SaveWCAL asserts that St. Olaf College’s $10.5 million sale of the former WCAL-FM wasn’t legal. The argument: For more than 80 years, the station was a charitable trust, meaning the college needed approval from its listener-members and a court to close such a deal. 

Northfield’s dirty laundry got aired this way in the WSJ: 

“St. Olaf has looted the assets they were charged with protecting,” St. Olaf alumna Ruth Sylte, the president of SaveWCAL, says. “Donors everywhere should be worried.”

Steven Blodgett, a St. Olaf administrator, says opponents are “harassing the college” with their court fight. “Everybody wants to just move on,” he says.

Like Coleman, SaveWCAL filed a notice of appeal at the beginning of the week. Unlike Coleman, the group took the next step today, filing its actual appeal brief at the state Court of Appeals. St. Olaf and MPR have 30 days to file their responses.

SaveWCAL wants the court to return the money to WCAL’s charitable trust, along with the fund’s $3 million endowment and the building the trust constructed on the St. Olaf College campus in Northfield, Minn. The group also wants St. Olaf removed as trustee for liquidating the station’s charitable trust without judicial approval.

In pointing out an error in the original version of this post (see below), a Minnesota Public Radio representative wrote that MPR “is confident that there is no legal reason for a judge to void the sale of WCAL. As for St. Olaf and the sale proceeds, we are not involved in that portion of the hearing.”

CORRECTION: This article, as originally posted on Sept. 25, misattributed a quoted phrase as coming from a June 9 order by Rice County District Court Judge Gerald J. Wolf (pdf). The quoted words were not Judge Wolf’s but instead came from a June 12 letter written by SaveWCAL to the state attorney general. The Minnesota Independent regrets the error.

Further clarification after the jump.

The quoted words did not, however, originate with SaveWCAL. They originated in American Jurisprudence, a legal encyclopedia, as quoted by SaveWCAL in its letter — a letter which in other places also quotes from Judge Wolf’s order.

Here is the sentence from American Jurisprudence as quoted in SaveWCAL’s letter: “Where the trustees of a charitable trust have no power under the trust instrument or under an order of a court of equity to convey such property, a deed made of such property is void and subject to cancellation upon application of proper parties.” (The last 10 words of the sentence are those mistakenly attributed to Judge Wolf’s order regarding MPR and WCAL in the original version of this post.)

As MPR pointed out in its request for a correction to this post (see below, in comments section), Judge Wolf’s June 9 order actually states, in the first sentence of the introduction: “The Court recognizes that the sale of WCAL is neither before the Court at this time nor has it ever been before the court.”

Indeed, Judge Wolf reserved his criticism not for MPR but for St. Olaf and especially the state attorney general’s office. He concluded his order’s introduction with this:

The only watchdog looking out for the interests of the trust in this case was Respondent, the non-profit organization SaveWCAL. SaveWCAL raised the alarm when they first learned of the sale of WCAL by St. Olaf, but neither St. Olaf nor the Minnesota Attorney General’s Office paid any heed to SaveWCAL’s warning.

Now, the Court is faced with a plethora of issues to unravel in the aftermath of St. Olaf’s unapproved sale of WCAL and the Minnesota Attorney General’s Office’s breach of its duties in this case.

Here are links to MnIndy’s earlier posts related to the MPR/St. Olaf deal for WCAL/The Current, which themselves contain links to original documents as well as to news coverage elsewhere:

Donors’ group demands AG act to void deal that created MPR’s The Current (June 13, 2008)

Judge finds WCAL-FM, station now ‘The Current,’ was St. Olaf trust (June 11, 2008)

Hatch’s lack of concern for charitable trusts predated WCAL dustup (May 29, 2008)

‘Screwed’ again: Piper Jaffray fined for violating ban after improper T-Paw donations (May 16, 2008)

Kick a Man When He’s Down (For the Count) (July 6, 2007, third item)

Alternating Current? Lawsuit Aims to Void WCAL Sale (June 14, 2007)

Advocates for both stations ask their state attorneys general to investigate whether the prospective sales violate laws governing charitable trusts, the structure under which the stations raise funds from donors.

Last month, Florida’s AG agreed to examine whether MPR’s current bid for WMCU at Trinity International University runs afoul of charitable trust law. But in Minnesota four years ago, Mike Hatch, then Minnesota’s attorney general, declined to investigate a similar deal for WCAL (now MPR’s The Current) between MPR and St. Olaf College. WCAL donors thought they saw politics in Hatch’s lack of interest in exercising oversight of a deal involving a charitable trust when the willing parties were powerful people at MPR and St. Olaf.

Now, through a comments thread at MinnPost, comes anecdotal testimony that even before the WCAL deal, Hatch seemed not to have time for charitable trust concerns — even when invited to speak to a roomful of people who cared deeply about them at a Minnesota Planned Gifts Council conference. According to one attendee, 30 seconds on the issue was all Hatch could muster before veering off-topic into extended populist broadsides.

“Hatch clone” though she may be, his successor, Lori Swanson, engaged the issue in a pending case regarding WCAL in Rice County District Court, suggesting that the court continue its investigation. 

Overexuberant support for Gov. Tim Pawlenty has come back to bite a major Minnesota company — for a second time. First, an executive with Piper Jaffray, Minnesota’s top municipal bond underwriter, gave too much money to the state’s top elected official. Then the firm did not abide by its penalty — an industry-imposed ban on bond deals with state agencies — and now faces another round of punishment.

After an initial donation of $200 in 2005, two more $250 checks from Addison “Tad” Piper (pictured), then Piper Jaffray’s vice chairman, to Gov. Tim Pawlenty’s reelection campaign earned the firm a two-year ban on underwriting bonds for state agencies. (A well-known industry rule limits such donations to $250 annually.) As the industry’s top self-regulation officer put it to the Star Tribune at the time, “You’re screwed for two years.”

Now the firm is in trouble again for two much bigger checks it earned on bond deals that violated that ban. The Bond Buyer reports that the Financial Industry Regulatory Authority (FINRA) socked Piper Jaffray with a $25,000 fine Thursday and ordered the firm to disgorge (return) profits of more than 10 times that amount from those deals. (Under the terms of the sanction, Piper Jaffray officially neither admitted nor denied violating the ban.)

FINRA wasn’t specific, but at least one of the two underwriting deals was with the Minnesota Housing Finance Agency for $167,316, the Bond Buyer deduced.

Which agency was involved in the other ban-breaking bond is more of a mystery. One that can apparently be ruled out is the St. Paul Port Authority’s $11.5 million financing for Minnesota Public Radio’s purchase of WCAL-FM from St. Olaf College, the station that became The Current. The timing in 2005 is right, Tad Piper served on the boards of both MPR and St. Olaf, and Piper Jaffray was said to be lined up to do the underwriting. But the Allied Irish Bank ended up as underwriter, and that’s probably just as well for Piper Jaffray, which stood to be thrice-bitten: an investigator’s report released in March raised the chances that MPR’s purchase of WCAL could yet come undone.

Josh Wolf runs for SF mayor: Minneapolis videoblogging pioneer Chuck Olsen — who made the film Blogumentary and runs the daily vlog Minnesota Stories — broke the news that controversial  anarchist videographer Josh Wolf will run for mayor of San Francisco. After Olsen posted his video, Wolf announced his candidacy.

WCAL, SOL? Don’t count on a reversal of St. Olaf College’s sale of WCAL to Minnesota Public Radio, say experts quoted in a Star Tribune story on the case. The Minnesota attorney general’s office filed a memo agreeing with alumni and community members who opposed the 2004 sale of the station to Minnesota Public Radio that the school’s assets, including WCAL, are a community trust. But the logic of groups like SaveWCAL — that a reversal of the sale might be in the offing — doesn’t necessarily follow. At issue is how St. Olaf can spend funds earned in the deal, not terms of the deal itself, which earned MPR a slot on the dial for The Current. “The sale and the sale proceeds aren’t at issue right now,” said Deputy Attorney General Ann Kinsella. “We’re not going to be able to put the genie back in the bottle. The sale was three years ago.” Hamline professor David Schultz, writes the Strib, agrees the sale likely won’t be nullified.

New TC art paper: The Twin Cities has a new arts journal. Dubbed ARP! (that’s Art Review & Preview), the quarterly publication is the brainchild of Minnesota natives Ariel Pate and Tiffany Hockin, both recent graduates of the Kansas City Art Institute. According to Hockin, the pair saw and wanted to fill “a critical gap in the Twin Cities Visual Arts community.” The first issue is out — and the publishers are looking for contributors to the next one, which will offer a history of Twin Cities art.

Even the media blames the media: As filmmaker Michael (“Sicko“) Moore tells “Good Morning America” that “3,500 soldiers that are dead today may not have had to die had our news media done its job” — i.e., challenge the Bush administration’s justifications for war in Iraq — Fox News concludes an online story about the arrest of mosque bombers in Baghdad with this line: “FOX News’ Jennifer Griffin and the Associated Press contributed to this attack.”

A few more farewells: A day before some 50 newsroom staffers say goodbye, Star Tribune readers representative Kate Parry shares reflections by two more people who are taking buyouts, online news assistant Mary Harnan and night assistant city editor Nancy Olsen.

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