The Air America Radio scandal involving the alleged diversion of hundreds of thousands of dollars from a New York City charity has reportedly led to two more resignations.

The case involves the Gloria Wise Boys & Girls Club in Bronx, N.Y., where executive director Charles Rosen resigned suddenly last week.

Sources told the New York Post that acting executive director Lorraine Corva will be leaving her job Aug. 26, and that assistant executive director Jeff Aulenback also quit, effective immediately.

While a club spokesman refused to say why the two were leaving, sources told the paper the departures are “tied to the ongoing fallout from the highly unusual and possibly improper loan to Air America, as well as other dubious fiscal practices.”

A member of the board at Gloria Wise said management had been “hoodwinked” by Rosen into making the “bizarre” loans of $875,000 to the liberal radio network.

“We’re not commenting on anything right now because of the delicate nature of negotiations to get the money back” from Air America, said spokesman Jim Grossman.



Air America’s Al Franken

The network, noted for its liberal voices including Al Franken and Janeane Garofalo, reportedly made a $50,000 repayment on the loan to an escrow account controlled by the station’s lawyer.

“The [city] Department of Investigation advised Air America to repay $875,000 into an escrow account from which no money can be disbursed without our approval,” DOI spokeswoman Emily Gest told the Post. “Air America has not followed that recommendation.”

In addition to the DOI, New York’s Attorney General Eliot Spitzer has also opened a probe into the case.

WorldNetDaily columnist Michelle Malkin has been among those covering the issue, writing “If a conservative radio network had been entangled in a scam to steal from black children to line the pockets of wealthy white con artists, Jesse Jackson and Al Sharpton would already be staging hunger strikes in protest. But both have hefty political and financial stakes in Air America’s success – and the big mouths aren’t about to badmouth their friends.”

Meanwhile, online reports indicate the radio network is having problems meeting its payroll.

According to the Radio Equalizer, a blog published by broadcasting analyst Brian Maloney, an internal memo indicates Air America employees faced late paychecks in late July.

“They were apparently stunned to receive a last-minute notice sent at 5:09 p.m. Thursday, July 28th, indicating direct deposits would not be made Friday, as expected,” Maloney states. “Written by company Vice President/Finance Sinohe Terrero, it implied the payroll processing company was to blame:


We have been advised by ADP that Direct Deposit will probably not post until Monday. We apologize for any inconvenience this may cost (sic). If you have any questions please feel free to call me.

Sinohe Terrero

“Was it really a foul-up at ADP, the nation’s largest payroll processing company? Have you ever known ADP to delay direct deposits, due to its own negligence? I thought not.”

Maloney says insiders believe the problem is more alarming than a technical glitch: a lack of ready cash to make payroll.

Sources said it was a race against the clock to pay staffers, one that failed.

“An expected cash infusion arrived late, causing the mad scramble,” Maloney notes.

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