TV DISCORD IS ON VIEW IN THE BRONX
Axed board chief cites conflicts of interest at community television station
For 30 years, the Bronx’s community television operation quietly expanded and burnished its reputation. Now, an internal feud among board members has spilled into the public eye as the nonprofit struggles with declining revenue.
The dispute has pushed the usually sleepy operations of BronxNet, which operates three studios in different parts of the borough, onto the desk of investigators at the state attorney general’s charities bureau.
The trigger came in December when Paul Gentile, the board chairman for nearly three decades who was voted off the board in September, sent an 11-page complaint to the charities bureau alleging conflicts of interest in two key board decisions and a failure to abide by its own bylaws.
“To me it’s important it gets out there so the attorney general’s office — and elected officials — will look at it,” Gentile said in an interview. “BronxNet should welcome the AG’s involvement.”
In response, a lobbyist and spokesman for the nonprofit and a lawyer representing it have called Gentile an unreliable source and said his allegations were untrue.
A spokeswoman for the AG’s office, which has broad authority to regulate charities, said it is reviewing the complaint.
Changing views
Gentile, 80, worked in the Bronx district attorney’s office for 20 years and served a year in the office’s top job after Mario Merola’s death in 1987. He joined the board in 1992 and became chairman a year later.
“I saw it grow from not much of a staff to three locations, from home cameras to high definition,” Gentile said. “It means a great deal to the community, and right now, it’s on life support.”
Indeed, BronxNet is facing challenging times. Revenue from cable TV services, its main source of income, has declined as people switch increasingly to satellite TV and internet streaming.
The operation’s income from cable dropped from $5.1 million in 2021 to $4.5 million in 2022, BronxNet’s most recent financial statements say. Tax returns show BronxNet ran operating deficits of $189,000 in 2020 and $592,000 in 2021, with a $129,000 surplus in 2022.
BronxNet spokesman Anthony Hayes said BronxNet is seeking other funding streams, such as renting space it controls. BronxNet received $110,180 from the city in 2022, records show. The Bronx borough president’s office allocated $500,000 in 2023.
“Public access television networks across the city are facing financial ruin without the continued support of cable companies,” Bronx Borough President Vanessa Gibson said in a statement.
Because of the revenue shortfalls, BronxNet has relied more on its roughly $7 million contingency fund to cover operating expenses. Its audited financial statement for 2023 shows more than $900,000 was transferred in 2022 from the board’s contingency fund to its operating fund.
The contingency fund is managed by Puerto Rico-based Consultiva Wealth Management. Consultiva was founded by Myrna Rivera, a BronxNet board member since 2014.
Consultiva worked for free until 2018, when — after a change in ownership structure — it sought to be compensated. The
board, including Gentile, agreed.
Around the same time, BronxNet lawyer Andy Phillips says, Rivera sold her shares in Consultiva, resigned as CEO and from its board, but remained with the company as a salaried employee.
“She no longer had any equity in, or ownership of, the company,” Phillips wrote. “Ms. Rivera received no personal financial gain from the fact that BronxNet chose to work with Consultiva.”
Rivera remains closely involved in the BronxNet account. A Jan. 26 Consultiva quarterly report lists her as one of two senior investment advisers on the account.
Despite his earlier support of the arrangement, Gentile says his opinion changed. In his letter to the charities bureau, he describes Rivera’s role as a conflict of interest.
“Regardless of how the account functioned, the conflict is always there because you have to make decisions — what is in the best interest of your company and what is the best interest of the board. You can’t serve both,” Gentile said. Simmering tensions explode
In early 2023, the financial challenges and a growing disagreement over the Consultiva arrangement raised tensions on the board.
On Feb. 23, Gentile held a special meeting to discuss those issues. Board treasurer Edwin Mejia disclosed in the meeting that BronxNet could be insolvent in three to four years if nothing changed, Gentile writes in his letter.
When the discussion turned to whether to keep Consultiva, another board member, John Collazzi, blocked a vote on the issue with a “filibuster,” Gentile writes.
Gentile claims he was denied access to recordings of that meeting and of two meetings later in the year.
Hayes, the BronxNet spokesman, declined to provide the complete recordings of those meetings to the Daily News. He claimed the meeting fell into disarray because Gentile tried to bypass procedural rules.
That spring, a new clash mushroomed — also tied to the station’s financial challenges. Some members of the board began discussing hiring a lobbyist to press the Legislature to impose a state tax on satellite and streaming providers to raise money for public access media.
Gentile claims that during the May 11 ribbon-cutting for BronxNet’s new La Central studio, board member Nick Lugo introduced him to Taina Borrero, a lobbyist with the Hayes Initiative. Gentile says Lugo described Borrero as a close friend.
On May 15, five board members, including Lugo, held a “special meeting” and voted to hire the Hayes firm at a rate of $6,000 a month.
Gentile and fellow board member Heller opposed hiring a lobbyist, seeing it as a waste of money with only three weeks left in the legislative session. They boycotted the meeting.
The meeting minutes show Lugo, Collazzi and BronxNet Executive Director Michael Max Knobbe said other unnamed firms all had unspecified conflicts. Lugo declared that the fee to Hayes was a small investment compared to the potential results, the minutes show.
“Lugo openly acknowledged his conflict of interest and did not recuse himself from voting,” Gentile wrote in the letter to the AG.
Hayes, the spokesman who is also the founder of the lobbying firm, said Lugo has known Borrero “personally and professionally for years,” but underscored that multiple firms were considered.
“As president and CEO of the New York City Hispanic Chamber of Commerce, it is fair to say that Mr. Lugo knows an awful lot of people,” Phillips wrote. “There is nothing remotely improper about Lugo recommending a communications specialist he has familiarity with.”
State lobbying records show BronxNet has paid the Hayes firm at least $57,000 to date. The bill’s Assembly sponsor, Michael Benedetto, recently cast doubt on its prospects during a Jan. 22 segment on BronxNet host Gary Axelbank’s program.
“It has major repercussions, we’re talking about taxes,” Benedetto (D-Bronx) said. “It’s an idea that has to probably ripen.”
A pivotal board meeting
On July 19, at Borough President GIbson’s office, the board elected Mejia as board chairman. Gentile opposed the move.
After Mejia became chairman, he scheduled a Sept. 6 special board meeting where Gentile was voted off the board.
Hayes said Gentile was not removed, that his term was up and he was simply not reappointed in accordance with the group’s rules.
Gentile claims the vote was improper because it didn’t follow bylaws.
His views are largely shared by Heller, the other board member voted off in September.
Heller, who was on BronxNet’s board for two decades, called Gentile’s removal “just another element in a string of improper actions” including the Consultiva arrangement and the tapping of the lobbyist “with only a few days left in the legislative session.”
Gibson and City Councilman Eric Dinowitz (D-Bronx) point to a need for a review of the nonprofit.
Gibson said in her statement she is “deeply alarmed by the accusations that were made and disappointed by the delay in reporting them to the authorities.”
“We know the attorney general’s office will conduct a thorough investigation if any of these claims are substantiated,” Gibson said.
“It is surprising that Paul wasn’t aware of the mismanagement and self-dealing that he alleges took place under his watch as chair,” Gibson added, appearing to lay blame with Gentile.
Said Dinowitz, “Allegations of mismanagement or financial challenges facing BronxNet are concerning and should obviously be looked into to ensure the continuity of this vital community resource.”