Another White House critic audited

Chuck Harder, the popular talk-radio personality and founder of Peoples Network Inc., a 501c3 tax-exempt foundation based in White Springs, Fla., has been undergoing an Internal Revenue Service audit since just after the 1992 presidential election. For over five long, painful years he’s been dragged through the process and there’s no end in sight. No charges have been filed.

Moreover, he’s embroiled in litigation with the United Auto Workers, which he maintains ultimately stems from administration efforts to silence him. He believes he was targeted for his unabashed criticism of the Clinton administration and its policies. Harder was one of the most influential opponents of NAFTA, GATT, and the $40 billion bailout of the Mexican peso.

As Harder sees it, “In ’92 they sicced the IRS on us. They couldn’t finish the job in time (for the 1996 election), so in ’96 they sicced the UAW on us. They want to destroy Chuck Harder — and they’re doing a pretty good job,” he told WorldNetDaily.

Paranoia, perhaps? The record indicates otherwise.

When the administration fixed him in their sights, Chuck Harder was already something of a legend in the world of talk radio. In 1987, at the age of 43, with 25 years of experience in broadcasting behind him, he began syndicating his own three-hour program, For the People, from a one-car garage in Tampa, Fla. He and his wife, Dianne, invested $160,000 of their life savings in the effort.

A mix of populist economics, consumer advocacy and analysis of government policy, For the People caught the attention and loyal support of millions of Americans who loved Harder’s unapologetic, no-holds-barred verbal bashing of big corporations and corrupt government officials. Yet it’s hard to pin a label on Harder’s politics. He can hardly be considered “conservative” when he has guests like former California governor Jerry Brown and civil rights attorney Gerry Spence. Ralph Nader has been a weekly guest for 11 years. Consumer advocacy, with an anti-big corporation stance is usually viewed as “left.”

“It was for the little guys who have no voice,” says Harder — “a forum for the average citizen to learn about consumer information and the workings of our government.”

In 1989 the Harders launched Peoples Network, Inc., an organization featuring 24-hour programming. To serve as headquarters they bought the historic Telford Hotel in White Springs, on the banks of the Swanee River, and outfitted it with satellite up-link equipment.

Like the program, the network did well. Too well in too short a time, apparently. Before their troubles with the UAW started, Peoples Network Inc. was a huge alternative media serving some 300 radio stations and 83 TV stations. A 1996 survey of 3,000 people by the newsletter Talk Daily ranked Harder among the top-10 radio talk-show hosts. The network was grossing $5 million a year in membership dues and sales derived mostly from the sale of books, audiotapes, videotapes and small shortwave radios. The latter, in particular, Harder sees as integral to the network’s mission. They were sold for $100 each to enable people to hear the programs who don’t live within the reach of an AM station that carries them.

But despite the apparent large revenues, this was no huge money-making scheme but pretty much “a hand-to-mouth operation,” says Harder’s former tax attorney George Foote. “As money came in, it went to keep the show on the air. It went to buy more stock.”

Shortly after the November 1992 election, the IRS sent an audit notice, alleging Harder had attempted to influence the election against George Bush. If provable, that would be grounds for yanking its 501c3 status. Eventually the IRS loaded on such allegations as “electioneering”, “personal inurement” (milking the organization for personal gain), and failure to pay income tax on sales of the products.

Harder dismisses the notion that it was remarks about Bush that prompted the audit. He sees it clearly as coming from the Clinton White House. In 1992 Peoples Network Inc. published a newspaper, the News Reporter, which had a circulation of about 40,000. In his words it was a “feisty little independent paper.” It was too feisty for the incoming administration.

“We were doing a lot of muckraking, and I know we hit the radar screen at the DNC,” he said. “We looked not only into George Bush’s dirty laundry, but Bill Clinton’s. We wrote a series of articles prior to the election about Whitewater and the strange deaths near Mena Airport. We also called attention to his sexual encounters.”

The IRS sent an agent who set up shop in the one-man office of Douglas Perrault, the CPA who handled Harder’s account. Their demands eventually forced him out of business.

“They came every day to the office,” Perrault recalled. They demanded things I couldn’t get — documents, a copy of every item we ever sold, a copy of every book in our inventory, an audio-cassette copy of every single radio show.”

This last was to determine if Harder had ever promoted one presidential candidate over another or directed listeners how to vote. “She was looking for some point where she could see that Chuck crossed the line. If Chuck ever said, Vote for Bill Clinton or Vote for Ross Perot, they would have nailed him,” said Perrault. “But he offered equal time to all parties, all candidates.”

Eventually the search for grounds to revoke the network’s tax-exempt status was abandoned, but not the audit itself. Rather, its scope was expanded. First, the IRS wanted to audit only 1989 and 1990. “Then 1991, then 1992, then 1993,” said Perrault.

As the auditing process wore on Perrault found he could not attend to his other clients. His was a one-man office and he had some 200 accounts. In 1995, after a year of serving at the bidding of the IRS agent, he sold his business. There’s no question in his mind that this was no impartial, randomly chosen audit.

Says Perrault, “I don’t agree with everything Chuck says, but I agree with him absolutely on this point, that they’re trying to put him out of business. It would be one thing if they came in and audited For the People or Peoples Network Inc., but they’ve been there five years. That’s harassment.”

Harder recently signed an extension — requested by the IRS — that will extend the audit through 1999 and back to 1988. His case is currently being handled by the Las Vegas-based National Audit Defense Network, a organization comprised of former-IRS agents and directors who now fight their former employer on behalf of taxpayers undergoing intrusive audits. The defense network is also handling the audit of Paula Jones and her husband. The Joneses received their notice just five days after Mrs. Jones had turned down a settlement proposal from Clinton’s attorneys.

By 1995, attorney George Foote had persuaded the IRS to back off on the allegations of “electioneering” and “inurement” (Chuck and his wife live on less than $50,000 a year). Still, the IRS was “pounding” on them and informally suggested the Harders sell their assets and create a for-profit company, after making a settlement with the IRS.

Harder agreed and asked Dr. Pat Choate, political economist and author, to look for a funder. Choate had been a frequent guest on For the People. With an associate Ed Miller, former president of the non-profit National Center for Manufacturing Sciences, he brought in the United Auto Workers as partners. The plan was for UAW to buy the assets — including the Telford Hotel — for $5 million. A new company — United Broadcasting Network — was formed in May, 1996, with Choate as president and the UAW as chief investor. In a four-way split Harder, Choate, a friend of Miller and the UAW were each to receive 25 percent of the stock.

The deal soon turned sour.

The UAW began running the operation even though the final papers had not been signed. Harder says he received only $300,000 (instead of a promised $3.5 million). Long-time employees were fired.

And the White House became involved.

The UAW did not return phone calls, but according to court papers filed by Choate and Miller in a suit they have against the union, shortly after the creation of UBN Hillary Clinton called UAW president Steven Yokich to complain that the UAW had invested in a network that featured Choate and Harder. In the First Lady’s view, a “better investment” would have been the sponsorship of her brother Hugh Rodham’s talk-show. Those remarks were intended “to insure that the management of UBN would be sensitive to the wishes of the President and Mrs. Clinton in conjunction with its on-air contents.”

Indeed. To demonstrate its sensitivity, UBN forced Harder off the air in mid-August. The book catalogue of the former Peoples Network was reissued, stripped of all materials critical of Clinton or his policies — such as former FBI agent Gary Aldridge’s best-seller “Unlimited Access” — as well as books and videos deemed conspiracy-oriented. Harder’s feisty newspaper, the News Reporter, was moved to Chicago and turned over to two union writers in Chicago, who promptly converted it into a UAW house organ that, in Harder’s words, “essentially represented the Democratic National Committee.” The UAW directed the editor to delay until after the 1996 election a story with a chart describing how the members of Congress had voted on GATT, NAFTA, and the Most Favored Nation status for China — despite the union’s long-standing opposition to the treaties and MFN.

When Choate in September decided to run as Ross Perot’s running mate, he resigned as chairman of UBN and put his stock in trust.

Down but not out, Harder has moved his program to Talk America, an independent network. His three hour program is heard daily on over 100 stations.

UBN has declared bankruptcy and both Harder and Choate are suing for their shares of the assets. They look at the UAW’s actions from different perspectives. For Choate — as explained in the lawsuit — the UAW was trying to get its hands on an established network, for as little money as possible, which it could then use as a propaganda organ to advance its political agenda.

Harder is more charitable. To him the UAW began in good faith, but was “used” — “caught between a rock and a hard place.” As he sees it, “The White House went to the UAW and promised them things if they’d do what was asked — passage of the No Strike Replacement bill was one. That bill hasn’t passed, but the UAW is ever hopeful that Bill Clinton will deliver on his promise.”