Welfare Trust Fund of the Tim 
ber Operators Council. (See KLRK's proposed findings and con 
clusions, at para. 55.) No credit is warranted, however, in light 
of T. Wilson's testimony that his work on this Board was 
neither civic nor charitable. (Tr. 730.)
18
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
116. D. Wilson testified that he did most of the work 
connected with the preparation of KLRK's application be 
cause, "as my nature, I want to have the say on 
everything." (Tr. 689.) He further testified that T. Wilson 
was not involved in these activities because his son was 
very busy and it was impractical to have him involved. 
(Id.) In this regard, the KLRK application was put together 
quickly, that is, when D. Wilson learned of the availability 
of the Vancouver allocation, there was not much time left 
within which to file the KLRK application. (Tr. 689-90.)
117. T. Wilson learned of the availability of the Vancou 
ver station from his father who asked him to become 
involved in KLRK. (Tr. 701-02.) At the time the applica 
tion was filed on April 13, 1989, T. Wilson was a 50 
percent stockholder in KLRK. (Tr. 709.) At that time, T. 
Wilson believed his father would serve as General Manager 
of the station. (Tr. 716.)
118. T. Wilson has not paid for his stock in KLRK. D. 
Wilson keeps the stock certificates representing T. Wilson's 
ownership interest in KLRK. T. Wilson explained that his 
father contributed the money for the stock initially, and he 
owed his father for those funds. There is no written prom 
issory note from T. Wilson to either his father or KLRK 
for the stock. (Tr. 703, 719-20.) With the exception of his 
stock subscription agreement, there is no written docu 
mentation or guarantee obligating T. Wilson to contribute 
any funds to KLRK. (Foster Ex. 10; Tr. 642, 650.) As of the 
date of the hearing, D. Wilson was the only KLRK princi 
pal who had supplied funds for the prosecution of the 
application. (Tr. 719-20, 758-59.) T. Wilson testified that he 
and his father "in the end" will determine the total 
amount of KLRK's prosecution expenses, and he will "set 
tle that figure" with his father. (Tr. 719-20.)
119. T. Wilson initially served as Secretary-Treasurer of 
KLRK. (Tr. 704.) While serving in these positions, he did 
not type up the corporate minutes, although he took notes, 
nor did he keep the official corporate records. (Tr. 710-11.) 
He did not receive or see any bank statements for KLRK's 
bank account, or ever prepare any type of accounting work 
for the corporation. (Tr. 714-15.) T. Wilson has never kept 
KLRK's corporate checkbook, and has not signed a cor 
porate check. (Tr. 703-04.) As of the date of his deposition 
in this proceeding (May 10, 1991), T. Wilson did not know 
he was authorized to sign such checks. (Tr. 703-04.)
120. T. Wilson had no role in selecting Bentley, O'Dell, 
or McClanathan. (Tr. 701-02, 712.) He had no role in 
securing the consulting services of Schwary. (Tr. 713.) T. 
Wilson learned of the consulting fee arrangement with 
Schwary from his father, and did not know how much 
KLRK owed Schwary. (Tr. 727.) T. Wilson had not seen a 
bill from Schwary and did not believe Schwary had billed 
KLRK for his services. If Schwary is to be paid, D. Wilson 
will handle the disbursement. (Tr. 714.)
121. T. Wilson did not sign any part of KLRK's applica 
tion, and had no role in preparing its Program Service 
Statement or its EEO program. (Tr. 705, 709-10.) He 
played no role in establishing KLRK's public inspection 
file. (Tr. 710.) T. Wilson had no involvement in securing 
either of KLRK's transmitter sites, and first became aware 
that KLRK had an auxiliary power proposal during his 
May 10, 1991, deposition. (Tr. 706-07.)
122. On July 28, 1989, Karen Peck (now Karen Peck 
Wilson) subscribed to 48 percent of KLRK's stock. (Foster 
Ex. 11; Tr. 642, 660.) K. Wilson was informed of the 
Vancouver allocation by D. Wilson. (Tr. 737.) D. Wilson 
testified that he brought K. Wilson into the application
because he knew she had money to invest, and believed 
this application presented a good opportunity for her. (Tr. 
661.) In this regard, K. Wilson testified that "because of the 
way it is in our household and because of the type of 
person that my husband is, I was forced to constantly work 
away at him to be allowed to be a part of this radio station 
and to invest my money." (Tr. 758.)
123. K. Wilson has not paid for her stock in KLRK. (Tr. 
740.) With the exception of her stock subscription agree 
ment, there is no written document committing her to 
contribute any funds to the applicant or obligating her to 
provide funds for the prosecution of the application, or the 
construction and initial operation of the station. (Foster 
Ex. 11; Tr. 642, 650, 740, 759.) As of the date of the 
hearing, K. Wilson had not contributed any funds toward 
the prosecution of the KLRK application. (Tr. 758-59.)
124. K. Wilson originally served as Vice President of 
KLRK, but was serving as Secretary-Treasurer at the time 
of the hearing. (Tr. 669, 739.) She believed that both D. 
Wilson and T. Wilson decided she should serve as Vice 
President because D. Wilson was already President and T. 
Wilson was already Secretary-Treasurer. K. Wilson did not 
know who made the decision that she should become 
Secretary-Treasurer. (Tr. 778.) According to D. Wilson, the 
change in K. Wilson's officership was not a demotion 
because, in his view, her new position was superior to that 
of Vice President and he wanted to give her "more duties" 
as Secretary-Treasurer. (Tr. 669-70.) K. Wilson testified 
there was no particular reason for her change from Vice 
President to Secretary-Treasurer. (Tr. 767.)
125. K. Wilson has not handled the corporate paperwork 
for KLRK, nor has she maintained the corporate books. 
(Tr. 739.) She did not have authority to sign checks on 
KLRK's bank account, and had never seen a corporate 
bank statement. She performed no accounting and did not 
know if an accounting was ever performed. (Tr. 680-81, 
742-43.) K. Wilson had no knowledge of whether 
McClanathan or Schwary had sent KLRK a bill for their 
respective services. (Tr. 751, 754.) As of the date of-her 
deposition in this proceeding (May 10. 1991), she did not 
know whether Bentley had billed KLRK for his services. 
Before her deposition, she had never spoken to Bentley. 
(Tr. 751.) She did not know whether Schwary was paid for 
attending her deposition, or whether there was an agree 
ment for Schwary to be paid for his services to KLRK. (Tr. 
754-55.) K. Wilson had no involvement in negotiating for 
the use of KLRK's present transmitter site. As of the date 
of her deposition, she did not know the owner of the site, 
nor did she know the location of KLRK's public inspection 
file or whether such a file existed. (Tr. 746. 750-51.)
126. Diversification. Neither KLRK nor any of its princi 
pals has any ownership interest in, or connection with, any 
medium of mass communications. (KLRK Ex. 2. p. 1; 
KLRK Ex. 3, p. 3; KLRK Ex. 4, p. 3.)
127. Auxiliary Power. KLRK will install and maintain an 
auxiliary power generator at its transmitter site so that the 
station may remain on the air in the event of a power 
failure at its transmitter site. (KLRK Ex. 5. p. I.)
Thomas M. Eells
128. Structure and Integration. Eells is an individual ap 
plicant. Eells does not propose any full-time or part-time 
integration of ownership into management of his proposed
19
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
station. Instead, Eells "will search for and employ the best 
qualified manager for the proposed station." (Eells Ex. 1, 
p. 1.)
129. Diversification. Eells is the permittee of station 
WUVE(FM), Saginaw, Michigan (File No. BPH- 
880825NO). (Eells Ex. 1, p. 1; Tr. 127.) In the event his 
Vancouver application is granted, Eells will divest his in 
terest in and terminate all connections with WUVE(FM). 
(Eells Ex. 1, p. 1.)
130. Auxiliary Power. Eells proposes to install emergency 
generators at the studio and the transmitter to enable con 
tinued service in the event of a commercial power outage. 
(Eells Ex. 1, p. 1.)
Clark Broadcasting Limited Partnership
131. Structure and Integration. Clark is a limited partner 
ship organized under the laws of the State of Washington. 
Originally, Clark was comprised of one general partner, 
Lynne Keller, and 11 limited partners. (Clark Ex. 1, p. 1.) 
However, on March 6, 1992, Clark amended its application 
to report the withdrawal of three of its limited partners. 
(Motion for Leave to Amend, filed by Clark on March 6, 
1992; official notice taken.)23 The amendment was accepted 
by Order, FCC 92M-417, released April 2, 1992. (Official 
notice taken.) The names of the individuals involved, and 
the nature and extent of their original and current partner 
ship interests in Clark are as follows (Clark Ex. I, p. 1; 
Wireless Ex. 13):
Name
Nature of 
Interest
Percentage Percentage
of Original of Current
Interest Interest
Lynne Keller General 
Partner
Sonny Mitchell Limited 
Partner
Connell Murray Limited 
Partner
Jim Fowler
Arch Miller
Marty Wolf
Rolf & Nancy
Glerum
Don & Irene
Fowler
Gordon
MacLean
Arthur D.
Bridges
Limited
Partner
Limited
Partner
Limited
Partner
Limited
Partners
Limited
Partners
Limited
Partner
Limited
Partner
12.5%
16.25%
16.25%
5.0%
5.0%
5.0
5.0% 
5.0%
5.0% 
25.0% 2
11% 
11% 
29% 
11% 
11% 
11% 
11% 
Withdrew
5% 
Withdrew
No documents have been issued evidencing the ownership 
interests of the general and limited partners of Clark. (Tr. 
324.)
132. Section 3.06 of Clark's Limited Partnership Agree 
ment provides that the limited partners:
shall not (i) be permitted to take part in the manage 
ment or operation of the business or affairs of the 
Limited Partnership; (ii) have any voice in the man 
agement or operation of the Station or the property;; 
[sic| (iii) communicate with the General Partner on 
day-to-day matters involving the operation of the 
Partnership; (iv) have the authority or power in the 
capacity of a Limited Partner or any other Partner to 
do any act which would be binding on the Limited 
Partnership or any other Partner or to incur any 
expenditures with respect to the Limited Partnership 
or the Property; (v) act as an employee if his func 
tions relate (directly or indirectly) to the Station; or 
(vi) serve in any material capacity as an independent 
contractor or agent or in the performance of other 
services with respect to the Station, except in making 
loans or acting as a surety for the Station.
(Clark Ex. 1, p. 78; see also Clark Ex. 1. p. 28.)
133. Clark general partner Lynn Keller proposes to work 
at the station full-time (at least 40 hours per week) as 
General Manager. In that capacity, Keller will oversee all 
aspects of station operation, including but not limited to 
the hiring and firing of personnel, program policies, sales, 
and business management. To effectuate her commitment, 
Keller will terminate her current position as General Sales 
Manager at station KKSN-AM/FM, Portland. Oregon, im 
mediately upon any grant of Clark's application. (Clark Ex. 
2, p. 1.) In early 1990, Keller taught a 3 credit-hour course, 
one night per week for 10 weeks, in Broadcast Sales at Mt. 
Hood Community College in Gresham, Oregon. This was a 
paid position. Keller enjoyed teaching and plans to con 
tinue doing so if the Clark application is granted. (CFMLP 
Ex. 10, p. 2; Tr. 247-48, 288.)
134. Keller has resided in Lake Oswego. Oregon, since 
1981. Lake Oswego is located within the service area of 
Clark's proposed station. (Clark Ex. 2. p. 1.)
135. Keller engaged in the following civic activities with 
in the service area of Clark's proposed station (Clark Ex. 2, 
pp. 1-2, and transcript pages cited):
a. Member, Portland Advertising Federation 
(1984-Present)
The Portland Advertising Federation is 
an organization comprised of 
professionals from radio, the print media 
and advertising agencies. As a member of 
the Federation's Education Committee 
since the fall of 1989. Keller has been 
working to develop an agenda for high 
school teachers to integrate information
23 In its hearing exhibits, Clark stated that one of these 
individuals, Arthur D. Bridges, was "contemplating withdrawal" 
from the partnership, and that an amendment would be filed if 
and when he withdrew. (Clark Ex. 1, p. 1.) However, there is a 
serious question as to whether Bridges was ever a limited part 
ner of Clark. Specifically, the record reflects that Bridges never 
signed either Clark's original or revised Limited Partnership 
Agreement. (Clark Ex. 1, pp. 53, 101-09; Tr. 320, 352, 2068-69, 
2139.) Rather, Bridges subjectively believed that he was a limit 
ed partner because he had an option to acquire up to a 25 
percent interest in Clark. (Tr. 2159; Clark Ex. 3, Att. C.) In 
addition, although Bridges' initial capital contribution to Clark 
was to be $5,600 (Clark Ex. 1, p. 110; CFMLP Ex. 9, p. 3: Tr. 
274-75), only $2,500 was paid on his behalf prior to his "with 
drawal" (Tr. 341-42, 352). In this connection, the money with 
which the $2,500 payment was made did not come from 
Bridges' own funds. (Tr. 2069-70, 2183.) 
24 See, however, note 23, supra.
20
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
about advertising into their career cur 
ricula. Keller has also served as a mem 
ber of the organization's Political Action 
Committee since the fall of 1989. The 
committee developed a handbook for po 
litical advertisers to assist them in learn 
ing how to most effectively use the media 
during a political campaign and to help 
them better understand FCC regulations 
regarding political advertising. (Tr.
245-46.)
b. Member, Mountain Park Community Church 
(1986-Present)
Keller has been active in the Church 
Choir since 1986. In the fall of 1988. she 
became Secretary of the Choir. In the 
spring of 1989, after she learned about 
the Vancouver allocation, Keller became 
Director of the Youth Choir, directing 30 
high school students who performed 
monthly during church services. (Tr.
246-47.)
136. Keller has had the following broadcast experience: 
(a) Blair/Banner Radio, Portland, Oregon, 1983, Sales As 
sistant; (b) Blair/Banner Radio, Portland, Oregon, 1983-87, 
Manager of Portland Office; (c) KXYQ-FM, Portland, Or 
egon, January 1987-May 1987, Account Executive; (d) 
KWJJ-AM/FM, Portland, Oregon, May 1987-December 
1987, Account Executive; (e) KUPL-AM/FM, Portland, Or 
egon, January 1988-January 1989. Account Executive; (f) 
KKSN-AM/FM, Portland, Oregon, January 1989-February 
1990, Account Executive; and (g) KKSN-AM/FM, Portland. 
Oregon, February 1990-Present, General Sales Manager. 
(Clark Ex. 2. p. 2.)
137. Formation of the Applicant and the Preparation and 
Prosecution of the Application. Lynne Keller, Clark's gen 
eral partner, made all of the decisions concerning the 
prosecution of the Clark application. To that end, she, 
among other things, retained counsel, retained the en 
gineer, arranged for the proposed tower site, opened the 
bank account and become the sole signatory for the ac 
count, prepared and revised a budget for the costs of 
constructing and operating the station, arranged for financ 
ing those costs, completed a draft of the FCC Form 301 
application, reviewed and signed the typewritten applica 
tion, and supervised the prosecution of the application. 
(Clark Ex. 1, p. 2; Clark Ex. 3; Tr. 300-02, 331-32.)
138. With respect to counsel, Clark has an FCC counsel, 
originally Roger Metzler. and a limited partnership coun 
sel, David Christel. (Tr. 248-51, 340.) Keller made a num 
ber of telephone calls trying to find an experienced limited 
partnership counsel. In this connection, she asked limited 
partner Jim Fowler for a recommendation, and he gave 
her Christel's name. (Tr. 249-51.) Similarly, limited partner 
Sonny Mitchell recommended Metzler and another attor 
ney to Keller. To the best of Keller's knowledge, Metzler 
has never in the past represented Mitchell or any of his 
companies. (Tr. 248-49, 337-38.) Pursuant to Keller's 
instructions, Christel went to the Vancouver library to set 
up Clark's public inspection file, and went to the news 
paper to arrange for the publication of local notice of the 
filing of the Clark application. (Tr. 252-53, 338-39.)
139. With regard to budgeting and financing, at the end 
of March or the beginning of April 1989, Keller began to 
talk to people and gather information to prepare a budget 
for the estimated costs of construction and initial operation 
of the proposed station. In calculating the budget figures, 
Keller prepared handwritten notes. Clark limited partners 
Sonny Mitchell and Connell Murray advised Keller that 
Arthur Bridges was a person of substantial resources who 
could provide the necessary financing and might be inter 
ested in doing so. Keller called Bridges and, during that 
conversation, he agreed to provide the necessary financing. 
(Clark Ex. 3, p. 1 and Alt. A; Tr. 253.)
140. Bridges sent to Keller by facsimile a letter setting 
forth the terms and conditions of their arrangement. A 
statement of the financial condition of Bridges and his wife 
was appended to the letter. The letter stated that Keller 
could contact James Peterson at the Bank of America in 
Danville, California, to verify his financial capabilities. Kel 
ler telephoned Peterson and reviewed with him the sub 
stance of Bridges' financial statement. (Clark Ex. 3, pp. 1-2 
and Alt. C; Clark Ex. 4.)
141. In the spring of 1991, during the discovery phase of 
this proceeding, Keller reviewed the parameters of her 
budget for Clark. This was done at counsel's initiative 
because the station could be constructed and operated for a 
lot less money than originally estimated. Keller secured an 
equipment proposal from Harris Corporation. On the basis 
of this proposal, as well as conversations with other knowl 
edgeable sources, including engineers at the station where 
she then worked, Keller developed a revised budget. Be 
cause he was providing the financing, she then advised 
Bridges by memorandum that Clark's needs would be re 
duced. Bridges did not ask Keller to revise Clark's budget. 
(Clark Ex. 3. p. 3 and Atts. F. G and H: Tr. 300-02.)
142. Keller communicated with the limited partners by 
memorandum, by telephone, and at meetings. (CFMLP 
Exs. 7, 8, 9 and 10; Tr. 283-84. 287-88.) Clark held ap 
proximately six limited partnership meetings. All of the 
limited partners were invited to attend, and Keller encour 
aged their attendance. On average, however, only two or 
three of the limited partners attended the meetings. The 
meetings were held so that Keller could provide updated 
information about the Clark application to the limited 
partners. (Tr. 283-84.) Keller did not at these meetings 
solicit advice from the limited partners as to how to handle 
management problems or problems relating to the prosecu 
tion of the Clark application. Similarly, no votes were 
taken at these meetings concerning management problems. 
(Tr. 343-44.) Keller prepared minutes of some meetings 
and distributed them to the limited partners. (CFMLP Exs. 
7 and 9.)
143. In late May 1989, Keller sent to all of her limited 
partners a list of the competing applicants, soliciting what 
ever information they might have on the competition. She 
received such input only from Jim Fowler. (CFMLP Ex. 8; 
Tr. 280-82.)
144. In June 1989. after a partnership meeting at which 
seven limited partners and Christel were present. Keller 
sent minutes to all the limited partners in which she 
described the meeting as "very constructive" and at which 
"much was accomplished." The topics discussed included 
the review of a letter from Metzler regarding the timetable 
for payments by the partners into the limited partnership 
account, anticipated expenses, the review of a draft of a 
revised limited partnership agreement, the review of
21
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
Clark's FCC application, and a discussion of the FCC 
process and the other applicants for the license. (CFMLP 
Ex. 7.)
145. In April 1990, Keller sent to all limited partners an 
"Update on Vancouver FM License," noting that she had 
spoken with many of the limited partners during the past 
year concerning their questions about "the process or the 
pending application." (CFMLP Ex. 10.) Keller reported 
that the petition to deny phase had just passed and that no 
petitions were filed against Clark. Keller also reported on 
the Supreme Court's anticipated rejection of the female 
preference and its likely impact on Clark, and brought 
them current on her promotion at work, her teaching 
position at Mt. Hood Community College, and the fact that 
she had just had a telephone call from Clark's FCC coun 
sel, Roger Metzler and Lewis Paper, the details of which 
she promised to share at the next partnership meeting. 
(CFMLP Ex. 10; Tr. 287.)
146. On September 25, 1990, Keller held another part 
nership meeting at which only two limited partners and 
Christel were present. Keller later sent minutes of the 
meeting to all the limited partners, reporting that the meet 
ing produced "enough involved questions that we put 
through a conference call to Roger Metzler, our FCC attor 
ney, and asked him a series of questions." The questions 
concerned what would happen if the general partner died 
and a successor general partner needed to be named, and 
the "hearing phase" of the proceeding. A revised initial 
capitalization plan was handed out and enclosed with the 
minutes* and the date and place of the next meeting were 
tentatively scheduled. (CFMLP Ex. 9; Tr. 283, 285.)
147. In early November 1990, limited partner Jim 
Fowler circulated a letter to his fellow limited partners 
seeking their support for the addition of a second general 
partner for Clark. Fowler indicated that several of the 
limited partners had shared with him their "apprehensions 
concerning the top management of Clark Broadcasting 
Co." He specifically promoted the addition of Jane 
Schmidt Cook, a local cable TV general manager, who, he 
told them, had expressed a keen interest in participating in 
the Clark application as a general partner. He closed the 
letter by indicating that he had already asked limited part 
ner Murray to "check with our attorneys to determine (1) 
if a second General Partner at this time would jeopardize 
our present position, and (2) if a second GP is desireable 
[sic]." (Foster Ex. 7.)
148. Keller learned about the letter from Christel and 
proceeded to set up a meeting of the limited partners. (Tr. 
311-12.) At this meeting Keller asked specifically what the 
basis for the letter was. All the limited partners told Keller 
they were not concerned with the way she was running 
Clark. Rather, their concern was whether adding a second 
general partner at that juncture would enhance Clark's 
application. (Tr. 314.) It is noted in this connection that 
Clark's Limited Partnership Agreement provides that Kel 
ler may veto or override the addition of another general 
partner, and Keller made it known to the limited partners 
that she did not want an additional general partner. (Clark 
Ex. l,pp. 15, 72; Tr. 339-41.)
149. The Clark Limited Partnership Agreement provided 
for a total capitalization of 4,000 shares at $50 per share. 
There were 800 voting shares (representing a 20 percent 
equity interest in Clark), and 3,200 nonvoting shares (re 
presenting an 80 percent equity interest in Clark). Keller 
held 500 voting shares (12.5 percent), the remaining 300 
voting shares (7.5 percent) were "Reserved for Additional
G.P. [General Partner|," and the 3,200 nonvoting shares 
(80 percent) were held by the limited partners. (Clark Ex. 
1, p. 110; CFMLP Ex. 9, p. 3.) The "Reserve for Additional 
G.P." was subsequently eliminated. As noted above, Keller 
had the right to veto the addition of a second general 
partner, and she made it known that she would exercise 
her veto power. In addition, Bridges, Murray and Mitchell 
indicated they wanted a larger share of Clark. Therefore, 
the reserve was eliminated and the reserved shares (7.5 
percent) were distributed to Bridges (5 percent), Murray 
(1.25 percent), and Mitchell (1.25 percent). There was no 
objection by the limited partners to the elimination of the 
reserve. (Tr. 273-74, 292, 339-41.)
150. Keller issued capital calls to the limited partners 
when Clark has needed funds. (Tr. 293.) In May 1991, 
limited partners Jim Fowler, Don Fowler and Gordon 
MacLean were in default of a capital call she made. Keller 
spoke with them and they made their contributions. (Tr. 
272-73, 275.) Arthur Bridges was also in default of his 
capital contributions. (Tr. 274-75, 317.) In July 1991 Keller 
instructed Christel to draft a letter to Bridges regarding the 
default. Keller herself also sent letters about this to Bridges, 
and discussed this on the telephone with both Bridges and 
his attorney. (Tr. 275-76.)
151. As of the date of her testimony in this proceeding 
(July 9, 1991), Keller had contributed to Clark over 
$12,000 of her own money. (Tr. 342.)
152. Diversification. Keller is General Sales Manager at 
station KKSN-AM/FM, Portland, Oregon. If the Clark ap 
plication is granted, Keller will terminate this employment. 
(Clark Ex. 2, p. I.) Neither Keller nor Clark holds any 
cognizable interest in any medium of mass communica 
tions. (Id. at p. 3.)
153. On May 4, 1990, Keller obtained an option to 
acquire 2,000 shares of Class A Common Stock in Heritage 
Media Corporation ("Heritage"), licensee of stations KKSN- 
AM/FM. (Clark Ex. 6. p. 2; Tr. 297-98.) This option could 
not be exercised until April 1992. Heritage is a publicly 
traded company on the American Stock Exchange. There 
are more than 160 million shares of Class A Common 
Stock authorized and more than 25 million issued. Even if 
exercised, the option would entitle Keller to obtain signifi 
cantly less than one percent of the authorized and issued 
stock of Heritage. (Clark Ex. 6, p. 2.)
154. Auxiliary Power. Clark will install auxiliary power 
at both the station and the transmitter site to ensure con 
tinued operation in the event of any power outage. (Clark 
Ex. 5.)
Columbia FM Limited Partnership
155. Structure and Integration. CFMLP is a State of Wash 
ington limited partnership. Catherine C. Edmiston is the 
sole general partner of CFMLP. holding 20 percent of the 
partnership's equity and 100 percent of its voting control. 
Craig L. Siebert ("C. Siebert") is the sole limited partner, 
holding 80 percent of CFMLP's equity with no voting 
rights. (CFMLP Ex. 1.)
156. If the CFMLP application is granted, Edmiston will 
work full time, a minimum of 40 hours per week, as 
General Manager of the proposed station. In that capacity, 
Edmiston will have the primary and ultimate responsibility 
for all decisions affecting the station's day-to-day and long- 
range operations. She will have authority for the hiring 
and firing of all station personnel, will have the ultimate 
authority for all matters involving station sales and pro-
22
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
gramming, and will be the person at the station responsible 
for implementation and oversight of the station's EEO 
program. Edmiston is also prepared to do "everything" at 
the proposed station, if she has to. To effectuate her in 
tegration proposal, subsequent to a grant of the CFMLP 
application, Edmiston will resign her current employment 
with a Vancouver. Washington, law firm to devote full 
time to the construction and operation of the station. 
(CFMLP Ex. 3, p. 1; Tr. 898.)
157. CFMLP claims qualitative enhancement credit for 
Edmiston's status as a Hispanic American. (CFMLP Ex. 3, 
p. 1, and Atts. A-E; Tr. 917.) This status derives from 
Edmiston's maternal grandmother. Carmen Ardito Chap 
man, who was born in Mexico. (CFMLP Ex. 3, Atts. A-E; 
Tr. 921, 929.) Edmiston's birth certificate lists the "Color 
or Race" of her mother. Geneva Chapman, as "White." (Id. 
at Alt. A.) Geneva Chapman's birth certificate lists the 
"Color" of her mother. Carmen Ardito Chapman, as 
"White." (Id. at Alt. B.) Carmen Ardito Chapman's death 
certificate lists her race as "White." (Id. at Alt. C.)25 
Edmiston did not know why her mother and grandmoth 
er's birth certificates listed their color or race as "White." 
(Tr. 927-29.) Edmiston formerly spoke Spanish, but no 
longer does so. Edmiston is not involved in any Hispanic 
organizations or social clubs, and does not know any His 
panic individuals in the community in which she resides. 
Edmiston did not recall what race she classified herself as 
on the 1990 U. S. Census form which she completed. (Tr. 
918-20.)
158. From January 1973 to August 1987, Edmiston re 
sided at various addresses in Portland, Oregon. These resi 
dences were within the service area of CFMLP's proposed 
station. Edmiston has resided in Vancouver, the commu 
nity of license, since September 1987. (CFMLP Ex. 3. p. 2.)
159. During her residence in Portland and Vancouver. 
Edmiston was involved in the following civic activities 
(CFMLP Ex. 3, pp. 2-3. and transcript pages cited):
a. St. Vincent Hospital (Winter 1972-73)
Volunteer work in the emergency room 
twice a week, three hours a day. Served 
as liaison between doctors and families in 
the waiting room.
b. St. Pius Catholic Church (1978-83)
Volunteer at Sunday School during the 
school year, two to three hours each 
Sunday. Edmiston's son attended this 
church during this period. (Tr. 912-13.)
c. St. Pius Catholic School (1980-85)
Member of the PTA and various commit 
tees organizing fundraising activities. 
Edmiston's son attended this school dur 
ing this period. Edmiston was not a PTA 
officer. (Tr. 913.)
d. Den Mother, Cub Scouts of America (1981-85)
Edmiston's son was a member of the 
Cub Scouts during this period. (Tr. 
913-14.)
e. Assistant coach of her son's T-Ball Team (1980) 
f. Fundoers (1988-90)
Member of this non-profit organization 
which sponsored square dances to raise 
funds for the benefit of community or 
ganizations such as the Vancouver 
School District or the Shelter for Bat 
tered Women. (Tr. 916-17.) Member of 
the food committee, kitchen committee, 
and entertainment committee for various 
dances.
g. American Cancer Society (1991)
Member of her employer's planning 
committee for the Society-sponsored July 
1991 Walk-a-Thon. Her employer en 
tered a team and Edmiston devoted an 
average of two to three hours per week 
to this activity. (Tr. 917.)
160. Formation of the Applicant and the Preparation and 
Prosecution of the Application. Edmiston learned about the 
availability of the Vancouver FM channel from her broth 
er-in-law, Tom Siebert ("T. Siebert"), an attorney in the 
Washington D.C., law firm of Besozzi & Gavin. (Tr. 889, 
1010, 1048.) T. Siebert is married to Edmiston's older 
sister. (Tr. 1011.) CFMLP is represented in this proceeding 
by other attorneys from that law firm. (Tr. 7. 28, 932, 
1010-11.) T. Siebert is the brother of C. Siebert. (Tr. 930, 
1048.)
161. T. Siebert recommended that Edmiston call C. 
Siebert, and she did so. In that telephone conversation, 
which was their only telephone conversation before the 
CFMLP application was filed, Edmiston and C. Siebert 
"talked about the whole thing," including the Vancouver 
area, the frequency, and the financial aspects of the project. 
Subsequent to the filing of the CFMLP application 
Edmiston and C. Siebert spoke on the telephone three or 
four times. On those occasions, Edmiston called C. Siebert 
and requested him to send money to meet capital calls. (Tr. 
930-32, 1043-44.)
162. Edmiston and C. Siebert have known each other on 
a social and family basis since 1975 or 1976. They had not 
been involved in business arrangements with each other 
prior to CFMLP, and have had no business dealings apart 
from CFMLP since the filing of the application. (Tr. 930, 
1042-43.) Although Edmiston was aware that C. Siebert 
was involved in other FM applications, she had no specific 
knowledge of those interests until her FCC attorneys told 
her in connection with the preparation of CFMLP's hear 
ing exhibits. (Tr. 911-12.)
163. CFMLP's Agreement of Limited Partnership was 
drafted by T. Siebert after a general discussion with 
Edmiston about the concept of a limited partnership. (Tr. 
923, 1011.) The agreement was sent to Edmiston's local 
attorney's office in Vancouver, and she went there and
25 Although her death certificate states that she was a citizen 
of Mexico, a "Card of Identity and Registration" issued by the 
American Foreign Service in Mazatlan, Sinaloa, Mexico, in 
November 1945, certifies that Carmen Ardito Chapman "is cur 
rently registered in this office as a citizen of the United States 
of America." (CFMLP Ex. 3, Att. D.) In addition, a United 
States passport was issued to Carmen Ardito Chapman in March 
1976. (Id. at Att. E.)
23
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
signed it. C. Siebert's signature was already on the agree 
ment at the time Edmiston signed it. (Tr. 936-40.) This was 
the only version of the agreement she saw, and she made 
no changes thereto. (Tr. 924-25, 1025.) Edmiston did not 
provide C. Siebert with any comments on the agreement, 
nor did Edmiston and C. Siebert have any discussions 
about the agreement. (Tr. 1042.)
164. The CFMLP Agreement of Limited Partnership 
specifies that Edmiston's "Partnership Interest" is 20 
percent and C. Siebert's "Partnership Interest" is 80 
percent. (CFMLP Ex. 5, pp. 3, 20.) Edmiston informed T. 
Siebert of the 80/20 split during their general discussions of 
the limited partnership concept, and he incorporated it 
into the agreement. (Tr. 1011.) C. Siebert was the individ 
ual who decided on the 80/20 split. If Edmiston wanted to 
go forward with the project and use C. Siebert as her 
"funding partner" for prosecution expenses, she had to 
accept this division of equity interests. (Tr. 947-48.)
165. T. Siebert suggested that Edmiston hire Stan Karas 
as a consultant to prepare an estimate of the costs of 
constructing and operating the proposed station. Edmiston 
had known Karas since about 1985 and, through T. Siebert, 
hired him. Karas prepared a proposal for the construction 
and operation of the station. The proposal included a 
staffing plan. Edmiston never consulted with Karas person 
ally about his proposal, had no input into the staffing plan, 
did not discuss the proposal with Karas after the filing of 
the CFMLP application, and did not know what steps 
Karas went through to prepare the proposal. (Vancouver 
FM Ex. 14; Tr. 890-91, 899-900, 958-60, 1020.)
166. Similarly. T. Siebert recommended that Edmiston 
hire Satellite Systems Engineering, Inc. ("Satellite Engi 
neering"), as CFMLP's engineering firm and, through T. 
Siebert, she did so. Satellite Engineering prepared the en 
gineering section of CFMLP's application. Edmiston had 
never spoken with any individual at Satellite Engineering 
in connection with the CFMLP application. (Vancouver 
FM Ex. 16; Tr. 891-92, 970.) Satellite Engineering billed 
Edmiston for its services and Edmiston paid this bill with 
funds from CFMLP's checking account. (Vancouver FM 
Ex. 16; Tr. 971-74.)
167. Edmiston believed that Satellite Engineering found 
CFMLP's transmitter site. (Tr. 891.) However, the record 
reflects that Shaffer Associates Communications Consul 
tants ("Shaffer") was retained to find that site. (Vancouver 
FM Ex. 17.) Edmiston did not know what role Shaffer had 
in the preparation of the application, never spoke with 
anyone at Shaffer. and did not instruct any of her attorneys 
to speak with anyone at Shaffer. (Tr. 975-77.)
168. At the instruction of T. Siebert, Edmiston tele 
phoned Jack Matranga, the president of Columbia River 
Television. Inc., the lessor of CFMLP's proposed transmit 
ter site. (Vancouver FM Ex. 18; Tr. 978-79, 981-82.) 
Matranga sent Edmiston an Agreement to Lease, which he 
had already signed. (Tr. 978-79.) Edmiston provided a copy 
of the agreement to T. Siebert, and discussed it with him. 
He advised her to sign the agreement, after explaining to 
her what it was all about, and she did so. (Tr. 979, 982-83.) 
Edmiston personally brought the agreement to Matranga 
with a check for $100. (Tr. 982.)
169. In April 1991, the lessor's business manager sent 
Edmiston a letter asking whether she wanted to renew the 
Agreement to Lease. Edmiston responded in the affirmative 
and sent another $100 check to the lessor for the renewal.
(Tr. 982.) At the time of her testimony in this proceeding 
(July 12, 1991), Edmiston did not know what the rent for 
CFMLP's proposed transmitter site would be. (Tr. 983.)
170. In December 1990, CFMLP filed an engineering 
amendment addressed to a tower-height matter raised in 
the HDO. The engineering amendment was prepared by 
Karl L. Lahm, P.E., who was contacted by CFMLP's FCC 
counsel. Edmiston did not have any communication with 
Lahm about this amendment. (Vancouver FM Ex. 20; Tr. 
992-93.)
171. When CFMLP was initially capitalized, and when its 
checking account was opened, both Edmiston and C. 
Siebert made capital contributions in accordance with their 
partnership interests. Specifically, Edmiston contributed 20 
percent of the initial capital ($1,400) and C. Siebert contri 
buted 80 percent ($5,600). (CFMLP Ex. 5, p. 20; Tr. 936, 
941, 974, 1044.) Edmiston pays all the expenses of the 
partnership when they come due, drawing funds from 
CFMLP's checking account. (Tr. 935-36, 974.) Edmiston 
tends to wait for a few bills to add up. depending on the 
amount, and then issues a capital call. (Tr. 935-36.) She 
also issues a capital call when the balance in the checking 
account gets below a certain level. (Tr. 974.) In response to 
these capital calls, Edmiston contributes 20 percent of the 
funds and C. Siebert contributes 80 percent. (Tr. 936.) As 
of the date of her testimony in this proceeding. Edmiston 
had contributed a little over $3,800 to CFMLP (Tr. 897), 
and C. Siebert had contributed a little more than $15.500 
(Tr. 1044, 1063). Edmiston will not be reimbursed for her 
20 percent contribution, but will seek reimbursement for 
any contributions she makes which exceed her 20 percent 
share. (Tr. 942.) C. Siebert does not expect to be reim 
bursed for the funds he has contributed in capital to 
CFMLP. (Tr. 1064.) C. Siebert's contributions to CFMLP 
were not loans (Tr. 963, 1064), and there is nothing in 
writing which sets an upper limit on the amount of funds 
he will contribute to the venture (Tr. 1068, 1072).
172. CFMLP's arrangement with Besozzi & Gavin is that 
legal fees will be payable only in the event CFMLP receives 
the construction permit in this proceeding, or if this case is 
settled. This fee arrangement was not reduced to writing. 
Edmiston receives monthly bills from the law firm but 
does not pay the portion attributable to attorney's fees 
because of the contingent fee arrangement. Edmiston does, 
however, pay the costs and expenses of the law firm, such 
as telephone calls and photocopying. (Tr. 892. 933-36.) If 
CFMLP receives the construction permit, the funds from 
which Besozzi & Gavin will be paid will "probably" come 
from CFMLP's bank loan. (Tr. 1016-18.)
173. Pursuant to his pre-filing discussion with Edmiston, 
C. Siebert arranged for the financing of CFMLP's construc 
tion and operation costs from Maryland National Bank 
("MNB"). He did so because he, and not Edmiston. had a 
"relationship" with that bank. (Tr. 1025, 1044-45, 1048.) C. 
Siebert was unable to arrange for bank financing prior to 
the filing of the CFMLP application on April 13, 1989, 
because he is a Certified Public Accountant ("CPA") and 
that was his busiest time of the year. He therefore delayed 
his efforts to obtain financing. C. Siebert did not advise 
Edmiston of the delay; he advised one of CFMLP's FCC 
attorneys. (Tr. 943-44, 1024, 1028, 1049.) At the time the 
application was filed, T. Siebert told Edmiston that financ 
ing had not yet been obtained, and Edmiston did not, 
therefore, certify that CFMLP was financially qualified. (Tr. 
944.)
24
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
174. MNB issued two letters to CFMLP, the first dated 
May 3, 1989, and the second dated May 22, 1989. Both 
were addressed to CFMLP at Edmiston's address in Van 
couver. (Vancouver FM Exs. 12 and 13; Tr. 882, 954.) The 
first letter began "Dear Mr. Siebert," (Vancouver FM Ex. 
12). Since Edmiston was the general partner, C. Siebert 
requested the bank to reissue the letter and change the 
salutation to include her name. (Tr. 1026, 1052-53; CFMLP 
Ex. 11, pp. 1-2.) Thus, the second letter began "Dear Mr. 
Siebert & Ms. Edmiston: " (Vancouver FM Ex. 13).
175. According to Edmiston, she needed C. Siebert's 
participation as a limited partner because, at the time the 
opportunity to file this application was brought to her 
attention, she could not by herself have paid for all of the 
costs and expenses associated with the prosecution of the 
CFMLP application through the grant of a construction 
permit. (Tr. 925-26, 945-48, 1012, 1017-18, 1019-20.) In 
this regard, Edmiston specified such items as the filing fee. 
hearing fee, engineering fees, and the law firm's costs and 
expenses as the prosecution expenses to which she was 
referring. (Tr. 1006.) Although Edmiston believed that 
Besozzi & Gavin "probably" would have carried her as a 
client without C. Siebert's participation as her limited part 
ner, that subject was never discussed. In response to a 
question asking whether it was correct that CFMLP's own 
ership structure and contingent fee arrangement "was sort 
of a package deal," Edmiston responded, "In a way." (Tr. 
1012-13.)
176. Section 2.3 of CFMLP's Agreement of Limited Part 
nership prohibits the limited partner from having any role 
in the management of the proposed station. (CFMLP Ex. 5, 
p. 4.) Section 4.1 of the agreement provides that the gen 
eral partner is exclusively responsible for the management 
of the station. (Id. at p. 5.) Section 4.5(a) of the agreement 
requires the consent of "a majority of" the limited partners 
before the general partner may sell or otherwise dispose of 
all or substantially all of the partnership's assets. (Id. at p. 
7.) Section 4.6 of the agreement specifies that the limited 
partner shall not (id. at pp. 7-8):
a. Perform any services to [sic] the Limited Partner 
ship materially relating to its radio station;
b. Become actively involved in the management or 
operation of the Partnership's radio station;
c. Be an employee of the Partnership's radio station;
d. Perform any services as an independent contractor 
or agent with respect to the Partnership's radio sta 
tion.[sic]
e. Communicate with the General Partner on matters 
pertaining to the day-to-day operations of the busi 
ness.
177. Section 8.3 of the agreement requires that the re 
moval of the general partner for "incapacity" be pursuant 
only to an adjudication of incompetence by a court of 
competent jurisdiction. (CFMLP Ex. 5, p. 15.) Section 8.4 
of the agreement provides that the general partner may be 
removed for cause upon a finding by an independent ar 
bitrator that the general partner has "engaged in malfea 
sance, criminal conduct or wanton or willful negligence." 
(Id. at pp. 15-16; Tr. 925.) In response to a line of hy 
pothetical questions asking what he would do if it became
clear to him that the station was losing a lot of money 
because Edmiston was incapable of running or managing a 
radio station, C. Siebert testified (Tr. 1036-38):
My jurisdiction [sic|, then I come in and I offer my 
advice or my opinion on the situation.
I'm assuming that this is an extreme case and we 
don't want to throw money down the drain and that 
to me is an extreme case and I would assume the 
limited partner can come in and come to the aid of 
the entire entity in that case.
C. Siebert further testified that, in his opinion as a layman, 
the hypothetical situation outlined would come within the 
"negligence" provisions of Section 8.4 of the Agreement of 
Limited Partnership. (Tr. 1038.)
178. Diversification. Neither CFMLP, its general partner, 
nor its limited partner have any attributable ownership 
interest in any medium of mass communications, including 
any radio or television station, cable television system, 
newspaper or magazine of general circulation, Multipoint 
Distribution Service system station, or Multi-Channel 
Multipoint Distribution Service system station. (CFMLP 
Ex. 2.)
179. Auxiliary Power. CFMLP will install auxiliary power 
facilities at both its studio and transmitter sites. (CFMLP 
Ex. 4.) However, there is no reference to auxiliary power 
in CFMLP's cost estimates. (McCoy Exs. 8 and 9; Tr. 
895-96.)
Trans-Columbia Communications
180. Structure and Integration. Trans-Columbia is a gen 
eral partnership organized under the laws of the State of 
Washington. Andrew L. Brown and Lester M. Friedman 
are the sole general partners, each owning 50 percent of 
the applicant's equity. (Trans-Columbia Ex. 1, p. 1.)
181. Brown will be the full-time General Manager and 
the Program/Production Manager of the proposed station. 
He will devote no less than 40 hours per week to the 
station during normal business hours, i.e., at a minimum, 9 
a.m. to 5 p.m., Monday through Friday. As General Man 
ager, Brown will oversee all aspects of the management and 
operation of Trans-Columbia's proposed station. Together 
with Friedman, Brown will set all station policy and be 
responsible for hiring and firing the station's employees. As 
Program/Production Manager, Brown will be responsible 
for the development of the station's format, production, 
and training of production personnel. Brown will resign 
from current employment and curtail any other activities 
as necessary to fulfill his integration commitment. (Trans- 
Columbia Ex. 1, pp. 1-2.)
182. Friedman will be the station's full-time News and 
Public Affairs Director and its General Sales Manager. He 
will devote no less than 40 hours per week during normal 
business hours, i.e., at a minimum 9 a.m. to 5 p.m., 
Monday through Friday. Friedman will be jointly responsi 
ble for developing and maintaining all station policy and 
for hiring and firing station personnel. As News and Public 
Affairs Director, Friedman will oversee the station's news 
and public affairs programming and ensure service to the 
community through community involvement. He will be
25
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
responsible for implementing and maintaining the station's 
EEO program. As General Sales Manager, Friedman will 
supervise the station's sales activities and staff, and develop 
and implement the station's advertising, marketing, and 
promotional campaigns. In the event Trans-Columbia is 
awarded the construction permit in this proceeding, 
Friedman will resign his current employment and will 
curtail any other activities as necessary to fulfill his integra 
tion commitment. (Trans-Columbia Ex. 3, pp. 1-2.)
183. Brown has resided in Portland, Oregon, since 1976. 
All of his residences have been within the predicted 1 
mV/m contour of Trans-Columbia's proposed station. In 
the event Trans-Columbia's application is granted, Brown 
will relocate and maintain his full-time permanent resi 
dence in Vancouver, Washington. (Trans-Columbia Ex. 2, 
p. 2.)
184. Brown's civic activities include involvement with 
the following organizations which serve Vancouver and the 
area within the predicted 1 mV/m contour of Trans-Co 
lumbia's proposed station (Trans-Columbia Ex. 2, pp.2-3, 
and transcript pages cited):
a. During the last quarter of 1977 and the first quar 
ter of 1978, Brown participated in Career Day pro 
grams in the Vancouver public school system. He 
learned about the programs through his employment 
at a radio station, but devoted his own time to the 
programs. (Tr. 1642-44.)
b. In 1983 and 1984, Brown participated in planning 
and coordinating communications for the Special 
Olympics Committee of Oregon.
c. Since 1985, Brown has been a United Way repre 
sentative at station KATU-TV, Portland, Oregon, and 
was the leader of his department's volunteer 
fundraising effort in 1988. Brown was one of several 
people at that station who solicited funds from sta 
tion personnel. He did not solicit funds outside the 
station. (Tr. 1644-45.)
d. Since 1984, Brown has been a donor and member 
of the American Lung Association.
e. Since 1988, Brown has been a donor and member 
of the American Heart Association, the Humane So 
ciety, Greenpeace, the Cousteau Society, and the 
Paralyzed American Veterans Society.
Brown's involvement in the organizations listed in Items 
(d) and (e), above, was limited to giving them money and 
becoming a member, and reading the literature these or 
ganizations send to him. (Tr. 1641-42, 1666-67.)
185. Friedman resided in Vancouver. Washington, from 
1977 to 1981. He resided in Portland. Oregon, within the 
predicted 1 mV/m contour of Trans-Columbia's proposed 
station from 1964 to 1968, in 1976, and from 1981 to the 
time of his testimony. In the event Trans-Columbia's ap 
plication is granted, Friedman will relocate and maintain 
his full-time permanent residence in Vancouver. (Trans- 
Columbia Ex. 3, p. 2.)
186. Friedman's civic activities include involvement with 
the following organizations which serve Vancouver and the 
area within the predicted 1 mV/m contour of Trans-Co 
lumbia's proposed station (Trans-Columbia Ex. 3, pp. 3, 4, 
4A, and transcript pages cited):
a. From 1976 to 1984. Friedman participated in ca 
reer day and drug awareness programs with the Van 
couver and Evergreen School Districts. He helped 
publicize school district activities, including school 
board meetings, school bond levy elections, and edu 
cational programs. Friedman initiated coverage of 
these activities at the radio stations where he worked, 
wrote public service announcements and press re 
leases, and assisted in copy writing activities for dis 
semination to other stations in the market. (Tr. 
1605-06, 1608.)
b. From 1976 to 1984, Friedman helped publicize 
highway safety, school safety, and drug awareness 
programs for the Vancouver Police and Clark County 
Sheriffs Departments, and the Washington State Pa 
trol.
c. From 1976 to 1984, Friedman helped publicize 
energy conservation and weatherization programs for 
the Clark County Public Utility District, and assisted 
the Clark County Regional Planning Council in pro 
viding public awareness of county growth and plan 
ning issues.
d. From 1976 to 1984, Friedman helped publicize the 
Portland Special Olympics and learn-to-read and 
adult education programs for the Fort Vancouver 
Regional Library, assisted publicity and fundraising 
efforts to found the Columbia Arts Center, and to 
promote the Fort Vancouver Fourth of July Commit 
tee and Fort Vancouver Days.
e. From 1976 to 1980, Friedman assisted the South 
west Washington Health Department in promoting 
children's immunization programs and other public 
health programs relating to venereal disease, drug 
awareness, and rabies. On his own initiative, he ar 
ranged media coverage of these organizations by the 
radio stations where he was employed, as well as by 
other radio stations. Friedman also wrote copy and 
publicized these activities on the air as public service 
announcements at these radio stations. (Tr. 161'1.)
f. Since 1981, Friedman has been a donor and mem 
ber of the United Way and Oregon Public Broadcast 
ing.
g. Since 1983, Friedman has been a donor and 
member of the Oregon Historical Society.
h. Since 1986, Friedman has been a member of the 
American Heart Association, and he participated in 
one march. (Tr. 1612.)
i. Since 1989. Friedman has been a donor and mem 
ber of the Fort Vancouver Historical Society. Colum 
bia Arts Center, and .Chinook Trail Association.
j. Since 1988. Friedman has participated in the Red 
Cross Blood Drive at the National Broadcasting 
School by recruiting and scheduling blood donors for 
the semi-annual blood drives. (Tr. 1613.)
k. During 1981, Friedman taught on a volunteer 
basis at the New Rose School in Portland. The New 
Rose School is an alternative school which provides 
training to assist low-income individuals to obtain 
various skills and education. Friedman taught a one- 
semester course in media and public service respon 
sibility.
26
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
187. The activities in Items (a) through (e), above, were 
closely related to Friedman's employment at stations 
KVAN(AM) (1976-1980) and KKSN(AM) (1980-1984) in 
Vancouver. (Tr. 1604.) Friedman testified that these activi 
ties consisted of his efforts to promote these organizations 
on radio stations where he was employed, and on other 
stations. (Tr. 1605, 1612.) Friedman's publicity activities 
with the organizations listed in Items (a) through (e) were 
discontinued when he left his employment with KKSN in 
1984. (Tr. 1611-12.) With respect to Items (f) through (i), 
above, other than paying membership dues and making 
charitable donations, Friedman did not undertake any sig 
nificant activity for these organizations, with the exception 
of his participation in one American Heart Association 
march. (Tr. 1612-13.)
188. Both Brown and Friedman have past broadcast 
experience. In 1973, Brown served in a part-time capacity 
as on-air talent and board operator at stations WZTA-FM, 
Tamaqua, Pennsylvania, WLVR-FM, Bethlehem, Pennsyl 
vania, and WSAN(AM), Allentown, Pennsylvania, succes 
sively. From 1974 to 1976, Brown was employed in various 
full-time positions at station WSAN(AM), including on-air 
talent, board operator, and assistant engineer. In 1976, 
Brown was employed part time as operator at stations 
KUPL(AM) and KUPL-FM, Portland, Oregon, and part 
time as on-air talent, board operator, and assistant engineer 
at station KVAN(AM), Vancouver, Washington. From 1977 
to 1978, Brown held various full-time positions at 
KVAN(AM), including on-air talent, board operator, and 
chief engineer. In 1981, Brown was the full-time assistant 
engineer at station KMJK-FM, Lake Oswego. Oregon. 
From 1982 to 1984, Brown served as KMJK-FM's chief 
engineer, engineering manager, and promotion coordina 
tor. During that same period, Brown was also the backup 
engineer on a contract basis at stations KCNR(AM) and 
KCNR-FM, Portland, Oregon. Since 1985, Brown has been 
employed as the full-time maintenance engineer and sat 
ellite transmission engineer at station KATU-TV, Portland, 
Oregon. (Trans-Columbia Ex. 2, pp. 3-4.) Brown has never 
held a management position in a radio station other than 
in the area of engineering management. (Tr. 1648.)
189. From 1972 to 1973, Friedman served in a part-time 
capacity as on-air talent, operator, producer, and news 
reporter at station KWAX-FM, Eugene, Oregon. During 
that same period he held various part-time positions, in 
cluding on-air talent, copy writer, producer, and assistant 
music director at station KFMY-FM, Eugene, Oregon. 
From January 1974 to mid-1974. Friedman performed 
these duties as a full-time employee at KFMY-FM. From 
mid-1974 to 1976, Friedman was employed in various full- 
time positions, including on-air talent, copy writer, pro 
ducer, news reporter, and news anchor at station 
KZEL-FM, Eugene, Oregon. From November 1976 to Jan 
uary 1980, Friedman held various full-time positions, in 
cluding on-air talent, news reporter, news and public 
affairs director, and program director at station 
KVAN(AM). Vancouver, Washington. From March 1980 to 
July 1984, Friedman held various full-time positions, in 
cluding on-air talent, news reporter, news anchor, and 
news and public affairs director at station KKSN(AM), 
Vancouver, Washington. From April through October of
1988, Friedman was a studio and classroom instructor at 
the National Broadcasting School located in Portland-. Or 
egon. He has been the assistant director at the school since 
October 1988. (Trans-Columbia Ex. 3, pp. 4-5.)
190. Diversification. Neither Trans-Columbia nor 
Friedman has any interest in or connection with any AM, 
FM or TV broadcast station or application, any newspaper, 
cable television system, or other medium of mass commu 
nication. (Trans-Columbia Ex. 1, p. 1; Trans-Columbia Ex. 
3, p. 1.) Brown is currently employed as an electronics 
maintenance engineer at station KATU-TV, Portland, Or 
egon. In the event that Trans-Columbia is awarded the 
construction permit in this proceeding, Brown will resign 
this position and sever all connections with KATU-TV. 
Brown does not have any interest in or other connection 
with any AM, FM or TV broadcast station or application, 
any newspaper, cable television system, or other medium 
of mass communication. (Trans-Columbia Ex. 2, p. 1.)
191. Auxiliary Power. Trans-Columbia will install and 
maintain auxiliary power generators at the transmitter and 
main studio locations of sufficient capacity to power the 
transmitter and main studio in the event of a power failure 
at one or both locations. (Trans-Columbia Ex. 4, p. 1.)
Basic Qualifications Issues
Issue 4 -- Financial Issue Against Clark
192. This issue was designated for hearing because, in 
response to Section III of its application, Clark certified 
that it did not have sufficient net liquid assets on hand or 
sufficient funds available from committed sources to con 
struct and operate its proposed station for three months 
without revenue. (HDO at para. 13.)
193. At the end of March or the beginning of April 
1989, Keller began to talk to people and gather information 
to prepare a budget for the estimated costs of construction 
and initial operation of the proposed station. In calculating 
the budget figures, Keller prepared handwritten notes 
which were subsequently typewritten. Keller estimated that 
the approximate costs of construction and operation for 
three months would be $954,750. (Clark Ex. 3, p. 1 and 
Atts. A and B.)
194. In the meantime, Clark limited partners Sonny 
Mitchell and Connell Murray advised Keller that Arthur 
D. Bridges, who lived in the San Francisco area, was a 
person of substantial resources who could provide the nec 
essary financing and might be interested in doing so. Keller 
telephoned Bridges on or about April 6, 1989, and during 
that conversation he agreed to provide the necessary fi 
nancing. According to Keller, Bridges made it clear that 
the financial commitment was on behalf of himself. (Clark 
Ex. 3, p. 1.) Bridges confirmed that he was "personally" 
committed to providing funds to Clark. (Clark Ex. 4, p. 1; 
Tr. 2124-25.)
195. On April 10, 1989. Bridges sent to Keller by 
facsimile the following letter ("April 10 letter"), which was 
typewritten on the letterhead of "ADBRIDGE, INC." 
("Adbridge")26 (Clark Ex. 3, p. 1 and Alt. C; Clark Ex. 4, 
p. 1 and Alt. 1):
26 Adbridge is a management company that holds and manages 
the personal assets of Bridges. (Tr. 2123-24, 2174.) Bridges owns
100 percent of the stock of Adbridge. (Tr. 2174-75.) Adbridge 
has no assets of its own. Rather, the assets of Adbridge are the
27
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
Dear Ms. Seller:
You have applied to me for a loan to be used for the 
construction and operation of a new FM radio station 
at Vancouver, Washington. Based on the information 
that you have submitted and conditioned upon grant 
of the construction permit for the station, I will loan 
up to $1,000,000. The monies would be available 
within 30 days of the issuance of the construction 
permit to Clark Broadcasting from the FCC. This 
loan would bear interest at the rate of 2% above 
prime. 180 equal installments will include principal 
and interest and will commence within 30 days of 
actual air date and will be paid twice monthly. This 
obligation would be guaranteed by Clark Broadcast 
ing and be fully secured by a first lien on the assets 
of the station and the senior pledges of all interests in 
the partnership operating the station and holding the 
license.
In addition, up to 25% of the total interests of Clark 
Broadcasting will be made available for my purchase 
at introductory rates as a limited partner. Cashiers 
checks have been enclosed as payment toward the 
shares.
You may verify my financial capabilities through Mr. 
James Peterson, Private Banking, Bank of America, 
16 Cavalry Court, Danville, CA 94526. He will be 
able to supply you with the necessary data you may 
need in this regard.
Sincerely, 
ADBRIDGE, INC.
By [Signature]
Arthur D. Bridges, President
196. Attached to Bridges' letter was the "Statement of 
Financial Condition" of Arthur D. and Beverly Bridges as 
of December 31, 1987. (Clark Ex. 3, p. 1 and Att. C: Clark 
Ex. 4, p. 1 and Att. 1.) Although all but three entries on 
the financial statement refer to notes thereto, and the fi 
nancial statement says "See Accompanying Notes and 
Accountants' Report," it does not appear that Keller was 
provided with these materials. (Clark Ex. 3. Att. C; Clark 
Ex. 4, Att. 1.)
197. The Statement of Financial Condition reflected that 
Mr. and Mrs. Bridges had total assets of $104.033,528, 
including cash in the amount of $1,280.908 and a pension 
plan in the amount of $156,822. The remaining assets were 
comprised of the following: notes receivable; investments 
in real estate, personal properties, leasehold improvements,
real estate partnerships, and interests in closely-held com 
panies; residence; and personal effects. The financial state 
ment listed total liabilities of $25,065,570, comprised of 
notes payable on real estate, personal properties, leasehold 
improvements, and "Unsecured." Long and short-term 
liabilities were not broken down. Mr. and Mrs. Bridges' net 
worth was stated to be $78,967.958. (Clark Ex. 3, Att. C; 
Clark Ex. 4, Att. 1.)
198. Pursuant to the suggestion in Bridges' letter, on 
April 10, 1989, Keller telephoned James Peterson at the 
Bank of America and reviewed with him the substance of 
Mr. and Mrs. Bridges' financial statement. Peterson assured 
Keller that there had been no material change in their 
financial condition. (Clark Ex. 3, p. 2.)
199. Prior to the receipt of the April 10 letter, Keller did 
not provide to either Bridges or Adbridge any financial 
statement of Clark or of any of the partners of Clark. (Tr. 
347.) Keller did not receive any financial information on 
Adbridge, and had no knowledge as to the financial capa 
bility of Adbridge. (Tr. 347-48.)
200. Bridges' recollection of the factors which led him to 
issue the April 10 letter was extremely poor. Bridges could 
not recall with certainty whether he spoke to Keller or 
whether he saw her resume, "the proposal," or the budget 
prior to April 10, 1989. (Tr. 2081.)" Bridges could not 
recall if, at the time of the April 10 letter, he knew 
anything about Keller's background, experience in running 
a radio station, and level of education (Tr. 2099), or wheth 
er he had someone else look into her background (Tr. 
2102). Nor could Bridges recall whether Clark had any 
assets as of April 10, 1989. (Tr. 2113.) Bridges could not 
recall if he saw the personal financial statements of Keller, 
or of limited partners Mitchell and Murray (Tr. 2118), and 
could not recall whether he had seen a business plan or 
prospectus for Clark prior to April 10, 1989 (Tr. 2121).
201. Bridges and Mitchell have been friends for 25 to 35 
years; Bridges and Murray have been friends for 25 years. 
(Tr. 2165, 2173-74.) Although Bridges did not know Keller 
personally and had not done business with her, prior to 
April 1989 he knew who she was through Mitchell and 
Murray. (Tr. 2080, 2145.) Bridges also knew that Keller 
was the sole general partner of Clark, and that she was 
going to be the General Manager of Clark's proposed sta 
tion. However, Bridges could not recall whether he ob 
tained this knowledge prior to April 10, 1989. (Tr. 
2102-04.) Bridges did know that neither Mitchell nor Mur 
ray would be involved in running the station. (Tr. 2105.)
202. Prior to signing the April 10 letter, Bridges was not 
involved in any way in broadcasting, and did not do any 
research into what this particular Vancouver station might 
be worth, or into how much similar kinds of radio stations 
in similar markets might be worth.28 Bridges had no per 
sonal or business ties to the Vancouver area. (Tr. 2079-80.)
same as those of Bridges. (Tr. 2146-49.)
27 Bridges subsequently testified that he saw a budget for 
Clark, and had "a package" of materials. Bridges implied that he 
reviewed these materials prior to the issuance of the financing 
letter. (Tr. 2175-77.) This testimony was not as credible as his 
initial testimony, and is rejected. Bridges was a witness who was 
susceptible to suggestion, and his later testimony was adduced 
on redirect examination by counsel for Clark after a break was 
taken and counsel had an opportunity to confer with Bridges. 
(See Tr. 2153-55.) Moreover, Bridges' explanation for his appar 
ent change of testimony (Tr. 2183-86) was unconvincing in light 
of his almost total lack of specific recollection of the events in 
question. Finally, even assuming, arguendo, that Bridges did 
review "a package" of materials from Clark, the record does not 
support a finding that the review was performed prior to April 
10, 1989. (Tr. 2184-85.)
28 Bridges subsequently testified that he had an idea of what 
the station would be worth, and that Mitchell and Murray told 
him it would be worth $2 to $3 million. (Tr. 2178-79.) Bridges' 
initial testimony that he did not know what the station might
28
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
203. Although Bridges had made loans of approximately 
$1 million to businesses, he could not recall making a loan 
of this magnitude to an entity which was managed and 
operated by someone of whom he had no personal knowl 
edge. (Tr. 2107.) Bridges testified that he was not in the 
loan or finance business (id.), but stated that he neverthe 
less agreed to lend funds to Clark for the following reasons 
(Tr. 2165):
Q: Why is it that you're planning to make this loan 
to this entity here?
A: Well, because I've talked to Sonny Mitchell and 
the other party and we had talked a million times 
about getting something that would be -- a radio 
station is what I'm referring to. and if he would keep 
his eyes open and I would appreciate it. And we have 
been friends way back, Conn Murray and myself, and 
they6 were looking for something that would be a 
viable deal or that -- they were   and I told them if 
they needed money, I would be willing to help.
Q: So you did this because of your friendship with 
Mr. Murray and Mr. Mitchell?
A: I would say -- I would say yes.
Bridges also testified that his attorneys and accountant 
advised him that the loan to Clark would be a good, 
profitable investment. (Tr. 2166-67, 2186.)
204. Bridges did not negotiate the terms and conditions 
of the loan to Clark with Keller or with anyone else. 
Rather, Bridges and his advisors decided on the terms and 
conditions of the loan and included them in the April 10 
letter. Clark did not have to accept those terms. (Tr. 2152.)
205. Bridges would not lend $1 million to Clark without 
security, and the April 10 letter provides for such security 
as follows: "This obligation would be guaranteed by Clark 
Broadcasting and be fully secured by a first lien on the 
assets of the station and the senior pledges of all interests in 
the partnership operating the station and holding the li 
cense." (Tr. 2118-19; Clark Ex. 3, Alt. C; Clark Ex. 4, Att. 
1.) At the time he issued the April 10 letter, Bridges did 
not know whether Clark intended to own or lease the 
equipment needed to operate the station (Tr. 2123), and 
had not considered what the assets of Clark were likely to 
be at the time the loan proceeds would be made available 
to Clark (Tr. 2116). If Clark receives the construction 
permit, Bridges testified that he will consult with his attor 
neys and accountants prior to making the funds available 
to Clark in order to make sure that the letter was being 
adhered to and the loan was secured. (Tr. 2186-87.)
206. With regard to the "senior pledges of all interests in 
the partnership," Section 3.01(c)(iv) of Clark's Limited 
Partnership Agreement provides that the general partner 
shall not "pledge any Partnership Property to a lender 
other than a bank or other institutional lender" without
obtaining the "prior written consent" of partners holding 
more than 65 percent of the partnership interests. (Clark 
Ex. 1, pp. 73-74; Tr. 326.) According to Keller, although 
there was nothing in writing, there were discussions among 
the limited partners, and they agreed to pledge their inter 
ests and Clark's assets should Clark receive the license and 
require financing. (Tr. 32  30, 34S-46.)29 Keller told 
Bridges by telephone in April 1989 that the limited part 
ners had agreed to this. (Tr. 354-56.)
207. After receiving the April 10 letter, Keller completed 
in her handwriting the FCC Form 301 application (August 
1987 edition) and sent it to her attorney by facsimile. 
Keller checked the "Yes" box in Section III of the applica 
tion. Section III reads as follows: "The applicant certifies 
that sufficient net liquid assets are on hand or that suffi 
cient funds are available from committed sources to con 
struct and operate the requested facilities for three months 
without revenue." (Clark Ex. 3, p. 2 and Att. D.) Keller 
believed that Clark had adequate financing based on the 
April 10. 1989, letter from Bridges. (Clark Ex. 3, p. 3; Tr. 
346-47.351.)
208. Keller reviewed and signed Clark's typewritten ap 
plication on April 11, 1989. Keller assumed that the "Yes" 
box in Section III was checked so as to reflect that Clark 
did have access to the necessary financial resources. (Clark 
Ex. 3, p. 2.)
209. In June 1990, Clark's new FCC attorney, Lewis 
Paper, advised Keller that the "No" box in Section III of 
Clark's application had been checked. That was the first 
occasion on which Keller was alerted to that fact. Keller 
explained that the error was an inadvertence and "just one 
of those things" that had escaped her attention when she 
reviewed the typewritten application. On June 7, 1990, 
Keller executed an amendment to be filed with the Com 
mission which would, among other things, have changed 
Clark's response to Section III to "Yes." The amendment 
was filed with the Commission on July 13, 1990. (Clark 
Ex. 3, pp. 2-3 and Att. E; Clark Ex. ).) The HDO in this 
proceeding made no reference to Clark's July 13, 1990, 
amendment, which was filed nearly one year after the last 
date for filing amendments as of right. (HDO at paras. 13, 
16-17, 31.)
210. In the spring of 1991. during the discovery phase of 
this proceeding, Keller reviewed the parameters of her 
budget for Clark. This was done at counsel's initiative 
because the station could be constructed and operated on a 
lot less money than originally estimated. Keller secured an 
equipment proposal from Harris Corporation. On the basis 
of this proposal, as well as conversations with other knowl 
edgeable sources, including engineers at the station where 
she then worked, Keller developed a revised budget which 
was dated May 13, 1991. Keller's revised estimate of the 
costs of construction and three months operation was 
$568,900. Because Bridges was providing the financing, 
Keller advised him by memorandum dated May 14, 1991, 
that Clark's needs would be reduced to "approximately
be worth was more credible than his later testimony, which is 
rejected. Again, Bridges was susceptible to suggestion, and his 
later testimony was adduced on redirect examination by counsel 
for Clark after a break was taken and counsel had an opportu 
nity to confer with Bridges. (See Tr. 2153-55.) Further, in light 
of Bridges' almost total lack of specific recollection of the events
in question, it is not credible that he would spontaneously recall 
the value of the station allegedly related to him by Mitchell and 
Murray in April 1989.
29 Keller had previously testified that there was no agreement 
for Clark to pledge its assets. (Tr. 326-27.) However, Keller was 
clearly confused by the line of questioning at the time she gave 
this answer (id.), and her subsequent explanation for the 
discrepancy (Tr. 330) was credible and is accepted.
29
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
$570,000." The memorandum also stated: "Therefore, your 
commitment to Clark has been reduced to that amount 
(although we will still abide by the same terms and con 
ditions for repayment set forth in your letter to me of 
April 10, 1991 [sic])." Bridges did not ask Keller to revise 
Clark's budget. (Clark Ex. 3, p. 3 and Atts. F, G and H; Tr. 
300-02.)
211. Bridges' written direct testimony, dated June 12, 
1991, stated that no circumstance had arisen since April 
1989 to affect his commitment to personally provide fi 
nancing for Clark. (Clark Ex. 4, p. 1.) In his oral testimony 
taken on March 19, 1992, Bridges stated that he withdrew 
in his own mind from the Clark limited partnership in 
about November 1991 based upon the advice of counsel. 
(Tr. 2130, 2135, 2137.)30 Subsequent to the time that he 
withdrew in his own mind, Bridges had not confirmed in 
writing his commitment to provide financing to Clark. (Tr. 
2137-38.) Bridges did, however, confirm during his oral 
testimony that the April 10 letter accurately reflected his 
current intentions. (Tr. 2174.)
Issue 8 -- Misrepresentation/Lack of Candor Issue Against 
CFMLP
212. This issue was specified because CFMLP general 
partner Catherine Edmiston received a letter from the 
Federal Aviation Administration ("FAA") in June 1989 
concluding that CFMLP's proposed site would be a hazard 
to air navigation, but CFMLP failed to report this adverse 
determination to the Commission until May 29. 1991. 
(Memorandum Opinion and Order, FCC 91M-2687, released 
September 4, 1991.)
213. CFMLP proposes to mount its antenna on the exist 
ing tower of station KPDX-TV, Portland, Oregon. In re 
sponse to Question 5 of Section V-B of its application,31 
CFMLP stated that the Northwest Mountain office of the 
FAA had been notified of CFMLP's proposed construction 
on April 11, 1989. (Vancouver FM Ex. 18, Tr. 977-78; 
Section V-B of CFMLP's application; official notice taken.)
214. In addition to CFMLP, 13 of the other original 
applicants in this proceeding proposed to use this site. 
They were: Q Prime, MCLP, Winston, Turnbeaugh, Eells, 
Clark, Foster, Vancouver FM, CWLP, VPBC, Point, Cas 
cade, and Shabaz. Of these applicants, only Foster, Cascade, 
Shabaz, and CFMLP stated in response to Question 5 of 
Section V-B that the FAA had been notified of the pro 
posed construction. The following applicants answered 
Question 5 in the negative, that is. responded that the FAA 
had not been notified of the proposed construction, or 
stated that the question did not apply: Q Prime, Winston, 
Turnbeaugh, and Clark. The following applicants also re 
sponded to Question 5 in the negative, or stated that the 
question was not applicable, but explained that no notifica 
tion was made because the proposed antenna was to be 
located on an existing structure and no change in the 
overall height thereof was being proposed: MCLP, Eells, 
Vancouver FM, CWLP, VPBC, and Point. (Section V-B of 
the applications of Q Prime, MCLP, Winston. Turnbeaugh, 
Eells, Clark, Foster, Vancouver FM, CWLP, VPBC, Point, 
Cascade, and Shabaz; official notice taken.) The HDO in
this proceeding did not specify an air hazard issue against 
any of the 14 original applicants proposing to use the site 
in question. (HDO at para. 11 and Issue 3.)
215. In June 1989, Edmiston received a letter, dated 
June 14, 1989, and addressed to her, from Richard E. 
Prang, Manager of the Airspace and System Management 
Branch of the FAA's Northwest Mountain Region. (Van 
couver FM Ex. 19; Tr. 984-85.) The letter stated, in per 
tinent part (Vancouver FM Ex. 19, p. 1):
The addition of [CFMLP's] FM broadcast facility at 
the proposed location could have an adverse effect on 
FAA's navigational aid facilities and also cause inter 
ference with aircraft navigational receivers during fi 
nal approach and landing at the Portland, Oregon, 
airport.
Based on [the enclosed] analysis, we object to the 
construction of the facility at this location and have 
determined the proposal a hazard to air navigation. 
This study is therefore terminate'd.
Attached to the letter was a 23-page analysis of the pre 
dicted intermodulation interference and the areas affected 
by such interference. (Id. at pp. 2-24.)
216. When Edmiston received the June 14, 1989, letter 
she read it and reviewed the attachments. (Tr. 985.) She 
did not, however, understand the attachments. (Id.) 
Edmiston knew that the FAA was objecting to CFMLP's 
tower site location, but did not know why. (Tr. 987-88.) 
Edmiston was not sure at the time that the FAA would not 
approve CFMLP's site, and did not know what the FAA 
meant by their statement. "This study is therefore termi 
nated." (Tr. 987.)
217. Edmiston called Jeffrey Craven, one of her attorneys 
at Besozzi & Gavin, and told him that she had received the 
letter. (Tr. 985-86.) She did not ask Craven to explain what 
the letter meant. (Tr. 988.) Craven told Edmiston to send 
him a copy of the letter, and he would take care of it. (Tr. 
988.) On June 20, 1989, Edmiston sent a copy of the letter 
to her attorney. (Tr. 985, 988.) Edmiston did not know 
what steps had to be taken to get the FAA to withdraw 
their objection. (Tr. 988.) Edmiston did not think it was 
necessary to follow up with her attorneys and she did not 
do so. (Tr. 985-86, 988.) Edmiston explained that she had 
hired the law firm to take care of things like this and she 
expected them to do so. (Tr. 988-89.)
218. The HDO in this proceeding, released November 19, 
1990, required CFMLP to submit a clarifying or corrective 
engineering amendment because there were slight 
discrepancies between the tower heights listed in CFMLP's 
application and those found in the Commission's records 
for CFMLP's proposed transmitter site. (HDO at paras. 12 
and 27.) On December 14, 190, CFMLP filed an amend 
ment to its application addressed to the matter raised in the 
HDO. (Vancouver FM Ex. 20; Tr. 992.) The cover page of
30 As noted above, Clark filed an amendment on March 6, 
1992, reporting the withdrawal of three of its limited partners, 
including Bridges. (Official notice taken.)
31 Question 5 asks: "Has the FAA been notified of the 
proposed construction?" "Yes" and "No" boxes are provided.
The question continues: "If Yes, give date and office where 
notice was filed and attach as an Exhibit a copy of FAA deter 
mination, if available." Spaces are provided for the "Exhibit 
No.," "Date" and "Office where filed." (Vancouver FM Ex. 20, 
p. 5.)
30
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
the amendment was signed by Edmiston, who believed she 
had the entire amendment in front of her before she signed 
the cover page. (Vancouver Ex. 20, p. 3; Tr. 993-95.) The 
amendment consisted of a revised application Section V-B, 
pages 14 through 18, and an amended application Exhibit 
El. (Vancouver FM Ex. 20, pp. 4-9.) These materials were 
prepared by Karl D. Lahm, P.E., CFMLP's "Consulting 
Engineer." (Id. at p. 8; Tr. 992.) In response to Question 5 
of Section V-B of the amendment, CFMLP stated that the 
Northwest Mountain Regional office of the FAA had been 
notified of CFMLP's proposed construction on April 11, 
1989. (Vancouver FM Ex. 20, p. 5.) In an addendum to 
this answer, the following was typed at the bottom of the 
page on which Question 5 appeared: "* On file - No 
change" (id.; Tr. 995-96). CFMLP's amendment was ac 
cepted by Order, FCC 91M-175, released January 16, 1991. 
(Official notice taken.)
219. By Memorandum Opinion and Order, FCC 91M- 
1467, released April 26, 1991 (official notice taken), a 
ruling was made on a motion to enlarge issues filed by 
KLRK against (former) applicant Bernard V. Foster. KLRK 
had obtained a copy of a letter from the FAA to Foster 
wherein the FAA determined that Foster's proposal would 
constitute a hazard to air navigation. KLRK noted that 
Foster had not reported this determination to the Commis 
sion and argued, inter alia, that this failure presented mis 
representation and lack of candor questions. KLRK's 
motion was granted to the extent that the air hazard issue 
in this proceeding (Issue 3) was modified to include Foster. 
However, no misrepresentation/lack of candor issue was 
specified because it was concluded that no motive or intent 
to conceal had been demonstrated.
220. By Memorandum Opinion and Order, FCC 91M- 
1522. released May 2, 1991 (official notice taken), the 
above ruling on the request for a misrepresentation/lack of 
candor issue was rescinded. It appeared from the review of 
another matter in this proceeding that Foster may have had 
a motive to conceal his receipt of the air hazard determina 
tion from the FAA. Therefore, the issues were enlarged to 
include a misrepresentation/lack of candor issue against 
Foster (former Issue 7).
221. On May 13. 1991, Edmiston's deposition was taken 
in Washington, D.C. (KLRK Ex. 22, p. 1.) Edmiston was 
asked whether she had ever seen a notice to the FAA of 
CFMLP's proposed installation of an antenna on the 
KPDX-TV tower, and she responded: "I don't think I have. 
I have received a notification from the FAA that I have in 
my files that they did receive notification." (Id. at p. 5.) 
Edmiston was next asked when she received notification, 
and she answered: "One was in '89 and one was within the 
past year. I don't know exactly when." (Id.) When asked
whether she took any action in response to "those letters ... 
from the FAA,"32 Edmiston stated: "I think I might have 
advised my attorneys that I received them." (Id. at p. 6.)
222. Edmiston later clarified her deposition testimony. 
Specifically, the items that she recalled receiving in 1989 
and 1990 from the FAA were two postcards that acknowl 
edged receipt of CFMLP's notices of proposed construction. 
Edmiston had taped them to the inside of her file folder 
because they were too small to be secured otherwise in her 
file. Edmiston did not produce these postcards in response 
to a Request for Production of Documents because they did 
not appear to her to be encompassed by that request. 
Edmiston did not even mention them to counsel for 
CFMLP. After her deposition, she gave counsel copies of 
the postcards. (KLRK Ex. 22A.)
223. On May 14, 1991, Craven received an undated letter 
addressed to him from Robert Brown, Airspace & Proce 
dures Specialist of the FAA's Northwest Mountain Region 
("May 14, 1991, letter"). (KLRK Ex. 23; Tr. 1869-71.) The 
letter stated, in pertinent part (KLRK Ex. 23):
After evaluation we object to the installation of 
[CFMLP's] FM broadcast station at this location due 
to the proximity to our Portland, Oregon naviga 
tional aid facilities. Operation of the proposed FM 
transmitter at this site may cause interference with 
aircraft navigation receivers during final approach 
and landing.
Based on [the enclosed] analysis, we object to the 
construction of the station at this proposed location.
224. On May 29, 1991, CFMLP filed a Petition for Leave 
to Amend and Amendment. (Official notice taken.) 33 
Therein, CFMLP reported the receipt of the June 14, 1989, 
and May 14. 1991, letters from the FAA. CFMLP further 
reported that these letters raised objections regarding 
CFMLP's proposed transmitter site, and that the FAA had 
determined that CFMLP's proposal would be a hazard to 
air navigation. CFMLP represented in its petition that 
Edmiston had "recently discovered" the June 14, 1989, 
letter from the FAA. The amendment was unopposed and 
was accepted by Order, FCC 91M-1886, released June 13, 
1991. (Official notice taken.)
32 It is noted that Edmiston did not testify at her deposition 
that she received letters from the FAA. (KLRK Ex. 22.) Rather, 
counsel's question assumed that the notifications about which 
Edmiston was testifying were in the form of letters.
33 Attached to CFMLP's petition was the declaration under 
penalty of perjury of Edmiston. Paragraphs 3 and 4 of that 
declaration contain representations concerning the circum 
stances surrounding Edmiston's discovery of the June 1989 FAA 
letter and its disclosure to the Commission. While official notice 
may be taken of the fact that a declaration was appended to the 
petition, no cognizance may be taken of the "facts" contained 
therein. Suffice it to say, the declaration is not a part of the 
record in this proceeding. (See Tr. 1874-76.) It was not offered 
into evidence by CFMLP or any other party, and the statements
made therein were not subject to cross-examination or other 
wise corroborated. In this regard, compare Foster Ex. 5, which 
was addressed to an issue similar to Issue 8, with CFMLP's 
direct case exhibits. In addition, the last sentence of paragraph 3 
of the declaration contains hearsay which, in all probability, 
would have been stricken even if the declaration had been 
offered into evidence. Further, Rule 201(b) of the Federal Rules 
of Evidence provides that a judicially noticed fact must be one 
that is not subject to reasonable dispute in that it is either 
generally known within the jurisdiction of the court or capable 
of accurate and ready determination by resort to sources whose 
accuracy cannot reasonably be questioned. The "facts" contained 
in paragraphs 3 and 4 of Edmiston's declaration are not of this 
nature.
31
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
225. On June 12, 1991, CFMLP filed an amendment to 
its application. The amendment notes the FAA's objection 
to CFMLP's antenna proposal, and requests that the Com 
mission condition any grant of CFMLP's application as 
follows:
Upon receipt of notification from the Federal Com 
munications Commission that harmful interference is 
being caused by the operation of the licensee's 
(permittee's) transmitter, the licensee (permittee) 
shall either immediately reduce the power to the 
point of no interference, cease operation, or take 
such immediate corrective action as necessary to 
eliminate the harmful interference. This condition 
expires after one year of interference-free operation.
(Vancouver FM Ex. 21; CFMLP Ex. 6, pp. 1-2.) The 
amendment was filed because CFMLP did not have FAA 
clearance. Edmiston testified that she learned this subse 
quent to her deposition when she went back to her records 
and "again" found the FAA's June 14. 1989, letter. (Tr. 
998-99.) CFMLP's amendment was accepted by Memoran 
dum Opinion and Order, FCC 91M-2687, released Septem 
ber 4, 1991. (Official notice taken.)
Issue 9 - Financial Issue Against CFMLP
226. This issue was added because C. Siebert's statements 
as to the steps he took to obtain CFMLP's reasonable 
assurance letters from MNB were uncorroborated, because 
CFMLP failed to establish that the individual qualifications 
of the borrower (i.e., CFMLP) were preliminarily reviewed 
by MNB prior to the issuance of its letters, and because it 
did not appear that CFMLP submitted to MNB a business 
plan or any information concerning the personal financial 
condition, assets, or net worth of its general partner. Cath 
erine Edmiston. (Memorandum Opinion and Order, FCC 
91M-2687, released September 4, 1991.)
227. CFMLP's estimated costs for the construction of its 
proposed station and operation for three months without 
revenue total $296.058. (Vancouver FM Ex. 14. p. 11; Tr. 
958.) To meet these costs. CFMLP is relying on a letter 
from MNB dated May 22, 1989, addressed to CFMLP at 
Edmiston's address in Vancouver. (Vancouver FM Ex. 13; 
Tr. 882, 954.) The text of the May 22 letter is identical to 
the text of a letter from MNB to CFMLP dated May 3. 
1989. (Tr. 1054, 1764-65.) The May 3 letter, however, 
contained the salutation "Dear Mr. Siebert," whereas the 
May 22 letter contained the salutation "Dear Mr. Siebert & 
Ms. Edmiston: " (Vancouver FM Exs. 12 and 13). The May 
22, 1989. letter from MNB reads as follows (Vancouver FM 
Ex. 13):
We understand that you are applying to the Federal 
Communications Commission for a construction per 
mit for FM Ch. 290C2 to serve Vancouver, Washing 
ton.
The purpose of this letter is to advise you that,
subject to the qualifications stated below, Maryland
National Bank is willing to extend to you, a line of
credit up to $450.000.00 to cover equipment costs 
and working capital requirements, provided the fol 
lowing conditions are met:
1. You are successful in obtaining ap 
proval from the Federal Commission 
[sic] to [sic] Vancouver, Washington.
2. All reasonable and ordinary credit cri 
teria of Maryland National Bank are met 
at such time as you (a) receive the con 
struction permit; (b) request a formal 
lending commitment from Maryland Na 
tional Bank, and (c) execute all custom 
ary documentation normally required by 
the Bank.
While the pricing and terms of the amortization of 
the loan commitment will be contingent upon the 
exact credit conditions prevailing at the time the loan 
is extended, we anticipate calculating interest at 2% 
over the Bank's prime rate as determined from 
month to month. Our Bank's current prime rate is 
11.5%. Any loan made will be repaid, after a one 
year moratorium on principal repayment as neces 
sary, in 60 monthly installments or as otherwise rea 
sonable in line with financial projections received 
prior to the time of borrowing.
We have reviewed relevant financial statements re 
garding the funding of the proposed station and are 
satisfied with them.
The loan will be collaterialized [sic] with the assets of 
the permitee [sic] for the Vancouver FM station and 
any other assets deemed appropriate. Our loan docu 
ments will comply with all requirements of the Fed 
eral Communication [sic] Commission including the 
provision of a minimum of ten (10) days prior writ 
ten notification to you and to the Federal Commu 
nications Commission before any equipment will be 
repossessed under any default clause of the loan 
agreement.
We look forward to working with you in connection 
with this venture.
Sincerly [sic],
[Signature: "Timothy J. Murphy/DW" 34 | 
Timothy J. Murphy 
Commercial Banking Officer
228. The May 1989 MNB letters were obtained by C. 
Siebert pursuant to his pre-filing discussion with Edmiston. 
Some time after this conversation. C. Siebert received from 
Besozzi & Gavin an estimate of the costs of construction 
and initial operation of the proposed facility. He then 
contacted Timothy J. Murphy, Commercial Banking Of 
ficer at MNB. (CFMLP Ex. 11, p. 1: Tr. 1059.) C. Siebert 
did not believe he had done business with Murphy prior to 
obtaining the May 1989 letters, but he was not certain 
about that. (Tr. 1730, 1738.) C. Siebert asked Murphy for a 
financing letter from MNB for the CFMLP application.
34 "DW" is Debra Wicker, who was Murphy's Loan Collateral 
Officer at the time. She signed Murphy's name, followed by her 
initials, at Murphy's request. (Tr. 1756-57.)
32
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
Murphy agreed to provide C. Siebert with such a letter. 
When C. Siebert received the May 3, 1989, letter, he 
noticed that the salutation referred only to him. He tele 
phoned Murphy and asked that he re-issue the letter in 
both his and Edmiston's names. C. Siebert subsequently 
received the May 22. 1989, letter. (CFMLP Ex. 11. pp. 1-2; 
Vancouver FM Exs. 12 and 13: Tr. 1026, 1051-53.)
229. C. Siebert had maintained an active banking rela 
tionship with MNB since 1974. He had a relationship with 
MNB as a customer at all times since before the CFMLP 
application was filed. C. Siebert had his CPA business 
account, his personal account, his commercial checking 
account, and his mortgage with MNB. At the time, C. 
Siebert had no accounts at other banks. (CFMLP Ex. 11, 
pp. 1-2, 11-14; Tr. 1031, 1059-60.)
230. C. Siebert had previously dealt with MNB in con 
nection with other communications transactions, including 
loans and several financing letters. For example, in 1981, 
C. Siebert personally arranged a loan with MNB to finance 
the purchase of an FM radio station in Yorktown, Virginia, 
by a company in which he was a stockholder. The loan was 
repaid in 1983. In addition. C. Siebert had personally been 
a loan customer of MNB and had a personal line of credit 
with the bank. (CFMLP Ex. 11, pp. 1, 3, 7, 10.)35
231. Since the 1970s. C. Siebert regularly provided to 
MNB a copy of his personal financial statement. These 
statements contained a detailed breakdown of his financial 
position, were prepared by C. Siebert himself in his capac 
ity as a CPA, and were periodically updated. (CFMLP Ex. 
11, pp. 2, 5-10: Tr. 1070-71, 1739.)
232. C. Siebert believed that at the time he requested the 
financing letter for CFMLP he discussed Edmiston's role 
with Murphy, including the fact that she was the general 
partner, that she would be the person in charge of day- 
to-day matters, that she was involved in a previous radio 
license, and that she lived in the Vancouver community. 
(Tr. 1027, 1740-41.) He may have also told Murphy that 
Edmiston is his brother's sister-in-law. (Tr. 1741.)
233. The May 22. 1989, letter provides that the MNB 
loan will be collateralized with the assets of the permittee 
and any other assets deemed appropriate. (Vancouver FM 
Ex. 13.) At the time the letter was requested, C. Siebert did 
not discuss with Murphy the assets of the permittee or any 
other assets. (Tr. 1055.)
234. C. Siebert testified that he provided Murphy with 
copies of the CFMLP limited partnership agreement (Tr. 
1027. 1071, 1739), a financing letter, to be used as an 
exemplar, which he had obtained from MNB in connec 
tion with a previous application (Tr. 1060).35 and two 
portions of the proposal prepared for CFMLP by Stan 
Karas for the construction and operation of the station (Tr. 
1056-59, 1071: McCoy Exs. 8 and 9; Vancouver FM Ex. 14, 
pp. 7-8. 11). These portions of the Karas proposal were 
entitled "Operating Expenses" and "Proposed Cost of Con 
struction & Operating for 3 Months," and contained an 
itemized breakdown of CFMLP's projected costs. (McCoy 
Exs. 8 and 9; Vancouver FM Ex. 14, pp. 7-8, 11.) C.
Siebert did not give the entire Karas proposal to MNB and, 
at that time, C. Siebert did not know what revenue figures 
had been estimated by Karas. (Tr. 1058-59.)37 In addition, 
as discussed above, MNB had C. Siebert's financial state 
ment on file at the bank. (Tr. 1071, 1739.)
235. In securing the May 1989 letters, C. Siebert did not 
provide MNB with Edmiston's financial statement, or with 
any other financial information concerning Edmiston. (Tr. 
1051.) In this regard, C. Siebert did not ask Edmiston for 
any financial information, and Edmiston did not provide a 
personal balance sheet to either C. Siebert or MNB. (Tr. 
896.) Edmiston had no role in obtaining the MNB letters 
(Tr. 896), and did not know what information C. Siebert 
submitted to the bank in order to obtain them (Tr. 956-57).
236. Edmiston did not believe that she had any personal 
liability in connection with the bank loan, did not know 
whether C. Siebert had any personal liability, and had no 
understanding of whom the bank would look to if the loan 
were not paid back. (Tr. 951-53.) It was C. Siebert's under 
standing that he would not be personally liable for the 
MNB loan but that Edmiston, as CFMLP's general partner, 
would be personally liable for the entire amount of the 
loan. (Tr. 1055.)
237. Timothy J. Murphy testified in this proceeding. At 
the time of his testimony, Murphy was no longer employed 
by MNB, having worked there from July 1985 through 
November 1989. (Tr. 1755.)
238. Murphy testified that he was contacted by C. Siebert 
in the spring of 1989. (Tr. 1758.) C. Siebert was referred to 
Murphy because Murphy represented the bank's commer 
cial lending group for that geographic area and C. Siebert 
had a prior relationship with that group. (Tr. 1761.) In 
addition, Murphy "inherited" part of the portfolio of the 
loan officer C. Siebert previously dealt with. (Tr. 1762.)
239. Murphy knew at the time he was contacted that C. 
Siebert was a customer of MNB, and the bank had a 
commercial loan file relating to him. (Tr. 1759-60.) In 
cluded in that file was C. Siebert's personal financial state 
ment. (Tr. 1760, 1772.) Murphy had no contact with 
Edmiston and no recollection of her position or role in 
CFMLP. (Tr. 1770, 1807.)
240. Murphy testified that it was the normal, standard 
bank practice, and his practice, when considering letters 
such as the ones in question to request from the prospec 
tive borrower and to review a business plan or proposal, 
information regarding the type of collateral which might 
be offered, cash flow data, personal financial statements, 
potential for repayment, and/or the ability of the prospec 
tive borrower to successfully manage or operate the busi 
ness. (Tr. 1759-60, 1765-66, 1771, 1774-75, 1788, 1796-97, 
1808-09.) It would not have been sufficient, or met the 
bank's criteria, for such information to have been given 
orally. The bank required the information in writing. (Tr. 
1809.) Murphy testified that, in his own mind, C. Siebert 
was the "borrower" or the "co-borrower" because he was 
the CFMLP partner making the initial proposal. (Tr. 
1778-79.)
35 As of February 1, 1989. C. Siebert owed a total of $26,000 to 
MNB on two lines of credit, and owed another $30,000 to MNB 
on a short-term loan. In addition, as of February 1, 1989, C. 
Siebert had lines of credit at First National Bank ($13,000), 
Chase Bank of Maryland ($19,000), and Perpetual Bank 
($20,000). (CFMLP Ex. 11, p. 7.) As of June 30, 1991, C. Siebert 
owed a total of $37,981 to MNB on a line of credit. (Id. at p. 10.)
36 The substance of this letter was provided to C. Siebert by
Besozzi & Gavin, and he asked Murphy for a similar letter. (Tr.
1060-61, 1717-18.)
37 It is noted that the Karas proposal contained estimated
revenue figures on a monthly basis for the first 12 months of
operation of the proposed station. (Vancouver FM Ex. 14, pp.
9-10.)
33
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
241. Murphy further testified that he had no reason to 
believe that he departed from these normal, standard prac 
tices in issuing to CFMLP the May 3 and May 22, 1989, 
letters. (Tr. 1788-89, 1796-97, 1808-09.) However, Murphy 
admitted that the term "practice" meant that something 
was done most of the time, but not every time. (Tr. 1797.)
242. Murphy had over 200 customers and many requests 
(Tr. 1808) and, at the time of his testimony, he had no 
specific recollection of his conversations with C. Siebert or 
of this particular transaction (Tr. 1760, 1796, 1805). Thus. 
Murphy could not recall: (a) the date of C. Siebert's per 
sonal financial statement or what it reflected (Tr. 1760, 
1772); (b) discussions regarding the collateral or "other 
assets" mentioned in the MNB letters (Tr. 1768, 1787); (c) 
reviewing the personal financial statement in C. Siebert's 
commercial loan file (Tr. 1773); (d) receiving or reviewing 
CFMLP's limited partnership agreement or whether the 
agreement was in C. Siebert's commercial loan file (Tr. 
1775); (e) reviewing the portion of the Karas proposal 
entitled "Proposed Cost of Construction & Operating for 3 
Months" (Tr. 1776); (f) whether he understood that C. 
Siebert was a limited partner in CFMLP (Tr. 1783); (g) 
whether he understood that C. Siebert was involved in 
other broadcast applications (Tr. 1783-84); (h) whether he 
knew if C. Siebert would be involved in the management 
of CFMLP's proposed station (Tr. 1806): (i) whether he 
had documentation from CFMLP demonstrating a potential 
for repayment or collateral (Tr. 1796-97, 1815-16); and (j) 
whether he received any information regarding this trans 
action from anyone other than C. Siebert (Tr. 1816).
243. During his deposition, Murphy was shown a copy of 
CFMLP's limited partnership agreement and the portion of 
the Karas proposal referred to above. However, these docu 
ments did not refresh Murphy's recollection as to what he 
reviewed prior to the issuance of the MNB letters. (Tr. 
1790-91.)
244. The commercial loan file of C. Siebert, which was 
retrieved from MNB's records retention facility, contained 
no contemporaneous documentation relating to the May 3 
and May 22, 1989, letters. Specifically, none of the docu 
ments which C. Siebert testified he provided to Murphy 
prior to the issuance of the letters was found in that file. 
(Tr. 1822, 1834, L835, 1865-67.) The record in this pro 
ceeding contains no authoritative or reliable statement of 
MNB's records retention policy during the relevant time 
period.38 It was possible, however, that the documents in 
question were purged from the file because there had been 
no subsequent contact between C. Siebert and Murphy or 
MNB about CFMLP's proposal. (Tr. 1784, 1797-1802.)
245. Although Murphy did not specifically recall what 
he reviewed prior to the issuance of the MNB letters, he 
stated that he would not have issued letters of this nature 
without having made a preliminary review of something. 
(Tr. 1774, 1795.) For example, the paragraph of the MNB 
letter beginning, "We have reviewed relevant financial 
statements . . . ," indicated to Murphy that he reviewed 
some type of financial information, but he had no specific 
recollection of what that information was. (Tr. 1778.) Mur 
phy further stated that he was satisfied enough with the 
material he saw to have issued the letters. (Tr. 1794.) 
Murphy also recalled discussing C. Siebert's request with
someone at MNB prior to the issuance of the letters, but 
he could not remember who that individual was. (Tr. 
1766.)
246. Murphy testified that he would only have been 
familiar with whatever material was contained or reflected 
in C. Siebert's commercial loan file. (Tr. 1770, 1780-82.) In 
this regard, the following colloquy took place (Tr. 
1779-82):
Q: And if you can remember, what did you know 
about that entity [CFMLP]?
A: I was aware that they were applying for a Federal 
license to operate a radio station and any other in 
formation   we may have had a personal financial 
statement of all individuals involved. It would all 
depend upon what's in the file at this time because I 
do not recall.
Q: At the time you issued these letters ... is it fair to 
say that you thought that you were thoroughly famil 
iar with the borrower's assets?
A: I really don't recall.
Q: Would you say that you were thoroughly familiar 
with the borrower's credit history?
A: To such a degree that would be contained in the 
commercial loan file.
Q: So whatever was in the file you were familiar 
with?
A: Correct.
Q: Would you say that you were thoroughly familiar 
with the borrower's current business plan?
A: Pertaining to what was in the commercial loan 
file, yes, sir.
Q: So if there was nothing in the commercial loan 
file regarding the business plan of Columbia FM 
Limited Partnership, then you couldn't have been 
thoroughly familiar with it?
A: Correct.
Q: Would you say that at the time that you issued 
these letters that you were thoroughly familiar with 
the borrower's ability to manage and operate a busi 
ness of this nature?
A: No sir, I would not. and I refer back to paragraph 
number two of both letters, which state that, "All 
reasonable and ordinary credit criteria of Maryland 
National Bank are met at such time."
Q: Mr. Murphy, at the time that you issued these two 
letters did you have an understanding of Craig 
Siebert's position within Columbia FM Limited Part 
nership?
A: Depends upon what was in the file -- commercial 
loan file. I really don't recall at this time.
38 Although Michael T. Dunn, Regional Business Manager and 
Vice President of MNB, testified about MNB's records retention 
policy, there were many things he was unsure of and his
testimony largely reflected what he. personally, would have 
done in similar circumstances. (Tr. 1820, 1824-25, 1833-36, 1839, 
1842-43, 1847.)
34
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
Q: Well, if nothing was in Mr. Siebert's commercial 
file at Maryland National Bank, would it be fair to 
say that you would not have had an understanding of 
his position in the partnership?
A: That would be correct.
247. Turning to the specific letters under consideration, 
Murphy testified that they did not constitute a commitment 
on the part of MNB to lend funds to CFMLP. (Tr. 1793.) 
Nor did the letters provide an indication as to whether 
CFMLP might meet the bank's lending criteria at the time 
a loan request is considered. (Tr. 1792.) Rather, the letters 
represented "a willingness to consider financing" for 
CFMLP's proposed station at some time in the future. (Tr. 
1793, 1765.) The intent of the letters "was to consider 
proposed financing provided that the future conditions 
were met." (Tr. 1803.)
248. Michael T. Dunn. Regional Business Manager and 
Vice President of MNB, also testified in this proceeding. 
(Tr. 1820.) Dunn was the individual who retrieved C. 
Siebert's commercial loan file, and the file was in his 
custody at the time of his testimony. (Tr. 1822. 1834.) 
Dunn had no personal knowledge of the May 3 and May 
22, 1989. MNB letters, their terms and conditions, the 
bases for their issuance, the documentation provided to and 
reviewed by Murphy, or MNB policy relating to letters of 
this nature at the time they were issued. (Tr. 1821-22. 1827, 
1831-32, 1836.) Dunn was not at MNB when the letters 
were issued (Tr. 1825-26), did not know what C. Siebert's 
relationship with the bank was in 1989 (Tr. 1828-29), did 
not know or work with Murphy (Tr. 1831-32), and did not 
know on what basis Murphy issued letters such as the ones 
in question (Tr. 1832).
249. The first time Dunn saw the May 3 and May 22. 
1989, MNB letters was in January 1992 when one of 
CFMLP's FCC attorneys transmitted copies of them to him. 
(Tr. 1821-22. 1831.) Since the May 22 letter was then two 
and one-half years old and Dunn was not sure what the 
intent of the letter was, he transmitted it to Paul Albey, his 
supervisor and the senior credit officer of Dunn's division, 
for Albey's review and advice. (Tr. 1849-54.)39
250. Albey's reply to Dunn was as follows: "Commit 
ment not valid w/o [without] updated info." (Tr. 1850-51.) 
Dunn interpreted this to mean that a formal lending com 
mitment40 would not be issued to CFMLP without the 
submission of additional information, and the bank's cur 
rent credit criteria would have to be met. (Tr. 1852-53. 
1855, 1857.) At a minimum, the additional information 
would consist of projections of the financial performance 
of the start-up business, an evaluation of the collateral to 
be offered, personal financial statements on all the princi 
pal parties in the company, personal tax returns for at least 
two years, a copy of the license application, and the part 
nership agreement. (Tr. 1829-30.)
251. Dunn testified that if CFMLP were awarded the 
construction permit, and if C. Siebert came to him with 
the May 22, 1989, letter, he would tell C. Siebert that in 
order to pursue the request further, the additional informa 
tion enumerated in the preceding paragraph would have to 
be submitted. (Tr. 1840.) Assuming such information 
showed that CFMLP met the current credit criteria of 
MNB. Dunn stated that "we would still want to do busi 
ness." (Tr. 1841.)
252. Dunn has never communicated to CFMLP anything 
to the effect that the May 22. 1989, letter was not still valid. 
(Tr. 1855.) However, Dunn did not know whether MNB 
would honor the terms of the May 22 letter if it were asked 
to do so. (Tr. 1856-57.) Dunn also testified that CFMLP 
was in no different position with respect to obtaining a 
loan as reflected in the May 22 letter than would be any 
other individual that might approach the bank seeking to 
obtain a loan. (Tr. 1843.)
Issue 14 -- Financial Issue Against MCLP
253. This issue was added to inquire into the ability of 
Ragan Henry to meet his financial commitment to MCLP 
as well as his concurrent financial commitments to other 
broadcast applicants. (Memorandum Opinion and Order, 
FCC 91M-3079, released October 15. 1991.)
252. For financing to construct its proposed Vancouver 
station and operate it for three months, MCLP is relying 
on a letter dated April 11. 1989. from Joerg G. Klebe, 
president of CVC Capital Corporation. That letter provided 
MCLP "with reasonable assurance of the availability of 
$550,000 in financing for the construction and operation" 
of the proposed facility. CVC's financing commitment is 
contingent on the partners of MCLP contributing 
collectively "up to $80,000" to the capital of the partner 
ship. (Wireless Ex. 11.)
255. From the date of the filing of MCLP's application 
until March 23, 1991, Waldron Broadcasting Company, 
Inc., was MCLP's sole limited partner, holding 75 percent 
of the partnership's equity. Regina A. Henry. Mr. Henry's 
wife, was a nonvoting shareholder in Waldron. (McCoy Ex. 
1, p. 1.) In a letter to MCLP's sole general partner. Paul 
McCoy, Mrs. Henry stated that she would lend Waldron 
the funds to meet its capital obligations to MCLP. and that 
she would obtain the funds to make these loans from her 
husband, Mr. Henry. (Wireless Ex. 5.)41 This letter commit 
ted $40,000 toward the prosecution of MCLP's application, 
relying on Mrs. Henry's ability to borrow the $40.000 from 
Mr. Henry. (McCoy Ex. 18, p. 1.) In a letter to Klebe dated 
April 12. 1989. Mr. Henry also committed to lend $80,000 
to MCLP for the construction and initial operation of the 
proposed station in the event MCLP availed itself of the 
CVC financing. (Wireless Ex. 6: McCoy Ex. 18, p. 1.) The 
financial commitments from the Henrys, which totalled 
$120.000, expired on March 23. 1991. the day Waldron was 
replaced as MCLP's limited partner. (McCoy Ex. 18. p. 1.)
256. At some or during all of the time between April 12, 
1989, and March 23. 1991. Mr. Henry was committed to 
providing financing to up to ten applicants for new FM 
broadcast stations, including MCLP. as follows (McCoy Ex. 
18. pp. 1-2):
39 Dunn also transmitted the letter to MNB's in-house legal
counsel, but received nothing from them in writing. (Tr.
1853-55.)
40 "Formal lending commitment" means that the loan has
been approved by the bank. (Tr. 1K30-31.)
41 Mrs. Henry's letter is undated. (Wireless Ex. 5.) McCoy
testified that he read this letter on April 12, 1<>8Q. (Tr. 1270.)
35
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
(a) $440,000 for construction, operation and prosecu 
tion to Sanders Broadcasting Company L.P., appli 
cant for a new FM station at Greenwood, Indiana 
(commitment made August 4, 1987, expired Novem 
ber 15, 1990);
(b) $400,000 for construction, operation and prosecu 
tion to Port City Communications L.P.. applicant for 
a new FM station at Shreveport, Louisiana (commit 
ment made August 14, 1987, still pending);
(c) $500,000 for construction, operation and prosecu 
tion to Novella Broadcasting Company L.P.. 
applicant for a new FM station at Germantown. Ten 
nessee (commitments made September 8, 1987, and 
October 7, 1989, expired March 31, 1991);
(d) $300,000 for construction and operation to Best 
Broadcasting Company L.P., applicant for a new FM 
station at Rochester, New York (commitment made 
September 15, 1987, expired August 15, 1990);
(e) $505,000 for construction, operation and prosecu 
tion to Fahlda Broadcasting Company, a California 
Limited Partnership, applicant for a new FM station 
at Sacramento. California (commitment made No 
vember 10, 1987, still pending);
(f) $530,000 for construction, operation and prosecu 
tion to Crimiel Communications Associates L.P.. 
applicant for a new FM station at Eden Prairie, 
Minnesota (commitment made December 2. 1987, 
expired November 5, 1991);
(g) $330,000 for construction, operation and prosecu 
tion to Amerzine Broadcasting, L.P., applicant for a 
new FM station at Wakefield-Peacedale. Rhode Island 
(commitment made February 17, 1988, application 
granted);
(h) $30,000 for prosecution to M.C. Broadcasting, 
L.P., applicant for a new FM station at Olathe, Kan 
sas (commitment made April 21, 1988. expired Octo 
ber 8. 1991);
(i) $120,000 for construction, operation and 
prosecution to MCLP (commitment made April 12, 
1989. expired March 23, 1991): and
(j) $502,000 for construction, operation and prosecu 
tion to Owens Broadcasting, Ltd., applicant for a new 
FM station at Jupiter, Florida (commitment made 
September 11, 1989, expired June 10, 1991).
257. As of April 12, 1989. when the Henrys' commit 
ments to MCLP were made, these financial commitments 
totaled $3,085,000. Between October 7, 1989. and August 
15, 1990, Mr. Henry's cumulative financial commitments 
to new broadcast applicants reached their highest amount, 
totalling $3.657,000. Prior to the substitution of another
limited partner for Waldron on March 23, 1991, Mr. Hen 
ry's cumulative commitments totaled $2.917,000. (McCoy 
Ex. 18, p. 3.)
258. Assuming that all the applications to which Mr. 
Henry had committed funds had been granted simulta 
neously between April 12, 1989, and March 23, 1991, Mr. 
Henry would have had to finance these commitments using 
his personal assets. (McCoy Ex. 18, p. 3.) Mr. Henry has 
been a radio owner since 1972, controls a number of 
companies that own radio stations/and is active in buying 
and selling radio properties. (Tr. 1921.) Mr. Henry would 
have financed his concurrent commitments to new broad 
cast applicants by selling the following radio properties that 
he controlled:
(a) WXTR(FM), LaPlata, Maryland, in the Washing 
ton, D.C., market (the "Washington station"). Mr. 
Henry owned 60.2 percent of the equity in this sta 
tion. (McCoy Ex. 18, p. 5; McCoy Ex. 24, p. 2.)
(b) WEZS(FM) (now WMXB-FM), Richmond, Vir 
ginia (the "Richmond station"). Mr. Henry owned 
60.2 percent of the equity in this station. (McCoy Ex. 
18, p. 5.)
(c) WDIA(AM) and WHRK-FM, Memphis, Tennessee 
(the "Memphis stations"). Mr. Henry owns 60.2 
percent of the equity in these stations. (McCoy Ex. 
18, p. 5.)
(d) WKSG(FM) (now WXCD(FM)), Mt. Clemens, 
Michigan, in the Detroit market (the "Detroit sta 
tion"). Mr. Henry owns virtually 100 percent of the 
equity in this station. (McCoy Ex. 18, p. 5; McCoy 
Ex. 27, p. 2; Tr. 2232.)42
If necessary, the Washington and Richmond stations were 
to be sold first, then the Memphis stations were to be sold, 
followed by the sale of the Detroit station. Mr. Henry 
determined this order of priority in 1988. (Tr. 2008.) 43
259. The BIA Appraisals. In April 1988, appraisals of the 
Washington, Richmond. Memphis, and Detroit stations, in 
ter alia, were performed for RHNR by Broadcast Invest 
ment Analysts, Inc. ("BIA"). (McCoy Exs. 23-27.) BIA 
claims to have had "one of the most experienced staffs in 
the field, having examined hundreds of properties worth, 
in aggregate, more than $4 billion." (McCoy Ex. 23, p. 3.) 
BIA also publishes the reference book "Investing in Ra 
dio," a market-by-market investment guide to the radio 
industry. (Id.) One of the three BIA appraisers who 
worked on the project was Frank J. Higney. who was then 
the Manager of BIA's Valuations Division. Higney had 
been involved in the evaluation of broadcast properties 
worth in the aggregate nearly $2 billion. (McCoy Ex. 23, 
pp. 10-11.)
260. In performing its appraisals of the stations, BIA's 
primary valuation technique was the discounted cash-flow 
approach. This is a comprehensive technique requiring the
42 Mr. Henry is the sole owner of Ragan Henry Broadcast 
Group, Inc. ("RHBG"). RHBG, in turn, is (or was) the sole 
general partner of: (a) Ragan Henry National Radio, L.P. 
("RHNR"), the licensee of the Detroit station: (b) Ragan Henry 
Communications Group L.P., the licensee of the Memphis sta 
tions and former licensee of the Richmond station; and (c) 
Communications Management National L.P., which was the li 
censee of the Washington station. (Tr. 2011-14.)
43 However, in his written direct case testimony, Mr. Henry 
stated that, after the sale of the Washington and Richmond 
stations, the station which it would have made the most sense 
to sell would have been the Detroit station. (McCoy Ex. 18. p. 
6.)
44 Also appraised were five stations serving the Baltimore, 
Maryland, Kansas City, Kansas, and Columbus, Ohio, markets. 
(McCoy Ex. 23.)
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
projection of future cash flows and the restatement of these 
cash flows into their present value equivalent through the 
use of a discount rate. These future cash flows are derived 
from the operation of the station and the future proceeds 
from the sale of the station. BIA also reviewed recent sales 
of comparable facilities. (McCoy Ex. 23, p. 3.)
261. BIA's estimates of the fair market values of the 
stations in question, as of April 1, 1988, were as follows 
(McCoy Ex. 23, p. 5):
The Washington Station 
The Richmond Station 
The Memphis Stations 
The Detroit Station
$17.2 million 
$14.0 million 
$15.0 million 
$ 8.1 million
262. The Washington and Richmond Stations. Mr. Henry 
sold the Washington station on April 2, 1990, for $33 
million. He sold the Richmond station on February 1, 
1990, for $20.25 million. The amount of cash distributed to 
Mr. Henry personally as a result of the two sales was 
$9,620,209. (McCoy Ex. 18, pp. 5-6; McCoy Ex. 22.)
263. In April 1990, the cash payable to Mr. Henry from 
the sales of the Washington and Richmond stations was 
credited to Mr. Henry's account. (Tr. 1923-24.) Approxi 
mately $8.3 million of that amount was reinvested imme 
diately to capitalize U.S. Radio, a new partnership that had 
just been formed by Mr. Henry. (Tr. 1924-25, 1930.) Mr. 
Henry was not relying on any U.S. Radio properties to 
meet his commitments to new broadcast applicants. (Tr. 
1908-10. 1928-29.) The remainder of the money payable to 
Mr. Henry from the Washington and Richmond sales was 
not maintained in cash. (Tr. 1933.) Mr. Henry used ap 
proximately $500.000 of the money to buy paintings for his 
wife, and Mr. Henry testified that selling those paintings 
"would likely be one of the last thing I would do." (Tr. 
1931-32.) Mr. Henry also used about $225,000 or $275,000 
of these funds to make a downpayment on a Milwaukee 
station, and he used a portion of these funds to pay some 
interest to Continental Bank ("Continental") on another 
bank loan. (Tr. 1933.) He may also have used a small 
amount of the money to "do something for myself." (Id.).
264. The Memphis Stations. A valuation of the Memphis 
and Detroit stations was performed in April 1992 by Susan 
Harrison. (Weagant Ex. 9.) Harrison was retained to per 
form these valuations by counsel for Wireless and Weagant. 
(Tr. 2276.) Harrison is a principal of Harrison, Bond & 
Pecaro ("HB&P"), a Washington, D.C., consulting firm 
specializing in financial and economic analyses for the 
broadcasting industry. In the six years since she first or 
ganized HB&P, Harrison has been retained to appraise, for 
a fee, the fair market value of more than 350 radio and 
television stations. For the 12 years prior to organizing 
HB&P, Harrison was employed at Frazier, Gross & Kadlec, 
Inc.. most recently as Vice President and Director. During 
her tenure there. Harrison was responsible for the prepara 
tion of approximately 750 analyses of radio and television 
stations, cable television stations, and other electronic com 
munications media. Harrison has testified as an expert 
witness in more than 30 proceedings before the FCC and 
in federal and state courts. (Weagant Ex. 9, p. 1.)
265. Harrison's evaluation of the Memphis stations fixed 
their fair market value as "not higher than $12.1 million" 
during the period April 1, 1990, to March 31. 1991.
(Weagant Ex. 9, p. 3.) As noted above, BIA appraised the 
value of those stations as $15.0 million. (McCoy Ex. -23. p. 
5.)
266. Harrison recognized that her valuation of the Mem 
phis stations was lower than that arrived at by BIA in its 
April 1988 appraisal. (Weagant Ex. 9, p. 3.) Harrison ex 
plained that one factor in her lower valuation of the Mem 
phis stations (and the Detroit station as well) was that the 
stations generated substantially less gross revenue and op 
erating profit in calendar year 1989 than BIA's 1988 ap 
praisals had projected. (Id. at pp. 3-4; Tr. 2287-88.) In 
addition, the lower valuation of the stations was brought 
about by changes in the banking community and banking 
regulations that resulted in the reduction of the availability 
of financing for radio and television transactions. (Weagant 
Ex. 9, p. 4; Tr. 2324, 2406, 2409.) The increasing competi 
tive situation in the industry also depressed the stations' 
values. (Tr. 2406.) Indeed, Harrison testified that between 
1988 and the period April 1990 to March 1991, the stations 
lost from 25 to 30 percent of their value. (Tr. 2406-07.)
267. Mr. Henry testified that between January 1990 and 
March 1991, he received and rejected several offers to 
purchase the Memphis stations for $17 million. (Tr. 
2024-25.) He stated that the offers were received from 
brokers Joseph Sitrick and Tony Rizzo of the Blackburn 
firm, broker Bob Mahlmann, and a representative of a 
broadcast group owner in New Orleans headed by Jim 
Hutchinson. (Tr. 2034-35.) Mr. Henry further stated that 
he would have accepted an offer of $20 million for the 
Memphis stations. (Tr. 2035.)
268. From April 1989 until the Richmond station was 
sold in February 1990, the Memphis and Richmond sta 
tions, and another RHNR station serving Columbus, Ohio, 
were subject to a single financing agreement, dated as of 
February 24, 1989, with Chrysler Capital Corporation 
("Chrysler"). (Tr. 1934; Weagant Ex. 10.) The disbursement 
letter in connection with this financing agreement indi 
cated that $23.2 million was borrowed. (Weagant Ex. 12. p. 
2.) Pursuant to. an agreement dated January 31. 1990, 
whereby Chrysler consented to the sale of the Richmond 
station (Weagant Ex. 13), some of the proceeds from the 
Richmond sale were used to reduce the outstanding indebt 
edness to Chrysler under the single financing agreement, 
which then covered only Memphis and Columbus (Tr. 
1935).
269. According to MCLP, the total debt secured by the 
Memphis and Columbus stations was $13.996.445 as of 
December 31, 1990, and $14,023.308 as of March 31, 1991. 
MCLP's calculations show that the remaining debt alloca- 
ble to the Memphis stations was $12.176.907 as of Decem 
ber 31, 1990, and $12,200,278 as of March 31. 1991. These 
calculations were based on the assumption that 87 percent 
of the total Memphis/Columbus debt was allocable to the 
Memphis stations, and that the remaining 13 percent 
would remain secured by the Columbus station. (McCoy 
Ex. 30, pp. 24-25.)
270. Mr. Henry testified that in order to sell the Mem 
phis stations, he would have had to obtain the consent of 
Chrysler to leave a portion of the Memphis/Columbus 
debt, which amounted to approximately $2 million, se 
cured by the Columbus station. (Tr. 2035-36; McCoy Ex. 
18, p. 6.) Mr. Henry has never asked Chrysler for such 
consent because "we've never gotten that far." (Tr. 2039.)
271. The Detroit Station. BIA's April 1988 appraisal of 
Mr. Henry's Detroit station valued the station at $8.1 mil 
lion. (McCoy Ex. 23, p. 5.) Harrison's April 1992 valuation
37
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
of the station placed its fair market value as "not higher 
than $5.3 million" during the period April 1, 1990, to 
March 31, 1991. (Weagant Ex. 9, p. 3.)
272. Mr. Henry testified that the Duncan's "stick value" 
for the Detroit station was $12 million. (Tr. 2022.)45 The 
actual Duncan's base value, as reflected in "Duncan's Ra 
dio Market Guide, 1990," was $12.5 million. (McCoy Ex. 
30, p. 5.) Harrison testified that it would not have been 
reasonable for station owners to use the base value in 
valuing their stations during the period April 1990 to 
March 1991. (Tr. 2378.)
273. In October or November 1990, Mr. Henry entered 
into either a letter of intent or a contract to sell the Detroit 
station for $8.5 million. The sale did not close because, 
according to Mr. Henry, the purchaser chose instead to buy 
a station in Chicago. (Tr. 1954. 2018-22.) There was an 
environmental problem with the transmitter site of the 
Detroit station, but the purchaser signed the letter of intent 
or agreement even after being informed of the problem. 
(Tr. 1950. 1953-55, 2019.)46 Mr. Henry testified that he was 
willing to sell the Detroit station for $8.5 million, which 
was below Duncan's "stick value," because it was not gen 
erating positive cash flow and economic conditions had 
changed. (Tr. 2022.) Mr. Henry no longer thought the 
"stick value" figure was valid. (Id.)
274. When Mr. Henry purchased the Detroit station in 
June 1988, he entered into a loan agreement with Con 
tinental to borrow $6.7 million to acquire the station. (Tr. 
1946-47; Weagant Ex. 15.) However, only $5.55 million 
was actually borrowed from Continental. (Tr. 1947. 2017.) 
That amount was payable throughout the period April 
1989 through March 1991. (Tr. 1947.)
275. At the time of the purchase of the Detroit station, 
Mr. Henry also executed a promissory note in the amount 
of $1.25 million to the seller of that station. (Tr. 1947-48: 
Weagant Ex. 14.) Mr. Henry made two or three quarterly 
interest payments on the note (Tr. 1956), but after the 
environmental problem was discovered in late 1989 or 
early 1990 (Tr. 1957), Mr. Henry refused to make any 
further payments under the note (Tr. 1953). MCLP's cal 
culations indicate that as of December 31, 1990, and March 
31, 1991, the debt owing on this promissory note was 
$1,276,399. (McCoy Ex. 30, pp. 9-10.)
276. Funds Available to Mr. Henry from Sales of the 
Memphis and Detroit Stations. Tables 1 and 2 summarize 
the amounts distributable to Mr. Henry from hypothetical 
sales of the Memphis and Detroit stations as of December 
31. 1989, as of December 31. 1990. and as of March 31. 
1991, under various assumptions as to the value of the 
stations at those times. These figures were arrived at by 
adding the estimated sales price of the stations, adding total 
current assets, subtracting liabilities and debt, and calculat 
ing the amount distributable to Mr. Henry personally as a 
function of his total equity in the owner company.47
45 Mr. Henry defined "stick value" as the value of the station
with no business, that is, the value of the "bare license." (Tr.
2022.)
46 Mr. Henry testified that this environmental problem, which
still exists, "definitely" affects the marketability of the Detroit
station. (Tr. 1953.) The April 1988 BIA appraisal of the Detroit
station did not take the environmental problem into account.
(Tr. 1957.) In her valuation of the Detroit station, Harrison did 
not attempt to quantify the effect of that problem on the 
station's fair market value. (Weagant Ex. 9. p. 4.) 
4; The complete calculations may be found at McCoy Ex. 30, 
pp. 5-25. In this regard, all of the calculations concerning the 
Memphis stations assume that a 13 percent portion of the com 
bined Memphis/Columbus acquisition debt would remain se 
cured by the Columbus station.
38
9 FCC Red No. 1 Federal Communications Commission Recbrd FCC 93D-24
Sale aa of
12/31/89
12/31/90
3/31/91
a] Sale wouljd not have occurred since it would have generated no cash.
Sale as of
12/31/89
12/31/90
3/31/91
Table 1: The Detroit Station
Valuation Assumption Distributable to 
(& value in Millions) Mr. Henry
Duncan's ($12.5) 
BIA ($8.1) 
Harrison ($5.3)
Duncan's ($12.5) 
BIA ($8.1) 
Harrison ($5.3)
Contract Price ($8.5) 
BIA ($8.1) 
Harrison ($5.3)
$5,681,130 
$1,281,130 
No Sale [a.}
$4,976,634 
$ 526,634 
No Sale [a]
$ 662,365 
$ 262,365 
No Sale [a]
McCoy 
Ex. 30
p. 5
p. 8
p. 11
p. 6
p. 9
p. 12
P- 
P- 
P
7
10
13
Table 2: The Memphis Stations
Valuation Assumption Distributable to 
(& Value in Millions) Mr. Henry
Asking Price ($20) 
Brokers' Offers ($17) 
BIA ($15) 
Harrison ($12.1)
Asking Price ($20) 
Brokers' Offers ($17) 
BIA ($15) 
Harrison ($12.1)
Asking Price ($20) 
Brokers' Offers ($17) 
BIA ($15) 
Harriaon ($12.1)
$3,984,527 
$2,620,997 
$1,711,997 
No Sale [b]
$3,841,553 
$2,478,023 
$1,569,003 
$ 250,924
$3,742,746 
$2,379,216 
$1,470,196 
$ 152,117
McCoy 
Ex. 30
p. 14 
p. 17 
p. 20 
p. 23
p. 15 
p. 18 
p. 21 
p. 24
P- 
P- 
P- 
P-
16
19
22
25
[b] Sale would not have occurred since it would have generated no cash.
39
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
277. Tables 3 through 8 summarize the cumulative 
amounts distributable to Mr. Henry from hypothetical sales 
of both the Detroit and Memphis stations as of December 
31, 1989, as of December 31, 1990, and as of March 31, 
1991, using various valuation permutations.48
48 In its proposed findings and conclusions, at pages 32-33, 
MCLP presents a number of superfluous and illogical permuta 
tions. For example, MCLP combines appraised values for one 
station with Mr. Henry's asking price or Duncan's "stick value" 
for the other station. Also combined is the B1A appraisal for 
one station with the Harrison valuation for the other. This 
approach is rejected as inconsistent and irrelevant. In making 
any rational and meaningful comparison of the total amount of 
funds distributable to Mr. Henry under the various valuation 
assumptions, a consistent method of valuation must be used 
within each hypothetical, to the greatest extent possible. To do 
otherwise would produce disingenuous comparisons.
Further, in its proposed findings and conclusions, at pages 
35-39, MCLP attempts to convert the amounts distributable to 
Mr. Henry into 1989, 1990, and 1991 dollars by using a discount 
rate. The result is an increase both in the values of the stations 
and in the amounts distributable to Mr. Henry. This approach 
is also rejected. First, MCLP's computations, and the basis 
therefor, are absent from the record, have not been tested 
through cross-examination, and have not been stipulated to by 
any other party. Second, the uncontroverted testimony of Ilar- 
rison was that station values decreased, both generally and with 
regard to the Memphis and Detroit stations, between 1988 and 
1991. (Weagant Ex. 9, pp. 3-4; Tr. 2406-07. 2408-09.) Mr. Henry. 
too, testified that values fell during this period. (Tr. 1921-22.)
40
9 FCC Red NO. i Federal Communications Commission Record FCC 93D-24
Table 3
Valuation Assumption (Detroit station): Duncan's "stick value" of 
$12.5 million (used for 12/89 and 12/90), and contract price of $8.5 
million (used for 3/91) .
Valuation Assumption (Memphis stations): Mr. Henry's asking price 
of $20 million.
Sale as of Distributable to Mr. Henry
Detroit Memphis Total
12/31/89 
12/31/90 
3/31/91
$5,681,130 
$4,976,634 
$ 662,365
$3,984,527 
$3,841,553 
$3,742,746
$9,665,657 
$8,818,187 
$4,405,111
Table 4
Valuation Assumption (Detroit station): Duncan's "stick value" of 
$12.5 million (used for 12/89 and 12/90), and contract price of $8.5 
million (used for 3/91) .
Valuation Assumption (Memphis stations) : Mr. Henry's testimony that 
several brokers offered him $17 million.
Sale as of Distributable to Mr. Henry
Detroit Memphis Total
12/31/89 
12/31/90 
3/31/91
$5,681,130 
$4,976,634 
$ 662,365
$2,620,997 
$2,478,023 
$2,379,216
$8,302,127 
$7,454,657 
$3,041,581
41
FCC 93D-24 Federal Communications Commission Record 9 FCC Red NO. i
Table 5
Valuation Assumption (Detroit station): BIA's appraisal of $8.1 
million (used for 12/89 and 12/90), and contract price of $8.5 
million (used for 3/91) .
Valuation Assumption (Memphis stations): BIA's appraisal of $15
million.
Sale as of Distributable to Mr. Henry- 
Detroit Memphis Total
12/31/89 
12/31/90 
3/31/91
$1,281,130 
$ 526,634 
$ 662,365
$1,711,997 
$1,569,003 
$1,470,196
$2,993,127 
$2,095,637 
$2,132,561
Table 6
Valuation Assumption (Detroit station): Harrison's valuation of 
$5.3 million (used for 12/89 and 12/90), and contract price of ($8.5 
million (used for 3/91).
Valuation Assumption (Memphis stations): Harrison's valuation of 
$12.1 million.
Sale as of Distributable to Mr. Henry
Detroit Memphis Total
12/31/89 No Sale [c] No Sale [c] $ 0
12/31/90 No Sale [c] $ 250,924 $ 250,924
3/31/91 $ 662,365 $ 152,117 $ 814,482
[c] Sale would not have occurred since it would have generated no 
cash.
42
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
Table 7
Valuation Assumption: BIA's appraisals of $8.1 million for the 
Detroit station and $15 million for the Memphis stations.
Sale as of Distributable to Mr. Henry
Detroit Memphis Total
12/31/89 
12/31/90 
3/31/91
$1,281,130 
$ 526,634 
$ 262,365
$1,711,997 
$1,569,003 
$1,470,196
$2,993,127 
$2,095,637 
$1,732,561
Table 8
Valuation Assumption: Harrison's valuations of $5.3 million for the 
Detroit station and $12.1 million for the Memphis stations.
Sale as of
12/31/89 
12/31/90 
3/31/91
Distributable to Mr. Henry 
Detroit Memphis Total
No Sale [d]
No Sale [d]
No Sale [d]
No Sale [d] 
$ 250,924 
$ 152,117
$ 0
$ 250,924
$ 152,117
[d] Sale would not have occurred since it would have generated no 
cash.
CONCLUSIONS OF LAW
Basic Qualifications Issues
278. This proceeding involves the mutually exclusive 
applications of Q Prime, SBI, Wireless. Weagant, MCLP, 
KLRK, Eells, Clark, CFMLP, and Trans-Columbia for a 
construction permit for a new FM station in Vancouver, 
Washington. Basic qualifications issues are outstanding 
against Clark, CFMLP, and MCLP. Since only basically 
qualified applicants are entitled to comparative consider 
ation, Louis Adelman, 29 FCC 1223 (1960), aff'd sub nom. 
Guinan v. FCC, 297 F.2d 782 (D.C. Cir. 1991), these issues 
will be resolved before addressing the standard comparative 
issue.
Financial Issue Against Clark
279. This issue must be resolved against Clark. A broad 
cast applicant must have "reasonable assurance" of having 
sufficient funds to construct its proposed station and op 
erate it without revenue for three months before the ap 
plicant certifies its financial qualifications. Northampton 
Media Associates, 4 FCC Red 5517, 5518 (1989). It is well 
settled that in order to determine whether an applicant has 
reasonable assurance of committed sources of funds, it 
must be shown that the lender has a long and established 
relationship with the borrower sufficient to infer that the 
lender is thoroughly familiar with the borrower's assets, 
credit history, current business plan, and similar data, or 
the prospective borrower has provided the lender with 
such data, and the lender is sufficiently satisfied with this 
information that, other things being equal, a loan in the 
stated amount would be forthcoming. In other words, cen 
tral to any successful reasonable assurance showing of a
43
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
loan is that the individual qualifications of the borrower 
have been preliminarily reviewed. Scioto Broadcasters, 5 
FCC Red 5158, 5160 (Rev. Bd. 1990), aff'd 6 FCC Red 
1893 (1991).49 Clark has failed to meet this test and is not, 
therefore, qualified to become a Commission licensee.
280. First, Bridges did not have a long and established 
relationship with either Clark or Keller sufficient to infer 
that Bridges was thoroughly familiar with Clark or Keller's 
assets, credit history, current business plan, and similar 
data prior to the issuance of his April 10 letter. In this 
regard, although Bridges had a long-time friendship with 
Clark limited partners Mitchell and Murray, there is no 
evidence that Bridges, Mitchell. and Murray had a long 
and established business relationship sufficient to satisfy the 
requirements of Scioto Broadcasters.
281. Second, the evidence of record does not support a 
conclusion that, prior to the issuance of the April 10 letter. 
Bridges was provided with information on Clark or Keller's 
assets, credit history, current business plan, or similar data. 
Nor does the record support a conclusion that, prior to the 
April 10 letter, the individual qualifications of the bor 
rower were preliminarily reviewed. Indeed, the evidence is 
to the contrary. Thus, prior to the issuance of the letter. 
Keller did not provide Bridges with any financial statement 
of Clark or any of its partners. In addition, Bridges could 
not recall whether he saw Clark's proposal, business plan, 
prospectus, or budget prior to the issuance of his letter. 
Similarly, Bridges could not recall whether Clark had any 
assets as of April 10, 1989. or whether he saw the personal 
financial statements of Keller, Mitchell, or Murray prior to 
the issuance of the April 10 letter. Moreover, Bridges did 
not know Keller personally and had not done business with 
her. He could not recall whether he saw Keller's resume 
before April 10. 1989, or if, at that time, he knew anything 
about her background, experience in running a radio sta 
tion, and level of education. Nor could Bridges recall 
whether he knew, prior to April 10, 1989, that Keller was 
going to be the General Manager of the proposed station. 
Of further significance is the fact that Bridges apparently 
agreed to provide the necessary financing to Clark at the 
time of Keller's initial telephone conversation with him, 
but there is no evidence of record detailing what, if any 
thing, Keller supplied to Bridges at the time of that call.50
282. Since Clark has failed to establish that it submitted 
to Bridges, prior to the issuance of the April 10 letter, a 
business plan for the proposed station, written cost es 
timates, the financial statement of Clark or Keller. or any 
information of any sort concerning the financial condition
of Clark or Keller. and there was no long and established 
relationship between Bridges. Keller and Clark, it must be 
concluded that the April 10 letter did not provide Clark 
with the requisite reasonable assurance of the availability of 
funds. Shawn Phalen, 5 FCC Red 53 (Rev. Bd. 1990). In 
other words, it is concluded that the April 10 letter did not 
represent a bona fide "present firm intention to make a [$1 
million] loan [to Clark], future conditions permitting." 
Merrimack Valley Broadcasting, Inc., 82 FCC 2d 166, 167 
(1980).
283. On the contrary, the findings establish, and it is 
further concluded, that the April 10 letter was nothing 
more than an accommodation. Bridges was not in the loan 
or finance business, and he could not recall ever making a 
loan of $1 million to an entity which was to be managed 
and operated by someone of whom he had no personal 
knowledge. As noted above, he had no such knowledge of 
Keller, or of her background and experience, at the time 
he issued the April 10 letter. In addition. Bridges was not 
involved in broadcasting and did not research the value of 
the Vancouver, or similar, stations. Further, the collateral 
provisions of Bridges' April 10 letter also undermine the 
bona fides of that letter. Although Bridges expressed his 
concern that the loan be adequately secured, and the letter 
provided for security in the form of a first lien on the 
assets of the station, inter alia. Bridges did not know at the 
time he issued his letter what those assets were likely to be 
and did not know whether Clark intended to own or lease 
its equipment. Finally, the following Question and Answer 
clearly and succinctly disclosed the actual reason Bridges' 
April 10 letter was issued:
Q: So you did this [agreed to make the loan to Clark] 
because of your friendship with Mr. Murray and Mr. 
Mitchell?
A: I would say   I would say yes.
Consequently, Clark has not established that it is finan 
cially qualified to become a Commission licensee, and it 
must be disqualified. Cf. John D. Bomberger, 1 FCC Red 
5516 (Rev. Bd. 1992).51
Misrepresentation/Lack of Candor Issue Against CFMLP
284. This issue is resolved against CFMLP. As noted in 
the Preliminary Statement, supra, the burden of proceeding 
on Issue 8 was assigned to KLRK, and the burden of proof 
on this issue was assigned to CFMLP. Contrary to CFMLP's
49 Although Scioto Broadcasters referred specifically to a loan 
from a lending institution such as a bank, it has recently been 
held that these standards apply equally to a loan from a minor 
ity enterprise small business investment company ("MESBIC"), 
which is not a conventional financial institution. Salt City Com 
munications, Inc., 8 FCC Red 683, 687 (1993): Short Broadcasting 
Co. Inc., 8 FCC Red 5574 (Rev. Bd. 1993). There appears no 
reason to depart from the standards enunciated in Scioto Broad 
casters where the lender is an individual rather than a bank or 
MESBIC.
50 As discussed above. Bridges' recollection of the events in 
question was extremely poor. Under these circumstances, it was 
incumbent upon Clark, in order to satisfy its burden of proof 
on this issue, to present evidence from individuals with a better 
recollection of what, if any, documents and information were 
provided to Bridges prior to the issuance of his letter. Certainly 
Keller possessed such information, and it is likely that Bridges'
attorney and accountant, as well as Mitchell and Murray, could 
have provided additional information. Clark's failure to call 
these witnesses suggests that their testimony would have been 
unfavorable. Washoe Shoshone Broadcasting, 3 FCC Red 3948, 
3953 (Rev. Bd. 1988).
51 Both CFMLP and Trans-Columbia further contend that 
Clark is not financially qualified because Clark's cost estimate 
efforts were inadequate and unreliable, Clark cannot rely on the 
oral pledges of its principals with regard to collateral, and 
Bridges was not financially capable of lending the required 
funds. See CFMLP's proposed findings and conclusions, at paras. 
126-31, and Trans-Columbia's proposed findings and conclu 
sions, at paras. 62-63. In light of the ultimate disposition of this 
issue, it is not necessary to address these matters. Suffice it to 
say, however, that such contentions are largely without merit 
for the reasons recited in Clark's reply findings and conclusions, 
at pages 3-7, 11-14.
44
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
contention,52 KLRK satisfied its burden of proceeding by 
establishing that in June 1989 Edmiston received a letter 
from the FAA concluding that CFMLP's proposed site 
would be a hazard to air navigation, and that CFMLP 
failed to report this adverse determination to the Commis 
sion until May 29, 1991, nearly two years later. At that 
point, the issue was joined and the burden shifted to 
CFMLP to explain the facts and circumstances surrounding 
its failure to report,53 and to establish that such failure did 
not constitute a misrepresentation or lack of candor. 
CFMLP failed to do so.
285. Specifically, the only explanation contained in the 
record regarding the failure of CFMLP to report the FAA 
determination for nearly two years was Edmiston's testi 
mony that she sent a copy of the FAA letter to her 
attorney, that she expected him to take care of it, that she 
did not follow up on the matter, and that she "again" 
found the letter upon a review of her records after her 
deposition. This was manifestly insufficient to resolve the 
issue, and raises more questions than it resolves. For exam 
ple, was the copy of the letter Edmiston sent to the attor 
ney received by him? If so, what happened to it for almost 
two years? If not, what steps, if any, did the attorney take 
to obtain another copy of the letter? (After all, the attorney 
knew from his telephone conversation with Edmiston that 
the CFMLP site was determined to be an air hazard, a 
matter of obvious decisional significance.) If no steps were 
taken by the attorney to obtain another copy of the letter, 
why not? Why was the June 1989 letter disclosed to the 
Commission at the time it was? Was it because issues had 
just been added against   Foster as a result of his 
nondisclosure of a similar FAA letter? Did Edmiston know 
about the issues added against Foster? Was the FAA letter 
disclosed at the time it was as a consequence of something 
which occurred at Edmiston's deposition? Was it disclosed 
at the time it was as a consequence of the receipt of the 
FAA's May 14, 1991, letter? Was this the first time that 
Edmiston had reviewed her records? Had she reviewed her 
records at the time documents were exchanged in discov 
ery? If not, why not? If so, why did she not find the FAA 
letter earlier? All of these questions, and many, many 
others, are directly relevant to the facts and circumstances 
surrounding CFMLP's failure to report, and to the ap 
plicant's intent and motive. The record is completely de 
void of any evidence on these matters, and Issue 8 may not, 
therefore, properly be resolved in CFMLP's favor. In the 
Commission's words:
There is no question that the burden of proof rested 
upon [CFMLP]. Any gaps in the record were 
[CFMLP's| to fill and the uncertainties were for 
[CFMLP] to resolve: "As a rule, one who has the 
burden of proof must produce evidence which re 
moves the issue or fact as to which the burden relates 
from the realm of conjecture and establishes its truth 
with reasonable certainty. . . ." [Citation omitted.) 
"The burden of proof must be satisfied in order to 
sustain a decision or finding in favor of the party on
which the burden rests." [Citations omitted.| The risk 
of nonpersuasion was upon [CFMLP|, . . . [footnote 
omitted).
Voice of Reason, Inc., 37 FCC 2d 686. 700-01 (Rev. Bd. 
1972). Where, as here, an applicant fails to meet its burden 
of proof on a basic qualifications issue, it must be found 
unqualified. See Milton Broadcasting Company, 34 FCC 2d 
1036, 1043 (1972). Consequently, it must be concluded that 
CFMLP has failed to establish that it has the basic quali 
fications to become a Commission licensee.
Financial Issue Against CFMLP
286. This issue must be resolved against CFMLP. The 
standards by which bank letters are adjudged were outlined 
above, in connection with the financial issue specified 
against Clark, and need not be repeated. Suffice it to say, 
the findings establish that the May 22, 1989, letter to 
CFMLP does not provide a reasonable assurance of com 
mitted sources of funds from MNB. It must, therefore, be 
concluded that CFMLP is not financially qualified to be 
come a Commission licensee.
287. CFMLP is comprised of two individuals. Edmiston 
and C. Siebert. Even assuming, arguendo, that the bank 
had the necessary information and lending experience with 
regard to C. Siebert. MNB knew nothing about Edmiston's 
financial condition or credit history. Neither MNB nor 
Murphy was provided with any financial information about 
Edmiston, a "co-borrower" and the individual who, accord 
ing to C. Siebert's lay opinion, would be personally liable 
as CFMLP's general partner for the entire amount of the 
loan. In addition, Edmiston had no clear understanding of 
whether she would be personally liable for the loan if it 
were not repaid. It is difficult to construe a bank letter as 
providing a reasonable assurance of the availability of 
funds when the bank knew virtually nothing about one of 
the two borrowers, and where that borrower had no knowl 
edge of her obligations to the bank in the event of a 
default.
288. Further, according to Murphy, it was the normal, 
standard bank practice, and his practice, to require in 
formation in writing about, inter alia, the ability of the 
prospective borrower to successfully manage and operate 
the business for which the loan was being sought. How 
ever, it appears that Murphy had only the most cursory 
information about Edmiston's role in CFMLP, her familial 
relationship to C. Siebert, and her purported involvement 
in a previous radio license.54
289. It was also the normal, standard bank practice, and 
Murphy's practice, to require a written business plan from 
a prospective borrower. However, it is uncontroverted that 
no business plan was submitted to MNB or Murphy. Nor 
was cash flow or revenue data provided to the bank. In 
addition, although the May 22, 1989. bank letter stated that 
the loan would be collateralized with the assets of the 
permittee and other assets, C. Siebert testified that he did 
not discuss these matters with Murphy.
52 See CFMLP's proposed findings and conclusions, at para. 
111. It is noted that CFMLP has misstated the allocation of the 
burden of proof on this issue. 
53 These facts and circumstances were peculiarly within the
knowledge of CFMLP and/or its agents. C/. United Telephone 
Co. of Ohio, 26 FCC 2d 417, 421 (1470); Elyria-Lorain Broad 
casting Co., 6 RR 2d 191, 198 (1%5).
54 The record reveals no past broadcast experience or owner 
ship on the part of Edmiston.
45
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
290. Citing Scioto Broadcasters, supra, 5 FCC Red at 
5160, CFMLP argues that MNB enjoyed a "long and diver 
sified banking relationship" with C. Siebert prior to the 
issuance of the letter, and that this alone is sufficient to 
render the MNB letter valid.55 CFMLP's contention is with 
out merit and is rejected. The portion of Scioto Broad 
casters relied upon by CFMLP is inapposite. The sole 
purpose for considering the duration and nature of the 
bank's relationship with the borrower is to create an infer 
ence as to the lender's familiarity with the borrower's 
assets, credit history, business plan, and similar data. Here, 
there is no need for the establishment of such an inference 
because the documentation which was before the lender is 
known. Specifically, the only things MNB or Murphy 
could have considered were C. Siebert's financial state 
ment, the CFMLP limited partnership agreement, cost fig 
ures, and a letter to be used as an exemplar. According to 
Murphy's testimony concerning the bank's, and his, stan 
dard practice, this information was insufficient to provide a 
basis for the issuance of a letter upon which reliance could 
be placed. In this regard, absent from the bank's or Mur 
phy's consideration was financial information about 
Edmiston, the general partner of CFMLP and a "co-bor 
rower," a business plan, specific information regarding 
available collateral, cash-flow data, and information regard 
ing Edmiston's ability to successfully manage or operate a 
radio station.
291. Moreover, the nature of the "long and diversified" 
relationship between MNB and C. Siebert demonstrated in 
the record is not adequate to raise the inference that MNB 
was thoroughly familiar with the borrower's plans for 
CFMLP. C. Siebert is a CPA, not a professional broad 
caster. His primary relationship with MNB was in his 
capacity as a CPA and as an individual. It is not, therefore, 
reasonable to conclude that MNB's prior experience with 
C. Siebert would have given it any insight into or familiar 
ity with his broadcast-related plans. In this connection, the 
record discloses only one broadcast-related loan by MNB to 
an entity in which C. Siebert was a principal. However, the 
record is silent as to the amount of the loan or its terms 
and conditions. (Was it of the magnitude of CFMLP's 
proposed $450,000 line of credit? Did C. Siebert personally 
guarantee the loan?) Similarly, C. Siebert's ownership in 
terest and role in the borrower were not disclosed. (Was he 
an 80 percent owner? Did he have a voting or nonvoting 
interest? Did he participate in the operation and manage 
ment of the station?) Further, the loan was repaid six years 
prior to the issuance of the MNB letter under consider 
ation and was not a contemporaneous credit experience. In 
addition, with the exception of two lines of credit and a 
short-term loan totalling $56,000, the record does not re 
veal the magnitude of any of the other accounts, either 
business-related or personal, that C. Siebert had at MNB at 
the time the bank letter was issued. It is also abundantly 
clear and undisputed that the "co-borrower," Edmiston, 
did not have a "long and diversified banking relationship," 
or any other relationship, with MNB sufficient to create 
the inference that the bank was familiar with her or her 
plans for CFMLP.
292. Finally, a key element in the test enunciated in 
Scioto Broadcasters is that the lender have sufficient in 
formation from and knowledge about the borrower so that, 
other things being equal, a loan in the amount stated in the 
bank letter will be forthcoming. Scioto Broadcasters, supra 
at 5160. The testimony of Dunn establishes, to the con 
trary, that a loan from MNB would not be forthcoming on 
the basis of the May 22. 1989, letter. Indeed, Dunn testified 
that CFMLP was in no different position to obtain a loan 
with the May 22, 1989, letter than any other individual 
approaching the bank seeking a loan would be without 
such a letter.56
Financial Issue Against MCLP
293. This issue is resolved against MCLP. It is well 
established that where a financier such as Mr. Henry com 
mits funds towards multiple applications, it must be dem 
onstrated that he has sufficient funds available to finance 
all of those commitments concurrently. See Texas Commu 
nications Limited Partnership, 5 FCC Red 5876, 5878 (Rev. 
Bd. 1990). aff'd 6 FCC Red 5191 (1991); Welch Commu 
nications, Inc., 5 FCC Red 4850 (Rev. Bd. 1990); George 
Edward Gunter, 104 FCC 2d 1363 (Rev. Bd. 1986). During 
the pendency of his commitment to MCLP, Mr. Henry had 
committed to provide as much as $3,657,000 to ten broad 
cast applicants, including MCLP. To satisfy his commit 
ments, Mr. Henry was relying on the proceeds from the 
sales of the Washington, Richmond, Memphis, and Detroit 
stations. The findings establish, and it is concluded, how 
ever, that for about half of the time MCLP was relying on 
Mr. Henry's financing, the sales of the stations in question 
would not have provided Mr. Henry with sufficient funds 
from which to satisfy simultaneously all of his commit 
ments. Since the financing from Mr. Henry was a con 
dition precedent to the availability of funds from CVC 
Capital Corporation, and since it has not been established 
that Mr. Henry could have provided the requisite funds at 
all relevant times, it must also be concluded that MCLP is 
not financially qualified to become a Commission licensee.
294. The findings establish, and it is concluded, that Mr. 
Henry did have sufficient funds with which to fulfill all of 
his commitments from April 12, 1989, when he and Mrs. 
Henry made their commitments to MCLP, to April 1990, 
when Mr. Henry was credited with the cash payable to him 
from the sales of the Richmond and Washington stations. 
Specifically, the sales of these stations netted Mr. Henry 
with over $9.6 million, far more than he needed.
295. However, in April 1990, after he received the cash 
from these sales, Mr. Henry reinvested these funds to 
capitalize a new media company, the property of which he 
was not relying on to meet his financial commitments to 
MCLP and other applicants, to make a downpayment on 
another radio station, to make an interest payment on a 
bank loan, and to purchase paintings for his wife. None of 
the proceeds from the Washington and Richmond sales was 
retained in cash, and from April 1990 to March 23, 1991, 
when the Henrys' commitment to MCLP expired. Mr. 
Henry could no longer rely on funds from those stations to 
fulfill his commitments to new broadcast applicants. As a 
consequence, from April 1990 until March 23, 1991. Mr.
55 See CFMLP's proposed findings and conclusions, at para.
120, and CFMLP's reply findings and conclusions, at paras. 22,
28.
56 The fact that MNB did not retain any documentation relat 
ing to the May 1989 letters, and did not even have those letters 
in its files, is a factor which also reflects adversely upon 
CFMLP's reliance on MNB. John D. Bomberger, supra.
46
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
Henry had only his Memphis and Detroit stations from 
which to satisfy financial commitments which by that time 
had reached $3,657,000, and which had at no relevant time 
been below $2,917,000.
296. Mr. Henry's stations in Memphis and Detroit were 
heavily debt-laden. The Memphis station was subject to 
debt on a February 1989 acquisition loan by Chrysler of 
$23.2 million, covering Mr. Henry's Richmond, Memphis, 
and Columbus, Ohio, stations. Chrysler consented to Mr. 
Henry's sale of the Richmond station and Mr. Henry used 
a portion of the proceeds to pay off part of this debt. Even 
afterward, MCLP's own calculations show that from 1990 
through March 1991, the acquisition debt allocable to the 
Memphis station exceeded $12 million. These figures as 
sume, moreover, that about $2 million more of this debt 
remained secured by the Columbus station. Mr. Henry 
conceded at the hearing that he would have needed 
Chrysler's consent to leave this portion of the debt out 
standing.
297. The situation was similar in Detroit. Not only did 
Mr. Henry borrow $5.55 million from Continental in June 
1988 to acquire that station, but he also executed a promis 
sory note for $1.25 million to the seller of the station. The 
$5.55 million remained payable throughout the period 
from April 1990 to March 1991. In addition, in late 1989 
or early 1990 environmental difficulties arose at the Detroit 
station's transmitter site. This problem not only caused Mr. 
Henry to cease paying on the promissory note to the seller 
after just a few interest payments, but also affected the 
station's marketability.
298. In order for MCLP to have been financially quali 
fied between April 1990 and March 23, 1991, the cumula 
tive value of the Memphis and Detroit stations must have 
been sufficiently in excess of the stations' debt to have 
permitted distributions to Mr. Henry of at least $3,657,000 
from sales of those stations. The overwhelming weight of 
the evidence shows that this was not the case.
299. MCLP relies upon appraisals of Mr. Henry's stations 
performed by BIA in April 1988. These appraisals valued 
the Memphis stations at $15 million, and the Detroit sta 
tion at $8.1 million. An analysis performed for counsel for 
Wireless and Weagant by financial consultant Susan Har- 
rison valued the Memphis stations at $12.1 million and the 
Detroit station at $5.3 million during the period from 
April 1, 1990, to March 31, 1991.
300. For various reasons, MCLP argues that the BIA 
appraisal is entitled to more weight and, for various other 
reasons, the opposing parties contend that the Harrison 
valuations are more credible.57 However, no conclusion 
need be reached as to which appraisal/valuation was more 
accurate or realistic because under neither set of figures 
would Mr. Henry have had sufficient funds.
301. As shown in Table 8, supra, under Harrison's valu 
ations, a sale of the Detroit and Memphis stations would 
have resulted in distributable funds to Mr. Henry of 
$250,924 as of December 31, 1990, and $152,117 as of 
March 31, 1991. These funds would have resulted from a 
sale of only the Memphis stations. The Detroit station 
would not have been sold, as it would not have generated
See MCLP's proposed findings and conclusions, at paras. 
161-68, 170-71, and Weagant's proposed findings and conclu 
sions, at para. 72.
58 See MCLP's proposed findings and conclusions, at para. 80, 
and MCLP's reply findings and conclusions, at para. 31.
any cash. These amounts fall far short of the $3.6 million 
Mr. Henry would have needed to fulfill all of his outstand 
ing commitments to new broadcast applicants.
302. Similarly, using the BIA figures, the funds resulting 
from sales of the Detroit and Memphis stations still would 
not have provided Mr. Henry with sufficient funds to 
satisfy all of his commitments. As shown in Table 7, supra, 
under BIA's valuations, sales of the Memphis and Detroit 
stations would have generated distributable funds to Mr. 
Henry of $2,095,637 as of December 31. 1990, and 
$1,732,561 as of March 31, 1991. These amounts also fall 
far short of the needed funds.
303. Further, it may be argued that the least hypotheti 
cal, most realistic number in the record is the late 1990 
$8.5 million contract price for the Detroit station. How 
ever, as shown in Tables 5 and 6, supra, even when that 
figure is utilized in combination with the BIA and Har 
rison figures, sufficient funds would not have been gen 
erated as of December 31, 1990. and March 31. 1991, to 
enable Mr. Henry to fulfill all of his commitments.
304. MCLP contends that the cumulative amounts of Mr. 
Henry's commitments included prosecution expenses, that 
between September 1989 and November 1990 those ex 
penses ranged from $412.000 to $452,000. that Mr. Henry 
was meeting those expenses through "normal cash flow," 
and that such prosecution expenses should therefore be 
deducted from the cumulative amount of funds needed by 
Mr. Henry.58 Even assuming, arguendo, that MCLP is cor 
rect and that Mr. Henry's cumulative commitments were 
reduced to approximately $3.2 million ($3,657,000 minus 
$452,000), Tables 5 through 8 establish that Mr. Henry still 
would not have had sufficient funds with which to meet all 
of his commitments to broadcast applicants. Moreover, 
with the exception of MCLP, the record contains no evi 
dence quantifying the total amount of funds Mr. Henry 
actually paid to broadcast applicants to cover their prosecu 
tion expenses, or whether that figure even approached the 
$412.000 to $452.000 he promised. In this regard it is 
noted that Mr.. Henry, on behalf of Mrs. Henry and 
Waldron, made a commitment to provide $40,000 to 
MCLP for prosecution expenses but that, as of the date of 
Waldron's withdrawal, only $9.000 had been contributed to 
MCLP.
305. The only way it may be concluded that sales of the 
Detroit and Memphis stations would have yielded Mr. Hen 
ry funds sufficient to fulfill all of his financial commit 
ments is if it is determined that the value of the Detroit 
station was equivalent to the $12.5 million "stick value" 
listed in "Duncan's Radio Market Guide. 1990" and. subse 
quently, to the late 1990 $8,5 million contract price, and 
that the value of the Memphis stations was equivalent to 
either the $20 million for which Mr. Henry testified he 
would sell the stations or the $17 million that Mr. Henry 
alleged to have been offered for the stations by several 
brokers. (See Tables 3 and 4, supra.)**
306. Except for the $8.5 million contract price, none of 
these figures is entitled to any weight. First, Harrison, an 
expert witness, testified that it would not have been reason 
able for station owners to use Duncan's base value as a
59 However, as shown in Table 4, even assuming the $8.5 
million contract price for Detroit and the alleged $17 million 
offers for Memphis, the amount distributable to Mr. Henry 
under a sale as of March 31, 1991, still would not have been 
sufficient to meet his $3.6 million commitments.
47
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
measure of value for their stations during the period April 
1990 to March 1991. Further, Mr. Henry testified that he 
was willing to sell the Detroit station for $8.5 million, 
which was below Duncan's "stick value," because it was 
not generating positive cash flow and economic conditions 
had changed. Thus, Mr. Henry, himself, no longer thought 
the "stick value" figure was valid, and it cannot be cred 
ited.
307. Similarly, the $20 million and $17 million figures 
for the Memphis stations can be given no weight. The $20 
million figure is nothing more than what Mr. Henry tes 
tified he would take for the station, and is highly self- 
serving. In this regard, there is no evidence anywhere that 
explains how Mr. Henry arrived at this figure or whether it 
is reasonable or credible. As to the purported $17 million 
offers for the Memphis stations, the record is totally devoid 
of any evidence corroborating that these offers were made, 
the circumstances surrounding the offers, or the basis for 
the claimed $17 million price. Nor was the $17 million 
figure supported by an appraisal. Indeed, the BIA ap 
praisal, relied on by MCLP, valued the station at $15 
million. See Texas Communications, supra, 6 FCC Red at 
5193; Opal Chadwell, 4 FCC Red 1215, 1216 (1989).
308. MCLP raises a number of additional arguments in 
its proposed findings and conclusions which must be ad 
dressed. First, MCLP cites Mr. Henry's good faith, his 
experience as a broadcaster, and his confidence that he 
could raise sufficient funds.60 However, the issue against 
MCLP is not a false financial certification or misrepresen 
tation issue, it is a financial qualifications issue. The in 
quiry, therefore, is not Mr. Henry's state of mind, it is 
whether he could provide the necessary finances to meet 
his aggregate commitments to ten broadcast applicants. The 
weight of the evidence shows that he could not.
309. Second, MCLP cites "the inherent improbability" 
that Mr. Henry would have been called upon to meet all of 
his financial commitments simultaneously.61 However, 
Commission precedent establishes that this is the standard 
Mr. Henry was required to meet. See Texas Communica 
tions, supra, 5 FCC Red at 5878; Welch Communications, 
supra; Gunter, supra. Third, MCLP cites the social con 
sciousness of Mr. Henry's underwriting of numerous other 
minority broadcast applicants, and implies that he should 
not be held to a "letter perfect standard. "2 While Mr. 
Henry's commitment to finance minority applicants is 
laudable, the Commission has consistently refused to relax 
its financial qualification standards for minority applicants. 
Salt City Communications, supra at 687, and cases cited 
therein.
310. MCLP also suggests that, even if Mr. Henry falls 
short as a financing source, MCLP "found another investor 
anyway."63 However, it is well settled that an applicant may
not rely on later substitute financing unless it was finan 
cially qualified before. E.g., Aspen FM, Inc., 6 FCC Red 
1602. 1603 (1991); Goodlettsvilie Broadcasting Co., Inc., 1 
FCC Red 1833, 1835 (Rev. Bd. 1992). Finally, MCLP con 
tends that if Mr. Henry found that he lacked sufficient 
funds, he would have distributed whatever liquid funds he 
had pro raia to MCLP and the other nine applicants rely 
ing on "his commitments. M This is rejected as pure specu 
lation, contained nowhere in the record.
311. In sum, the best that can be said is that MCLP was 
financially qualified from April 12, 1989, until April 1990, 
when Mr. Henry sold his Washington and Richmond sta 
tions. However, after April 1990, Mr. Henry could not 
have met his $3.6 million simultaneous financial commit 
ments by selling his Memphis and Detroit stations. Since 
the CVC Capital Corporation "reasonable assurance" letter 
was contingent on the funds to be provided by Mr. Henry, 
it must be concluded that MCLP was not financially quali 
fied from April 1990, and the financial issue must be 
resolved against MCLP. 6S
Standard Comparative Issue
312. Clark, CFMLP, and MCLP have been disqualified 
and are not, therefore, entitled to comparative consider 
ation. Louis Adelman, supra. Consequently, the applications 
of Q Prime, SBI, Wireless, Weagant, KLRK, Eells, and 
Trans-Columbia must be evaluated under the comparative 
issue, which is governed by the Commission's Policy State 
ment on Comparative Broadcast Hearings, 1 FCC 2d 393 
(1965). In the policy statement, the Commission established 
two primary objectives toward which the process of com 
parison should be directed: (a) maximum diffusion of con 
trol of the media of mass communications (the 
diversification criterion); and (b) the best practicable ser 
vice to the public (the integration criterion). Policy State 
ment, at 394. In addition, the acquisition and proposed use 
of auxiliary power equipment is also a factor of decisional 
significance in comparative AM and FM proceedings. Ad 
dendum to Policy Statement of July 28, 1965, on Compara 
tive Broadcast Hearings, 2 FCC 2d 667 (1966).
Auxiliary Power
313. Each of the remaining applicants proposes to install 
auxiliary power equipment which would permit its pro 
posed station to remain on the air in the event of a power 
outage. Therefore, none of those applicants is to be pre 
ferred on this basis.
60 See MCLP's proposed findings and conclusions, at paras. 170, 
176.
61 Id. at paras. 173-74.
62 Id. at para. 174. 
"J Id. at para. 175.64 Id.
65 On June 18, 1993, Wireless filed a Petition to Reopen the 
Record directed against MCLP. A revised petition was filed on 
June 25, 1993. Wireless seeks such reopening for the purpose of 
introducing evidence purportedly showing that Paul McCoy,
MCLP's sole general partner, was no longer capable of effectuat 
ing his integration commitment. (See note 17, supra.) MCLP 
filed an opposition on June 29, 1993.
Wireless' petition and revised petition will be denied. Suffice 
it to say, given MCLP's disqualification, the new evidence 
sought to be introduced, even if true, would not affect the 
ultimate disposition of this proceeding. Omaha TV 15. Inc., 4 
FCC Red 730, 730-31 (1988), and cases cited therein.
48
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
Diversification
314. Through various corporations and limited partner 
ships, Q Prime's principals hold construction permits for 
two FM stations in California, and licenses for two other 
FM stations in California. Q Prime does not commit to 
divest any of these media interests and it must, therefore, 
be assessed a diversification demerit. Policy Statement, at 
394-95.
315. SBI principal Gregory Smith has pledged to resign 
his employment as National Sales Manager of the licensee 
of radio stations in Portland, Oregon, if the SBI application 
is granted. Similarly, Trans-Columbia principal Andrew 
Brown has pledged to resign his current employment as an 
electronics maintenance engineer at a Portland, Oregon, 
television station if the Trans-Columbia application is 
granted. Consequently, neither SBI nor Trans-Columbia 
will receive a diversification demerit.
316. Weagant is the sole owner of an AM station in 
Portland, Oregon. If her application is granted, Weagant 
has pledged to divest her interest in and sever all ties to 
this station. The opposing parties challenge this assertion, 
arguing that Weagant has no understanding of her 
divestiture commitment, and that she does not know 
whether she will adhere to it.66 These arguments are re 
jected. Weagant's testimony reveals that what she does not 
understand is the Commission policy which would require 
her to sell her AM station to fulfill her divestiture pledge, 
but allow her to purchase another AM station at a later 
date. Further, nothing in Weagant's testimony establishes 
that she will not divest her AM station, as promised, or 
that she has any plans to purchase another AM station in 
the future. The arguments to the contrary are pure specula 
tion. Consequently, Weagant's divestiture pledge will be 
fully credited, and she will not be assessed a diversification 
demerit.
317. Although Thomas Eells is the permittee of an FM 
station in Saginaw, Michigan, he has made a commitment 
to divest his interest in, and terminate all connections with 
that station if his application is granted. Therefore, he will 
not receive a diversification demerit.
318. Wireless and KLRK have no attributable media 
interests. Neither, therefore, will receive a diversification 
demerit.
319. In sum, SBI, Wireless, Weagant. KLRK, Eells, and 
Trans-Columbia are to be preferred over Q Prime on the 
diversification criterion. However, among SBI, Wireless, 
Weagant, KLRK, Eells, and Trans-Columbia. none is to be 
preferred over any other on this criterion.
Integration
320. Q Prime Inc. and Thomas M. Eells. Neither Q Prime 
nor Eells proposes any full-time or part-time integration of 
ownership into the management of their proposed stations. 
Therefore, Q Prime and Eells are not entitled to any 
integration credit.
321. Smith Broadcasting, Inc. 67 SBI is entitled to 25 
percent quantitative integration credit for its management 
participation proposal. Gregory Smith, SBFs voting 
shareholder, holds a 25 percent equity interest in the ap 
plicant. Smith will serve as the General Manager of the
66 See Wireless' proposed findings and conclusions, at para.176.
67 In its proposed findings and conclusions, at paras. 59-60, O
proposed station on a full-time basis. In order to effectuate 
his commitment, Smith will resign and terminate his cur 
rent employment. For the reasons which follow, the 75 
percent equity interest of Columbia Investments, Ltd.. SBI's 
nonvoting shareholder, must be attributed to SBI for in 
tegration purposes.
322. It is well established that in order for limited part 
ners or nonvoting stockholders to avoid attribution of their 
equity interests in the integration analysis, they must main 
tain a purely passive role. See Anax Broadcasting Inc., 87 
FCC 2d 483, 488 (1981). Moreover, where an applicant 
adopts an ownership structure in which an owner is des 
ignated as a limited partner or nonvoting stockholder, that 
owner's subsequent participation in any aspect of the ap 
plicant's decision-making process raises a question whether 
he will, in accordance with the applicant's bifurcated struc 
ture, have only a passive, rather than active role in the 
management of the licensee. Coast TV, 5 FCC Red 2751, 
2752-53 (1990). In this regard, the Commission has stated: 
"where a 'passive' owner is shown to be materially in 
volved in the applicant's activities after that owner has 
been held out as a passive investor, that owner's interest 
will be considered for comparative purposes. (Footnote 
omitted.1" Id. at 2752. The Commission has also held that 
the provision of legal services by passive owners after the 
adoption of the applicant's organizational structure will 
result in the passive owners' interests being attributable to 
the applicant for comparative purposes. Magdalene Gunden 
Partnership, 6 FCC Red 5976, 5977 (1991); National Com 
munications Industries, 7 FCC Red 1703 (1992).
323. Here, Columbia, SBI's nonvoting shareholder, is an 
entity wholly owned by Peter Stott. Roger Krage. a Port 
land attorney, represents Stott's companies, including Co 
lumbia. Krage serves as an officer and director of 
Columbia. Krage also served as SBI's corporate counsel 
throughout this proceeding. In that capacity. Krage pre 
pared some of the applicant's corporate documents, includ 
ing its articles of incorporation, bylaws, stock certificates, 
and a Consent to Corporate Action in Lieu of an Organiza 
tional Meeting of the Shareholders and Board of Directors. 
Krage also acted as the incorporator of SBI and serves as its 
registered agent. Krage held SBI's March 1990 annual 
meeting at the office of Columbia, and attended that meet 
ing both as one of SBI's attorneys and as a representative of 
Columbia. He also acted as secretary of the meeting by 
taking and preparing the minutes.
324. In accordance with Magdalene Gunden, supra, Co 
lumbia must be considered a principal of SBI for integra 
tion purposes because of Krage's position as an officer and 
director of Columbia, and his provision of legal services to 
SBI as its corporate counsel. Under the Commission's at 
tribution policy, Krage was precluded from providing any 
service to SBI that Columbia would be prohibited from 
providing. Because Columbia could not provide legal ser 
vices to SBI without having its equity interest attributed to 
SBI, Krage could not do so. Consequently, Krage's provi 
sion of such services results in SBI receiving no more than 
25 percent integration credit. Magdalene Gunden, supra; 
National Communications, supra.
Prime contends that SBI is not financially qualified to become a 
Commission licensee. This argument is rejected for the reasons 
recited in SBI's reply findings and conclusions, at pages 13-14.
49
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
325. SBI argues that Krage's provision of legal services 
should not be attributable because Krage has no ownership 
interest in Columbia.68 However, it is Krage's position as an 
officer and director of Columbia which renders such legal 
services attributable to SBI for integration purposes. 
Magdalene Cunden, supra. SBI also argues that Krage per 
formed only "garden variety corporate work" on behalf of 
SBI, and that his actions were "ministerial."69 Suffice it to 
say, such assertions have been consistently rejected. 
Magdalene Gunden, supra; National Communications, supra; 
see also Mark L. Wodlinger, 3 FCC Red 3139, 3141 (Rev. 
Bd. 1988).
326. While the provision of legal services, standing alone, 
is sufficient to attribute Columbia's 75 percent equity inter 
est to SBI for comparative purposes, there is an additional, 
independent, basis for doing so. The findings establish that 
Krage has had other involvement in SBI's activities, which, 
when considered together, is material.
327. First, Krage helped to arrange for SBI's bank com 
mitment letter from First Interstate Bank of Oregon. Krage 
selected this bank because it was one of the banks used by 
Columbia. Krage made the initial contact with the bank, 
and arranged for Smith to meet with a representative of the 
bank to discuss SBI's application. Second, Krage, in his 
capacity as a representative of Columbia, was provided by 
Smith with a copy of documents concerning SBI's pro 
posed transmitter site lease. Third, Krage and Smith dis 
cussed the possibility of moving SBI's transmitter site, and 
Smith assumed that Krage would pass the information on 
to Stott. Fourth, Krage received from Smith a copy of a 
letter from SBI's consulting-engineer regarding the number 
of applicants for the proposed facility and their transmitter 
sites. Smith assumed that Krage would forward this letter to 
Stott. Fifth, Smith regularly provided Krage with copies of 
bills he received from SBI's communications counsel and 
consulting engineer. Sixth, Smith contacted Krage at regu 
lar intervals to apprise him of the status of the SBI applica 
tion. Finally, and significantly, Smith testified that he 
would continue to have conversations with Columbia, and 
would probably "confer" with Columbia "out of respect" 
and courtesy on various matters, such as equipment pur 
chases and promotions, after the SBI application was grant 
ed. While some of these activities appear rather 
unimportant and innocuous, taken together, they dem 
onstrate a clear pattern of involvement establishing that 
Columbia has not at all times maintained a purely passive 
role in SBI. This leads to the conclusion that Columbia 
would not. in all likelihood, remain completely passive in 
the future. For this reason, too, Columbia's equity interest 
must be attributed to SBI for comparative purposes. Coast 
TV, supra. 10
328. Columbia River Wireless, Inc. Wireless is entitled to 
100 percent quantitative integration credit for its manage 
ment participation proposal. Margaret McCormick. Wire 
less' sole voting stockholder, will serve as General Manager
of the proposed station on a full-time basis. In order to 
effectuate her proposal, Ms. McCormick will withdraw 
fully from her current employment and will not engage in 
any other time-consuming business pursuits.
329. Wireless' integration proposal is enhanced by Ms. 
McCormick's proposed future residence within the com 
munity of license. Wireless' integration proposal is further 
enhanced by Ms. McCormick's residence within the com 
munity of license for 16 years, from December 1969 
through October 1985.'' coupled with her record of civic 
activities within the community of license and proposed 
service area. In this connection, contrary to the arguments 
of the opposing parties,'2 Wireless is entitled to enhance 
ment credit both for Ms. McCormick's non-employment- 
related civic activities as well as her employment-related 
activities. National Communications Industries, 6 FCC Red 
1978. 1982 (Rev. Bd. 1991). 73 However. Wireless may not 
receive full credit for all of Ms. McCormick's civic activi 
ties.
330. Specifically, Wireless receives only minimal credit 
for the following activities of Ms. McCormick: Southwest 
Washington Health District Board: CETA Board; Clark 
County Committee on Aging: Retired Senior Volunteer 
Program; the city volunteer bureau described at paragraph 
34(b), supra; the concert series described at paragraph 
34(d). supra; the senior nutrition program described at 
paragraph 34(e), supra; the community garden program 
described in the first sentence of paragraph 34(f). supra; the 
Senior Trip Program described at paragraph 34(i). supra; 
the newspaper for the elderly described at paragraph 34(j), 
supra; the musical production described at paragraph 34(1) 
supra; and the Marshall Center Orchestra and Chorus de 
scribed at paragraph 34(m), supra. These activities are too 
remote in time to have significance in terms of an appre 
ciation of the current needs, problems, and interests of the 
Vancouver community. Sorenson, supra at 1952. citing Lin 
da Crook, 3 FCC Red 354 (Rev. Bd. 1988).
331. Similarly, only minor credit is warranted for Ms. 
McCormick's participation as a guest speaker at the Of 
ficers' Row Arboretum, and as a guest speaker at the 
Rotary Club. Inn at the Quay. These activities took place 
after the Wireless application was filed. Colonial, supra. In 
addition, Wireless may receive no credit for Ms. 
McCormick's participation on the Fort Vancouver Days 
Committee, the Slocum House Theatre Board, and the 
Smith Reynolds American Legion Post. These activities are 
unaccompanied by any description of the nature and extent 
of Ms. McCormick's involvement, or of how such involve 
ment familiarized her with the needs and interests of the 
Vancouver community.
332. Consequently, Wireless receives full credit for Ms. 
McCormick's civic participation in connection with the 
Fort Vancouver Fourth of July Committee, Cooperative 
Arts Council. Women-In-Action. Visitors Service Division.
68 See SBI's reply findings and conclusions, at page 5.
69 Id. at pages 5-6.
70 In light of the conclusion that SBI is entitled to 25 percent 
integration credit and other applicants have been awarded 100 
percent credit, it is not necessary to analyze the qualitative 
attributes of SBI's proposal. Miracle Strip Communications. Inc., 
4 FCC Red 5064, 5066 (1989).
71 Wireless is entitled to virtually no credit for Ms. 
McCormick's residence in Vancouver from 1937-39 and 1940-41
due to its extreme remoteness in time and lack of any associated 
civic activities. Colonial Communications. Inc., 1 FCC Red 674 
(1992); Ronald Sorenson. 6 FCC Red 1952 (1991). 
'_2 See SBI's proposed findings and conclusions, at para. 60. 
' 3 MCLP's argument that Wireless is entitled to no enhance 
ment for civic activities (see MCLP's proposed findings and 
conclusions, at para. 144), is rejected for the reasons recited in 
Wireless' reply findings and conclusions, at pages 6-7.
50
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
gardening program for the handicapped, summer lunch 
program, motorcycle safety course, and Washington 
Recreation and Parks Association. It is noted, however, that 
these activities were discontinued in the mid-1980s.
333. The opposing parties contend that Wireless is en 
titled to no integration credit, alleging, inter alia, that it is a 
"family paper proposal" that was passively acquiesced to. 
that it was totally created and driven by FCC counsel, and 
that Ms. McCormick did little more than execute docu 
ments prepared by FCC counsel.74 These arguments are 
without merit.
334. The findings establish that Ms. McCormick has 
controlled Wireless and that she has been anything but a 
passive follower of her FCC counsel or of anyone else. Ms. 
McCormick contacted seven consulting engineers before 
retaining one for Wireless, and contacted two different site 
owners before selecting a transmitter site. Although her 
FCC counsel provided Ms. McCormick with a set of sam 
ple cost estimates, she revised those estimates based on 
discussions with FCC counsel and others. She obtained 
equipment cost estimates from two equipment suppliers. 
She included in her estimates the cost to change the fre 
quencies of two FM stations. Ms. McCormick also selected 
and retained local counsel, and that counsel, not FCC 
counsel, prepared Wireless' corporate documents. Ms. 
McCormick arranged for publication of public notices and 
established the applicant's public inspection file.
335. The opposing parties further maintain that Wireless' 
two-tiered corporate structure was not formulated for any 
sound business reason, that the stock subscription agree 
ments of Emmett McCormick and Brad and Marie Skinner 
were not the results of negotiations, and that Ms. 
McCormick has not paid for her stock and has little finan 
cial stake in Wireless. 75 These arguments, too, are rejected.
336. First, Ms. McCormick testified that she discussed the 
stock subscription with Emmett McCormick several times, 
and there is no record evidence that there were no negotia 
tions. Second, Ms. McCormick did discuss with Brad and 
Marie Skinner how the deal was to go together. Ms. 
McCormick testified that she calculated how much money 
Wireless needed for pre-operational and prosecution ex 
penses, and that figure was reflected in the Skinners' stock 
subscription agreement. The Skinners accepted that figure. 
In essence, Ms. McCormick presented a proposal to the 
Skinners, and they accepted it. There is nothing sinister or 
improper about that. Third, the record reflects that, al 
though Ms. McCormick has not paid for her stock, she has 
performed substantial services on behalf of Wireless and 
has significant "sweat equity" in the applicant. Finally, the 
record reflects that Wireless' corporate structure is entirely 
believable and reflects a measured balance between risk 
and reward. Moreover, none of the opposing parties has
pointed to any evidence that Wireless" nonvoting share 
holders will be anything but passive investors or that its 
two-tiered structure is not legitimate.
337. Florinda J. Weagant. 1** Weagant is entitled to 100 
percent quantitative integration credit for her management 
participation proposal. As sole owner. Weagant will serve 
as the General Manager of her proposed station on a 
full-time basis.
338. Weagant's integration proposal is enhanced by her 
25 years of continuous residence in an area contiguous to 
the community of license, followed by approximately 2 
years of continuous residence within the service area of her 
proposed station.' 7 Such residence is coupled with a record 
of civic activities within the community of license and 
proposed service area. However, Weagant may not receive 
full credit for all of her civic activities.
339. Specifically, Weagant receives only minimal credit 
for the following activities: Member, Oregon and Southwest 
Washington Occupational Therapy Association; Keynote 
Speaker, Western International Conference of Occupation 
al and Physical Therapists; Speaker, American Heart Asso 
ciation Conference; Member, Alpha Phi Fraternity; 
Kindergarten Room Mother, Mill Plain Elementary School; 
Campfire Girls and Boy Scout Leader; and Founder and 
Volunteer of a tutorial program, Evergreen School District. 
These activities are too remote in time to have significance 
in terms of an appreciation of the current needs, problems, 
and interests of the Vancouver community. Sorenson, supra 
at 1952, citing Crook, supra.
340. Similarly, Weagant receives only minor credit for 
her participation as a guest speaker at the Fort Vancouver 
Lions Club since this activity took place after her applica 
tion was filed. Colonial, supra. In addition. Weagant may 
receive no credit for her participation in the Annual 
Health Fair. Rudy Leutke Senior Center, because the years 
of her participation have not been specified. Beach Broad 
casting Limited Partnership, 6 FCC Red 4485 (1991).
341. Further. Weagant receives no credit for the follow 
ing broadcast-related activities of AM station KKEY: (a) 
broadcasting a live program for The Greater Mt. Calvary 
Church of God; (b) donating a freezer to the church; (c) 
permitting community church groups to advertise and pro 
mote their activities as a public service: and (d) hosting on 
talk shows representatives from Network Employment 
Training, Southwest Washington Health District. Clark 
County Department of Community Services, Vancouver 
Child Abuse Prevention Center, and Fort Vancouver Lions 
Club.
342. With respect to Items (a), (c). and (d), there is no 
evidence that Weagant had any involvement in the produc 
tion of the programs or announcements. Sorenson, supra at 
1953 and 1954 n.6. In addition. Weagant, as the owner of 
the station, was compensated for airing the program in 
Item (a). With respect to Item (b), no credit is warranted
74 See SBI's proposed findings and conclusions, at paras. 58-59, 
and Trans-Columbia's proposed findings and conclusions, at 
para. 85. 
" Id.
76 Q Prime contends in its proposed findings and conclusions, 
at paras. 66-67, that Weagant should be disqualified on mis 
representation grounds based upon the failure to report a cer 
tain matter. However, these allegations were raised in a Motion 
to Enlarge Issues Against Florinda J. Weagant, filed by Trans- 
Columbia on March 4, 1992, which was denied by Memorandum
Opinion and Order, FCC 92M-531, released May 8, 1992. Q 
Prime's attempt to revisit this matter in its proposed findings 
and conclusions is totally improper and must be rejected. C/. 
Section 1.106(a)(l) of the Commission's Rules (reconsideration 
of interlocutory actions will not be entertained). 
77 Service area residence which has occurred within a commu 
nity contiguous to the proposed community of license is equal 
in importance to residence within the proposed community. 
E.g., Minority Broadcasters of East St. Louis, Inc., 99 FCC 2d 
264, 269 (Rev. Bd. 1984).
51
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
for what was, in essence, a charitable donation. With re 
spect to Item (d), there is no evidence establishing that 
Weagant, herself, hosted these programs, or otherwise par 
ticipated in their production or broadcast. Moreover, there 
is no evidence of record indicating how any of the above 
familiarized Weagant with the needs and interests of the 
Vancouver community. Id. at 1953.
343. Consequently, Weagant receives full credit for her 
civic participation in connection with St. Joseph School, 
Stroke Team, Women-In-Action, American Business Wom 
en's Association, Clark County Sheriffs Office, George C. 
Marshall House, and the 1987 activities described at para 
graph 54, supra. It is noted, however, that Weagant's activi 
ties with St. Joseph School ended in 1982, that her 
activities with the Stroke Team ended in 1987, that there is 
no indication that Weagant's 1987 activities were continued 
beyond that year, and that she became less involved in 
Women-In-Action in 1990.
344. Finally, Weagant's integration proposal is enhanced 
by her past broadcast experience. For approximately six 
months in 1972, during the illness of her husband, 
Weagant was the full-time manager of station KKEY(AM). 
Beginning in May 1987. upon her husband's death, 
Weagant became the full-time General Manager of that 
station with responsibility for all aspects of its day-to-day 
operation. However, Weagant is entitled to no credit for 
her association with KKEY between her husband's recov 
ery in 1972 and his death in 1987. Suffice it to say. the 
nature and extent of her involvement during that time 
period is too vague and indefinite to warrant any credit.
345. KLRK, Inc . KLRK is not entitled to any integration 
credit for its management participation proposal. It has 
completely failed to establish that its proposal is credible.
346. It is axiomatic that integration credit is due only 
when the applicant sets forth a specific integration pro 
posal, adheres to that proposal, and gives reasonable assur 
ance that it will be carried out. Bradley, Hand and Triplett, 
89 FCC 2d 657, 662 (Rev. Bd. 1982)". In this regard, the 
burden is on the applicant to establish the bona fides and 
reliability of its proposal and, to the extent an applicant's 
conduct is demonstrably at odds with its described owner 
ship structure, it has failed to meet that burden. Royce 
International Broadcasting, 5 FCC Red 7063, 7064, 7065 
n.12 (1990). In addition, integration credit has been denied 
where a principal of an applicant did not have sufficient 
interest in or influence over the applicant to warrant a 
finding that his or her future participation would be mean 
ingful in terms of the purposes behind the integration 
criterion. Utah Television Associates Limited Partnership, 
102 FCC 2d 1470, 1478-79 (Rev. Bd. 1985). Similarly, 
integration credit has been denied where purportedly in 
tegrated principals showed no active participation in or 
knowledge of the applicant's affairs, and where the in 
tegrated principals exhibited passivity. Cuban-American 
Limited, 5 FCC Red 3781, 3786 n.4 (1990); Jarad Broad 
casting Company, Inc., 1 FCC Red 181, 183 (Rev. Bd. 
1986).
347. Duane Wilson is a 26 percent shareholder. Presi 
dent, and a director of KLRK. His son, Tracy Wilson, is a 
26 percent shareholder. Vice President, and a director of 
KLRK. D. Wilson's wife, Karen Peck Wilson, is a 48 
percent shareholder, Secretary-Treasurer, and a director of 
KLRK. D. Wilson proposes to serve as the full-time Chief 
Executive Officer and Chief Financial Officer of KLRK's 
station. T. Wilson proposes to serve as the full-time Sales 
Manager of the station. K. Wilson proposes to serve as the
full-time General Manager of the station. The findings 
establish, however, and it is concluded, that KLRK:s in 
tegration proposal does hot accurately and reliably depict 
the respective roles of the Wilsons in the proposed opera 
tion of the station. Consequently, all integration credit 
must be denied. Atlantic City Communitv Broadcasting, Inc., 
6 FCC Red 925, 932-34 (Rev. Bd. 1991)!
348. Turning first to T. Wilson and K. Wilson, the find 
ings demonstrate that each had a lack of knowledge with 
respect to significant aspects of KLRK's proposal, and that 
each exhibited a near total passivity and lack of involve 
ment in KLRK. In addition, although both T. Wilson and 
K. Wilson have served at various times as KLRK's Sec 
retary-Treasurer, the findings establish that KLRK's cor 
porate structure has been completely ignored. KLRK is not, 
therefore, entitled to receive integration credit for the 48 
percent and 26 percent equity interests of, respectively, K. 
Wilson and T. Wilson. Cuban-American, supra; Jarad, 
supra; Utah Television, supra.
349. The record reflects that, while serving as Secretary- 
Treasurer of KLRK, T. Wilson did not keep the official 
corporate records, did not receive or see any bank state 
ments for KLRK's account, did not prepare any type of 
accounting work for the corporation, never kept the cor 
porate checkbook, and never signed a corporate check. 
Indeed, T. Wilson did not know until his deposition in this 
proceeding in May 1991 (more than two years after the 
KLRK application was filed) that he was authorized to sign 
checks.
350. Likewise, the evidence establishes that, while serving 
as Secretary-Treasurer of KLRK. K. Wilson did not handle 
any corporate paperwork, did not maintain the corporate 
books, had no authority to sign checks on KLRK's bank 
account, had never seen a corporate bank statement, per 
formed no accounting and did not know if one was ever 
performed, had no knowledge as to whether KLRK's con 
sulting engineer or a consultant. Dick Schwary. had billed 
KLRK for their services, and did not know as of the date of 
her deposition in May 1991 whether KLRK's FCC counsel 
had billed the applicant for his services. Indeed. K. Wilson 
had never spoken to KLRK's FCC counsel prior to her 
deposition.
351. Further, T. Wilson played no role in the selection 
of KLRK's FCC counsel, corporate counsel, or consulting 
engineer, had no role in securing the consulting services of 
Schwary, did not know how much Schwary was owed for 
his services, did not sign or prepare any portion of KLRK's 
application, had no role in establishing the applicant's 
public inspection file, had no role in securing either of 
KLRK's transmitter sites, and first became aware that 
KLRK had an auxiliary power proposal at his deposition.
352. K. Wilson, too, had no involvement in negotiating 
for the use of KLRK's present transmitter site, and did not 
know the owner of the site or its location as of the date of 
her deposition. She did not know the location of the 
applicant's public inspection file or even whether such file 
existed. In addition, the record reflects that K. Wilson 
originally held the position of KLRK's corporate Vice 
President, and that her corporate position was later 
changed to Secretary-Treasurer. However, she did not par 
ticipate in the decision to make her Vice President and 
then Secretary-Treasurer, and she did not participate in the 
decision to change her corporate position.
353. In stark contrast to the passivity, lack of knowledge, 
and lack of involvement of T. Wilson and K. Wilson, the 
findings establish that D. Wilson has completely dominated
52
9 FCC Red No. 1 Federal Communications Commission Record FCC 93D-24
the affairs of KLRK. Thus, D. Wilson made the decision to 
apply for the allocation, made the decision to use the 
corporate structure, selected the corporate name, acted as 
an incorporator, selected corporate counsel, FCC counsel, 
and KLRK's consulting engineer, determined that T. Wil 
son would (initially) hold 50 percent of KLRK's stock, and 
was the only KLRK shareholder present at KLRK's pre 
liminary organizational meeting.
354. Further, D. Wilson prepared KLRK's application 
with Schwary's help, signed all the application certifica 
tions, certified KLRK's financial qualifications solely on the 
basis of his finances, used Schwary to negotiate an option 
on KLRK's original transmitter site, had the applicant's 
consulting engineer negotiate for the use of KLRK's second 
site, obtained cost estimates, prepared a budget with 
Schwary's help, reimbursed Schwary for the payment of 
the FCC's application filing fee, and established KLRK's 
public inspection file.
355. Moreover, D. Wilson established KLRK's bank ac 
count, made the decision as to which bank to use, kept the 
corporate checkbook in his office, signed all checks written 
on the KLRK account, kept KLRK's corporate documents 
in his office, and kept T. Wilson's stock certificates in his 
office. D. Wilson has, in addition, paid for all of the 
outstanding stock in KRLK, and has supplied all of the 
funds for the prosecution of its application. In this regard, 
neither T. Wilson nor K. Wilson have paid for their stock 
or provided any funds toward prosecution expenses. With 
the exception of their stock subscription agreements, there 
is no written document committing or obligating T. Wilson 
or K. Wilson to contribute funds to KLRK.
356. Given D. Wilson's dominance over KLRK, it may 
be argued that it is entitled to 26 percent integration credit, 
representing D. Wilson's equity position in the applicant. 
However, no credit is warranted even for D. Wilson's 
participation proposal.
357. D. Wilson proposes to serve as CEO and CFO of 
KLRK's station. He claimed he will be responsible for 
formulating and instituting the business policy and or 
ganizational structure of the station, as well as formulating, 
implementing, and managing the station's financial oper 
ations and strategy. However. D. Wilson admitted that for 
mulating and instituting the business policy would be 
largely accomplished before the station goes on the air, but 
stated that continuous revisions would be necessary. Simi 
larly, D. Wilson acknowledged that formulating and in 
stituting the organizational structure had already been 
done, and that securing financing and deciding whether to 
use cash or borrow money would be done before the 
station goes on the air. Budgets for cash flow and expenses 
had already been established, but would be ongoing as the 
station commenced operation.
358. D. Wilson testified that he would avoid "as much as 
possible" the day-to-day management of the station's staff. 
He further testified that he would not necessarily be at the
station at a certain time each morning to manage the 
station and staff because he expected K. Wilson, the Gen 
eral Manager, to assume that responsibility. Moveover, 
when questioned regarding what he intended to do to 
occupy 40 hours per week at the station, D. Wilson stated 
that he would be involved in a lot of "peripheral things." 
D. Wilson admitted, however, that the description of his 
position made it hard to believe he would be working 
more than a couple of hours each day. D. Wilson 
"guessed" that he would retain his main duties for "quite 
some time" and delegate his peripheral duties to others. He 
foresaw that sometime "down the road," he would not have 
to work at the station on a daily basis.
359. An applicant has the burden of demonstrating the 
extent of a principal's policy functions and the likelihood 
that he will have a meaningful management role at the 
proposed station. Doylan Forney, 5 FCC Red 5423, 5426 
(1990), citing Policy Statement, supra; Ft. Collins Telecasters, 
60 RR 2d 1401, 1408 (Rev. Bd. 1986). The Commission 
also requires integration proposals to be adhered to on a 
permanent basis. Martin fmerman, Inc., 3 FCC Red 1650, 
1652 (Rev. Bd. 1988), citing Policy Statement, supra. Given 
the above, it cannot be concluded that D. Wilson will have 
any meaningful management role at KLRK's proposed sta 
tion. The duties and responsibilities he described are far 
too vague, indefinite, and ephemeral to warrant credit. Cf. 
Forney, supra at 5426. Indeed, it does not even appear that 
the position described by D. Wilson would occupy his time 
on a full-time basis, and he admitted as much. Finally, it is 
impossible to conclude that D. Wilson intends to adhere to 
his integration proposal on a permanent basis. Martin 
Intermart, supra.
360. KLRK contends that it is illogical to deny integra 
tion credit to T. Wilson and K. Wilson on the basis of D. 
Wilson's dominance, yet, at the same time, deny integra 
tion credit to D. Wilson because he will not do enough at 
the station.78 While superficially appealing, this argument is 
without decisional significance. Even assuming, arguendo, 
that KLRK is correct, the findings of fact clearly establish 
that, at best, KLRK would warrant either 74 percent in 
tegration credit for T. Wilson's and K. Wilson's proposals 
or 26 percent credit for D. Wilson's proposal, but not 
credit for both. However, neither the 74 nor 26 percent 
figure would be sufficient to overcome the advantage of 
those applicants awarded 100 percent quantitative integra 
tion credit. Miracle Strip, supra. Further, to the extent that 
there was confusion and uncertainty in the record as to the 
accuracy and reliability of KLRK's integration plan, the 
burden was on KLRK to eliminate such confusion and 
uncertainty and to establish the credibility of its proposal. 
Royce, supra at 7065 n.12. KLRK has manifestly failed to do so.79
361. Trans-Columbia Communications.80 Trans-Columbia 
is entitled to 100 percent quantitative integration credit for 
its management participation proposal. Andrew Brown, 
one of Trans-Columbia's general partners, will serve as
78 See KLRK's reply findings and conclusions, at pages 9-10.
79 Since KLRK is entitled to no integration credit, the qualita 
tive aspects of its proposal need not be analyzed. Miracle Strip, 
supra.
80 Q Prime and CFMLP contend that Trans-Columbia lacks 
the basic qualifications to become a Commission licensee be 
cause of alleged false testimony given by Brown and Friedman 
concerning Trans-Columbia's financial qualifications. See Q 
Prime's proposed findings and conclusions, at paras. 76-86, and
CFMLP's reply findings and conclusions, at paras. 40-45. How 
ever, Q Prime raised these allegations in a Motion to Enlarge 
Issues Against Trans-Columbia Communications, filed on Au 
gust 13, 1991, and its motion was denied by Memorandum 
Opinion and Order, FCC 91M-3080, released October 15, 1991. 
The attempts to revisit this matter are totally improper and 
must be rejected. Cf. Section 1.106(a)(l) of the Commission's 
Rules (reconsideration of interlocutory actions will not be en 
tertained).
53
FCC 93D-24 Federal Communications Commission Record 9 FCC Red No. 1
General Manager and Program/Production Manager of the 
proposed station on a full-time basis. Lester Friedman, 
Trans-Columbia's other general partner, will serve as the 
station's News and Public Affairs Director and its General 
Sales Manager on a full-time basis. Both Brown and 
Friedman have pledged to resign from their current em 
ployment and curtail any other activities as necessary to 
fulfill their integration commitments.
362. Trans-Columbia's integration proposal is enhanced 
by the promise of Brown to move to and reside within the 
community of license should the application be granted. 
Trans-Columbia's proposal is further enhanced by Brown's 
service area residence since 1976 coupled with a record of 
civic activities within the community of license and pro 
posed service area. However, Trans-Columbia may not re 
ceive full credit for all of Brown's activities.
363. Specifically, Trans-Columbia receives only minimal 
credit for Brown's participation as a United Way repre 
sentative at his place of employment since this activity was 
limited to fundraising. Naguabo Broadcasting Company, 6 
FCC Red 4879 (1991). No more than minimal credit is 
also warranted for Brown's memberships in and donations 
to various organizations since these activities involved only 
the payment of money for which Brown received litera 
ture. Cf. Rebecca L. Boedker, 6 FCC Red 2557, 2558 
(1991).
364. Trans-Columbia's integration proposal is enhanced 
by the promise of Friedman to move to and reside within 
the community of license should the application be grant 
ed. Trans-Columbia's proposal is further enhanced by 
Friedman's residence in the community of license from 
1977 to 1981 and in the service area in 1976 and from 
1981 to the time of his testimony.81 Such residence is 
coupled with a record of civic activities within the commu 
nity of license and proposed service area. However, Trans- 
Columbia may not receive full credit for all of Friedman's 
activities.
365. Specifically, Trans-Columbia receives only minimal 
credit for Friedman's memberships in and donations to 
various organizations. With the exception of the American 
Heart Association, for which he participated in one march, 
these activities involved only the payment of membership 
dues and making charitable donations. Cf. Boedker, supra.
366. Consequently, Trans-Columbia receives full credit 
for Brown's civic participation in connection with the 
Vancouver public school system, which ended in early 
1978, and the Special Olympics Committee, which ended 
in 1984. Trans-Coiumbia also receives full credit for 
Friedman's civic participation in connection with the Van 
couver and Evergreen School Districts, Vancouver Police 
and Clark County Sheriffs Departments, Washington State 
Patrol, Clark County Public Utility District, Clark County 
Regional Planning Council, Portland Special Olympics, 
Fort Vancouver Regional Library, Columbia Arts Center, 
Fort Vancouver Fourth of July Committee, Fort Vancou 
ver Days, Southwest Washington Health Department, Red 
Cross Blood Drive, and New Rose School. It is noted, 
however, that Friedman's activities were discontinued in
1984 (with the exception of Southwest Washington Health 
Department, which ended in 1980), when he left his em 
ployment.
367. Finally. Trans-Columbia's integration proposal is 
enhanced by the past broadcast experience of both Brown 
and Friedman. Brown has been involved in broadcasting 
since 1973 in various capacities including on-air talent, 
board operator, assistant engineer, chief engineer, engineer 
ing manager, promotion coordinator, backup contract en 
gineer, maintenance engineer, and satellite transmission 
engineer. Brown has held engineering management posi 
tions, but the record provides no details with regard there 
to. Friedman has been involved in broadcasting since 1972 
in various capacities including on-air talent, operator, pro 
ducer, news reporter, copy writer, assistant music director, 
news anchor, news and public affairs director, and program 
director.
ULTIMATE CONCLUSION
368. With no integration credit, Q Prime, Eells, and 
KLRK cannot prevail in this proceeding. In addition, a 
diversification demerit has been assessed against Q Prime. 
Similarly, with only 25 percent quantitative integration 
credit, SBI's proposal is comparatively inferior to the pro 
posals of Wireless, Weagant, and Trans-Columbia, each 
having been awarded 100 percent quantitative integration 
credit. Among these three applicants, Weagant has pre 
sented the superior proposal, and her application will be 
granted.
369. Under the unified local residence-civic activities 
factor, Weagant's long-term and continuous residence in an 
area contiguous to Vancouver, and her more recent civic 
participation, entitle her to be preferred over Wireless and 
Trans-Columbia. Specifically, Weagant resided in an area 
contiguous to Vancouver for 25 years, from 1964 to late 
1989. Such residence is considered equal in importance to 
residence in Vancouver itself. Minority Broadcasters, supra. 
Weagant has also resided within the service area of her 
proposed station since 1989. Neither Ms. McCormick, 
Wireless' voting shareholder, nor Messrs. Brown and 
Friedman, Trans-Columbia's general partners, come close 
to matching the total length and continuity of Weagant's 
Vancouver-equivalent and service area residence. In addi 
tion, Ms. McCormick's 16 years of Vancouver residence 
ended in 1985, Friedman's 4 years of Vancouver residence 
ended in 1981, and Brown has never resided in Vancouver. 
Although Brown and Friedman have resided in the service 
area of their proposed station for approximately 13 and 9 
years, respectively, such residence is of less significance 
than residence in an area contiguous to the community of 
license and, in any event, is of far shorter duration than 
Weagant's total residence. McClenahan Broadcasting, Inc., 5 
FCC Red 7269, 7273 (Rev. Bd. 1990), rev. denied 6 FCC 
Red 2347 (1991). Moreover, the proposed future local resi 
dence of Ms. McCormick and Messrs. Brown and 
Friedman are not sufficient to overcome Weagant's decided 
advantage. Eugene Walton, 1 FCC Red 3237 (1992).
81 Trans-Columbia is entitled to virtually no credit for 
Friedman's service area residence from 1964 to 1968 due to its 
remoteness in time and lack of any associated civic activities. 
Colonial, supra.
82 The opposing parties argue that no credit should be allowed 
for the bulk of these activities because they consisted of nothing
more than airing public service announcements at the stations 
where Friedman worked. See Wireless' proposed findings and 
conclusions, at para. 227, and Q Prime's proposed findings and 
conclusions, at para. 90. The record evidence, however, does not 
establish that Friedman's activities were as limited as the oppos 
ing parties contend.
54
9 FCC Red NO. i Federal Communications Commission Record FCC 93D-24
370. While much of the civic participation of Weagant, 
Ms. McCormick, Brown, and Friedman has been discount 
ed for various reasons, Weagant is also entitled to an 
advantage over Wireless and Trans-Columbia in this regard. 
The record reflects that virtually all of the civic activities of 
Ms. McCormick, Brown, and Friedman were discontinued 
in the mid-1980s. In contrast, Weagant has had some civic 
participation in more recent years. When coupled with her 
long-term Vancouver-equivalent residence, her more recent 
civic participation reflects a greater likelihood of current 
knowledge of the needs and interests of the community. 
Jarad, supra at 189-90.
371. Finally, Trans-Columbia is entitled to a preference 
over Weagant and Wireless based on the past broadcast 
experience of Brown and Friedman. Although Weagant has 
had broadcast experience at the management level, the 
experience of Brown and Friedman has been far longer 
and more diverse. Threshold Communications, 1 FCC Red 
4554 (Rev. Bd. 1992); Walton, supra at 3239-40 n.10. How 
ever, Trans-Columbia's preference for broadcast exper 
ience, a minor comparative factor, is not sufficient to 
overcome Weagant's preference on the combined local resi 
dence-civic activities factor. Kennelwood Broadcasting Com 
pany, 1 FCC Red 520 (1992), citing Policy Statement, supra 
at 396.
372. In view of the foregoing, it is ultimately concluded 
that the application of Weagant is preferred over those of 
the basically qualified competing applicants under the 
comparative issue, and the grant of the Weagant applica 
tion would best serve the public interest, convenience and 
necessity.
Accordingly, IT IS ORDERED that the Petition to Re 
open the Record, filed by Wireless on June 18, 1993, and 
the Revised Petition to Reopen the Record, filed by Wire 
less on June 25, 1993, ARE DENIED.
IT IS FURTHER ORDERED that, unless an appeal 
from this Initial Decision is taken by a party, or it is 
reviewed by the Commission on its own motion in accor 
dance with Section 1.276 of the Rules, the application of 
Florinda J. Weagant for a construction permit for a new 
FM station on Channel 290C2 in Vancouver, Washington, 
IS GRANTED, and the applications of Q Prime Inc., 
Smith Broadcasting, Inc., Columbia River Wireless, Inc., 
McCoy Communications Limited Partnership, KLRK, Inc., 
Thomas M. Eells, Clark Broadcasting Limited Partnership, 
Columbia FM Limited Partnership, and Andrew L. Brown 
& Lester M. Friedman d/b/a Trans-Columbia Communica 
tions, ARE DENIED.83
FEDERAL COMMUNICATIONS COMMISSION
Arthur I. Steinberg 
Administrative Law Judge
83 In the event exceptions are not filed within 30 days after the 
release of this Initial Decision, and the Commission does not 
review the case on its own motion, this Initial Decision shall 
become effective 50 days after its public release pursuant to 
Section 1.276(d) of the Rules.
55