/ ( (' / ""'·C/<, ':...._..,, '-"' i ,,.["-, I ~ '- Y/.\/ Federal Communications Commission FCC 93-148
tlon ("SALAD"): (c) Opposition ro Petitions to Denv filed by TBF; (d) Reply to Consolidated Opposition to Pe"titions Before the to Deny filed by Glendale: (e) Request for [)eclaratorv Federal Communications Commission Rul_i~g of National .\1inority T\.', Inc. ("NlVIT\l"): (f) 0P \Vashington, D.C. 20554 poslt1on to Request for Declaratory Ruling filed by G!en ~~ale: (g) Response to the Commission's Letter of Inquiry tiled by NM~V: a~d ( h) Comments on NMTV's Response to the Commissions Letter of Inq_uiry fi!ed hy Glendale. ~1M Docket No. 93-75
In re Applications of I. BACKGROUND 3. On December '27. 1991. Glendale filed a Petition to TRI"IITY BROADCASTING File "lo. BRCT-911001 LY Deny the license renewal application of TBF. While Glen OF FLORIDA. INC dale's pleadin$ .is s_tyled _as a_ "Petition co Deny" it actually For Renewal of License of seeks the spec1ftcation ot numerous issues against TBF. The thrusr of Glendale's Petition is that Paul F. Crouch and,'or Station V/I-IFT(TV). Miami. Florida Trinity Christian Center of Santa Ana. Inc. d.'b/a Trinitv Broadcasting -"~et\l.i·ork ("TB'.\i") have used ~·.\1T\/ as a fron~t and to evade the Commiss!on·s multiple o\l.i·nership rules . ..J.. TBN is a non-stock corporation. Paul F. Crouch. his GLENDALE file No. BPCT-9 l l 227KE \l.i'ife. Janice Crouch. and Norman G. Juggert are TBN's BROADCASTING directors. L These three are also the directors of other TBN 2 COMPANY affiliates wh.tch. v.·ich TB.'\J". are the licensees of 11 full 3 For Construction Permit pO\ver commercial television <;tations. Paul Crouch. P. Jane Duff. Phillip Aguilar and E.V. I--Ii!l:. are the directors .\1iami. Florida of NMTV. the !icen;;ee of KNMT-TV. Portland. Oregon. ,.\t one time. TI3N and its affiliates were the licensees of l~ commercial television stations. and '.'\MTV v.'aS the licensee HEARING DESIGNATION ORDER of two commercial television .:.tations.5 Paul Crouch. a non-minority. is the preSident of TB'.'l" and its affiliates as Adopted: March 16, 1993; Released: April 7_. 1993 well as president of NJVITV. [)uff. a minor.tty. i.i;; assistant to the president of TEN and secretary/treasure; of '.'·<.\1TV ('\he By the Commission: Commissioner Marshall not partici was formerly vice president of '.'.'\1TV).'' Paul Crouch and pating. Jane Duff are salaried employees of TBN. ,.\gui!ar. a mi nority. is the vice president of N\1TV and the-founder and 1. The Commission has hefore it the above-captioned pastor of Set Free Christian Fellov.·ship. a church in :.\na application for the renewal of license of S[ation heim. California. J{ill. a minority. is the pastor of the VVHFT(TV). Channel 45. Miami. Florida. filed by Trinity Ebenezer Baptist Church in \.~/arts. California. Broadcasting of Florida. Inc. ("TBF''). and the n1utually 5. On March 29, 1991. \'.\1TV filed an application to exclusive application of Glendale Broadcasting Company acquire the license of WTGI(TV). Wilmington. Delaware. ("Glendale") for a new commercial television station to A petition to deny the assignment application was filed. operate on Channel 45. Miami, Florida. \1/hich alleged that L\'.\1TV was a front for TEN. 1\fter 2. Also before the Commission are the following plead NMTV filed its Opposition. the Chief of the Mass Media ings: (a) Petition to Deny TBF"s renewal application filed Bureau's Video Services Division requested additional in by Glendale: (t)) Petition to Deny TBF's renewal applica formation from NMTV. After NMTV responded. but hefore tion filed by Spanish American League Against Oiscrimina- the Commission could act on the assignment application. it was v;.·ithdra ... v-n by NMTV. Glen In a non-stock corporation the Commission normally looks 4 From Septen1ber ll/80 until August 1990. Phillip David Es to directors in evaluating ownership and control. Roanoke pinoza, a minority, was a d·rrector of NMTV along ,,.,.·t!h Crouch Christian !Jroadcasting, Inc., 52 RR 2d 1725 (Rev. Bd. 1983). and Duff. Aguilar replaced Espinoza as a director in August ~ The term "TBN affiliates" is used herein to refer to the 1990. Hill became the fourth director in October 19Y!. broadcast licensees that have the same directors. Paul F. 5 TBN and its affiliates reached the 12 television station lirnit Crouch, Janice Crouch, and Norman G. Juggert, as TBN. Al in 1986 with the purchase of \\iCLJ(TV). Bloomington, lndi:::ina. though they are set up as separate legal entities. they are all ">JMTV acquired its first commercial television sration. K\1L.\I· controlled bv the same individuals . TV. in June 1987, allegedly putting TBN uver the rnultinle .l TBN: KTBN-TV, Santa Ana. California; \VOLJ(TV). Canton. ownership limit with 13 television stations. In Decembe; IY,~K. Ohio; and WHSG(TV). \Tonroe, Georgia. Trinity Broadcasting N\1TV' acquired KN~1T-TV raising TBN's alleged !nierest~ tn l-+ of Arizona. Inc., KPAZ-TV, Phoenix. Arizona. Trinity Broad television stations. In December l'lH9, KNAT-TV', Albuquerque. casting of Oklahoma City, Inc., KTBO-TV. Oklahoma City, New r..1exico, was sold and \VHSG(TV), :V1onroe. Georc:i:::i. \\JS Oklahoma. Trinity Broadcasiing of \Vashington, Inc .. KTB\V acquired. thus keeping TB\l's n!Jeg.ed interests ::i.t 1-+ te'.e\;'):.,)n T\.', Tacoma, Washington. Trinity Broadcasting of Florida. Inc., stations. In April 1991, Kr...IL\1-TV w::ts sold by N\lTV and in WHFT(TV), :Viiami, Florida. Trinity Broadcasting of Indiana, December 1991. \VLXl(TV) was <>old bv TBN. Thus. Ti;>J was Inc., \VKO!(T\'), Richmond, Indiana; nnd \VCLJ(TV). Bloom ailegedly in violation of the Commissi;n·, multiple O\\r.ership ington, Indiana. Trinity Broadcasting of New York. Inc.. \.VTBY rules from June 1987 until December Fl9\. TV', Poughkeepsie, New York. Trinity Broadcasting of Texas. b Prior to becoming a director of \Jlv1TV in !ll80. Duff \1.·::i.~ v:ce Inc., KDTX-TV, Dallas. Texas. president and a director of TB!\. 1 FCC 93-148 Federal Communications Commission matters that were alleged in connection ""'ith the ent unwillingness to grant the application ro acquire WTGI(T\') assignment application. Indeed. Glendale resub WTGI(T\/). Vlilmington. Delaware. has created uncertainty mits many of the pleadings and attachments previously as to \.\lhether the Commission's application of the provi filed in connection 1.1/ith the proposed sale of WTGI(TV). -;ions of Section 73.3555(e) has changed. I\l!vfrV has also filed a Request for Declaratory Ruling 10. NMTV contends that it is minoritv-owned because a concerning irs relationship to TBN. Consequently. the staff majority of_ its directors are members of ·minority groups. :-;ought additional information from ~-MTV through a Let Moreover. it asserts that it is minority-contro!led for pur cer of Inquiry. A!l of the responsive information and plead poses of Section 73.3555(e) because it meets that rule's ings are being considered herein because they all relate to definition of minority-controlled hy being more than 50 rhe issue of \vho controls NMTV. percent owned by one or more members of a minoritv group. NMTV further contends that the Commission:s multiple 01,vnership rules relating to minority ownership II. NMTV'S REQCEST FOR DECLARATORY RULING do not require integration of ownership into management A. Proposal and do not mention rninority programming. 6. NMTV's Request for Declarator)' Ruling, filed Novem 11. NMTV claims that minority ownership. under the ber 18. 1991. seeks a declaration from the Commission that Commission's multiple O\vnership rules. is an end in itself "the ·m1nonty-owned· standard ~et forth in rule 73 3555[ej .According to NMTV'. the Commission established a dif is met by a. nonprofit organization when a controlling ferent standard for determining minority-control under the number of its voting board members are individuals from multiple ownership rules than it estahlished for use in recognized minority groups. and \vhen the nonprofit or connection with the integration criteria of the :-;tandard ganization is in- compliance \vith 'itate law regarding its comparative issue. and for tax certificate and distress sale chartering and operations. \vithout resorting to consider policies. 0-:vrTV concedes that. in connection with the stan ation of other factors such as \.Vhether the minority direc dard co1nparative issue. ininority ov,.nership is significant tors are involved in day-to-day station operation." NMTV only when it is combined with integration of the minority also seeks a declaration v.'hether a minority-controlled cor ow·ner into the management of the broadcast :itation. poration is prohibited from receiving assistance from or NMTV also concedes that in adopting the minority distress associating v,.·ith a nonminority-controlled corporation in sale and tax certificate policies the Co1nmission \Vas striving various enumerated \\.'ays. 8 Because the issues raised in to increase minoricy ov.1 nership and operation of stations. NMTV's Request forDeclaratory Ruling are so closely re These policies. NMTV notes. were designed ro increase lated to the issues raised in the Petitions to Deny the minority management. minority programming and diver renewal application of TBF. they will be addressed herein. sity of broadcast voices. Statement of Policy on .\finoruy 7. ~-:\1.TV states that it is a California Nonprofit Corpora Ownership of Broadcasting Factlities, 68 FCC 2d 979 ( ~ 97-S). tion organized on September 16. 1980. and authorized to I--lowever. '.'!MT\/ argues that w·hen the Commission adopt do business in Texas. Oregon and Delaware. It is recog ed the minority ownership provisions of the multiple ow·n nized as a tax-exempt 50l(c)(3) organization by the IRS, ership rules. no reference was 1nade to management and ls tax-exempt in California. Texas and Oregon. NMTV involvement by minorities or to minority programining. states that all of i[S assets are irrevocably dedicated for Accordingly, ~MTV concludes that the Commission charitable purposes. should not look beyond mere legal ow·nership of a licensee in order to determine where control lies. 8. NMTV further states that its organizational documents provide that the corporation ·s directors are its members. 12. NMTV ackno\.vledges the longstanding and extensive are self-perpetuating, and that each has one vote. From its ties v.·ith TBN which are discussed herein in connection inception unti! October 1991, tv..'O of NMTV's three direc \Vith the Petitions to Deny. ~·evertheless. NMTV contends tors have been minorities. In October l 991. a third minor thar. because it maintains a separate corporate and legal ity director (Hill) was added to bring the current number existence from TEN. complies with federal and <;tate Ja\.VS. of '.\"~TV directors to four. and functions as a separate corporation. it satisfies the Commission's multiple ownership requirements. '.'i"\1TV 9. ~T\1TV notes that the Commission has tv..·ice approved also argues that its hi::.tory of constructing and operating its acquisition of television stations pursuant to the provi television stations indicates that its continued operation is sions of Section 73.3555(e) of the Commission's Rules. in the public interest. NMTV contends that the Commission reviewed its legal qualifications, organization, purpose. and association v..·ith TBN in both cases. Moreover. NMTV has provided addi tional information on several occasions when requested by the Commission's staff. NMTV claims that the staffs appar- The Cornmission recently amended Section 73.3555 of its (b) loaning funds at favorable rates; Rules which caused a renumbering of the subsections. Revision (c) sharing common officers; of Radio Rules and Policies . .7 FCC Red 6387 (1992). Thus, former Section 73.3555(d) has now become Section 73.3555(e). (d) using common employees; References herein will be to the new subsection numbers. (e) having salaried employees of the nonminor:ty·coritrolled g \I!v1TV queries whether the following activities are proh'tb corporation as principals of ·1t<> rninority-owned corrnraf1on: ited between a minority-controlled corporation and a non and, minority-controlled corporation pursuant to Section 73.3555(e) (f) having substantially ~imilar or even identical benefit p'.J'"\'i. of the Commission's Rules: personnel practices and other operational similarities. (a) entering into a program affiliation agreement; 2 Federal Communications Commission FCC 93-148 B. Discussion -i fo determine whether TB\- and/or Paul F. Crouch 13. :\s discusc;ed infra, we will specify a de facto control abused the Commission·s processes by using National Mi issue in this proceeding. We reject th_e contention that the nority TV. Inc .. as a subterfuge to evade Section 73.J5551e) minority-control portion of our multiple O\Vnership' rules of the Commission's Rules. precludes us from looking beyond mere legal ov.,nership of 3. To determine \vhether a grant of the WHFT renewal a licensee. See Arnold L. Chase, 5 FCC Red 1642 (1990). application "'·ould be consistent with Section 73.3555(ej of See also. Souzhwesz Texas Public Broadcasring Council, 85 the Commission·s Rules. f"CC 2d 713 ( 1981 ): The Trusrees of the L;'ni\'ersity of Penn 4. To determine whether \Tatiana[ Minority TV. Inc .. sy!vanuz Radio Swt1on WXPN!F\11, 69 FCC "d 1394 (1978). falsely claimed minority preferences in LPTV applications Cf- Pan Paciftc Television, Inc .. 3 FCC Red 6629. 6636 filed in its name and whether such false cerrifications were ( 1CJ88) (Commission !ooks beyond lega! O\.vnership in de an abuse of the Commission·s processes. termining compliance with alien ownership restrictions). 5. To determine· "'·hether National Minority TV. Inc .. As \Vas the case in our review of the first t\vO acquisicions Paul F. Crouch_ andior TBN lacked candor and/or mis of television stations by NMTV'. normally we v.i·ill seek to represented facts in an "Opposition to Petition to Denv" determine \vhether a proposed 1ninority-contro!!ed licensee filed in the name of '.'i"ational Minorit_v TV. Inc .. on :\1~v ls in fact a separate legally qualified minority entity. Typi 23. 1991. and/or its September 2o.J.. 1~991. response to ; cally. this review v.i·ould not entail an inquiry into areas Commission inquiry. such as involvement in management hy minority owners or the broadcast of any particular type of programming. 6. To determine whether National ~1inority TV. Inc .. violated Sections 73_3514 and 1.65 of the Co1nmission·s :\1oreover. \vhen the Commission approved earlier acquisi tions of television stations by NMlV', we did not l1ave Rules by failing to report the conviction of its director. Phillip R ..~guitar. of felony assault. before us detailed allegations of fact v.·hich v.:ould indicate that TBN might have de facto control of '.'J\1TV. However. 7 To determine v,.·hether National :\-1inority TV. Inc .. when a substantial and inaterial question of fact is appro and/or Paul F. Crouch mi:,repre::;ented facts and/or lacked priately raised concerning the de facto control of the li candor concerning Crouch"s knowledge of Phillip R. censee by another entity. we arc not precluded from Aguilar·s felony conviction. examining this issue using our established indic!a of con 8. To determine. in light of the evidence adduced pursu trol. See, e.g., Stereo Broadcasters, lnc., 55 FCC 2d 819 ant to the foregoing lssues. ¥ihether TBF. TBN or NMTV is (1985): Georg£: E. Canzeron Jr. Con1municazions, 91 FCC 2d qualified to remain a Comn1i.ssion licensee. 870 I Rev, Bd. 1983): Blue Ribbon Broadcasting, Inc, 90 FCC 2d 1023 (Rev. Bd. 1982). Indeed. for us to refuse to B. The De Facto Control and Multiple Ownership Issues determine \\.'here actual control of N\fTV lies would be 16. Section 73.3555{e)(l) of the Commis<;ion·s Rules inconsi~tent with the mandate of Section 310(d) of the states that: Communications :-\ct of 1934. as amended. Asrroline Conz. Co. Ltd. Partnership v. FCC, 857 F.2d 1556 (D.C. Cir. 1988). The ty·pes of activities listed in footnote 8. upon >.'o license for a commercial r\i\-1. FM or TV broad v.·hich Ntv1TV seeks a declaratory ruling. have been found cast station shall be granted. transferred or assigned to be individually acceptable to the Commission in the to any party (including all parties under coinmon context of specific factual situations. However. the facts that control) if the grant. transfer. or assignment of such are before us compel us [0 consider the "'·hole situation. license v.·ou!d result in such party or any of its including the types of activities referenced in footnote 8. in stockholders. partners, men1bers. officers. or direc order to determine whether the relationship between TBN tors, directly or indirectly. ov.·ning. operating or con and '.\I.MTV constitutes de facto control. trolling, or having a cognizable interest in: 14. One other matter which we wish to address is '.\'MTv·~ assertion that under the minority-control provi (ii) More than 14 television stations. or sion of our multiple O\.Vnership rules. minority ownership is seen as an end in itself. We reject this assertion. Such race based differentiation in the ownership of broadcast (iii) More than 12 television stations which are not '>tations would not be acceptable if it v.·ere not designed to minority-contro ! !ed. promote goals relating to diversity of programming which we have previously enumerated. See J1ezro Broadcasring, Furthermore_ Section 73_3555(e)(3)(iii) of the Commis Inc 1.:. FCC, 110 S. Ct. 2997 ( 1990). "Congress and the sion's Rules states that for purposes of this rule. "minority Commissiori have adopted a policy of minority ownership controlled" means more rhan 50 percent ov.·ned hy one or not as an end in itself, but rather as a means of achieving more members of a minority group. As the Commission greater programming diversity." Id. at 3025. stated v,.·hen it adopted its multiple ownership rules. it "permit[sJ group owners of te!evi.'>ion and radio stations to utilize a maximum numerical cap of 1-l- stations provided III. GLE'.'iDALE'S PETITION TO DENY that at least two of the stations in which they hold cog A. Issues Requested nizable interests are minority controlled." Reconsideration 15. Glendale requests that the fol!o\•,;ing issues be speci of Mulllple Ownership Rules, LOO FCC 2d 7.1. 94 ( l 98S I fied; 17. Commission precedent estaQlishes that questions as to 1. To determine whether Trinity Christian Center of possible de facto control must be decided on a case-h_y-ca-'>e Santa Ana. Inc. d/b/a Trinity Broadcasting Netv.'Ork (TB:--.·) basis. See, e.g., Turner Broadcasting Systeni, Inc., 101 FCC and/or Paul F. Crouch exercises de facto control O\·er Na 2d 843. 848 ( 1985). A wide variety of factors tnay he tional Minority TV. Inc. relevant in reaching a determination. See general!:,,, ~ 1ltiliani S. Paley, 1 FCC Red 1025 (1986), recon. denied, 2 FCC Red 3 FCC 93-148 Federal Communications Commission c274 I 1987), aff'd sub nom. Fairness In c'viedia v. FCC, 851 D. Alleged Control Over Programming F.2d 1500 (D.C. Cir. 1988)(mem.): and 1Vews lnternationat, ~O. Glendale contends that TBN provides .'JMTV with PLC, 97 FCC 2d 3.:.J.9 ( 1984). These decisions tend to focus virtually all of its programming. The programming is pro on the abltitv to control finances. personnel and program vided pursuant to a standard Affiliation t\greement he ming, ,Vews ,lnrernacional. PLC, 97 FCC 2d at 357-8. and. tv.:een TBN and ~MTV. Glendale contends that the \V·here appropriate. rhe abi!i(y or inability to dominate the provision of programming by TBi'r removes the program companv's board of directors. ~Villiam 5. Paley, 1 FCC Red ming from the control of NMTV's minority directors and at L026.~ In determining whether a person or entity pos places it under the control of TB~-. sesses de facto control. "we are goyerned chiefly by the ~1. In the Response of NMTV to the Commission·s demonstration of . pov,.:er to dominate the management of Letter of Inquiry ("~-YfT\/ Response"), NMTV stated that :t corporate affairs." Benjamin L. Dubb, 16 FCC 27-l-. 289 produced three programs during 1991. This programming I 195 L). involved crusades or revivals. one of which was put on by TBN. NMTV also claims co produce a weekly shO'W", Joy in C. Alleged Control Over Board of Directors the Morning. Hov.·ever, the show is broadcast from TB0!'s 18. Glendale contends that \-MTV"s directors are all studios on TB:'':'s station KTBN-TV, Santa Ana. California. closelv associated wi£h, and heavily dependent upon TB."J. Moreover. TBN retains significant control over the produc Both "crouch and Duff are employees of TBN. 1\gui!ar·s tion and rights to this show. For instance. TBN deterrnines minisrrv. Set Free. receives from TBN $5.000 per n1onth the time and schedule of broadcasts and retains all right. and th~ free use of houses and properties in California, title and interest in all programs. Texas and Illinois. Set Free provides -.;ervices to TBN which include "Prayer Partners." who talk to callers and help in E. Alleged Control of Finances distrihuting goods donated by TB'.\i viewers. Since its incep 22. Glendale asserts rhat evidence of the control \.\.hich tion in 1980. the other officers of NMTV have been em TB'.'f exercises over NMTv·s finances can he found in the ployees of TB'.'.-. Currently. employees of TDN, Terrence loan agreement bet'W·een TBN and J\"MTV which was to be f-Iickey and Allan Bro\vn. are assistant secretaries of u:.ed to acquire WTGI(TV), Wilmington. Delav.'are. Glen NMTV. Over the years other officers of NMTV IN·ho \.\l·ere dale speculates that the terms of the loan IN·ere arranged ~o also employees of TBN have included: Matthe\.\I· Crouch. as to give TBN control over NMTV. Moreover. Glendale Paul Crouch"s son, assistant secretary: Phillip Crouch. Paul claims it is unusual to have a provision ln the loan which Crouch·s son. assistant secretary: and Charlene Williams. calls for repayments to be made using 30 percent of the assistant secretarv. Glendale contends that NMTV·s depen contributions made to TBN from people having zip codes dence on TBN gives TBN the power to control NMTV·s \.\l·ithin the WTGI(TV) broadcast area. Glendale also stares minority directors. NMTV"s own Response indicates that that in connection with the proposed WTGI(TV) acquic;i NMTV'5 board of directors did not have independent an tion. 1\llan Brown, \Vho was nor an officer or director of nual 1neetings from 1981 through 1987, but instead partici NMTV, but 'N·as an officer of TBN. signed checks on hehalf pated in annual meetings of the combined boards of nf NMTV. Jirectors of TBN and "affiliated corporations." 13. The NMTV Response reveals that since at least Janu l 9. TBF contends that there are two significant factors ary 26, l987. TBN has been authorized and empov.'ered to that should be kept in mind when analyzing the de facto act as the accounting agent for NMTV. i'v1oreover. TB'.'\ control issue. First, TBF states that both TBN and '.\-YfTV currently provides book.keeping and accounting services to are nonmembership. nonprofit corporations Ln which no NMTV which include the preparation of Ni'vfTV's payroll. individual has an equity or other pecuniary interest. TBF financial statements. federal and state income tax returns contends char with religious charitable organizations there and reports. purchasing re4uirements. data processing, and is often a sharing of volunteers. offi-ce space. and financial the servicing of NMTV"s accounts payable. From i 981 support. TBF argues that the traditional de facto control through 1987 NrY1TV and TBN prepared combined balance analvsis cannot be blind!v applied to entities such as TBN. sheets and other financial documents. VVhile TBN has ad '.\' 4 Federal Communications Commission FCC 93-148 26. TBF asserts that Duff sets ~\1TV"s personnel policy. not focus on the need to report it. Moreover. TBF asserts and ensures implementation of NMTV"s EEO program. ~ha'. Aguilar·s conduct as a minister over the past ten years Additionally. it claims that Duff prepares and reviews indicates that he has been rehabilitated. '.'.'MTV's filings with the Commission. revie\vs regular check logs, and approves purchase order expenditures. Hov.'ever, 01.Y!TV's Response reveals that NMTV"s employ IV. DISCUSSION ee handbook is virtually identical to TBN's employee hand 32. 1\fter consideration of the factual allegations con book. Moreover. it appears that some personnel policies tained in the pleadings before the Commission, v,ie [1elieve \Vefe adopted at joint hoard of directors meetings v.·hich that a prirna facie case has heen made w·ith regard to che involved TBN and al! of its affilia(e'.'.> including Ni\1TV. alleged exercise of control over NMTV hv TB'.\'. Moreover. based on the information we have befor~ u:>. a substantial G. Alleged Lack of Candor/.\.1isrepresentation Issue and material yue'.:ition of fact is presented. In reaching this 27. Glendale challenges ~;\1TV's candor by referencing conclusion we are cognizant of the fact that both NMTV statements made by ~·MTV in lts opposition to the petition and TBN are nonscock. charitable corporations and have to deny filed in connection \vith the proposed acquisition different characteristics than most profit oriented broadcast of Vv'TGI(TV). Specifically. Glendale alleges that NMTV's licensees. Ho,,..·cver. these characrerisrics db not persuade us statement that it was relying on a loan commitment from chat '.\l"YITV and TnN should he treated diffcrenrlv than the Bank of California to acqulre the \.Vi!mingron 'ltation. for-profit licensees. The factors which we have tradirionallv \Vas deceptive because :-..·\.1T\/ C\'entually used funds bor considered v.·hen 4uestions of de ja(lO control are raised rowed from TBN to make the c.'>crov./ pay1nent. Glendale are equally applicable here See Sorufnvest Texas Public also c!ain1s that NMTV v.,.as misleading when it stated that Broadcasting Council. supra, The Trustees of the (Jni1·ersuv it "has its O\l.... n bank accounts from \vhich it pays its ol),.·n of Penns_vLvanta Radio Station H"J{P,\'iFJ1), sr~pra. · employees and other creditors. and has it~ own revenues. 33. There is evidence that TUN has asserted control over from the sale of broadcast time and spots . .'J.\1T\/ receives NMTV's board of directors in various ways. Specifically. its o\!<·n. contributions as a recognized 50l(c)l3) organiza o.;ince the creation of ~rv1TV hy TBN in September 1980. tion." Glendale further claims that NMTV was not forth until October 1991. t\\o of '.\i\1TV"s three directors \vere right about the role of its tninority directors in the high-ranking TBN employees. f"his provided TRN with a management and operation of NMTV. rnajority on '.\"MTV"-; hoard of directors. L\en since the 28. In reply. TBf argues that '.\'MT\r"s statement. that addition of a fourth '.\-MTV hoard memher. TBN retains funds w·ere available from the Hank of California. was not negative control of '.'\Y1TV's hoard hv virtue of che conduct made untrue merely because NMTV eventua!!y chose to of the two I"BN employees. One of these directors. Duff. obtain funds from another source. \1oreover. TBF states was an officer and director of TBN before heing appointed that '.\"MTV does have its own hank accounts and employ co the NMTV board of directors. '.\1oreover. i.;he has contin ees. Finally. NMTV states that it did not misrepresent ued in a high administrati\e poi.;ition at TBN. I fer position Duff's role in the management and operation of NMTV. and conduct on the NMTV hoo.rd of directors is integrally 29_ In its co1nments on :'<:\-1TV·s Response. Glendale related to her role at I"R'.'J. [n addition. Crouch is the president of both TBN and :'-J"i\1TV. 1\s president of :'-i\!ITV. cites additional statements by Nt\1TV which it believes are false or 1nisleading. Glendale claims chat Statements made Crouch has the authority under NMT\/"s hylaw·s to "super vise. direct and control tlle husine-.:; and the officer<> of by :--;MTV in LPT\/ applications filed in L980 do not INMTV]." Finally. for many years rnN and NMTV held accurately reflect the relationship between NMTV and joint hoards of directors meetings along l),.'ith other TBN TBN. Furthermore. Glendale claims that NMTV·s asser tions that it controls its own finances are false and its claim affiliates. that it produced local programming each week is false. 3"1-. There is also e\'idence that THN control::> N:V1TV"~ programming. Virtually all of ~MTV"s prograrnming comes from TBN. NMTV could identify only t'W·o programs H. Allegations Concerning the Reporting of the Felony that it had produced in the past year withou( the assistance Conviction of Aguilar of TBN. Another weekly "how that ~i\1TV claims to pro 30. Glendale states. and TBF concedes. that Aguilar \1.:as duce is actually recorded in TB'.\""s ."tudios in Taustin. convicted of a felony in 1976. N\1TV failed to report California, and broadcast on I"RN"s station KTBN-TV. Aguilar's felony conviction in a timely manner after he Thus. it appears that NMTV produces little or no program became a inemher of '."l"MTV's board of directors. Glendale ming independent frorn TBN. contends that a reporting issue is \\iarranted. In addition. 35. Furthermore. it appears that TRN provides account G!enOale contends that '.\i"MTV was untruthful when it ing and bookkeeping services co Ni\1TV including the <;tated in opposition to the petition to deny the \A/ilmington preparation of NMT\i\ payroll. financial statements. fed assignment application that it had just learned about eral and state income tax returns and reports. purchasing 1\guilar·s 1976 conviction. Since Aguilar's conversion from requirements. data processing. and servicing of N\lTV\ a "drug addict, biker_ and cx-convict 11 is an integral part of accounts payable. TBN has also "advanced/luanel1" '\IMTV his ministry. Glendale contends that NMTV must have $4 million with no formal notes or repayment schedules. been aware of his felony conviction. The ''advances/loans" <"lrc repaid from unrcstricteli dona 3 L N\1TV states that when it said that it hali just learned tions to TBN by people with zip codes \.Vithin tlle :-;MTV of Ao-uilar·s felonv conviction. it was referring to con1mu stations' service contours. Moreover. while i'i~TV has its nicati'ons counsel~ who had just learned of the conviction. O'W'n bank accounts. the people authorized to "ign on the not NMT\'. NMTV's directors were aware of 1\guilar"s accounts are generally THN employees. felony conviction long before he becarne a director hut did 36. ft also appears that TBN controls NMTv·.., personnel policies. Some of NMTV"s personnel policies \\€t"C adopted at joint boards of directors meetings with TB'\I and its 5 Federal Communications Commission FCC 93·148 26. TBF asserts that Duff sets NMTV"s personnel policy. not focus on the need to report it. Moreover. TBF asserb and ensures itnplementation of N:\1TV"s EEO program. that Aguilar·s conduct as a minister over the past ten years Additionally. it claims that Duff prepares and reviews indicates that he has been rehabilitated. :"ri\1TV's filings \virh the Commission. revie\•/S regular check logs. and approves purchase order expenditures. However. >r>.-JTV's Response reveals that N~1TV"s employ IV. DISCUSSION ee handbook is virtually identical to TBN's employee hand 32. 1\fter consideration of the factual allegations con hook. Moreover. it appears that some personnel policies tained in the pleadings before the Commission, \Ve believe were adopted at joint hoard <>f directors meetings \.Vhich that a prima facie case has heen made \Vith regard to the involved TEN and all of its affiliates including \'..\1TV. alleged exercise of control over NMTV hy THN. ;\1oreover. based on the information we have before us. a substantial G. Alleged Lack of Candor/l\1isrepresentation Issue and material question of fact i5 presented. In reaching this 27. Glendale challenges NMTV"~ candor hy referencing conclusion \Ve are cognizant of the fact that both :'-l"MTV statements made by NMTV in its oppo)ition to the petition and TBN are nonstock. charitable corporations and have to deny filed in connection with tl1e proposed acquisition different characreri;;tics than tnost profit oriented broadcast of \VTGI(TV). Specifically. Glendale a!!eges that N\1TV\ licensees. However. these characteri<;tic5 do not persuade us -.;tatement that it v..'as relying on a loan cotnmitment from that '.'l"MTV and TBN ihould he created differentlv than the Bank of California to acquire the \Vi!mingron station. for-profit licensees. The factors whicl1 v.'e have traditionallv was deceptive because N!\t1TV eventually used funds hor~ considered when questions of de fcicto control are raise:l ro\ved from TEN to make the C'icrow payment. Glendale are equally applicahle here. See SDuzJnvest Texas Public also claims that NMTV was misleading \vhen it stated that Broadcasting Council, supra: The Trustees of the [Jniversity it "has its own bank accounts from vvhich it pays its O\Vll of Pennsylvania Radio Stalion p,:xp,\'fFJI!, supra employees and other creditors. and ha'> its O\Vn revenues. 33. There is ev-1dence that TUN ha'i asserted control over from the sale of broadcast time and spots. Nl'v1TV receives NMTV"s board of director.'> in various ways. Specifically. its own. contributions as a recognized 50!{c)(3) organiza since the creation of Nl\.1TV hy !"Bi'\ in September 1980. tion." Glendale further claims that [\;MTV \Vas not forth until October 1991. t'WO of l\iMTV\ three directors \Vere right about the role of its n1inority directors in the high-ranking TB~- employee<; fhis provided I"B'.'i with a management and operation of N\1TV majority on NMTV\ hoard of directors. Even since the 28. In reply. TBF argues that NMT\/\ '>tatement. that addition of a fourth l'iMTV hnard memher. TR~ retains funds were available from the Rank of California. was not negative control of -..;\ffV\ hoard hy virtue of cbe conduct made untrue merely because NMTV eventually chose to of the two Tl3N employees. One of these directors. Duff. obtain funds from another source. Moreover. TBF states was an officer and director of TB:-.... hcfore heing appointed that NMTV does have its own bank accounts and employ to the NMTV hoard of directors . .\1oreover. '>he has contin ees. Finally. ~MTV states that it did not misrepresent ued in a high adminbtrati\·e po<.,ition at TB'.\J". lier position Duff's role in the management and operation of NMTV and conduct on the N\1TV hoan.J of directors is integrally :::'.9. fn its comments on '.'i:\1.TV's Response. Glendale related to her role at TB ..... _ [n addirion. Crouch i.'> the cites additional statements by NMTV which it believes are president of both TBN and '.'J"l'v1T\t'. t\S president of '.'ii\1TV. false or misleading. Glendale clatn1s that Statements made Crouch has the authority under NMTV\ hy!aws to "super by ~:\1TV in LPTV applications filed in 1980 do not vise. direct and control the business and the officers of accurately reflect the relationship between '.\""MTV and /N\1TV]." Finally. for rnany years TBN and [\';'v1TV held TBN. Furthermore. Glendale claims that NMTV"s as<:;er joint hoards of directors meetings <1long -with other TB~ tions that it controls its own finances are false and its claim affiliates. that it produced local programming each week is false. 34-. There is also evidence that rHN contrnl'-i N;\1T\i"s programming. Virtually all of '.'J"l\.1TV\ programming H. Allegations Concerning the Reporting of the Felony comes from TB~. ~·.\1TV could identify only l'-"'O programs Conviction of Aguilar that it had produced in the past year without the Jssistance of TBN. Another 'Weekly :.ho-w· that '.'l"J\.1TV claims to pro 30. Glendale states. and TBF concedes. that Aguilar v.·as duce is actually recorded in TB'.\.-·s studios in Taustin. convicted of a felony in ·1976. NMTV failed to report California, and broadcast on Tl3:'-I's station KTfl~-TV. Aguilar's felony conviction in a timely manner after he Thus. it appears that NMTV produces little or no program became a member of NMTV's board of directors. Glendale ming independent from !Tl N. contends that a reporting issue is v.·arranted. rn addition. 35. Furthermore. it appears rhat TB:.i provides account Glendale contends that NMTV was untruthful when it ing and bookkeeping services to NMTV including the stated in opposition to the petition to deny the \Vi!mington preparation of N:l'v1TV's payroll. financial statements. fed assignment application that it had just learned about eral and state income tax returns and reports. purchasing ,\guilar·s 1976 conviction. Since 1\guilar·s conversion from requirements, data processing. and servicing of '.\'.'vlTV"s a "drug addict. hiker. and ex-convict" is an integral part of accounts payable. TBN has also "advanced.:loaned" 0i:V1T\/ l1is ministrv. Glendale contends that NMTV must have 54 million with no formal notes or repayment ~ct1edules. been aware ,of his felony conviction. The "advances/loans" are repaid from unrestricted dona 31. NMTV stares that when it said that it had just learned tions to TBN by peop!e with zip codes \Vithin the :'-JP.ITV of Aguilar's felony conviction. it was r·eferring to commu stations' service contours. \.1oreover. while '.\".\1TV has its nications counsel who had just learned of the conviction. O\Vn bank accounts. the people authorized to iign nn the not NMTV NMTV's directors were aware of Aguilar\ accounts are generally TGN employees felony conviction long before he became a director hut did 36. It also appears that TBN control<> '.'<-\!ITV\ per'>onnel policies. Some of '\"\t1TV\ personnel policies v..·ere adopted at ioint boards of direct9rs tneetings with TB:'-! and its 5 Federal Communications Commission FCC 93-148 VI. PROCEDURAL MATTERS (a) !~ determine whether Paul F. Crouch. Trinity -l-4. TBF. the licensee of WHFT-TV. is legally a separate Chnst1an Center of Santa Ana. Inc., dibia Trinity entity from TB~. TBN is a programming supplier to TBF Broadcasting Network (TB:'-/) or its affiliates exercised and also a Commission licensee of several television sta de facto control over National .\:finority TV. Inc. tions. W~ile TB~ is not a subsidiary ofTBN. they <;hare the (NMTV). ~ame officers. directors. and operating policies. Because of (b) To determine 1,1.rhether NMTV, Paul F. Crouch this shared identity of interest and because the allegations TEN or its affiliates or principats abused the Com~ herein relate co TB,\T. it will be made a party to this mission's processes by using NMTV to evade the proceeding so that TBN's position mav be fullv advocated provisions of Section 73.3555(e) of the Commission's 7 FCC Red 7638, 7639 ( 199J2)(collateral Cf. Sha~vn Phalen, Rules and/or by using NMTV to lmproperly claim esroppe! is problematic unless entity is made a party to the minority preferences in LPTV applications. proceeding): RKO General, Inc. (WAXYF,YfJ, 5 FCC Red 6-1-2, 646 n.11 (1990). In addition. because the allegations (c) To determine. in light of the evidence adduced relate to the de facto control of NMTV by TBN and/or Paul pursuant to issues (a) and (bl. whether Trinity Broad Crouch. we will make ~1 YfTV a party so that its posi(ion casting of Florida, Inc .. is qualified to remain a Com may be fully advocated. Finally, the petitioner. SALAD. mission licensee. will be made a party to this proceeding. (d) To determine which of the proposals ;i..·ould, on a -1-5. While TB:--.- and :\'MTV are being made parties to this comparative basis. better serve the public interest. proceeding, \Ve are not nov/ going to cat! for early renevlals (e) To determine, in light of the evidence adduced or institute revocation proceedings against a!! NMTV. TB~· pursuant to the foregoing i".sues, Vv-hich of rhe ap or affiliate licenses. While the outcome of this proceeding plications should be granted. could have in1p!ications for all <;tations licensed to '.'rl'vfTV. TB~· and its affiliates. we believe that there is no need to --l-9. IT IS FLTRTHER ORDERED, That the Petitions to designate those licenses for hearing at this time. Although Deny filed by Glendale Broadcasting Company and the the issues being specified in this case are not limited to the Spanish American League Against Discrimination ,\RE operation of \VHFT(T\l). we are not prepared. at this time. GRA..NTED to the extent indicated above, and DE to conclude that they are so fundamental that they would ,\RE '.'J"IED in all other respects. affect the qualifications of NMTV. TB~ or its affiliates to hold anv station license. See 1986 Character Policv State 50. IT IS FURTHER ORDERED. That the Request for tnent, t62 FCC 2d at 1223. If issues (a) and (b), set forth Declaratory Ruling filed by National Minority TV. Inc .. IS below. are resolved against ~MTV. TB~ or its affiliates, the GRJ\NTED to the extent indicated above, and IS DE~IED Comrnission \Vi!l determine what actions are appropriate in in all other respects. connection with the stations licensed to these entities. rn 51. IT IS FURTHER ORDERED. That the Trinity addition. NMTV, TBN and its affiliates are free to dispose Christian Center of Santa Ana. Inc. d/b/a Trinitv Broadca.<,t of licenses during the pendency of this proceeding. NMTV. ing Network, '.:\'ational l'vtinority TV. Inc .. a~nd Spanish TBN and its affiliates n1ay also acquire licenses during the American League Against Discrimination 1\RE MADE pendency of this proceeding, subject to compliance with PARTIES to this proceeding. relevant Commis.)ion rules and policies. and provided that 52. fT IS FLIRTHER ORDERED. That irrespective of no more than a total of 12 commercial television stations whether the hearing record \.Varrants an Order denying the -;hall be licensed to NMTV, TEN and its affiliates at any renewal application for Station WHFT(TV). it shall be point in time. determined, pursuant ro Section 503(b) of the Communica tions i-\ct of 1934, as amended. whether an ORDER FOR FORFEITURE in an amount not to exceed 5250.000. :;hall VII. CONCLUSION be issued against TBF. TBN and/or ~MT\' for v.,;illful --l-6. We have carefully reviewed the pleadings and related and/or repeated violations of Section 3lfJ(d) of the Com- material before us. and. for the reasons indicated above. we 1nunications Act of 1934. as amended. and/or Section believe that issues have been raised which rnust be ex ?3.3555(e) of the Commission's Rules, which occurred or plored in a hearing. continued within the applicable statute of limitation<;. --l-7_ Except as indicated by the issues specified below, the 53. IT IS FURTHER ORDERED. That in connection applicants are qualified. Since the applications are mutu \1.>'ith the possible forfeiture liability noted above. this docu ally exclusive_ the Commission is unable to make the statu ment constitutes a notice pursuant to Section 503(b)(3) of tory finding that their grant will serve the public interest, the Communications Act of 1934, as amended. convenience, and necessity. Therefore, the applications 54. IT IS FURTHER ORDERED. That Cilenda!e and 1nust be designated for hearing in a consolidated proceed S/""\LAD shall have the burden of proceeding with the ing on the issues specified below. introduction of evidence as to issues (a) through (c). and -18. Accordingly. IT IS ORDERED. That pursuant to that TBF. TBN and NMTV shall have the burden of proof Section 309(e) of rhe Communications Act of 1934, as as to issues (a) through (c). amended. the above-captioned applications ARE DESIG 55. IT IS FURTHER ORDERED. That a copy of each NATED FOR HEARING IN A COMPARATIVE PRO document filed in this proceeding subsequent to the date of CEEDING ro be held before an Administrative Law Judge adoption of this Order SHALL BE SERVED on the coun at a ti111e and place to be specified in a subsequent Order. sel of record in the Hearing Branch appearing on behalf of upon the fotlo ...ving issues: the Chief. Mass Media Bureau. Parties may inquire as to the identity of the counsel of record by calling the [-fearing Branch at (202) 632-6402. Such service SI-IALL BF .AD DRESSED to the named counsel of record. Ifearing Branch, Enforcement Division. Mass \-fedia Bureau. Fed- 7 FCC 93-148 Federal Communications Commission eral Communications Commission, 2025 tvf Street. N.W .. Suite 7212, Washington, D.C. 20554. Additionally. a copy of each amendment filed in this proceeding subsequent to the date of adoption of this Order also SHALL BE SERVED on the Chief. Data Management Staff, Mass Me dia Bureau. Federal Communications Commission. 1919 .\1 Street, N.W .. Room 350, V/ashington. D.C. 20554. 56. IT IS FURTHER ORDERED. That. to avail them selves of the opportuntty to be heard, TBF. Glendale. TB:>, N!v1TV and SALAD, pursuant to Section l.221(c) of rhe Commission's Rules. in person or by their respective attor neys, \.\'ithin 20 days of the mailing of this Order. SHALL FILE in triplicate. r\ WRITTEN APPEARANCE. stating an intention to appear on the date fixed for the hearing and presenr evidence on the issues specified in this Order. 57. IT IS FCRTHER ORDERED. That the applicants herein, pursuant to Section 31 l(a)(2) of the Communica tions Act of 1934. as amended. and Section 73.3594 of the Commission's Rules. SHALL GIVE '.'JOTICE of the hear ing \vithin the time and in the manner prescribed. and SHALL ADVISE the Commission of the publication of such notice. as required by Section 73.3549{g) of the Com mission ·s Rules. FEDERAL COMMCNICATIONS COMMISSION Donna R. Searcy Secretary 8