David Lombino of The New York Sun continues to move the Air America story forward. According to Lombino’s latest article, Al Franken revealed that Air America’s current owners have known about the loan from Gloria Wise Boys & Girls Club for some time:

Mr. Franken said he has learned details of the story only in the last week. He said Piquant LLC, current owner and operator of the radio network, found a record of the transfers while conducting a “forensic” investigation into the finances of the previous owner, Progress Media, which was run by [former Air America chairman Evan] Cohen. That internal probe was conducted before the city agency became involved, Mr. Franken said.

A spokesman for the NYC Department of Investigation, Keith Schwam, told Lombino that if Air America discovered the transfers before the city probe began, “They neglected to tell anyone at DOI or in the city about it.”

Franken also said yesterday that “he did not know whether the hundreds of thousands of dollars apparently lent to the radio network by a Bronx social-service organization had indeed been relayed to Air America” by Cohen, who asserted that he needed money to treat a brain tumor. A Piquant spokesman said that Gloria Wise will “be compensated regardless of the amount of money it transferred.”

So: by Franken’s own admission, Air America’s current owners have known for months that their network received a large cash infusion from Gloria Wise Boys & Girls Club, a non-profit organization funded primarily by government grants. Presumably, they also knew that Gloria Wise’s director of development at the time the money was transferred was also Air America’s chairman at the time–a glaring conflict of interest. According to Franken, the owners still don’t know whether that cash was ultimately placed in Air America’s coffers or diverted somewhere else. (Franken seems to be hinting that the money was embezzled by Cohen.) Yet even as the radio network’s hosts railed on about Enron, it didn’t occur to any of Air America’s accountants, managers, or investors to mention the sketchy Gloria Wise transaction to law enforcement officials until after the city launched its investigation.

Despite the near-total MSM blackout, this story just keeps getting more and more interesting.

Update: Ed Morrissey notes that Franken’s statement seems to differ from the first statement issued by Air America last week:

PIQUANT had no involvement whatsoever with funds from GLORIA WISE BOYS &GIRLS CLUB. PIQUANT neither received nor expended any of the sums that are the subject of the City’s investigation of the CLUB.

Update II: Gerard Van der Leun calls its Air Scamerica.

More:

Silflay Hraka reflects. Good read.

N.Z. Bear is now tracking Air America blog coverage.

New York attorney Eric Costello weigh in at Captain’s Quarters. A snippet:

The use of the term “forensic” by Al Franken is interesting. “Forensic accounting” is a term well known in the legal community. I’ve attended CLE [continuing legal education] courses on “accounting for lawyers” that talk about exactly that — and usually this comes up *after* the fact, after some corporate entity has gone ker-splat (another legal term there, forgive me). It strikes me that if Franken is using the term correctly (I admit, a good question), this would imply that the new owners of Air America didn’t know of the issue before they bought in, possibly because of poor documentation of the loans (i.e., no note, no record). Poor documentation of loans is a Bad Thing, to use yet another legal term.

By the way, anyone know the terms of the loan(s)? What interest rates, what term, what security? Was this a sweetheart loan, on terms that Air America couldn’t have received at, say, Bank of America or J.P. MorganChase (or other Enron lenders). Any personal guarantees by individuals here, considering this was a startup? If so, anyone collecting on them? If not, why the hell not?

New York Post has a brief follow-up here.

Leon H. at Macho Nachos hammers home an important point:

What I can’t seem to get over is how everyone seems to treat Piquant LLC as a company that had nothing whatsoever to do with Progress Media and its doings, when in fact Piquant LLC is composed of the same people that made up Progress Media. It is certainly possible that Cohen and Rosen kept some of their fellow investors in the dark about this Gloria Wise deal, but given that Piquant LLC was primarily formed to dodge the legitimate debts of Progress Media, I find it hard to muster much/any sympathy.

Read the whole thing.

Wizbang readers mull over scandal monikers.

Austin Bay:

If Air America were a conservative radio network its corrupt funding trail and cynical abuse of a poverty program would be front page news at the NY Times and full-time mega-scandal at CNN.

Of course, if it were a conservative radio network it might: (1) have an audience and (2) ad revenue.

Touché.

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Air Deadbeat: the saga continues
The Air America loophole
Air America is scrambling
Air America: Don’t blame us
Air America: Stealing from poor kids?!

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