Not Looking Good--AFN Takes Mismanagement to a New Level
1. The Stealth Agenda
The item wasn’t on the agenda, and although City Attorney Mike Franell was present, he couldn’t give any advice on the issue. After all, it concerned the impending hiring of his brother as head of AFN. Pseudo-legal advice was provided by outgoing City Administrator Gino Grimaldi to the affect that the nepotistic character of the appointment could not be considered by the council. Brushing aside the objections of Councilor Jack Hardesty, the remaining claque of councilors voted to give a second plum job in the City of Ashland to the Franell Family. Joe Franell will relocate here at your expense from Florida. I hope his family like skiing and cappuccino.
2. A Fait Accompli
Since it wasn’t on the agenda, no one had signed up to speak on the issue, so no one could speak against it. It was, as they say, a fait accompli, a done deal. The maneuver left no doubt that what is most important to at least three members of the City Council is exercising power, and confirming the perception that their rule is law. They will have their way, however wayward that be. Some people might think that the point isn’t whether the City Attorney’s brother is the City Attorney’s brother, but rather, whether he is “the most qualified for the job.” If the City Council’s top lawyer had been in action, providing the advice to the City that he is paid to provide, they would have known that Joe Franell’s qualifications were irrelevant to the issue of his fitness for the job.
One of my favorite fairy tales will illustrate why this is the case. In “Donkey Skin,” the lovely princess (played by Catherine Denueve) dons a donkey skin to conceal her beauty and flees her father’s castle because, deranged by the death of his lovely wife, and seeking to fulfill her deathbed request that he marry only a woman as beautiful as herself, he has chosen his daughter to wed. Fortunately, the princess’s fairy godmother provides ethical guidance in a song that reminds us all that “fathers do not marry their daughters.” Some of the most important moral lessons are locked away in children’s stories, and “Donkey Skin” reminds us that, before we even consider an applicant’s fitness for a salaried position on the public payroll, we must consider whether they have any characteristics, such as blood relations, that would disqualify them from assuming the position. While the omnipotent will always disregard such limitations -– witness the marriage of Caesar Borgia to his sister Lucretia with the approval of their father the Pope — certain boundaries must be respected. In a world governed by sense, a princess cannot ascend to her mother’s throne via her father’s bed. Similarly, however qualified Joe Franell might be, he cannot properly ascend to the status of a top municipal official using his brother’s high office as a stepping-stone.
Let us presume the rogue Councilors are merely ignorant of the dangers of incestuous relations in City government. We would hazard a guess that they are acquainted with the concept of avoiding the “appearance of impropriety.” But like a truck full of kids in dad’s four-wheeler facing a super-mudhole, the rogue Councilors simply threw it into high and hit the gas, and you know how that works out. The Council’s decision (from which only Jack Hardesty dissented) will dishearten all who hoped, despite past evidences, that Ashland enjoys honest government. That notion is dead. As if the danger of cronyism had not been the subject of the last six months of national news, the Rogue Five -— Cate Hartzell, Russ Silbiger, Kate Jackson, Dave Chapman and Alex Amarotico – hijacked our civic vehicle and drove it directly into a filthy swamp of unknown depth.
4. A Setup For Failure
Why would the Rogue Five do this? Surely Mr. Franell’s brother could not have risen so far above the ranks of the other 59 applicants that he has to be the one to lead AFN. Surely, somewhere among the clever, intelligent techies already peopling the Pacific Northwest, or even in our own little town, we could have found someone to do this job. Aha, now you’ve hit upon it. What is this job? No one knows. Two hours after they decided to hire Joe Franell, the Council batted around four proposals on what to do with AFN, and Kate Jackson even came up with a hybrid concept that combined the worst elements of the non-profit spin-off (no City control over management) with the worst aspect of the “Open Carrier” proposal (no ESPN).
Like the job of managing FEMA, that the President thought could be managed by a connoisseur of horse-flesh, no one really knows what the new AFN head will do. Perhaps, like “Brownie,” all he has to do is “a heck of a job,” sitting around with his opposable digit shoved firmly into one orifice or another while the chips fall where they may. Such a person would be ideal for this position, since no one knows just what he will do to “manage” AFN, since even the business model for this orphan agency is up in the air. Many capable people would avoid such a job, since it is a setup for failure. It is thus doubly suspicious that the candidate we are told is the “best” would in fact accept the job. It would be far more believable to hear that the best candidate, after learning the vague particulars of the position, would reject it. There is every possibility that, like “Brownie,” who was chosen to dismantle FEMA, not manage it, our new AFN manager has been hired by Finance Director Lee Tuneberg and Gino Grimaldi to deliver the coup de grace by demonstrating, once and for all, that AFN is a failure.
5. Who Says We Can’t Make A Decision?
As Mayor Morrison asked rudimentary questions, he made it clear he had not studied the proposals that have been on the website for weeks. Dave Chapman, Russ Silbiger, and Cate Hartzell, who put their plan together in non-open meetings despite being a subcommittee of a public body that should hold open meetings, tried to explain things to the Mayor, but some of us thought it was a little late for that. Civic observer Tom Gaffey left in disgust, deeming the exercise a “study session” should’ve been completed long before the meeting. “They’re not going to decide anything,” he said, echoing the comments of former Mayor Cathy Shaw, who said the day before the City Council meeting that she didn’t plan to attend because it was inconceivable that the Council would decide anything. Of course, she didn’t know the appointment of Joe Franell of Florida as AFN head was on the stealth agenda.
6. The Problem of Managing “A Wonderful Man”
Political-correctness maven Leah Ireland, fancying herself charming, first insulted Joel Kramer by laughingly objecting to sharing a seat next to him because she doesn’t like JPR’s content offerings (not PC enough). Then she turned prophetess, telling us that if JPR were selected to manage AFN, there would be hell to pay. People would mount petitions, hit the streets, and massively reject the plan by popular referendum. By such skillful communications, Leah showed her ability to forge agreements, because after her mini-tirade against JPR, Joel Kramer didn’t want to sit next to her, either.
Then Leah got into another mode, gushing about “this wonderful man” who would be the new AFN head. She just thought this nepotism thing was ridiculous, and he should be given a chance. The other citizens were left wondering what she knew about Joe Franell that the rest of us didn’t. There has been little information about his qualifications released by the City, certainly not enough to know that he is “wonderful”. Even if he were wonderful, though, he would still be a terrible choice based on his blood relation to the City Attorney, which generates what lawyers call a “potential conflict of interest” that should be avoided whenever possible. Once you ignore a potential conflict, you move forward to the next stage of corruption, called “an actual conflict of interest.”
An actual conflict of interest arises when a lawyer would be required, due to his dual loyalties, to take opposite positions for two different clients. How would an actual conflict of interest for Joe Franell arise in this situation, and what would it mean for the City? Essentially, his brother has taken a job as a turnaround specialist, regardless what “option” is adopted by the council. The performance of this individual, who will take the reins of AFN, a department that loses about $10,000 a week, should be under a microscope, and he should be subject to some strict financial progress requirements tied to his compensation. The City Council will likely fight tooth and nail to prevent disclosing the terms of his contract, but we may assume it provides many protections for the employee and no provision for performance-based compensation. If his work is not satisfactory, his contractual performance should be reviewed, and at that point, the City Attorney would be consulted by City leaders charged with reviewing his performance. At that point, the City Attorney would be unable to perform his job.
If things go well with the new Franell, the conflict would just simmer in a potential form. Some obvious negative effects will be felt. Nepotism is almost always bad for work morale and productivity, as fellow employees move from feeling jealous to thinking how to get their own relatives hired. Other problems will arise. People will say that, in Ashland, it’s who you know, not what you know, that gets you hired, and that will be hard to refute. If the new Franell does well, it will be discounted as luck. If he receives raises, it will be thought of as favoritism. If his faults are overlooked, people will say he “has pull.”
Of course, things might not go well, because they rarely do at AFN. The new Franell’s faults might be of any type. We don’t know if his contract provides for a probationary period. We don’t know what conduct or misconduct would constitute grounds for discipline or firing. We might doubt whether anyone in the City would have the guts to criticize the City Attorney’s brother, which is an inherent problem here, but assuming someone did, we might need to impose some discipline on the new Franell. At that point, we clearly would not be able to rely on the legal advice of our City Attorney, who would be ethically unable to provide such advice, because of the conflict of interest between his loyalty to his brother and his duty to us. He would have to call one of his friends at a law firm in Portland and pay them a retainer of about $10,000, so a firm with a name like Stoel, Rives can bill us $350/hr for the services of a municipal employment lawyer. City lawyers make friends referring work out like this, and all things work together for good. There is less work for the City Attorney, a good connection with a big lawfirm, and perhaps a nice settlement for the outgoing Franell.
Oh, I can hear the optimists among us scoffing. Things like that never happen in Ashland! Right, and there are no ducks in Lithia Park. The City has wasted plenty of money on employment issues that result from poor hiring choices. Last time the City paid off a departing employee, Lisa Brooks of Ashland Police Department, she settled her harassment suit for $250,000. The legal fees certainly exceeded that amount, so the Brooks disaster probably cost half a mill. The City was once sued after it fired the Fire Chief, who was grossly obese, on grounds the City had failed to accommodate his disability -— weighing so much he couldn’t climb a ladder. Of course, if the Fire Chief had been the City Attorney’s brother, he’d probably still be sitting in the new station house, putting out bureaucratic brush fires. Last year, the City Council paid $35,000 to consultants who papered over the still-simmering antagonism toward Chief Mike Bianca, who insists on seeing the town as a peaceful place, and does not mistake himself for Clint Eastwood, to the great chagrin of the would-be gunslingers hired by the previous Chief, that Bianca can’t fire until he catches them committing some criminal act. Indeed, under the surface, the rift at the heart of the APD is still bubbling like an undersea heat-vent that will in time generate its own volcano. But let’s focus on the problem at hand.
The Rogue Five don’t want to see the employment disaster they have engineered by ignoring the laws of nature and the ethical law that governs lawyers. They are pleased to send the message that their will is law, common sense and legalities be damned. Of course, since the City Attorney finds it convenient to remain silent about the looming dangers of hiring his brother, the Rogue Councilors can claim ignorance. Deniability is built into this plan. Some might think, that placed in the City Attorney’s position, they would not even want their brother to get the job. For example, my brother has been one of the top City Attorneys in the City of Phoenix, Arizona for twenty years, but even when I’ve been between jobs and hard against it, he has never suggested that I apply for an opening there. After all, it would only taint his reputation and cause people to suspect my qualifications.
Then again, with hurricanes devastating the Gulf Coast, our City Attorney might be placing a premium on getting his brother out of harm’s way, and into the safe bosom of Ashland. To bring these two siblings together, currently separated by the entire length and breadth of the continental United States, all we have to do is pay the new Franell’s relocation expenses, his salary and benefits, the costs of extra legal advice to negotiate his contract and monitor his performance, and whatever costs arise from having him take a job that no one can tell you what it is. And for that, as Leah Ireland put it so well, we get a wonderful man.
7. Kissing Off the White Knight
Having demonstrated their imperviousness to sense, the Council found it easy to commit further blunders. They gave Joel Kramer of JPR all the excuse he needed to leave the discussion table for good. Of the “four” options on the table, many citizens liked the idea of passing management of the business to JPR, that has built a heck of a listener base and is one of the largest ISPs selling AFN Internet access. But it was clear to Kramer, probably even before the meeting, that three of the Councilors — Hartzell, Chapman, and Silbiger — were certain to vote against a JPR spin-off, and eager to proceed with the new “Open Carrier” model that the three prefer. And in predictable fashion, as these things always play out, the Council voted to focus on developing the Open Carrier option.
The Open Carrier model sounds very sensible, and quite frankly, I would support it, if it were possible. Before I explain why it’s not possible, however, I’ll tell you how the Council hopes it will work. An Open Carrier system would maintain City ownership of all of AFN. All households would receive mid-speed Internet access and a “base level of TV” (all broadcast and local channels, and CSPAN). The City would jettison costly TV cable channels that many AFN users shun. The City would add a new charge to the utility bill of between $7 and $15 per month for this service, thus going directly into competition with local ISPs like Jeffnet, Info structure, Ashland Home Net, and Open Door.
Practically speaking, of course, the financial part of the plan has already received a popular rejection. The City Council backed into a buzz-saw last year after Lee Tuneberg convinced them to add a monthly AFN charge to our utility bill. They withdrew the plan when it exploded in their face. Granted, the Open Carrier plan will give people something for their money -— Net access and basic TV – but the plan to charge everyone for service on the utility bill will not be made more palatable to those who objected they didn’t want to pay for AFN if they didn’t use it.
But let’s say, that like me, you think the Open Carrier proposal sounds good. Why do I say it can’t be done? The answer is simple. You will note that what is getting trimmed under the Open Carrier proposal is City spending “on TV.” What does that mean? That means not sending checks to the media magnates like Warner Brothers for that TV programming Ashlanders don’t seem that interested in, and that is equally available at lower price from Charter.
The high-priced question is, of course —- can we stop sending checks to Hollywood? According to Joel Kramer of JPR, the answer is a resounding “No.” Why? Kramer explained his answer in this fashion: “I would never have signed the contracts that the City signed to get television content. Most are binding until 2014. One, for religious programming, is effective until 2009.” Asked directly whether he thought these long-term TV contracts posed an insuperable obstacle to the adoption of the Open Carrier plan, he unequivocally answered, “Yes.”
So the City has signed contracts that obligate it to provide television channels like HBO, Disney, and Warner Brothers through AFN for the next eight years, and to pay the TV studios set rates per subscriber. Kramer said he was very disappointed to discover, once he got his hands on some of the contracts, that they had many onerous provisions, but was most taken aback by two things —- the extremely long terms and the fact that the contracts had been signed by the City without prior review by legal counsel. At this point, AFN’s Rick Holmboe chimed into to inform us that the assistance of a lawyer couldn’t have resulted in better terms -— the studio contracts are “take it or leave it.” You can see why the City Attorney isn’t worried about being unable to consult on AFN’s operations – they think his assistance would be of no value. Besides, our City Attorney is more than busy enough cutting deals with developers to manage the steady inflation in our residential real estate market, that is making many Medford realtors wealthy. Let AFN continue on its merry way, leaking money like a sieve! That’s entertainment!
I asked Kramer where the City’s action left JPR, and he answered: “We’re done. If the city had said they wanted to go forward with us, we would have worked on it with them. We do not want to be seen as pushing anything. If they had said ‘yes,’ I would have written up a report. Now I don’t have to write a report.” Then he was gone.
8. They Must Have Been Kidding
Joel’s statements rocked my world. I had walked into the Council meeting thinking that Open Carrier might be a tough sell to the citizens, but it seemed a logical approach to administering a valuable City resource. Though the nepotistic choice of the new Franell to do a vague job disturbed me, I felt I could still support the Open Carrier option. Now, that view had taken a serious hit, since I am disinclined to attempt the impossible. Being well-acquainted with the rapacity of entertainment lawyers, having practiced cheek by jowl with them in Century City, LA’s premier lawyer anthill, the likelihood of weaseling out of the agreements those guys build like steel traps to extract maximum revenue seemed slim. Hollywood is not to be toyed with. Through her handlers at Mattell, for example, Barbie is the nation’s most litigious woman with plastic tits.
While I was standing in the lobby area thinking about the dark side of Hollywood, out came the power troika that was rocking the cradle of their latest newborn horror — Hartzell, Chapman and Silbiger. Silbiger and Hartzell were frankly giddy. And why not? They had swept all before them. They had hired the wonderful man, they had given JPR the kissoff, and they had embarked on a course that, according to Joel Kramer, would lead straight to a brick wall. I was about to ask them if they had a plan for how to get out of these contracts, but I didn’t have to. As I listened to Cate Hartzell talking with Russ Silbiger, intermittently giggling with delight over their victory, my concern ripened into horror. The two were talking about how they could get out of the TV contracts by pricing the service so high that no one would buy it! Ha-ha! It was so funny, I joined in the joke. I said maybe we could just put one TV in the plaza, and we could all drop by and watch it, and just pay one subscriber fee. Humoring me, no doubt, and perhaps not quite getting the point of my sarcasm, even Cate laughed at the notion. I am afraid, however, that it will not be funny when the citizens realize that the Open Carrier option finances are built on the mistaken notion that the expensive TV contracts can be made to go away. Of course, the City Attorney has probably not been consulted on the binding nature of these media contracts, because he is keeping his nose out of all AFN business to avoid a conflict of interest.
9. Proceed Directly to the Status Quo
Having determined that the long-term TV contracts exist, although Joel did say he didn’t even see half of them because they are “confidential,” I was considerably let down. The Open Carrier proposal has no legs. We will have to either keep servicing those media contracts, and cutting TV out of the equation is not only theoretically going to cost you subscription revenue in the short run — it will cost you in litigation in the long run.
As Yogi Berra said, “The problem with not knowing where you’re going is, you may never get there.” He might have been talking about AFN. No one has any idea where it’s going, and it’s not likely to get there. Strangely, for an institution that is founded on law, the City has run AFN as if lawyers were a hindrance. They signed long-term contracts for television content — a product we can’t sell at a profit – and kept the agreements secret from ordinary citizens and even from prospective corporate suitors like JPR. The City has hired a new AFN director without the advice of outside or inside legal counsel to perform a job that cannot even be described. This path leads directly to more of the same treatment the citizens have received all along. Figurehead management, unconstrained spending, and a tax bill for the citizenry that expands to fit the demands of an ever-increasing, self-protective empire of bureaucrats.
When is comes to AFN, the City refuses to look at the cause of the problem, and persists in coming up with imaginative ways to hide a debt that has already been incurred, and must be paid. City spending cannot grow and grow. The town is no larger, by population, than when I moved here in 1978. But the budget, particularly under Finance Director Lee Tuneberg, has swelled in volume. Now weighing in at 423 pages of paper to describe the disbursement of $93 Million, the Ashland budget is verbally extensive and factually spare, omitting essential figures like the amount of Tuneberg’s salary, or that of the other top officials whose nests are so amply feathered. The annual report for General Motors, with total revenue of $35 Billion, is about half that length, and it lists the compensation of all top officers.
According to the census, there are 2,009 government workers in Ashland – one out of five people. We spend $4 Million per year on police. With a population of under 20,000 people, that’s $200 per year for each one of us to receive police protection, or harassment, depending on your age. Personally, I’d rather have a fourth as many cops, pay fifty bucks, and just exercise a greater degree of circumspection. If I see Dick Cheney or any other thug coming, I’ll take cover and phone Chief Bianca to talk him down. Ashland City government is a greedy little creature, and Lee Tuneberg is always looking for another place to slip in a hidden tax. Thanks to this philosophy of “we’re special and it costs more to be special,” we are the only town in Oregon where you pay sales tax on meals. In every other town in the state, your restaurant bill is 5% cheaper. Soon, if Tuneberg and the Council have their way, we will enjoy another distinction, and be the only city to tax people to give them Internet and local TV. After all, it’s the cost of being special.