Houston Forward Times

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01 October 2013 Written by  Jeffrey L. Boney

A “DUNN” DEAL GONE BAD? BOMBSHELL ALLEGATIONS THREATEN THE FUTURE OF KCOH RADIO

 

KCOH building - CopyThe African-American community has been reeling since scathing allegations were made public by veteran KCOH Radio on-air personality Michael Harris, who abruptly left the station after accusing his former boss, Jesse R. Dunn, of financial mismanagement and attempted fraud on the community. 

There is a saying that “the more things change, the more they stay the same.” Such seems to be the case as it relates to KCOH Radio.

It was a little over four years ago that Bud “Da’ Old African Warrior” Johnson wrote an article in the Houston Forward Times (HFT) where he declared, “It’s a done deal. KCOH Radio has been sold.”

That deal fell through, primarily because the principal buyer in the deal at that time, Paraclete Church Ministries Inc. d/b/a Beyond Broadcasting (Jesse R. Dunn), could not make good on securing the necessary funds to close on the transaction and subsequently resulted in a lawsuit between Dunn and KCOH owner Michael Petrizzo, involving the $250k in escrow funds that had been put up to buy the station.

Did we say Jesse R. Dunn?
Yes, this Jesse R. Dunn was the same Jesse R. Dunn who has since come back to the table to take over the reins at the all new KCOH Radio 1230 AM, with a Lease Purchase option that the HFT wrote about in January entitled, “Saved by a Lease Purchase Option - Is the Future of KCOH Radio Secure?” 

It was in that article that the HFT notified the community that under the Lease Purchase Option, Dunn would not own the station, the building on Almeda or the KCOH call letters and that the future of KCOH, while promising, was still at risk. 

These startling new allegations, coupled with the checkered past of its principal owner, have many in the African-American community asking questions and seeking facts concerning the future of KCOH Radio.
That is why it is equally important that the HFT continue to share facts with the community concerning KCOH Radio with its readers.

SCATHING ALLEGATIONS SURFACE
Harris tells the HFT that he decided to go public with these allegations because he has evidence and documented proof that suggests that Dunn took advantage of him Michael Harris - Copyand the station by having Harris personally guarantee approximately $170k worth of loans for station expenses, and then using the funds for personal use. 

Since these allegations surfaced, the HFT has received several internal documents that are connected to these allegations and they are interesting to say the least. Bank records sent to the HFT reveal that accounts belonging to South Houston Community Development Corp d/b/a KCOH have transactions totaling over $30k that are for withdrawals at gambling establishments all over the country. There are transactions showing withdrawals being taken from Delta Downs and L’Auberge in Louisiana, all the way to the Golden Nugget in Las Vegas, and many other places. 

Harris has filed a criminal complaint with the Houston Police Department (HPD), and according to him, HPD is currently investigating. 

“I trusted him (Dunn) and he took advantage of me,” Harris tells the HFT. “I refuse to let him do the same thing to the station, the employees and to the community that he did to me.” 

Part of Harris’ HPD criminal complaint is that he accuses Dunn of taking a business debit card that was addressed to Harris and using the card to spend money on gambling and other personal expenses. 

Harris states that he signed to be a guarantor on a $30k line of credit, a $100k line of credit and a $34k equipment loan; all with three different institutions, because he had good credit and wanted to help the station.

KCOH RESPONSE
Since these allegations were made public, the Houston Forward Times has had several conversations with the ownership and management of KCOH Radio, as well as their new legal counsel. 

KCOH Radio has retained long-time attorney and current State Rep. Harold Dutton (D-Houston) as their legal counsel. Dutton says that one of the primary things that he did prior to agreeing to represent KCOH Radio, was to look at the books and see if there was any impropriety. 

“I did an extensive review of the books and all information, and I am confident that there was nothing illegal done by Jesse Dunn or KCOH Radio,” said Dutton. “These are some serious allegations and we are going to defend ourselves against them.” 

Dutton states that the debit card in question belonged to the station, not to Harris and that Dunn had been instructed by his bookkeeper to use the debit card to keep track of all transactions that he performed. Dutton claims that Dunn was simply paying himself back from the initial investment of over $200k that he made into KCOH Radio. 

Dunn admitted to the HFT that he indeed used the card to go gambling, but said that he was well within his right to perform the transactions because he owns the company and is authorized to do so. 

In relation to the loans, Dunn says that the loans were not taken out in Harris’ name, but rather were taken out in the name of the corporation, which he is the president of. 

Dunn said that KCOH can pay all of its bills and he claims Harris gave him the card to use. 

Dutton tells the HFT that he is in the process of sending a cease and desist letter to Harris and has threatened to pursue other legal action if Harris continues to make accusations in the public that would be considered libel or slander.

DETAILS OF THE STATION
Based on public and private display, it would be safe to say that there was no greater advocate for Jesse Dunn than Michael Harris. 

Remember, it was the Houston Forward Times that wrote the first exclusive stories about the happenings at KCOH; articles which questioned the new ownership, their vision and whether the future of KCOH was secure.

KCOH 1430AM was transferred earlier (March) of this year from the Estate of Michael Petrizzo to La Promesa Foundation. The ultimate value of the KCOH 1430AM deal with La Promesa Foundation was $2.766M, with the asset portion amounting to $2.141M, including a $100K escrow deposit, $1.4M in cash at closing and a note for $641K. To better understand this, one must realize that KCOH 1430AM owners only received a guaranteed $1.5 million in cash towards the purchase of the station. To make up the remaining amount of the sale, KCOH owners had to personally finance $641k in the form of a promissory note.
Liberman Broadcasting provided KCOH a new home on 1230AM via a Lease Purchase Option.

According to sources, the studio located on Almeda is being leased to KCOH for $5k/mth and the station signal is being leased to KCOH for $40k/mth. Dunn states that the lease is for 2 years and that he has an option to buy at any time.

Sources tell the HFT that the station is currently up for sale and that the broker for the station, John Saunders, has been actively soliciting interested buyers.

According to additional sources, the current KCOH contract for the 1230AM signal has a clause in it that states the station can be sold at any time and if Dunn cannot come up with the funds to match the sales price within 10 days of that offer being made, they will not be guaranteed to broadcast on that signal.

The HFT reached out to Saunders for a response, but were unsuccessful at the time of this story.

COULD HAVE BEEN AVOIDED?
In our article entitled, “DID THE BLACK COMMUNITY DROP THE BALL ON KCOH? NO! IT AIN’T OVER!,” the HFT reported that there was a strong contingent of African-Americans who not only had been seeking to purchase KCOH for several years, they claimed that they were continuously blocked from doing so.
In that article, the HFT informed the community that the narrative that was continuously shared with the community and with the KCOH listening audience, that there were no African-Americans who stepped up to buy the station, was completely untrue.

A group which consisted of Michael McCall and Dr. John Stanford held a press conference in December, along with former Houston Astros player Enos Cabell, stating that a cash offer they made for over $3 million, was rejected by the KCOH 1430AM ownership.

Congresswoman Sheila Jackson Lee joined the group at the press conference to throw her support behind them and encourage continued African-American radio ownership. In addition to having more than the requested amount for sale in cash, the group expressed their intent to retain the traditional format and their commitment to invest heavily into the station.

Once again, they were blocked.

Dunn, who again did not have the adequate capital to buy the station, was joined by Harris as the vocal champions to move the station to the new signal under a Lease Purchase option.

Those same Black investors, minus Cabell, have gone on to invest in MJWJ Global Radio, an internationally positioned, online radio network which boasts a similar format to KCOH, and includes former KCOH personality Wash Allen and his popular show “Confessions.”

The HFT reported in January, that Allen had left KCOH to pursue other interests; and getting this network up and running was one of them.

BROKEN RELATIONSHIP
The HFT is no stranger to Jesse Dunn. To say these allegations were surprising or an “a ha” moment for us would be untrue. The HFT has had detailed information in our archives for years concerning Dunn and some of his questionable business dealings.

Harris claims that Dunn made verbal commitments to him about having an ownership stake in the company, and was solicited by Dunn to pursue the loans on behalf of KCOH Radio as an act of good faith.

Harris states that while he had heard about Dunn’s questionable past, he chose to ignore it because he’s seen people change and chose to trust him; a trust that seems to have backfired.

“If you look up the word ‘SUCKER’ in the dictionary you will see my picture right there next to it,” said Harris. “I was wrong about him and I should have handled things differently.”

When asked about the possibility of both of them mending fences and working together again, the two had two entirely different responses.

“I am more interested in repairing the friendship that Michael and I had, rather than thinking about the business side of things,” said Dunn.

Harris’ response was not as cordial.

“HELL NAW!” said Harris “He has ruined KCOH radio’s future and there is no way I could work for that crook.”

INSTITUTION OVER INDIVIDUALS
As we have stated before, as a small business that has thrived in the city of Houston for nearly 54 years, the HFT is totally supportive of any business owner who makes business decisions that are in their best interest, which includes making money and how they handle their affairs.

When the HFT spoke up on the issues surrounding KCOH Radio, we were called demeaning names and berated as being untruthful and uninformed. Not only have these allegations proven that the HFT was neither, untruthful or uninformed, it further shows that the HFT has and always will be the voice of truth for the African-American community.

The HFT has never been interested in defending the character or highlighting the faults of individuals, but has taken a posture to stand behind the station and its storied history. The certainty of the stations future has been put in jeopardy, not by a commitment from the community and advertisers, but because of the way individuals have chosen to handle this precious commodity in the African-American community.

Creative accounting and fancy financial work may be legal, but does it make it right and acceptable in the eyes of the community and those who choose to do business with the station?

Many in the community were excited about the new KCOH Radio, only to have recent allegations of financial mismanagement and operational instability, bring forth questions about the long-term stability of the station.KCOH 1

Many outraged community leaders, such as Kofi Taharka and Quanell X and many others have held rallies and had meetings with KCOH ownership to express their disappointment with these allegations and to find out whether the future of KCOH Radio is secure. 
 
When assessing this situation, one is reminded of the story in the Bible about the judgment of Solomon in which King Solomon of Israel ruled between two women both claiming to be the mother of a child by tricking the parties into revealing their true feelings.

The story appears in I Kings 3:16-28 and tells of two young women who lived in the same house and who both had an infant son, coming before King Solomon for a judgment. One of the women claimed that the other, after accidentally smothering her own son while sleeping, had exchanged the two children to make it appear that the living child was hers. The other woman denied this and so both women claimed to be the mother of the living son and said that the dead boy belonged to the other. 

After some deliberation, King Solomon called for a sword to be brought before him. He declared that there was only one fair solution; the live son must be split in two, each woman receiving half of the child. Upon hearing this terrible verdict, the boy’s true mother cried out, “Oh Lord, give the baby to her, just don’t kill him!” The liar, in her bitter jealousy, exclaimed, “It shall be neither mine nor yours; divide it!”

The king declared the first mother as the true mother and gave her the baby. King Solomon’s judgment became known throughout all of Israel and was considered an example of profound wisdom.

Based on the recent actions of both individuals, it is unclear who is right or who is wrong; what is clear is the fact that the community is once again having to worry about the future of KCOH, while having to watch Dunn and Harris feud publicly.

Like the baby in the story, it is not proving who is right or wrong that matters most, it is the future of the baby, or in this case, KCOH Radio that matters most.

Time will tell, but in the meantime the HFT will continue to provide its readers with information regarding this ongoing saga involving Dunn, Harris and the future of KCOH Radio.