NPR Stung Again: Phony Donor Coached on Evading Audit

A new, second secret recording reveals a supposed donor being coached on avoiding an audit. Howard Kurtz on yet another NPR executive suspension.

Investigative journalist and conservative activist James O'Keefe, left, and stills from his hidden camera during a meeting with NPR's Ron Schiller and Besty Liley. (Photo by Bill Haber / AP Photo)

Just when it seemed that National Public Radio had weathered the worst comes another storm, another setback, another suspension.

Two days after forcing out its chief executive over an undercover sting that embarrassed the network, NPR put another top executive on leave Thursday following the release of a second surreptitious recording by conservative activist James O’Keefe.

In that audiotape, Betsy Liley, NPR’s director of institutional giving, is heard advising a man posing as a wealthy Muslim donor on how the network could help "shield" his group from a government audit if it accepted the $5 million he was offering.

NPR spokeswoman Dana Davis Rehm said in a statement that Liley’s comments on the tape “regarding the possibility of making an anonymous gift that would remain invisible to tax authorities is factually inaccurate and not reflective of NPR’s gift practices. All donation—anonymous and named—are fully reported to the IRS. NPR complies with all financial, tax, and disclosure regulations.”

Broadening the statement to include Ron Schiller, the senior vice president who was caught on tape trashing the Tea Party as a group of Islamophobic racists, Rehm said: “Through unequivocal words and actions, NPR has renounced and condemned the secretly recorded statements of Ron Schiller and Betsy Liley… No stronger statement of disavowal and disapproval is possible.” Schiller, who had already accepted another job, was quickly suspended and let go.

The latest tape makes it harder for NPR to argue that the embarrassment was limited to a single rogue official. And it demonstrates that the ouster of chief executive Vivian Schiller (no relation) has not quelled the uproar over its management practices.

O’Keefe, who became a hero on the right after his sting against ACORN, gave the story new momentum by holding back the second tape until now.

Liley didn’t take the bait when the caller asked whether the potential grant could fund specific news coverage. “It doesn’t allow a direction,” she said.

During the call with Liley, the man posing as a member of a group affiliated with the Muslim Brotherhood asked whether the donation would have to be disclosed. “If you were concerned about that, you might want to be an anonymous donor and we would certainly, if that was your interest, we would want to shield you from that,” Liley replied.

Says the impostor, using the name Ibrahim Kasaam: “It sounded like you’re saying that NPR would be able to shield us from a government audit, is that correct?”

“I think that is the case, especially if you were anonymous and I can inquire about that,” Liley replied. She assured the impostor that only a few top NPR officials would know about the donation but deflected other questions by saying she will refer them to the organization’s legal counsel. And she later emailed “Kasaam” to say that NPR had cleared the anonymous donation. (It was never accepted.)

But Liley didn’t take the bait when the caller asked whether the potential grant could fund specific news coverage. “It doesn’t allow a direction,” she said.

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“Kasaam” pressed her on whether his dollars could influence the “magnitude of coverage.”

“Well even for that, that again is a news decision," Liley said. "So if Warren Buffett wanted to give us $100 million and he wanted us just to cover foot care, podiatry, we probably couldn't do $100 million of podiatry coverage in the next 100 years right? So that would probably be hard for us to take.”

Liley went on to say that "a lot of people have interest in specific areas, including institutions, so they give us support in that area, but we can only accept it to the point it matches our news judgment.”

Howard Kurtz is The Daily Beast's Washington bureau chief. He also hosts CNN's weekly media program Reliable Sources on Sundays at 11 a.m. ET. The longtime media reporter and columnist for The Washington Post, Kurtz is the author of five books.