Appendix — Hadji-Elias v. Los Angeles County Superior Court
Supreme Court brief1998
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“961358 FEB 25 1997
Case No. “tk OF THE CLERK
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM 1996
MARIA M. OCHOA,
Petitioner
V.
FEDERAL COMMUNICATIONS COMMISSION and
the UNITED STATES OF AMERICA,
Respondents
On Petition for Writ of Certiorari
to the United States Court of Appeals
for the District of Columbia Circuit
PETITION FOR WRIT OF CERTIORARI
APPENDIX
Stephen T. Yelverton, Esq.
Counsel of Record
Yelverton Law Firm, P.c.
1101 30th St., N.W.,
Suite 500
Washington, D.C. 20007
Tel. 202-625-4321
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APPENDIX A
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5 FCC Rcd 7079 (MMB 1990) .
APPENDIX B
Memorandum Opinion and Order j ’
FCC 91M-1475, rel.
Depa 26 SOR ergs,
APPENDIX C
Initial Decision, 7 FCC Rcd
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APPENDIX D
Decision, 7 FCC Rcd 6569
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APPENDIX E
Memorandum Opinion and Order,
S 2GC Bod 3136 (1993) . 6k
APPENDIX F
Memorandum Opinion and Order,
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APPENDIX G
Order, 10 FCC Rcd 142 (1995)
APPENDIX H
Order,
10 FCC Rcd 8746 (1995)
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APPENDIX I
Judgment, U.S. Court of
Appeals, D.C. Circuit, filed
September 23, 1996 ..-+e«s ce i2kha
APPENDIX J
Order, U.S. Court of
Appeals, D.C. Circuit,
filed November 27, 1996... . 140a
APPENDIX K
Portions of Hearing Transcript .. 14la
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APPENDIX A, HEARING DESIGNATION ORDER,
MM Docket No. 90-430, rel. Nov. 20, 1990,
5 FCC Rcd 7079 (MMB 1990)
In re Applications of:
MARIA M. OCHOA
File No. BPH-890615ME
FOOTHILLS BROADCASTING, INC.
File No. BPH-890616MR
For Construction Permit for a New FM
Station on Channel 277A, in Lenoir, North
Carolina
1. The Commission has before it the
above-captioned mutually exclusive
applications for a new FM station.
2. Goodale. The Report and Order in MM
Docket 84-750, 50 Fed. Reg. 19,936 (1985)
established a strict processing system for
applications for construction permits on
nonreserved FM broadcast channels. To be
considered substantially complete or
"tenderable", applications must meet
precise tenderability standards set forth
in Appendix D of the Report and Order. One
critical element of tenderability is
correct transmitter location
coordinates./1 Goodale’s application
indicates that the location of its
transmitter is 35 deg. 58’ 40" N.L.. 81
deg. 34’ 27" W.L. However, the FCC’s
engineering study, based on the
topographic map submitted by Goodale,
indicates that the coordinates shown on
the map are 35 deg. 58’ 40" N.L.. 81 deg.
34’ 43" W.L. This discrepancy cannot be
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resolved confidently and reliably within
the confines of the application: thus, the
presence of the incorrect data will be
treated as functionally equivalent to its
absence in accordance with the procedure
set forth in Appendix D.
3. Applications accepted for tender, but
that are ultimately shown to be
untenderable will be "returned as
inadvertently accepted for tender and, if
resubmitted, will not be accepted nunc pro
tunc. Return of the application will void
the application reference number
inadvertently assigned and whatever rights
of tender might have been associated with
it.* Id. Accordingly, due to the
inconsistency in its transmitter location
coordinates, Goodale’s application will be
returned as inadvertently accepted for
tender. Steven B. Courts, 4 FCC Rcd 4764
(1989).
4. The applicants below have petitioned
for leave to amend their application on
the dates shown. The accompanying
amendments were filed after the last date
for filing amendments as of right. Under
Section 1.65 of the Rules, the amendments
are accepted for filing. However, an
applicant may not improve its comparative
position after the time for amendments as
of right has passed. Therefore, any
comparative advantage resulting from the
amendments will be disallowed.
APPLICANTS AMENDMENTS FILED
Ochoa November 3, 1989;
June 15, 1990
Mystic December 11, 1989:
January 22, 1990
oe oe on nner re
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5. On May 4, 1990, Ochoa filed a
Petition To Deny Or Dismiss Furniture
City’s application. Ochoa states that
Furniture City’s contour map does not
clearly and legibly define the city
boundaries of Lenoir, North Carolina. It
is not clear, Ochoa claims, that the
community of license is fully encompassed
by the 70 dBu contour. Ochoa alleges that
Furniture City’s original application
shows an arrow pointing to 4 "darkened
smudge" purporting to represent the city
of Lenoir. Therefore, Ochoa concludes,
Furniture City’s application should be
dismissed, having been inadvertently
accepted for tender.
6. We will deny Ochoa’s petition. Ochoa
relies upon Karen S. Klehamer, 5 FCC Rcd
2554 (1990), which states,inter alia, that
applications whose contour maps are
without the boundaries of the city of
license clearly indicated, or without a
point on the map indicated as the city of
license clearly within the 70 dBu contour,
cannot be accepted for tender. In this
case, Furniture City’s contour map
indicates Lenoir as a shaded area clearly
within the 70 dBu contour. Accordingly,
Ochoa’s Petition To Deny will be denied
below.
7. Section II, Item 4 of FCC Form 301
(October 1986) requires that an applicant
specify its address (number, street, city,
state) as well as the home address of each
of its principals. Sundown has not
completed Item 4 correctly. Sundown’s
application gives a post office box number
as the residence address for Muriel D.
Payne, Billy Jack Morgan, and Rebecca Pons
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Morgan. Accordingly, Sundown must submit
an amendment which gives all the
information required by Section II, Item 4
to the presiding Administrative Law Judge
after this Order is released.
8. Attempts to obtain FAA clearance
through the Commission’s Antenna Survey
Branch and Foothills have been
unsuccessful. Accordingly, since no
determination has been received as to
whether the antenna proposed by Foothills
would constitute a hazard to air
navigation, an issue with respect thereto
will be included and the FAA made a party
to the proceeding.
9. The Commission requires that if
there will be five or more fulltime
station employees, the applicant must
complete and file Section VI of Form 301
and supply a statement detailing hiring
and promotion policies for women and each
minority group whose representation in
the available labor force is five percent
or greater in the proposed service area.
Although Bowman and Lingafelt have filed
such statements, they are deficient.
Bowman has not listed an acceptable
recruitment source for African Americans,
and Lingafelt has not listed specific
recruitment sources for either African
Americans nor women. Accordingly, Bowman
will be required to file an amended EEO
program with the presiding Administrative
Law Judge, or an appropriate issue will be
specified by the Judge.
10. Except as may be indicated by any
issues specified below, the applicants are
qualified to construct and operate as
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proposed. Since the proposals are mutually
exclusive, they must be designated for
hearing in a consolidated proceeding on
the issues specified below.
11. Accordingly, IT IS ORDERED, That,
pursuant to Section 309(e) of the
Communications Act of 1934, the
applications ARE DESIGNATED FOR HEARING IN
A CONSOLIDATED PROCEEDING, at a time and
place to be specified in a subsequent
Order, upon the following issues:
1. To determine whether there is a
reasonable possibility that the tower
height and location proposed by Foothills
would constitute a hazard to air
navigation.
2. To determine which of the
proposals would, on a comparative basis,
best serve the public interest.
3. To determine, in light of the
evidence adduced pursuant to the specified
issues, which of the applications should
be granted, if any.
12. IT IS FURTHER ORDERED That pursuant
to the discussion in paragraphs 2 and 3,
supra, Goodale’s application is HEREBY
RETURNED as inadvertently accepted for
tender.
13. IT IS FURTHER ORDERED, That the
petitions for leave to amend filed by
Ochoa and Mystic ARE GRANTED. and the
corresponding amendments ARE ACCEPTED to
the extent indicated herein.
14. IT IS FURTHER ORDERED, That Ochoa’s
May 4 1990 Petition to Deny or Dismiss
Furniture City’s application IS DENIED.
15. IT IS FURTHER ORDERED, That Sundown
shall submit an amendment which contains
the information required by Section II,
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Item 4 of FCC Form 301, to the presiding
Administrative Law Judge within 30 days
after the release of this Order.
16. IT IS FURTHER ORDERED, That within
30 days of the release of this Order,
Bowman and Lingafelt shall submit Section
VI information in accordance with the
requirement of Section 73.2080(c) of the
Commission’s Rules to the presiding
Administrative Law Judge.
17. IT IS FURTHER ORDERED, That the
Federal Aviation Administration IS MADE A
PARTY to this proceeding with respect to
the air hazard issue only.
18. IT IS FURTHER ORDERED, That a copy
of each document filed in this proceeding
subsequent to the date of adoption of this
Order shall be served on the counsel of
record in the Hearing Branch appearing on
behalf of the Chief, Mass Media Bureau.
Parties may inquire as to the identity of
the counsel of record by calling the
Hearing Branch at (202) 632-6402. Such
service shall be addressed to the named
counsel of record, Hearing Branch,
Entorcement Division, Mass Media Bureau,
Federal Communications Commission, 2025 M
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 shall also be served on the Chief,
Data Management Staff, Audio Services
Division, Mass Media Bureau, Federal
Communications Commission, Room 350, 1919
M Street, N.W., Washington, D.C. 20554.
19. IT IS FURTHER ORDERED, That, to
avail themselves of the opportunity to be
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heard, the applicants and any party
respondent herein shall, pursuant to
Section 1.221(c) of the Commissions Rules,
in person or by attorney, within 20 days
of the mailing of this Order, file with
the Commission, in triplicate, a written
appearance stating an intention to appear
on the date fixed for hearing and to
present evidence on the issues specified
in this Order.
20. IT IS FURTHER ORDERED, That the
applicants herein shall, pursuant to
Section 311(a)(2) of the Communications
Act of 1934, as amended, and Section
73.3594 of the Commission’s Rules, give
notice of the hearing within the time and
in the manner prescribed in such Rule, and
shall advise the Commission of the
publication of such notice as required by
Section 73.3594(g) of the Rules.
FOOTNOTE
/1 The geographic coordinates, to the
nearest second, of the proposed
transmitter site are critical to
processing an application. Inconsistent
data make it impossible to determine the
veracity of the site availability
certification, the environmental
impact statement, or the information
supplied for FAA approval. In other cases,
absence of these data makes it impossible
to determine the distance from the
proposed site to other proposed or
existing broadcast facilities and to the
community of license. In the commercial FM
service, spacing determines the
acceptability of an application where
mutual exclusivity exists with respect to
a given allocation (47 C.F.R. 73.207).
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APPENDIX B, MEMORANDUM OPINION AND ORDER,
FCC 91M-1475, rel. April 26, 1991 (ALJ)
1. Maria M. Ochoa has asked the Trial
Judge to issue a subpoena for Vanessa
Keys. Ochoa filed her request on April 24,
1991, and represents that Keys will
surrebut the rebuttal testimony of Susan
Litaker, a prospective witness’ for
Foothills Broadcasting, Inc.
2. The Trial Judge will not grant
Ochoa’s request. At the March 19-20
hearing sessions the Trial Judge granted
the right of rebuttal on aé narrow
comparative point: namely, whether Ochoa
really intends to move to Lenoir, N.C.,
(if her application is granted) and manage
her FM proposal. 1/ 2/.
3. Since that time what was a narrow
comparative point requiring a limited
amount of testimony, has turned into a
Cecil B. DeMille production that promises
to feature nine witnesses plus documents.
To start permitting surrebuttal could well
result in a waste of limited but valuable
trial time.
4. Now Ochoa wants to start scheduling
surrebuttal witnesses, even before the
rebuttal witnesses have testified. But she
hasn’t shown that the limited matters
Vanessa Keys would offer can’t be adduced
through one of the other nine witnesses,
or that the surrebutter’s (Ms. Keys)
testimony is an essential plank in Ochoa’s
version of the facts.
5. SO, the Request for Subpoena that
Maria Ochoa submitted on April 24, 1991,
IS DENIED.
ALJ Walter C. Miller
-Ga-
1/This ruling is being issued pursuant
to 47 C.F.R. 2.335.
2/The Trial Judge has always been loathe
to allow rebuttal sessions. They usually
lead to the adduction of evidence which is
of tangential relevance at best. He
allowed limited rebuttal here because he
was faced with a one-on-one; i.e., Maria
Ochoa and Reta Thorn giving contradictory
testimony.
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APPENDIX C, INITIAL DECISION, FCC 92D-19,
rel. March 9, 1992, MM Docket No. 90-430,
7 FCC Red 1861 (ALJ 1992)
1. Initially eight applicants sought
authority to operate a new FM station on
Channel 277A in Lenoir, North Carolina.
See 55 F.R. 50398 published December 6,
1990./1 Three remain: Maria M. Ochoa
(Ochoa), Gateway Media Limited Partnership
(Gateway) and Foothills Broadcasting, Inc.
(Foothills).
2. After a lengthy and intermittent
interlocutory cycle, we took evidence/2 on
the following issues: /3
1: To determine whether Gateway is
financially qualified to construct and
operate its proposed station and whether
it was so qualified on June 15, 1989, to
the date the application certified to its
financial qualifications: /4
2: To determine whether Foothills
lacked candor or misrepresented the facts
regarding its ownership structure when
they filed BPH-890616MP, and, if so,
whether Foothills is of fit character to
be an FCC licensee; /5
3: To determine whether Foothills’
two tier (voting and non-voting) ownership
structure is a "sham," and if so what
impact that has on their qualifications to
be an FCC licensee; /5 :
4: To determine which of the
proposals would, on a comparative basis,
best serve the public interest; and
5: To determine, in light of the
evidence pursuant to the specified issues,
which of the applications should be
granted, if any.
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Both the burden of proof and the burden of
proceeding on Issue 1 was placed on
Gateway Media Limited Partnership. On
Issues 2 and 3, the burden of proceeding
was placed on Maria M. Ochoa, while the
burden of proof remained on Foothills.
3. We held the Prehearing Conference on
March 1, 1991, and the Evidentiary
Admission Session on March 8, 1991.
Hearings were held on March 19 and 20, May
1, 2, and 20, and September 26, 1991. The
evidentiary record was closed on September
26, 1991.
4. The three applicants filed their
first set of Proposed Findings of Fact and
Conclusions of Law on July 5, 1991, and
their first set of Reply Findings on July
19, 1991. They filed their second set of
Proposed Findings on November 27, 1991,
and their second set of Reply Findings on
December 13, 1991.
Findings of Fact
Issue 1: Gateway Financial Issue
5. Under Issue 1 we must determine
whether Gateway was financially qualified
on June 15, 1989, at the time they
certified they were. It was General
Partner Susan Rowe, with 50% equity and
100% voting interests, who so certified.
6. Before Gateway filed its
application, Susan Rowe estimated the cost
to construct and operate the proposed
Station, added an "approximate buffer" to
her estimates and decided to ask the bank
for a $425,000 loan.
7. On May 31, 1989, Gateway’s counsel
telecopied a sample bank letter to Rowe.
The sample letter stated in part: (a) the
bank’s "willingness to lend" the applicant
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a sum to be inserted by the bank; (b) an
interest rate of "one to two percent above
the prime rate; (c) that the loan would be
"repayable over a period of four to six
years;" (dad) that the loan was subject to
final review of the applicant’s projection
and a complete loan package supported by
financial statements after grant of the
application; and (e) that the loan would
be subject to the bank’s "customary
covenants, terms, and conditions." Gateway
Ex. 14, Att. B, p. 2.
8. So about two weeks before she
certified Susan Rowe had a sample bank
letter to give to a financial institution.
But Rowe didn’t go to ae financial
institution. Instead, she contacted a
neighbor of hers, Al Wood. He was a branch
manager of First Union Bank in Lenoir. She
told Woods about her plans. She told him
she was interested in a $425,000 loan, she
gave him the sample letter, and said she
wanted a letter like the sample. The only
document she gave Wood was the sample
letter.
9. Wood said that he couldn’t authorize
commercial loans but that he would turn
the matter over to Stephen McCord, First
Union’s Commercial Banking Manager for
Lenoir. Wood never met with McCord about
Gateway’s request for a loan letter.
Instead, he telephoned McCord and sent him
the letter. Wood and McCord had one or two
brief conversations. Wood told McCord that
Rowe wanted to obtain a radio station and
needed a letter stating the bank’s
"interest" in providing funds. Foothills
Ex. 6, p. 8.
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10. At the time he was considering
Gateway’s request for a loan letter McCord
had never met Rowe, and he had no meetings
or telephone conversations with her during
the time he was considering and responding
to Gateway’s request. Foothills’ Ph. II,
Sx. 6) Pp. 5.
11. Susan Rowe has testified
differently. At the March 19, 1991 hearing
session, she testified at some length
concerning meeting at the bank with McCord
before Gateway received its loan letter.
(Tr. 182-188). She said that they had
talked about an interest rate "spread over
prime;" that she told him Gateway would
need "X" dollars; that she asked him to
prepare a bank letter; and that McCord had
asked her if her husband would back her in
the project and that she had replied that
he would. (Tr. 182, 183, 186-188).
12. However, a short time later, when
she was deposed on April 9, 1991, she
first testified that she had not met
with McCord to talk about a letter. Then
she said that she may have talked to
McCord, but didn’t remember the
conversation. Foothills Ph. II Ex. 7, pp 6
and 19. Thus we have Ms. Rowe giving three
different versions of events.
13. On June 6, 1989, McCord wrote two
letters for Gateway. In the first letter,
he referred to the bank’s "willingness to
consider a loan request." After he wrote
this first letter he had a telephone
conversation with Gateway communications
counsel (see para. 7 supra.) They talked
about the language in the letter. McCord
then wrote a second letter also dated
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June 6, 1989. This referred to the bank’s
"willingness to lend" Gateway money.
14. The first letter also contained
this sentence: "This letter should not be
construed as a commitment to lend."
The comparable sentence in the second
letter reads: "any commitment to lend is
expressly subject to the borrowing entity
meeting all terms, conditions and
covenants the bank may deem appropriate."
McCord says, that in his mind, those
changes in the letter didn’t effect its
substantive meaning at all.
15. During his telephone conversation
with Gateway’s counsel (see Finding 13
supra.), McCord discussed possible
interest rates and repayment terms. But
McCord refused to include such terms in
his second letter; he was "uncomfortable"
including those terms in the letter
without having seen "the total deal"; and
because he hadn’t seen a lot of detailed
information that he expected to get in the
future. Neither of the McCord’s letters
contained any language about security for
the proposed loan. When he agreed to write
the letters, McCord was mistakenly
assuming that Rowe’s husband, Bill White
and Hoffman’s husband Eric would be
involved in Gateway. Foothills Ph. III Ex.
6, eS.
16. Gateway admits that before they
filed their application, they didn’t
provide First Union with any documents
describing their financial plans for
construction and operation of the station
or with financial statements for the
application or its principals.
17. Gateway filed its application in
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this proceeding on June 16, 1989. There
Susan Rowe (who really had nothing to do
with the terms of the two McCord letters)
certified to Gateway’s finances. She swore
that Gateway had "sufficient net liquid
assets on hand and that sufficient funds
are available from committed sources to
construct and operate the requested
facilities for three months without
revenue." In so doing she was relying on
the second bank letter. Gateway did not
rely on the availability of money from
other sources.
18. Since Susan Rowe hadn’t talked with
McCord, she didn’t know that there were a
great many impediments to Gateway’s
obtaining a $425,000 loan. See Finding 6
supra. For example, she didn’t know that
it is First Union’s standard practice to
require borrowers to _ provide equity
contributions equal to 25% of the real
estate value and 20 to 25% of the value of
equipment to be purchased with the loan
proceeds; she didn’t know that First Union
doesn’t make long term loans for working
capital; she didn’t know that before First
Union will make a commercial loan, they
conduct a study of the potential cash flow
of the business to determine if it is
likely to generate adequate funeas for
repayment; and she didn’t know that McCord
didn’t have the authority to approve a
$425,000 loan.
19. Under Aspen FM, Inc., FCC 90R-37
released May 23 1990 at paras. 15-17 and
Shawn Phalen, FCC 90R-64, released July
24, 1990, Gateway must also prove they are
presently financially qualified.
20. On January 10, 1991, Foothills
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moved to enlarge the issues against
Gateway. That motion was granted. See
Footnote 4 supra. At that time McCord
prepared still another letter for Gateway.
This letter, dated January 18, 1991
contained the items missing from the June
6, 1989 letter. There is a _ specific
interest rate (1.5% above prime) a
repayment period (beginning 30 days after
the loan is issued, and not to exceed
seven years),and guarantee and
collateral requirements (the stations
assets and personal guarantees).
21. Most importantly, Mrs. Rowe’s
husband, Mr. William White, III, has now
personally guaranteed (in writing) a loan
from First Union to Gateway to construct
and operate the proposed station. See
Findings 11 and 15, White is a Vice-
President of Greer Laboratories Inc. Greer
is a family owned and operated
pharmaceutical manufacturer in Lenoir.
They specialize in producing allergenic
extracts. First Union has long had
financial dealings with Greer and is
familiar with Mr. White’s personal
financial status. However, a prenuptial
agreement governs White’s and Rowe’s
marriage. So White’s personal written
guarantee becomes significant.
22. Intermediate Financial Findings.
Based on the foregoing (Findings 19-21
supra.) a further finding is warranted
that Gateway is presently financially
qualified. They have shown that they now
have sufficient net liquid assets
available from a committed source to
construct and operate the requested
facilities for there months without
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revenues. The First Union January 18, 1991
loan commitment letter buttressed by
William White’s personal guarantee
provides the forward looking assurance.
23. But, under Aspen FM, Inc. and Shawn
Phalen, Gateway has a forward-backward
obligation. They must demonstrate that
they were financially qualified on June
15, 1989 when they certified they were.
See Finding 5. based on the foregoing, the
finding is warranted that it wasn’t
financially qualified on June 15, 1989,
when Rowe certified they were.
24. On June 15, 1989, Gateway did not
have sufficient net liquid assets on hand.
Rowe knew that at the time she was
certifying. Nor, on that date, did Gateway
have sufficient funds available from
committed sources to construct and operate
the requested facilities for three months
without revenue. Rowe knew that too, or
should have known it.
25. Ms. Rowe had never met Stephen
McCord of First Union, the person her
neighbor, Al Wood, had selected to provide
Gateway with a loan commitment letter. She
knew she needed $425,000, but she didn’t
know if this Stephen McCord was authorized
to approve a loan in that amount (see
Findings 6 and 18 supra.). Since she had
never personally dealt with either McCord
or First Union, Rowe knew that Gateway had
never provided First Union with the
background financial documents McCord
would need to draft a meaningful loan
commitment letter.
26. Moreover, had Susan Rowe compared
the sample loan letter her communications
counsel had given her with McCord’s second
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June 6, 1989 letter, she would have
readily seen the McCord letter for what it
was - a mere accommodation, and not a very
good one at that.
27. So, just as surely as Gateway is
financialiy qualified now, Gateway wasn’t
financially qualified on June 15, 1989,
when the sole General Partner, Susan Rowe
certified that they were. So Issue 1 is
decided adversely to Gateway, and Gateway
is not qualified to be a Commission
licensee.
Issues 2-3: Foothills’ Sham and
Misrepresentation Issues
28. Foothills filed its Lenoir
application on June 16, 1989. There they
represented to the Commission, their
opponents (see Footnote 1, and Finding 1
Supra.), and the public that they were a
North Carolina two-tier stock corporation
(common voting and common non-voting). The
following chart shows the details
(Foothills Ex. 1):
Stockholder Voting Non-voting
Shares (%) Shares (%)
John B. Beall 900 (82%) 0 (0%)
Steven Frank 200 (18%) 0 (02)
W. Wallace 0 (0%) 900 (100%)
Respess
Percentage of Equity
Beall 45%; Frank 10%; Respess 45%
eeacnarm irene tnata perceceimiaues. scmunnnnaann iene re
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29. John Beall is ostensibly the
President, Treasurer and a Director of
Foothills; Steven Frank is Vice-
President, Secretary and a Director; and
Respess claims to be neither an officer
nor Director, nor a voting stockholder.
30. Foothills’ formational problems are
legion. To start with, although the chart
(para. 28. supra.) shows Steven Frank
holding 200 shares of voting stock,
Foothills’ application says he holds 900
shares of voting stock. This discrepancy
has never been corrected. R
31. Foothills never signed or cannot
find fully-executed copies of several
important corporate documents. This
includes stock subscription agreements, /6
annual meeting minutes, and _ federal
business filings.
32. Foothills never amended its
application to accurately reflect a change
in Mr. Respess’address. Such formational
documents that Foothills has produced
clearly evidence backdating to the time
the application was filed; i.e., they
demonstrate that Foothills was not a legal
corporate entity on June 16, 1989 (the
filing date).
33. Foothills was unable to produce a
fully-executed site agreement letter, and
they never paid the proposed site owner
the option fee required by the site
contract until 2 or 3 weeks before the
hearing began. Foothills claims to have
held an annual corporate meeting in 1990.
But no corporate minutes for that meeting
were ever produced (Tr. 278, 323-324)./7
34. Even the documents Foothills have
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been able to produce do little to explain
their formational problems. Foothills’
Articles of Incorporation are dated June
15, 1989. But the stock certificates for
Foothills’ three owners are dated June 14,
1991 (2 years later). Foothills’
organizational meeting’s minutes say the
meeting was held on June 15, 1989, but
those same meeting were executed the
previous day, June 14, 1989.
35. While Foothills represents itself
as existing on June 16, 1989, that is not
consistent with the stockholders’checks
for their initial stock purchases.
Respess’ check is dated June 16, 1989;
Beall’s is dated June 19, 1989; and
Frank’s is dated July 3, 1989.
36. Nowhere is the evidence of
backdating (see Finding 32 supra.) clearer
than is displayed in a legal bill
Foothills received for its corporate
organizational formulation. Respess, an
alleged passive non-voting stockholder
(45% equity), is also an attorney-at-law.
He is a partner, and a 40% owner of Todd,
Vanderbloemen, Respess and Brady, a law
firm in Lenoir, North Carolina.
37. It was Respess who retained his own
law firm to be Foothills’ corporate
counsel. On October 2, 1989, Respess’
firm forwarded a bill for’ services
rendered to Foothills. That bill shows
that Respess’ partner, Bruce
Vanderbloemen, performed a series of
corporate organizational acts for
Foothills on September 12, 1989 - about
three months after Foothills represented
that it was a corporation en esse.
38. On September 12, 1989,
ae
-2la-
Vanderbloemen held = an organizational
conference with Beall, Frank, and Respess;
he completed and issued _ the stock
certificates; he prepared the Initial
Franchise Tax Return and forwarded it to
Raleigh; he completed the organizational
3 meeting minutes; and he completed other
j corporate documents. /8 39. John Beall
‘ agrees that the September 12, 1989 date is
accurate; the local recister of deeds’
date-stamp of September 28, 1989 on the
Articles of Preparation is consistent with
Vanderbloemen’s bill; Beall has noted on
the legal bill that he paid it on October
20, 1989; the tendered check is dated
October 1989, not June 1989; and
Vanderbloemen sent Foothills a memorandum
on September 29, 1989 regarding the
availability of the corporate name.
40. In addition to the legal services
his law firm has performed, and although
an ostensibly non-voting, passive
stockholder, Respess has been anything
but passive. He has actively participated
in the prosecution of Foothills’
application.
41. He recruited a rebuttal witness to
Maria Ochoa’s case, Jake Gurley. He talked
with Gurley on the telephone, drafted an
affidavit for Gurley’s signature, and
directed Steven Frank (a voting
stockholder) to go to Charlotte, North
Carolina and get Mr. Gurley’s signature on
an affidavit.
42. Respess was also instrumental in
recruiting another Ochoa rebuttal witness,
Mrs. Reta Thorn. He first tried to get
Mrs. Thorn to sign a written statement;
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she refused. So he secured her testimony
by arranging for her to be served a
subpoena ad testificandun. Respess
personally paid the airfare for Gurley,
Thorn, and a third person to come to
Washington, D.C. and testify.
43. Respess also initiated and handled
settlement negotiations for Foothills. He
has handled several such negotiations. In
fact, at the scheduled February 5, 1991
settlement conference, Respess was
Foothills’ chief spokesman and negotiator.
He not only did most of the talking he was
oblivious as to whether Steven Frank
(Finding 41 supra.) was even present
during all the meetirg.
44. Respess has performed other
prosecutorial activities on Foothills’
behalf. He has sent application materials
to Foothills’ FCC counsel; and he confers
regularly with Beall, Frank and FCC
counsel. When important matters come up,
Beall immediately contacts Respess for his
advice; Beall only secondarily confers
with Steven Frank. Beall received a copy
of his deposition transcript directly from
Respess. Either Respess or his law firm
has directly turned over Foothills’
documents to Foothills’ FCC’ counsel
without Beall’s knowledge.
45. Intermediate Findings. Based on the
foregoing (Findings 28-44 supra.), certain
intermediate facts are warranted. First,
Foothills’ two tier (voting and non-
voting) ownership structure is certainly
and surely a_— shan. Foothills has
represented that its two tier corporation
legally existed on June 16, 1989 when they
filed their application. It didn’t. The
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-23a-
corporation didn’t come into being, if it
came into being, until some three months
later, on September 12, 1989, at the
earliest (see Findings 38-39 supra. ).
46. Foothills’ principals were well
aware that their corporate structure was a
sham. The record contains evidence of
backdating documents to make it appear
that the corporation existed on the date
the application was filed. See Findings
32, 34-39, supra.
47. Moreover, the argument can be made
that Foothills has never established
itself as a bona fide corporate applicant.
The FM application contains discrepancies
that have never been corrected. Foothills’
principals never signed or cannot find
fully executed copies of vital corporate
documents. This includes stock
subscription agreements, annual meeting
minutes, and Federal business filings.
Findings 30-33, supra.
48. Foothills has been representing and
continues to represent’ that Wallace
Respess (45% equity) is a non-voting,
passive investor. see Finding 28 supra
That’s a blatant and overt
misrepresentation. Respess has been
anything but passive. Actually the record
supports a contrary inference; i.e., that
the Lenoir FM venture is Respess’ venture,
that he is the moving and driving force
behind the Foothills application, and that
Beall and Frank follow his guidance.
49. In sum, Foothills’ two tier (voting
and non-voting) ownership structure was a
sham on June 16, 1989 when it was filed.
-24a-
It remains a sham. Moreover, Foothills
knowingly misrepresented the facts about
its ownership structure when they filed
BPH-890616MP. Issues 2 and 3 will be
decided adversely to Foothills.
Issue 4 The Standard Comparative Issue
Description Of The Applicants
50. Maria Ochoa. Ochoa is an individual
applicant. She will be the 100%
controlling party and owner of the Lenoir
FM application. No other person or entity
has any understanding or agreement to
acquire any ownership or controlling
interest in her proposed station.
51. Gateway. Gateway Media Limited
Partnership, organized and existing under
N.C.law has the follow structure: Susan L.
Rowe, General Partner, 50% equity;
Margaret W. Hoffman, Limited Partner, 50%
equity.
52. Ms. Rowe controls 100% of the
applicant. No other person or entity has
any understanding or agreement to acquire
any ownership interest in Gateway’s FM
proposal.
53. Foothill’s Broadcasting, Inc. The
Foothills’ ownership structure is set out
at Findings 28-29 supra. and will not be
repeated here./9 Ostensibly they have two
voting shareholders: Beall has 900 shares
of voting stock (82%) with a 45% equity;
and Frank 200 shares (18%) with a 10%
equity. The other stockholder, Respess is
ostensibly a non-voting stockholder
holding 900 shares of non-voting stock and
a 45% equity.
PO ae yr oe
-25a-
Diversification of Mass Media
54. Ochoa has no media interests.
Neither Gateway or its partners have any
interest in any medium of mass
communications. Neither Foothill’s nor any
of its principals have any interest in or
association with existing media.
Best Practicable Service
Ochoa’s Effectuation Problem
55. Both Foothills and Maria Ochoa face
serious integration effectuation problems.
The sham aspects of Foothills proposal
have already been covered under Basic
Qualifying Issues 2 and 3. See Findings
28-49 supra. But since no sham issue has
been designated against Ochoa, and since
none of her opponents have even requested
such an issue against her, her
effectuation problem becomes relevant to
the standard comparative issue, and will
be considere@a under that issue. Maria
Ochoa claims 100% quantitative integration
based on her sole proprietorship. Before
we set out the details supporting that
claim, we must address 4 serious and
substantial attack Ochoa’s opponents have
levied at her integration claim. In
essence, her opponents claim that she
never intended to carry out her
integration pledge.
56. When she filed her FM application
on June 15, 1989, Ochoa was general sales
manager of Station WMXC-FM, Charlotte. She
pledged to divest this interest and sever
all connections with WMXC before
i a aaa ieereeniniinee
-~26a-
commencement of program test authority for
the Lenoir station. In her direct case
exhibit, she also claimed that she would
move to Lenoir if her application was
granted, and therefore claimed a
preference for future local residence.
57. At a hearing session held on March
19, 1991, Ochoa said that she had told
Jake Gurley, her immediate supervisor at
WMXC that she was filing for Lenoir, and
that she proposed to move to Lenoir and
sever her connection with WMXC if her
application were granted. She also
testified that she told her coworkers, as
well as the executive vice president and
president of the licensee of WMXC, Allan
Box, the same things (Tr. 80-82, 103).
58. Ochoa terminated her WMXC
employment on January 22, 1991. Gurley was
her supervisor until about the last 90
days of her employment. On October 15,
1990, about 90 days before Ochoa left the
company, a new General Manager Reta Thorn
replaced Gurley. At the March 19, 1991
hearing session Ochoa said that she had
talked with Thorn about her Lenoir
application and had told Thorn that she
(Ochoa) intended to leave WMXC if the
application was granted.
59. Also, on March 19, 1991, Ms. Ochoa
was asked if she had investigated any
opportunities to acquire other media
interests. She said she had not. Then she
was asked if she had any discussions with
anyone about having an ownership interest
in any other media. She said she had not
(Tr. 108-109).
60. Then she was asked if she
specifically recalled talking with Jake
ip ES CE BE SAE ME Oy CRS
-27a-
Gurley in the summer of 1990 about
becoming a stockholder in a group he was
forming to purchase WMXC and two other
stations that E-Z owned. She did remember
that (Tr. 109), but she said the group’s
offer "never came to be, because it was
rejected," and she didn’t take her
potential participation seriously because
"it was all very speculative." However,
she did admit during her discussions with
Gurley she told him that if the group was
able to purchase WMXC and the two other
stations, she would continue to work at
WMXC after the purchase. On the other
hand, she says that during’ those
discussions her then’ pending Lenoir
application or her intention to move to
Lenoir were never mentioned.
61. During her initial appearance on
March 19, 1991, Ochoa denied ever telling
Gurley she had no intention of moving to
Lenoir (Tr. 113); she denied telling
Gurley that she planned to dismiss her
application for a settlement payment (Tr.
113); she denied telling Gurley she
thought that her status as a female and
minority would make her chances of winning
so strong the other competing applicants
would pay her to dismiss her application
(Tr. 113); and she denied ever telling
Gurley that in the unlikely event her
application was granted she would sell the
station (Tr. 113-114).
62. Ms. Ochoa was then shown a sworn
statement of Mr. Gurley’s where he averred
that she had told him these things. She
unequivocally denied ever having given
Gurley the information set out in para. 61
supra.(Foothills Ex. 77 Tr. 116-117).
-28a-
63. She also denied having told Gurley
that she would continue to work at WMXC as
part of the group proposing to buy the
station and two other stations (Tr. 117).
But a short time later she conceded that
she had agreed (albeit on ae very
speculative basis) to go into business
with Gurley if he bought WMXC (Tr. 120).
64. Faced with the directly
contradictory record; i.e., Gurley-Ochoa
inconsistent statements, the Trial Judge
permitted rebuttal. He did not want either
the Review Board or the Commission to be
faced with resolving a "one-on-one"
situation (Tr. 241-243; 433-436).
65. Reta Thorn, the WMXC General
Manager during Ochoa’s final days at the
station, testified. She (Thorn) stated
that she had the occasion to ask Ochoa if
she intended to leave WMXC and move to
Lenoir to work at the new station if her
application was granted (Tr. 359).
66. According to Thorn, Ochoa told her
that she did not intend to leave WMXC if
her Lenoir application was granted, but
would continue to live in Charlotte and
work at WMXC indefinitely (Tr. 360- 361,
372-373). Ochoa told Thorn that she didn’t
intend to obtain the Lenoir station, that
she was not going to go that far, and that
if her application was granted she would
sell the station (Tr. 361, 372, 377-388).
Thorn says she believed Ochoa never
intended to prosecute the application to a
grant.
67. Edward R. Jablonski aka Johnny
Jacobs testified at the May 1-2, 1991
eee See ey
-29a-
rebuttal sessions. Jablonski, WMXC’s
local sales manager from October 1989 to
the present, stated that Ochoa had been
his superior until she left the station
(Tr. 600-601). He says that in late 1989,
he had a conversation with Ochoa about her
Lenoir application. He says that during
that conversation Ochoa indicated that she
did not intend to leave WMXC if her Lenoir
application were granted, that she had no
desire to move to Lenoir, and that she did
not intend to do so. She also told
Jablonski that she intended to settle the
Lenoir proceeding in return for a payment
(Tr. 603-604, 606).
68. Jablonski also says that on another
occasion Ms. Ochoa told him that she
intended to go to hearing on the Lenoir
application, but that her long-term goal
was to be WMXC’s general manager (Tr.
605-606).
69. Susan Litaker, WMXC’s Business
Manager since November 1989, also
testified at the rebuttal hearing. Litaker
says that on one occasion, and in Jake
Gurley’s presence, she asked Maria Ochoa
why she wanted a station in Lenoir when
she had a good job in Charlotte. Litaker
says that Ochoa replied that she didn’t
want to run the Lenoir station, she merely
wanted to file the application and sell it
(Tr. 741-744).
70. Ms. Litaker says she mentioned the
Lenoir application to Ochoa on other
occasions. According to Litaker, in one of
these conversations Ochoa said she had no
intention of constructing a station in
Lenoir; in another conversation she said
that she had no intention of moving to
eee
-30a-
Lenoir (Tr. 744-748, 752).
71. About a month after Thorn became
WMXC’s general manager, she came to
Litaker. She asked Litaker whether Ochoa
intended to leave WMXC and go to Lenoir.
Litaker thought Ochoa had told the truth
when she told her (Thorn) that she (Ochoa)
planned to stay at WMXC. Litaker told
Thorn that what Ochoa had told her (Thorn)
was consistent with what she told Litaker
(Tr. 760-762).
72. Jake Gurley (see Findings 57-62
supra.) testified at the rebuttal. He
confirmed the averments he had previously
made in his declaration. He was WMXC’s
General Manager from 1987 until September
of 1990. He originally hired Ochoa for a
sales person position. Later he promoted
her to local sales manager. He says Ochoa
told him that she had filed the Lenoir
application shortly after it was filed,
but she assured him that she did not plan
to leave WMXC. Rather, Ochoa said she
planned to dismiss her application in
return for a settlement (Tr. 653-654).
73. At the rebuttal session, Ochoa
presented the testimony of Sylvia Pinson,
a Lenoir real estate person. Pinson says
that in May and June 1989 she helped Ochoa
locate a transmitter site. She also drove
the Ochoa’s through certain areas of
Lenoir to show them houses. But they
didn’t go into any of the houses. Ochoa
told her that if she received a grant, the
Ochoa’s would move to Lenoir./10
74. Ochoa’s' husband, David, also
testified. He says that to the best of his
knowledge Maria intended to move to Lenoir
and run her proposed station if her
SSgtals, RRR WEA pee A NRIOL PS
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-31a-
application was granted (Tr. 909). He says
that he doesn’t believe his wife said any
of the things described in Gurley’s
statement (see Foothills Ex. 7, and
Findings 60-61 supra.). He even believes
that Thorn, Jablonski, Gurley and Litaker
all lied in their testimony about Ochoa’s
statements to them that she did not intend
to construct the station or move to Lenoir
(Tr. 909-911). However, he was unable to
provide a convincing rationale for his
belief (Tr. 910-914).
75. At her ‘counsel’s request Ochoa
remained in the hearing room while
Jablonski, Litaker, and Gurley testified
(Tr. 594-596, 782). She was also permitted
to testify again at the conclusion of the
rebuttal session. During the course of
this later testimony she substantially
changed and revised much of the testimony
she had given at the March 19, hearing
session. She said that when she talked to
Gurley and Thorn about her Lenoir
application she deliberately cast all her
statements in the negative. She told them
that the process would be long, the case
might be settled, and that there were a
number of applicants. She said she did
this because she wanted to protect her job
at WMXC, and she wanted to show them that
she was going to be a "long term player"
at the station (Tr. 970-971, 989, 1000).
She now concedes that she probably misled
Gurley, Thorn, Litaker, and Jablonski
about her intentions regarding the Lenoir
station and staying at WMXC because she
wanted them to believe that she intended
to stay at WMXC (Tr. 1001-1002).
-32a-
76. Intermediate Facts. First, Maria
Ochoa has failed to meet her burden of
proof. She has failed to persuasively
demonstrate that she will move from
Charlott2 to Lenoir if her application is
granted. She hasn’t shown her integration
pledge to be bona fide.
77. At the time she filed her
application she had no intention of moving
to Lenoir. From the outset she has
believed that her minority and female
status would make her chances of winning
so strong that her opponents would pay her
handsomely to dismiss her application. She
has even gone so far as to state that even
in the unlikely event her application was
granted, she would sell the station.
78. So, based on the foregoing, and
under ordinary circumstances, Ochoa would
be denied any quantitative integration
credit, and we would proceed from there.
79. But these are not ordinary
circumstances. During the course of the
_ hearing, Ochoa has inserted an additional
factor into the adjudicatory equation. We
are now dealing with a principal who
testified falsely in open hearing. Not
only that, but when she was confronted
with evidence that exposed her
falsifications, she repeated them. It was
only after much time, money, and effort
were expanded, that she finally conceded
that she had misled those individuals who
had testified contrary to her falsities;
Gurley, Thorn, Litaker and Jablonski./11
80. The Trial Judge can’t grant such an
applicant. It’s true that no character
issue has been set down against Ochoa. In
-33a-
fact neither of her opponents have even
asked for one. But that is of no moment.
An implicit character issue exists with
respect to the truth and veracity of every
witness who is a principal in a hearing
case, or who is a_ person under a
principal’s control in a hearing case.
Truth and candor are always in issue.
81. Issues are designated to place an
applicant or licensee on notice of the
charges he or she will be required to meet
at the hearing. But notice to an applicant
that he or she must testify truthfully and
not conceal material information is
superfluous. That’s what the oath is for.
82. No unfairness results to hold that
an ‘applicant has knowingly assumed the
risk of an adverse character
determination, when she testifies falsely
at a hearing. Maria Ochoa testified
falsely in open hearing. Her application
will be denied. See Nick J. Chaconas, 28
FCC 2d 231, 233 (1971); Grenco, Inc. et.
al.,; 39 860 2a 732 (1973); RKO General
Inc. (WNAC-TV), 78 FCC 2a 1 (1980) at 104
(para. 221); and Rebecca L. Boedker, 5 FCC
Red 2855 (Rev. Bd. 1990).
Quantitative and Qualitative Integration
83. Maria Ochoa. As previously noted, as
sole proprietor, Ochoa seeks 100%
quantitative integration. She claims she
will work full-time (at least 40 hours a
week) as general manager of her FM
station. Her 40 hours minimum will include
the hours between 8:00 a.m. and 5:00 p.m.,
Monday through Friday.
-34a-
84. As general manager she will direct
the overall station operation; i.e.,
she’ll set general policies to govern
finances, sales, administration, and
employment. She’1l set and oversee
programming policies. She will hire and
fire all employees and she will administer
and implement the station’s equal
opportunity program. She’ll oversee the
station’s public relations and community
outreach efforts. This includes overseeing
the on-going ascertainment of local needs.
85. Maria Ochoa, born Maria Victoria
Martinez, was born on July 4, 1969, in
Havana, Cuba. She grew up in Charleston,
South Carolina, and became a U.S. Citizen
in 1973. She currently resides’. in
Charlotte, North Carolina, outside the
proposed station’s 1 mV/m contour. She
asserts that she will move to Lenoir if
her application is granted (but see paras.
55-81 supra.).
86. Ms. Ochoa graduated from the
University of South Carolina in 1981 with
a B.A. in Journalism. She has past
broadcast experience. From January 1982 to
August 1983, she was an Account Executive
with Stations WBZK-AM,.and WDZK-FM, York,
South Carolina. From August 1983 to April
1987, she was an Account Executive with
Station WEZC-FM, Charlotte, North
Carolina.
87. In April 1987 she became Local
Sales Manager for Station WEZC-FM. From
August 1988 to January 22, 1991, Ochoa was
the General Sales Manager for WMXC-FM
(formerly WEZC-FM), Charlotte, North
Carolina. Both as Local Sales Manager,
-35a-
and as General Sales Manager, Ochoa
supervised sales persons and was
responsible for hiring and firing.
88. From February 25, 1991, until the
fall of 1991 (around October 30, 1991) she
was senior account executive with Station
WGKL-AM and FM, Charlotte N.c. But
starting in the fall of 1991, she left.
broadcasting. She has started sales
activity with the New York Life Insurance
Company looking toward becoming a New York
Life agent.
89. Maria Ochoa hasn’t been Civically
active within the proposed station’s 1
mV/m contour. But she does claim those
comparative enhancements due a White,
Hispanic female.
90. Gateway. Gateway claims 100%
quantitative integration based on the
proposed day-to-day integration of their
sole general partner, Susan Rowe. Rowe has
a 50% equity interest and 100% voting
interest in Gateway. She proposes to work
full-time (at least 40 hours a week) as
General Manager of the proposed station.
91. As General Manager, she will
Supervise all aspects of the station’s
day-to-day operation. This will include
hiring and firing personnel, setting
Station policies on employment, financial
Sales, and the administrative aspects of
the station’s operation. She will
determine the programming, administer and
implement the station’s equal opportunity
program, and assume responsibility for
complying with the FCC’s regulations. She
will oversee the station’s public affairs
and community involvement activities. This
includes ascertaining local needs and
-36a-
interests for programming. Ms. Rowe has no
other employment or business obligations
which might conflict with her integration
pledge.
92. Susan Rowe was born on June 13,
1961. She moved to Caldwell County (where
Lenoir is located) in August 1983, and
lived there until March 1986. Although she
didn’t live within the Lenoir city limits
at that time, her residence was within the
proposed city-grade contour of the
station. From March 1986 until January
1987, she lived within the Lenoir city
limits. She then left the area for about
18 months. She returned to Lenoir in July
1988 and has resided there ever since. She
currently resides at 111 Maple Drive in
Lenoir.
93. Ms. Rowe holds a Bachelor of
Science degree in finance from Clemson
University. Her employment background is
in accounting and finance. She has worked
in the accounting departments of the
Uniroyal-Goodrich Tire Co., Sealed Air
Corp., and Bernhardt Furniture Co. She is
presently a temporary, part-time Cost
Accountant with Greer Laboratories, Inc.
(see Finding 21 supra.).
94. Susan Rowe has no past broadcast
experience. However, she does have some
civic participation within the city of
license. From 1984 until January 1987 she
was active in the Lenoir Business and
Professional Women’s Club (BPW). She was
Assistant Treasurer and Chairperson of
BPW’s finance committee. She was BPW’s
Treasurer from June 1986 to January 1987.
95. Since the fall of 1984, except for
January 1987 to July 1988, Ms. Rowe has
-37a-
been an active member of St. James
Episcopal Church in Lenoir. She has taught
Sunday School and participated as a lay
reader. Since August 1988, Ms. Rowe has
been a dues-paying member of the Fairfield
Neighborhood Association. She currently
organizes and participates in waste
recycling efforts in Fairfield
Neighborhood on a monthly basis.
96. Susan Rowe Claims those
comparative enhancements due a White,
non-Hispanic female.
97. Foothills Broadcasting. Foothills
claims only part-time integration. They
premise their claim on a proposal to
integrate their two voting stockholders:
John B. Beall, and Steven Frank. John
Beall (82% voting, and 45% equity) is the
President, Treasurer and Director of
Foothills. Steven Frank (18% and 10%
equity) is Vice President, Secretary, and
a Director.
98. First, Foothills will integrate
John Beall into its proposed day-to-day
operation part-time. Beall will serve
as General Manager of the proposed station
20 hours a week (minimum). As the part-
time General Manager, Beall will be solely
responsible for developing and
implementing all station financial and
Sales policies. He will work with the
other integrated stockholder, Steven
Frank, to jointly develop program
policies. Beall will ultimately hire,
fire, and promote all non~programming
department employees, and supervise those
employees on a daily basis. Typically he
will work at the station from 8 to noon.
99. John Beall was born on March 18,
-38a-
1948. Except for the four years he
attended college he has lived in Lenoir.
100. Beall presently owns part of and is
the Chief Operating Officer of both Beall
Oil Corporation and BCW, Inc. of North
Carolina. Beall Oil and BCW are related
entities that operate retail gasoline, oil
and convenience store businesses. In order
to meet his part-time integration
commitment Beall plans to assign some of
his present duties at Beall Oil and BCW to
Mr. Robert Haus. He has 25 years of
experience in similar businesses, has been
an employee of Beall Oil for four years,
and is presently the Sales Manager.
101. John Beall has no _ broadcast
experience but he has been civically
active in Lenoir. From 1980 to 1984 he was
a Deacon of The First Presbyterian Church,
and from 1989 to the present he has been
an Elder. From 1984 to 1988 he was on the
Board of Directors of the Caldwell County
Chamber of Commerce; from 1986 to 1990 he
was a member of the Caldwell County Board
of Commissioners, and Chairman of the
Board in 1988 and 1989; from 1985 to 1989
he was a Trustee of Caldwell Community
College and Technical Institute; from
1985-1990 he was a member of the N.C.
Energy Policy Council; and from 1985 to
the present Beall was a member and
Founding Chairman of the Board of the
Caldwell County Economic Development
Commission.
102. Beall is a White, non-Hispanic
male. So he’s not entitled to any minority
or female comparative enhancements.
sac,
-39a-
103. Second, Foothills will integrate
10% equity holder’ ana 18% voting
shareholder, Steven Frank, full-time into
their proposed day-to day operations.
Frank will serve at least 40 hours per
week as Program-News Director. In that
capacity he’ll be responsible for the
content of all station programming. That
includes entertainment, news, and public
affairs. He will Supervise all program
department employees on a daily basis. He
will resign from his current employment
before Foothills’ station starts
operating.
104. Steven Frank was born on October
20, 1952. He has lived in Lenoir
continuously since August of 1981,
and currently resides at 151 Mayhill
Place, Lenoir.
105. Mr. Frank has past broadcast
experience. From January to May 1977 he
waS an Announcer/Salesman at Station
WDBM(AM), Statesville, North Carolina.
Then in 1977-1978, he was a Newsman,
Public Affairs Announcer at WBUY/WIXN(AM &
FM), in Lexington, North Carolina. In 1978
Frank moved to Roanoke Rapids, North
Carolina where he was the News and Public
Affairs Director for WCBT(AM). He stayed
there until 1981. In 1981, he became News
Director for WJRI(AM) in Lenoir, where he
remained until 1987. At the same time in
1983, he became a part-time News Reporter
for WSOC-TV serving Caldwell and western
North Carolina counties. He worked for
WSOC-TV until 1988. For a short while,
November of 1987 until January 1988 he was
General Manager of WKGX(AM) in Lenoir.
From July 1987 to the present time he has
-40a-
been a Contract Employee, a News Reporter
for WSOC-TV, Charlotte, N.C. As when he
worked for WSOC-TV part-time his beat is
Caldwell and other western North Carolina
counties.
106. Steven Frank has participated in
some civic activities within the proposed
station’s i mV/m contour. Between 1982 and
the present he has co-produced several
slide-tape/video-tape programs about
historic events in Caldwell County for
showing in local schools. In 1983 he
served on the Board of the Caldwell County
(Lenoir) Arts Council.
107. From 1983 1990, Frank was on the
Board of Directors oof the’ Lenoir
Crimestoppers. He has_ produced video
programs for civic club presentations,
coordinated press releases on organization
activities, presented awards to persons
reporting crimes and assisted law
enforcement officials in investigating
crimes.
108. Frank has been a member of the
Caldwell County (Lenoir) Chamber’ of
Commerce from 1984 to the present. In 1984
he wrote, produced, taped and edited a
video program about Caldwell county. This
was a joint project between the Chamber
and the County Economic Development
Commission. From 1989 to the present he
has served on the committee which sponsors
an annual 100 mile plus bicycle race in
Caldwell County. He prepared publicity and
photographs to publicize the event. From
1990 to the present he has been on the
committee preparing for Caldwell County’s
sesqui-centennial celebration.
ae
~4la-
109. Frank is a white, non-Hispanic
male, so he’s not entitled to any minority
or female comparative enhancements.
110. All three applicants propose to
use auxiliary power.
Conclusions of Law
1. Three applicants remain in the
competition for FM Channel 277A in Lenoir,
N.C.; Maria M. Ochoa, Gateway Media
Limited Partnership, and Foothills
Broadcasting, Inc.
2. We took evidence on four factual
issues. Three of them are basic qualifying
issues. Gateway faces a financial issue
(Issue 1); and Foothills faces a
: misrepresentation (Issue 2), and a "sham"
applicant issue (Issue 3). The fourth
factual issue is the standard comparative
issue (Issue 4).
3. Only basically qualified applicants
are entitled to a comparative analysis.
See e.g. Louis Adelman, 29 Fcc 1223, 18 RR
1062 (1960) affirmed sub. non. Guinan v.
Federal Communications Commission, 297
F.2d 782, 22 RR 2026 (1961). So before we
examine the standard comparative issue, we
must come to grips with Issues 1-3.
4. Issue 1: Gateway’s Financial Issue.
Under Commission and Review Board
precedent, Gateway must make a forward-
backward presentation. They must prove
that they presently are financially
qualified, and they must also prove that
they were financially qualified on June
15, 1989 when they first certified that
they were. See BPH-890616MN; Aspen FM,
ae ye eR ee ‘Kast
-~42a-
Inc., FCC 90R-37, rel. May 23, 1990 at
paras. 15-17; and Shawn Phalen, FCC
90R-64, rel. July 24, 1990.
5. Gateway has met the forward-looking
test. They’ve proved that they are
presently financially qualified; i.e.,
they have shown that they now have
sufficient net liquid assets available
($425,000) from a committed source (First
Union Bank) to construct and operate the
requested facilities for three months
without revenue. Findings 19-22 supra. The
First Union January 18, 1991 loan letter
when buttressed by William White III’s
personal loan guarantee provides’ the
forward-looking assurance.
6. But just as surely as Gateway meets
the forward-looking prong of the Aspen-
Phalen two prong test, they fail the
backward-looking test. Gateway wasn’t
financially qualified on June 15, 1989
when General Partner Susan Rowe certified
they were. (See BPH-890616MN, Findings
5-18 and 23-27 supra.).
7. Stated simply, when Gateway filed
their application on June 16, 1989, they
didn’t have sufficient net liquid assets
on hand or sufficient funds available from
committed sources to construct and operate
the requested facilities for three months
without revenue. The First Union’s
[second] June 6, 1989 loan letter was
defective and amounted to nothing more
than an accommodation, and a poor one at
that. In addition, meaningful loan
guarantee letters weren’t even in
existence at the time.
8. The reason that Gateway can
demonstrate that it was financially
-43a-
qualified the second time around, but
didn’t the first time around can be traced
to General Partner Susan Rowe’s conduct.
She bungled the job the first time. She
could have taken: (1) the $425,000 written
construction and operation estimate she
had prepared; (2) the Sample bank loan
letter FCC counsel had given her; and (3)
a written loan guarantee from her wealthv
husband (William White), and gone down to
First Union Bank. There she could have
detailed what she needed with Stephen
McCord and undoubtedly obtained a loan
letter identical to the one she later
obtained on January 18, 1991.
9. But Ms. Rowe didn’t do that. Instead
She took only the sample bank loan letter
her counsel had given her, and approached
a neighbor of hers, Al Wood, who was a
Branch Manager of First Union in Lenoir.
She gave Wood the Sample bank letter, told
him she needed a letter stating the bank’s
"interest" in providing funds, and asked
him to handle the matter. The net result
waS an accommodation letter that wouldn’t
pass Commission muster.
10. Now it isn’t that susan Rowe was
dishonest. She was careless; she handled
an important portion of Gateway’s
application in a Sloppy manner; she
botched the job. So Gateway must pay the
price for Rowe’s blunder. Since Gateway
has failed the backward portion of this
Aspen~Phalen forward-backward test, they
have failed to demonstrate that they’re
financially qualified and their
application will be denied.
-44a-
11. Issues 2-3: Foothills’ Sham and
Misrepresentation Issues. Issues 2 and 3
will both be resolved against Foothills.
Foothills filed their application on June
16, 1989. There they represented to the
Commission, to their opponents, and to the
public that there existed a two-tier
(voting and non-voting stock) corporation;
that there were only three stockholders;
and that two of the stockholders (Beall
and Frank) were voting and active
stockholders while the third (Respess) was
a non-voting, passive shareholder.
12. These representations proved to be
abjectly false. No such’ corporation
legally existed on June 16, 1989.
Foothills, if it legally exists at the
present time, did not come into being
until on or about September 12, 1989.
Thet’s when the corporate organizational
meeting was held; that’s when the stock
certificates were completed;/12 that’s
when the Initial Franchise Tax Return was
prepared and forwarded to Raleigh; and
that’s when other vital corporate
documents were prepared./13 In fact, the
memorandum confirming the availability of
the corporate name (Foothills
Broadcasting, Inc.) is dated September 29,
1989.
13. Not only were the ownership
structure representations contained in the
June 16, 1989 application false, but
Foothills’ three stockholders were well
aware they were false. The record is
replete with the evidence that documents
have been backdated to make it appear that
Foothills Broadcasting, Inc. legally
existed on June 16, 1989, when they filed
~45a-
their application.
14. Accordingly, the conclusion is
warranted under Issues 2 and 3 that
Foothills’ ownership structure is a sham;
that their three stockholders knew it was
a sham; and that Foothills misrepresented
the facts about their ownership structure
when they filed BPH-890616MP.
is. Moreover, Foothills nas
misrepresented their Ownership structure
in another way. They have represented to
the Commission, its opponents and the
public that Wallace Respess, a 45% equity
holder, is a passive, non-voting
Stockholder. Respess has been anything
but. He is an attorney-at-law, a partner,
and 40% owner of Todd, Vanderbloemen,
Respess and Brady, a law firm in Lenoir.
16. Respess retained his own law firm to
be Foothills’corporate counsel. 1t is
Respess’ partner, Bruce Vanderbloemen that
organized Foothills. In addition, Respess
has actively participated in the
prosecution of Foothills’ application. He
recruited two rebuttal witnesses to Maria
Ochoa’s case; i.e., Jake Gurley and Reta
Thorn. He personally paid the airfare for
Gurley, Thorn and a third person to come
to Washington, D.C. and testify.
17. Respess has initiated and handled
several settlement negotiations; he has
sent application materials to Foothills’
FCC counsel; he regularly confers with
Beall, Frank, and FCC counsel; Foothills’
voting stockholder, and President John
Beall immediately contacts Respess for his
advice when important matters come up;
Beall received a copy of his deposition
directly from Respess; and either Respess
-46a-
or his law firm has directly turned over
Foothills’ documents to Foothills’ FCC
counsel without President Beall’s
knowledge. In fact, the conclusion is
warranted that Foothills’ Lenoir FM
venture is primarily non-voting
stockholder Wallace Respess’ undertaking.
18. So the conclusion under Issue 2 must
be that Foothills lacked candor with and
misrepresented the facts to the
Commission, their opponents and the public
about their ownership structure when they
filed BPH-890616MP; and that this lack of
candor and those misrepresentations render
Foothills of unfit character to be a
Commission licensee.
19. Next, under Issue 3 the conclusion
is warranted that Foothills’ two tier
(voting and non-voting) ownership
structure is a "sham." Consequently,
Foothills is not qualified to be a
Commission licensee.
20. Ochoa. Since neither Gateway nor
Foothills are basically qualified to be a
Commission licensee, one would think that
ends the matter; that the only basically
qualified applicant, Ochoa would be the
winner. She faces no basic qualifying
issues. In fact, neither of her opponents
even asked for a basic qualifying issue
against her. So under ordinary
circumstances she would receive the grant.
21. But, as previously noted (Findings
78-81 supra.), these are not ordinary
circumstances. During the course of the
hearing Ms. Ochoa inserted an additional
complexity into the adjudicatory equation.
Ee Se RRR Nee meee GREET
~47a-
22. She chose to testify falsely in open
hearing. Not only that, but when she was
confronted with her falsifications, she
repeated them, and stood by them. It was
only after her opponents expended much
money, time, and effort (in a rebuttal
session) that Ochoa finally came clean.
She finally conceded that she had
deliberately misled those individuals who
were subpoenaed, who traveled to
Washington, D.C., and who testified
contrary to her falsities: (1) Jake
Gurley; (2) Reta Thorn; (3) Susan Litaker;
and (4) Johnny Jacobs.
23. Character issue or no character
issue, this Trial Judge cannot grant such
an applicant. He therefore must invoke the
policy that both the Review Board and the
Commission have used on similar occasions;
namely, that truth and candor are always
in issue. See Nick J. Chaconas, 28 FCC
231, 233 (1971); Grenco inc., 39 FCC 2d
732 (1973); RKO General, Inc. (WNAC-TV),
78 FCC 2d 1 (1980) at 104 (para. 221); and
Rebecca L. Boedker, 5 FCC Rcd 2855 (Rev.
Bd. 1990).
24. Truth and candor are always in
issue. An implicit character issue exists
with respect to the truth and veracity of
every witness (including Ochoa) who is a
principal in a hearing case, or is a
person under a principal’s control in a
hearing case.
25. Issues are designated to place an
applicant or licensee on notice of the
charges he or she will be required
to meet at the hearing. But notice to an
applicant (here Ochoa) that she must
testify truthfully, and not conceal
~48a-
material information is superfluous.
That’s what the oath is for. Maria Ochoa
took that oath.
26. No unfairness results to hold that
Ochoa has knowingly assumed the risk of an
adverse character determination, when she
testifies falsely at a hearing. Maria
Ochoa testified falsely in open hearing.
Her application will be denied.
Ultimate Issue 5
27. Under the ultimate issue, and in the
light of the evidence adduced pursuant to
the specified issues,/14 we must decide
"which of the applications should be
granted, if any." The answer is none.
SO, unless an appeal is taken from this
Initial Decision or the Commission reviews
it on their own motion, Maria M. Ochoa is
not of fit character to be a Commission
licensee, and her application
(BPH-890615ME) IS DENIED; /15
Gateway Media Limited Partnership was
not financially qualified on June 15,
1989, and their application (BPH-
890616MN) IS DENIED; and
Foothills Broadcasting, Inc. has filed a
"sham" application and is not of fit
character to be a Commission licensee, and
their application (BPH-890616MR) Ts
DENIED.
Walter C. Miller
Administrative Law Judge
~49a~
FOOTNOTES
/1 Five of the eight were dismissed
early on: (1) Mystic Radio Corporation
(BPH-890906MO) was dismissed on December
17, 1990 (FCC 9OM-3982); (2) Sundown
Communications (BPH-890612MI) and (3)
Bowman Communications, Inc. (BPH-890616MK)
on January 4, 1991 (FCC 91M-21); (4) Janet
Lingafelt(BPH~ 890616MO) on January 7,
1991 (FCC 91M-38); and (5) Furniture City
Broadcasters, Inc. (BPH-890616MM) on
January 30, 1991 (FCC 91M-351).
/2 The case ended up being tried in
three phases.
/3 In the interest of organization and
clarity the issues have been renumbered
and repositioned.
/4 See FCC 91M-625 rel. Feb. 15, 1991.
/5 See FCC 91M-1663 rel. May 17, 1991.
/6 The stock subscription agreements
that Foothills’ produced are _ only
partially executed and undated. See Ochoa
Exs. 4, 5, and 6.
/7 Beall and Respess purportedly took
out a bank note to fund the corporation’s
expense. But Foothills was unable to
produce a copy of that note.
/8 Respess’ firm via Vanderbloemen
previously provided legal services for
Respess, Beall, and Frank when they were
owners in High Country Broadcasting. High
Country was an FM applicant for Banner
Elk, N.C.. The Banner Elk application was
dismissed pursuant to a settlement, the
Foothills’principals made a profit on that
settlement.
/9 At one time, and in the interest of
giving the reader the entire picture in
-50a-
one place the Trial Judge would have
repeated the facts in para. 28. However,
the Review Board has disabused him of this
practice. See, Shawn Phalen, FCC 92M-164
rel. Feb. 5, 1992 at n.l.
/10 Ochoa also presented the testimony
of WMXC’s news editor, Karen Barnes. That
testimony proved amorphous.
/11 Ochoa apparently was able _ to
convince her husband David that Gurley,
Thorn, Litaker and Jablonski had all lied.
See, Finding 73, supra.
/12 The stock certificates for
Foothills’ three owners are dated June 14,
1991, two years after their application
was filed, and over six months after this
case was designated for hearing.
/13 The stock subscription agreements
that Foothills finally made available for
inspection and copying are only partially
executed and undated.
/14 Note however that comparative
findings have been made on all three
applicants. See, Findings 49-10, supra
This means that if an appellate body
determines that a standard comparison is
necessary, all the data is there. No
remand is needed. Stated another way,
findings of fact have been made on all
issues, and conclusions of law have been
made on all material issues. See, WFPG,
inc., 33. ROC 673. (2962), at para. 133
Alkima Broadcasting Co., 30 FCC 932, 21 RR
732 (1961), at n.2? Sayger Broadcasting
Co., 32 FCC 399, 22 BR 1059 (1962) at n.
7; 47 CFR 1.267(b), and 5 USC 557(c)(A).
-5la-
APPENDIX D, DECISION, FCC 92R-81, rel.
Oct. 13, 1992, 7 FCC Rcd 6569 (Rev. Bd.)
By the Review Board:
1. This case involves three competing
applications for a new FM broadcast
station at Lenoir, N.C.. The case was
tried before Administrative Law Judge
Walter Ci Miller on a financial
qualifications issue against Gateway Media
Limited Partnership; misrepresentation or
lack of candor and "sham" issues against
Foothills Broadcasting, Inc.; and the
standard comparative issue. In his Initial
Decision, 7 FCC Red 1861 (1992) (I.D.),
the ALJ resolved the basic qualifications
issues adversely to Gateway and Foothills,
resulting in their disqualification.
Although no qualifying issue was
outstanding against Maria Ochoa, the ALJ
found that she testified falsely in open
hearing and that her application could
likewise not be granted. Thus, all three
applications were denied. Exceptions and
replies have been filed by each applicant.
For the reasons set forth below, we affirm
the ALJ’s disqualification of Ochoa and
Gateway. We disagree, however, that the
evidence Supports Foothills’
disqualification, and thus grant its
application.
2. Ochoa is a sole proprietor, Claiming
100% quantitative integration credit
predicated on Ochoa’s commitment to work
full-time as the’ station’s general
manager. Ochoa Exh. 1. She currently
resides in Charlotte, N.C., and at the
time her application was filed on June 15,
1989, she was the general sales manager of
Station WMXC-FM in Charlotte. Daas
-52a-
Findings para. 56. In her direct written
case, she pledged to sever all connections
with WMXC and move to Lenoir in the event
the Commission granted her application. It
is in the context of Ochoa’s responses
regarding her proposal to move to Lenoir,
elicited under the standard comparative
issue, that the disqualifying testimony
occurred. We reproduce verbatim the
testimony the ALJ found’ candorless,
commencing with cross- examination of
Ochoa:
COUNSEL: Did you tell anyone at WMXC
that you were filing your application with
the FCC?
OCHOA: Yes.
COUNSEL: And who did you tell?
OCHOA: My immediate supervisor.
COUNSEL: Who was?
OCHOA: Jake Gurley.
COUNSEL: Jake Gurley?
OCHOA: Yes.
COUNSEL: Did you tell anyone else at
that station?
OCHOA: I told my co-workers.
COUNSEL: Did you tell them that in your
application, you are proposing to move to
Lenoir?
OCHOA: Yes.
COUNSEL: Did you tell that to Jake
Gurley?
OCHOA: Yes.
Tr. 80-81. On further cross-examination,
she responded:
COUNSEL: You indicated, in answer to a
question from [first opposing counsel]
that you had spoken with Mr. Gurley about
your Lenoir application and indicated to
him that you planned to move to Lenoir in
-53a-
the event that it was granted.
When did you have that conversation
with Mr. Gurley?
OCHOA: That was in June of ‘89.
keke
COUNSEL: You mentioned, a moment ago,
that he was your supervisor, until your
last 90 days of employment.
Who was your supervisor during those
last 90 days?
OCHOA: A new general manager came in,
by the name of Reta Thorn.
COUNSEL: Did you also discuss with Ms.
Thorn your pending application in Lenoir?
OCHOA: Yes.
COUNSEL: And what did you tell Ms.
Thorn?
OCHOA: That it was pending and just
brought her up to date on just what was
happening with it, just made her aware of
it.
COUNSEL: And did you make her aware of
the fact that you, again, proposed to
leave WMXC if your application was
granted?
OCHOA: Yes.
Tr. 103-104.
3. In a similar vein, she responded:
COUNSEL: Do you recall talking to Mr.
Gurley in the summer of 1990 [a year after
filing her application], about joining a
group he was forming to purchase WMXC and
some other’ stations, owned by EZ
Communications, Inc.?
OCHOA: Yes.
COUNSEL: And weren’t you to be a
stockholder in that group?
~54a-
OCHOA: Yes.
COUNSEL: Let’s assume, for a moment,
that his proposal to purchase WMXC and the
other stations had gone through, did you
indicate to him that you would continue
work at WMXC?
OCHOA: I am sorry. Could you repeat
the question?
COUNSEL: During the course of your
conversations with Mr. Gurley, did you
indicate to him that if,indeed, he was
able to purchase WMXC and the other
stations, you would continue to work at
WMXC, after that purchase?
OCHOA: Yes.
COUNSEL: Was the subject of your Lenoir
application raised, in these discussions?
OCHOA: No. They were all very
speculative discussions.
COUNSEL: So during those discussions,
you didn’t tell Mr. Gurley that you were
trying to move to Lenoir?
OCHOA: He was already aware of that.
Tr. 109-111.
4. Seeking to undermine Ochoa’s
testimony, counsel for Foothills produced
a declaration under penalty of perjury
from Jake Gurley (Foothill Exh. 7), in
which Gurley averred he was told by Ochoa
that she never intended to work at her
proposed Lenoir station and would sell the
station if her application were granted.
Tr. 114. The ALJ read aloud the
allegations from the declaration and asked
Ochoa whether she had made such statements
to Gurley. Tr. 116-117. She said, "No sir,
I did not." Id. After she was excused from
the witness stand, counsel for Foothills
-55a-
moved for permission to adduce rebuttal
testimony. Tr. 127. He reported that he
had subpoenaed Reta Thorn, and represented
she would testify that, on two occasions
in late 1990 and early 1991, Ochoa had
stated in public she had no plans to leave
her employment at WMXC and intended to
sell the Lenoir station if her application
were granted. Tr. 127-128. The ALJ granted
Foothills’ request, and after listening to
Thorn, ordered the attendance, at a second
phase of the proceeding already scheduled,
of certain other individuals who allegedly
possessed first-hand knowledge of the
facts on this matter. Tr. 433-439.
5. Three witnesses in rebuttal
appeared: Edward Jablonski, Jake Gurley,
and Sue Litaker. Each testified that Ochoa
had stated in their presence that she had
no intention to move to Lenoir. Tr. 603-
604, 653-654, 743-744. Gurley and Litaker
also declared that Ochoa had indicated she
would sell the station if she received the
grant. Tr. 654, 659, 743-745, 760-762. In
opposition, Ochoa presented four
witnesses, Milton Sigmon, Karen Barnes,
Sylvia Pinson, and Ochoa’s husband, but
their testimony focused simply on whether
Ochoa would in fact move to Lenoir rather
than what Ochoa had said to the other
witnesses.
6. Ochoa, who had personally listened
to the witnesses, returned to the stand.
Her immediate response was to retreat from
her prior position, asserting that she had
couched her comments to Gurley and Thorn
in the negative so that they would not
think she was leaving shortly to run the
Station at Lenoir. Tr. 985, 1004-1005. The
-56a-
ALJ read aloud his earlier questions and
Ochoa’s negative answers from the first
hearing sessions concerning whether she
had ever told Gurley that she had no
intention of moving to Lenoir and would
sell the station. Tr. 1013-1015. When
asked whether after listening to Gurley,
Thorn, Jablonski, and Litaker, they could
all have had it wrong, she responded that
they heard or misinterpreted what they
wanted to hear and what they wanted to
interpret. Tr. 1016-1017. The ALJ then
elicited her final testimony on the
matter:
ALJ: In passing, I note that these four
people, three of them well, at least Reta
Thorn and Jake Gurley were in a position
to cause you serious problems if they
suspected that you were going to leave the
organization high and dry, and from your
testimony, I think you suspected that
Johnny Jacobs [Jablonski’s air name] had
wires, was wired to Jake Gurley, so that
he could cause you problems if you left
the organization high and dry. And you
knew Susan Litaker had been Jake Gurley’s
executive assistant and had the, probably
had the ear of management and could leave
you high and dry. And you, not only you
needed, I would suspected that you
wanted to keep a $70,000 job with a $5,000
allowance and a car. Did you tell then,
no, I am not going, I’1ll be here at WMXC,
don’t you worry about it, in order to
protect your shoulder blades?
OCHOA: I probably led them to believe
that. By couching everything I everything
that I ever said about it in the negative.
-57a-
I can understand --
ALJ: And you wouldn’t need you wouldn’t,
for example, have to be so careful, you
could express feelings to Karen Barnes and
no one would, you know, Karen can’t hurt
you.
OCHOA: Right.
ALJ: And so that there’s a possibility
that Karen Barnes could give a different
perception of your future plans than say
Jake Gurley, isn’t that a possibility?
OCHOA: Sure.
ALJ: And isn’t that in fact what
happened?
OCHOA: Yes.
ALJ: Proceed, [counsel].
And to continue it, to continue the line
of thinking, because you told or gave them
the impression that you were not going to
go to Lenoir, didn’t mean that you had
abandoned your original intention of going
to Lenoir? But that was something that you
knew?
OCHOA: Right.
ALJ: And you didn’t want them to know?
OCHOA: Right. I mean I just -- yeah.
ALJ: All right. Proceed, [counsel].
And you see, coming back to that first
testimony, had you said to me, when I
asked you those questions directly, had
you said to me, Judge, I may have
used words that conveyed the impression,
your testimony today, conveyed the
impression that I was going to stay with
WMXC and he didn’t need to worry, Jake was
safe, he wouldn’t be left high and
dry without a sales manager, had that been
your answer there, you see, I would --
there might have never been a rebuttal
-58a-
session.
OCHOA: I wish I would have known.
Tr. 1017-1019.
7. In her exceptions, Ochoa contends
that the ALJ erred in disqualifying her
without first specifying a basic
qualifying issue. She asserts that her
testimony was consistent throughout the
hearing, and argues that the witnesses
could have legitimately misinterpreted her
statements because she wanted to downplay
the prospects of leaving the station.
8. DISCUSSION. It is well-established
that an applicant may be disqualified in
the absence of a basic qualifications
issue for candorless testimony occurring
directly before the agency where the
misconduct was of such a blatant and
unacceptable dimension that its existence
cannot be denied. RKO General, Inc. v.
PoC, 670 F.2d .215,.: 235 €i961),: cert.
denied, 456 U.S. 927 (1982); William M.
Rogers, 92 FCC 2d 187, 199 (1982). "The
Commission has long held that false
statements in the course of the hearing
process are, in and of themselves, of
substantial significance, that specific
notice to an applicant that he [or she]
must testify truthfully is superfluous,
and that such false testimony may lead to
disqualification." Old Time Religion Hour,
inc., 95 FCC 2d 713, 719 (Rev. Bd.i983)
(citations omitted).
9. In the case at bar, the specification
of a discrete disqualifying issue
concerning what Ochoa testified to at
hearing would have been superfluous. The
ALJ, in any event, established procedures
-59a-
for the second phase of the proceeding
that clearly placed Ochoa on notice that
her truthfulness was at issue and provided
her with ample opportunity to address the
matter. See paras. 5-6, supra. See Kuhn v.
CAB, 183 F.2d 839, 842 (D.C. Cir. 1950)
(if parties "understand exactly what the
issues are...they cannot thereafter claim
surprise or lack of due process" "when the
proceedings are had.") Ochoa is in error
that she testified consistently throughout
the hearing sessions. She explicitly
declared at the initial hearing session
that she had told her supervisors, Gurley
and Thorn, and coworkers she would move to
Lenoir if her application were granted and
that Gurley was Clearly aware of her
plans. It was only after significant time,
money, and efforts were expended by the
opposing parties to refute this testimony
that Ochoa disavowed it and conceded she
had couched her statements. to her
Supervisors and coworkers in the negative,
and could understand how they
misinterpreted her comments and arrived at
a belief that she was not intending to
move to Lenoir or to operate the station.
In this regard, our affirmance of the
ALJ’s holding is not dependent on whether
Ochoa was truthful or not to her coworkers
about her future plans; rather, it is
based solely on whether she testified
candidly at hearing, and the testimony
quoted above reveals that she did not.
10. Although the Commission in some
circumstances has shown leniency towards
applicants that have been less’ than
candid, see Broadcast Associates of
Colorado, 104 FCC 2d 16 (1986)(false
-60a-
testimony at deposition recanted prior to
hearing), more recently, "the Commission’s
demand for absolute candor [has] itself
[been] all but absolute." Emission De
Radio Balmeseda, Inc., 7 FCC Red 3852,
3588 (Rev. Bd. 1992). See Richardson
Broadcast Group, 7 FCC Rcd 1583 (1992). In
Richardson, an applicant was disqualified
for evasive testimony about her age,
length of continuous residence in the
community of license, status of
retirement, discussions with her husband
about his intention to be integrated at
the proposed station, and her son’s
involvement in the prosecution of the
station. 7 FCC Red at 1585. The Commission
held that the collective and general sense
of her candoriess testimony required her
disqualification. See also WCVQ, Inc., 5
FCC Rcd 3824 (1990) (extraordinary
interlocutory intervention to test
truthfulness of prior integration pledge);
Frank Digesu, Sr., FCC 92-373, released
August 25, 1992 (post-I.D. and Board
Decision petition to enlarge granted to
explore on remand principal’s claimed past
broadcast experience). We can do no less
here. No factual or legal error having
been demonstrated, we perceive no
principled basis to disturb the holding of
the ALJ who had "the opportunity to
observe the witnesses"; whereas we "view a
cold record--one devoid of emotion and
full contextual impact." WEBR v. FCC, 420
P.28 i188, i162 (0.¢C. Cir. 1969).
11. In light of our disposition, we do
not reach non-decisional exceptions raised
as to the veracity or bias of the rebuttal
witnesses or to the ALJ’s failure to add
-6la-
financial and related issues against
Ochoa. Were we not to disqualify Ochoa for
her candorless testimony, however, a
further hearing would be required on the
allegations that Ochoa never intended to
relocate at Lenoir and that she filed her
application solely to extract a
settlement, since they raise a substantial
and material question of fact. See Frank
Digesu, supra.
12. Gateway is a limited partnership
organized under N.C.law and comprised of
one general partner, Susan L. Rowe, and
one limited partner, Margaret W. Hoffman.
I.D. para. 51. In its application, filed
June 16, 1989, Rowe certified that the
applicant had "sufficient net liquid
assets on hand or that sufficient funds
are available from committed sources to
construct and operate the requested
facilities for three months without
revenue." Gateway Appln., Section III. The
ALJ added an issue to determine whether
Gateway was financially qualified on the
date it so certified, and whether it is
qualified currently, following a motion to
enlarge issues filed by Foothills. MO&O,
FCC 91M-625, rel. Feb. 15, 1991. The ALJ
thereafter concluded in his I.D. that
Gateway was not financially qualified when
it certified, and that, under Fcc
precedent. it could not rehabilitate
itself by subsequent’ actions. z.D.
Findings paras. 22-27, Concis. paras.
4-10.
i3. The findings are as_ follows.
Approximately, two weeks before
certification, Rowe contacted a neighbor,
Al Wood, who was also a branch manager at
-62a-
First Union Bank in Lenoir, and told him
about her plans to file an application for
the instant facility. I.D. Findings para.
8. She gave him a sample bank loan
commitment letter that she had obtained
from communications counsel and informed
Wood that she desired a similar letter
from First Union. Id. at para. 9. Wood
replied that he could not authorize
commercial loans but would turn the matter
over to Stephen McCord, First Unions’
commercial banking manager for Lenoir. Id.
Wood left the sample letter at McCord’s
office, but only spoke with him by
telephone, recounting his conversation
with Rowe and her wish to obtain a letter
from the bank stating its interest in
providing the requisite funds. Id. Rowe,
herself, never spoke to McCord nor did she
supply him or Wood with either financial
statements about herself or the applicant
or a business plan regarding the station.
Id. para. 16. 14. On or about June 6,
1989, McCord wrote on behalf of First
Union two loan commitment letters for
Gateway the second letter having been
prepared after communications counsel read
the first and suggested language
corrections. Id. at para. 13. The first
letter contained the sentence: "This
letter should not be construed as a
commitment to lend." The second stated:
"any commitment to lend is expressly
subject to the borrowing entity meeting
all terms, conditions and covenants the
bank may deem appropriate." Id. at para.
14. However, McCord, in a deposition held
on April 9, 1991, stated that he did not
consider the changes to have any
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substantive meaning. Foothills Phase II
Exh. 6, p. 10; I.D. para. 14. Moreover,
counsel and McCord discussed by telephone
possible interest rates and repayment
terms, but McCord also stated at his
deposition that he was "uncomfortable" in
including such terms in the second letter
beceuse of "not having the benefit of a
lot of the detailed information that I
expected to get at some point...."
Foothills Phase II Exh. 6, p. 31; I.D.
para. 15. Following Foothills’ motion to
enlarge issues, Gateway obtained a third
letter from First Union approximately
eighteen months after certification, dated
January 18, 1991. I.D., para. 20. The ALJ
found that the third letter shows that
Gateway now has reasonable assurance of
funding. Id. at para. 22. In disqualifying
Gateway for a lack of reasonable assurance
when it certified, the ALJ concluded that
the original letters were nothing more
than an accommodation by the bank because
Rowe never met with McCord or provided
First Union with background financial
documents necessary for a meaningful loan
commitment letter. I.D. para. 25.
15.In its exceptions, Gateway contends
there was no need for Rowe to be
personally involved in obtaining the
bank loan commitment. It argues’ that
McCord was familiar with Rowe’s husband,
William White, through First Union’s
dealings with Greer Laboratories, Inc., of
which White was then vice-president and a
major stockholder, and that White told
McCord in May or June 1989 that he would
personally guarantee any loan issued by
First Union to Gateway. Gateway further
-64a-
argues that McCord was aiso aware that
White’s sister, Margaret Hoffman, and her
husband, Eric, were managers at Greer, and
that Ms. Hoffman had personally banked
with First Union for ten to twelve years.
Finally, Gateway criticizes the All for
giving no credence to counsel’s telephone
conversation with McCord prior to
certification. Gateway declares that Rowe
understood that communication counsel and
McCord had discussions to work out the
terms of the letter, and based on the
foregoing, she had every reason to believe
at the time she certified that Gateway had
reasonable assurance of the loan from
First Union. Alternatively, Gateway
excepts to the Commission policy requiring
denial of a currently qualified applicant
on the basis of circumstances prevailing
in the past. Thus, it contends that, even
if the evidence is insufficient to
demonstrate that it had reasonable
assurance of ample funding at
certification, the fact that it is now
financially qualified, according to the
I.D., should entitle it to a grant in the
absence of a lack of candor or
misrepresentation issue.
16. DISCUSSION. Although an applicant
need not have a binding written agreement
when relying upon a bank loan commitment
for funding to certify that it is
financially qualified, Las Vegas Valley
Broadcasting Co. v FCC, 589 F.2d 594,
599-601 (D.C. Cir. 1978), it must under
well-settled Commission precedent
establish a sufficient dialogue with the
bank so that the latter has a "present
firm intention to make [the] loan, future
-65a-
conditions permitting." Merrimack Valley
Broadcasting, Inc., 82 FCC 2d 166, 167
(1980). We stated in Scioto Broadcasters,
5 FCC Red 5158, 5160 (Rev. Bd. 1990) :
{[Ijn order for the Board to determine that
an applicant has "reasonable assurance" of
"committed sources of funds" from a
lending institution, we will review the
following factors: Whether (1) the bank
has a long and established relationship
with the borrower sufficient to infer that
the lender is thoroughly familiar with the
borrower’s assets, credit history, current
business plan, and similar data, see
Multi-State Communications, Inc. v. FCC.
590 F/2d 1117(D.C.Cir. 1978); or, (2) the
prospective borrower has provided the bank
with such. data, and the bank is
sufficiently satisfied with this financial
information (e.g. collateral guarantees,
see Chapman Radio and Television Co., 70
FCC 2d 2063, 2072 (1979)) that, ceteris
paribus, a loan in the stated amount would
be forthcoming, and that the borrower is
fully familiar with, and accepts the
terms and conditions of the proposed loan
(e.g., payment period, interest rate,
collateral requirements, and other basic
terms). Short of these ordinary
fundamentals, it would be difficult to
infer "reasonable assurance" from a
"“committead source." In other words,
central to any successful “reasonable
assurance" showing of a loan from a
financial institution is that the
"individual qualifications" of the
borrower have been preliminarily reviewed,
Christina Comm., 2 FCC Rcd 1971, 1974
(1987), that adequate collateral has been
-66a-
demonstrated, Chapman, and that tentative
terms of the loan are _ specifically
identified and are satisfactory to both
borrower and lender.
17. Here, the ALJ properly found that
dialogue was wanting. Indeed, the record
reveals that McCord was mistaken who the
actual principals of the applicant were,
and, as noted in para. 14, supra, he was
"uncomfortable" about inserting interest
rates and repayment terms in his
precertification letters because he did
not have the detailed financial and
business information necessary to then
justify, the particular loan. Foothills
Phase II Exh. 6, pp. 5, 7, 30. McCord
acknowledged that when he wrote the
original letters, he assumed (erroneously)
that Messrs. White and Hoffman would also
be involved in the Gateway application.
Id. However, as Christina teaches, it is
the individual qualifications of the
borrower that must be preliminarily
reviewed, and that scrutiny was patently
absent here. It is not particularly
relevant that McCord may have _ been
familiar with Greer Labs and William
White’s and Eric Hoffman’s positions there
when he prepared the letters since they
were not parties to the applicant. And,
Gateway is in error that McCord was
informed prior to the June 1989 letters
that White would personally guarantee any
loans made to Gateway. Id. at pp. 8, 30.
McCord stated that he first became aware
in January 1991, or possibly December
1990, of White’s willingness to furnish
a personal guarantee. Id.
18. The telephone conversation between
RRR ar
al A a tt at Ra ee ree eee oda st, - P
-67a-
McCord and counsel is also unavailing to
show reasonable assurance at certification
because the two individuals merely
discussed interest rates and repayment
terms, not financial or other specific
information about the applicant. Moreover,
that Rowe may have certified in good faith
is not dispositive here. See Margaret
Escriva, 6 FCC Rcd 5391, 5392 para. 8
(Rev. Bd. 1991). An applicant faced with a
financial qualifications, as opposed to a
financial misrepresentation issue, must
show objectively that it actually had
reasonable assurance of funds at the time
of certification. Id. This, Gateway did
not do. Finally, The Board cannot negate,
or simply § ignore, the Commission’s
clear-cut policy of evaluating financial
qualifications as of the time of
certification, as urged by Gateway. See
Horne Industries, Inc., 91 FCC 2d 1193,
1194 (Rev. Bd. 1982) (Board not empowered
to change FCC policy); see also Marlin
Broadcasting Inc., 5 FCC Rcd 5751, 5751
para. 6 (1990) (applicant lacking
reasonable assurance of financial
qualifications at time of certification
not entitled to rely on subsequent bank
letter to support earlier certification).
In sum, we perceive no basis to overturn
the ALJ’s ruling.
19. In light of the foregoing, we have
not reached the non-decisional exceptions
raised that the ALJ erred in concluding
that Gateway’s post-certification January
1991 letter met the Commission’s standard
of financial qualifications or that he
should have disqualified Gateway for false
testimony purportedly proffered by Rowe.
-68a-
The false testimony allegation is
troubling, however, particularly in light
of the ALJ’s disqualification of Ochoa for
false testimony, and deserves some
comment. As detailed in paras. 11-12 of
the I.D., Rowe testified at an earlier
session of the hearing (i.e. March 19,
1991) that she had met with McCord prior
to receipt of the January 1989 bank
letters. She asserted they talked about
interest rates, her business plan, and her
husband’s promise of guarantee. When she
was subsequently deposed on April 9, 1991,
she acknowledged that she had not met with
McCord. Later, she said that she may have
talked with McCord but did not remember
their conversation. As noted in paragraph
13, supra, she did not meet with McCord.
Foothills concurs with the ALJ’s failure
to disqualify Gateway on this matter,
reply brief at n.8, contending that the
ALJ‘s actions should be distinguished from
those regarding Ochoa, because the
procedure safeguards mandated by RKO
General, Inc. v. FCC, supra, were not
employed by the ALJ to Gateway. The
allegation, however, raises a substantial
and material question of fact, and would
warrant further inquiry were the applicant
not already disqualified. See also Welch
Communications, Inc., 7 FCC Rcd 4542,
4545-4547 paras. 18-25 (Rev. Bd. 1992).
20. Foothills represented in its
application, filed June 16, 1989, that it
was a "For-profit corporation," comprised
of two voting shareholders, John Beall and
Steve Frank, and one non-voting
shareholder, Wallace Respess. Appln.,
Questions 1, 4, Section II. Beall owns 45%
-69a-
of the applicant and 82% of the voting
stock, while Frank owns 10% of the
applicant and 18% of the voting stock. Id.
at 4. Respess owns the remaining 45% of
the applicant and all of the non-voting
stock. Id. In its Integration Statement,
Foothills stated that Beall would work
part-time, or a minimum of 20 hours per
week, aS general manager, and that Frank
would work full-time, at least 40 hours
per week, as the program and news
director. Foothills’ Exhs. 2-3.
21. Following the adduction of evidence
under the standard comparative issue,
Ochoa filed a motion to enlarge issues
against Foothills, alleging that Respess
had been the dominant force in prosecuting
Foothills’ application. The motion
adverted to Respess’ admission that he had
been Foothills’ chief spokesman and
negotiator at a settlement meeting held in
February 1991, and that he had assisted
Foothills’ communication counsel in
marshalling rebuttal testimony to Ochoa’s
integration proposal, see para. 4, supra.
Respess had also testified that he would
perform other services if asked to do so.
He is an attorney whose law firm
represents Foothills as corporate counsel.
In its opposition to avert the addition of
issues, Foothills acknowledged that it may
have failed in its burden of proof to
demonstrate that Respess’ non-voting
interests should be ignored for
calculating integration credit, but it
Claimed credit for the other two
principals, who, it argued, have not been
passive in the applicant’s affairs or been
dominated by Respess.
-70a-
22. By Memorandum Opinion & Order, FCC
91M-1663, rel. May 17, 1991, the ALJ added
two interrelated issues against Foothills;
one, to determine whether Foothills lacked
candor or misrepresented facts regarding
its ownership structure when filing its
application; and two, to determine whether
Foothills’ two- tiered ownership structure
is a sham. The first issue was not
specifically sought by Ochoa’s motion but
was added apparently because of the ALJ’s
confusion regarding a cryptic notation on
an invoice from Foothills’ corporate
counsel, see Ochoa Exh. 7, billing the
client for services rendered on September
12, 1989, regarding, inter alia, the
organizational meeting; completion of
stock certificates and minutes of
organizational meeting; and issuance of
stock certificates. See Tr. 297-301 The
Foothills principals had testified that
the organizational meeting had occurred in
June 1989. Additionally, certain of the
documents produced by Foothills to the
opposing parties during discovery were
undated or unsigned. Tr. 279-285; 287-289;
4000-402; 404-406.
23. The ALJ disqualified Foothills on
issue one, concluding that Foothills’
representation that it was a corporation
with two voting and one non-voting
shareholders was “abjectly false." Id.
para. 12. He stated that Foothills was
not a legal corporation on the date the
application was filed, i.e., June 16,
1989; and that, if it even exists today,
it only came into existence on September
12, 1989, the date noted on the billing
invoice. Id. The ALJ reported that the
-~7la-
Foothills’ principals knew that the
representations were false and backdated
their documents to make it appear that the
corporate structure legally existed on
June 16, 1989. Id. at para. 13. The All
also resolved the "sham" issue adversely
to Foothills, characterizing the putative
non-voting shareholder as anything but
passive. He relied on Respess’ testimony
that his law firm served as Foothills’
corporate counsel, and on Respess’
participation in settlement discussions
and efforts to obtain evidence against
Ochoa. I.D., Concls. at paras. 15-17. The
ALJ also found that Respess had regularly
conferred with the other principals and
was immediately contacted when important
matters came up. Id. He concluded that the
FM venture was primarily Respess’
undertaking, id., and disqualified the
applicant for misrepresenting its
ownership structure by indicating that
Respess was a passive non-voting
shareholder. Id. at para. 15.
24. Foothills objects to its
disqualification. It argues initially that
the evidence, particularly its Articles of
Incorporation, which contains a stamped
date of June 15, 1989, by the Secretary of
State for North Carolina, clearly
demonstrates that it was a corporation
when it filed its application. It quotes
Section 55-8 of the North Carolina
Business Corporation Act then in force:
Corporate existence; filing of articles of
incorporation, effect ... a copy of the
articles certified by the Secretary of
State shall be conclusive evidence that
all conditions precedent required to be
-72a>
performed by the incorporator have been
complied with and that the corporation has
been incorporated under this Chapter,
except as against this State in a
proceeding to annul or revoke the articles
of incorporation. Foothills Br. at 6.
Moreover, po disputes the legal
proposition that an applicant may be
disqualified for subsequently reducing to
writing corporate documents that reflect
actions agreed to prior to incorporation.
On the second issue, it argues that an
applicant whose voting shareholders
participate substantially in the affairs
of the applicant should not be
disqualified *s a sham applicant merely
because its non-voting shareholder, a
lawyer, participated in post-designation
settlement discussions and assisted in
litigation. It concedes, however, that the
non-integrated interests of Respess should
be attributed to the applicant for
comparative purposes.
25. DISCUSSION. The Commission
indicated in Cuban-American Limited, 5 FCC
Rcd 3781, 3784 para. 21 (1990), that an
applicant’s failure to execute documents
concerning corporate ownership structure,
standing alone, does not provide a legal
basis for denying integration credit, much
less a finding of misrepresentation, since
applicants are not required to establish
their integration proposals as a legal
certainty. See generally Victory Media,
Inc., 3 FCC Red 2073, 2074 para. 15-16
(1988)(accepted "sworn and _unrebutted
testimony [confirming] that Victory’s
principals always intended ffor’ the
corporation to have two classes of
-73a-
stock"), Bradley, Hand, and Triplett, 89
FCC 2d 657, 662-663 para. 8 (Rev. Bd. ~
1982) (state definition of shareholder not
relevant for integration policies);
Pleasant Hope Broadcasting Co., LsPs, 6
FCC Red 6553, 6556 para. 16 (Rev. Bd.
1991)(state law not applicable to
integration analysis since local laws are
unrelated to Commission’s comparative
policies and purposes). Moreover, there is
Commission precedent that a prepared
executed copy of a written partnership
agreement, bearing the effective date of
an earlier oral agreement, does not
implicate misrepresentation or a lack of
candor where the written agreement simply
memorializes the oral agreement and does
not purport to represent that the written
agreement was physically signed on the
date therein. High Sierra Broadcasting
inc., 96 FCC 2d 423, 433-434 para. 21
(Rev. Bd. 1983); Compare Cuban-American
Limited, 2 FCC Red 3264, 3268 para. 18
(Rev. Bd.1987), aff’d, 5 FCC Rcd at 3784
paras. 22-23.
26. Here, the evidence does not support
the inference that Foothills’
representations concerning its corporate
structure were false or that its
principals misrepresented the date their
organizational meeting was held. All three
Foothills principals testified they
attended an organizational meeting in
mid-June 1989, prior to the filing of the
application, at Beall’s office in Lenoir
for the purpose of forming a corporation.
Tr. 276, 408, 412-413, 529, 573. Their
testimony is corroborated by extrinsic
evidence: the articles of incorporation
-74a-
and accompanying jurat, bearing’ the
stamped dates of June 15, 1989, from the
Secretary of State of North Carolina, and
notary, respectively; and by copies of the
checks dated June 16, 19, and July 3,
1989, from the three principals timely
remitting their capital contributions.
Foothills Exhs. 9, 11, and 12. The checks
bear bank clearance stamps of June 19 and
July 9, 1989. Respess’ check of June 16
also bears the notation "900 shares of
stock." Foothills Exh. 11, 12. Although
the record is unclear preciseiy as to the
significance of the September 1989 date
and notation on the billing invoice, Frank
volunteered that it probably reflects when
the firm completed its services relative
to the applicant, and got around to
billing them for it. Tr. 431-432. That
speculation appears to be as plausible as
any conjecture on the matter; we will not
impute misrepresentation on such a mere
scintilla of evidence.
27. The fact that the corporate minutes
were restructured at a subsequent date and
bear the actual date of the meeting is of
no moment legally because no showing has
been made that the minutes were inaccurate
or that the applicant purported to claim
that they were physically signed on the
date indicated therein. See High Sierra.
To the contrary, Respess openly testified
that he was "absolutely certain that [the
minutes] w[{ere] prepared much later" and
"could very well" have been prepared in
September 1989. Tr. 558-559. He added that
this was a very common practice in North
Carolina. Tr. 560. Similarly, Respess
openly declared that the actual
-75a-
preperation and dating of the’ stock
certificates probably occurred later than
the effective date, perhaps as late as
September 1939. Tr.537-539, 559-560.
28. Although Foothills may be faulted
because some of its documents produced
during discovery omitted signatures or
dates, see Ochoa Exhs. 4, 5, and 6, we
perceive no motive for imputing
misrepresentation or lack of candor
since the applicant was not relying on
these documents directly to prove that
they were incorporated prior to the
application filing. Thus, although the
applicant’s attentiveness regarding its
formation was not as "businesslike as
might be desired in hindsight," see Isis
Broadcast Group, FCC 92R-64, rel. Aug.
13, 1992 para. 36, its shortcomings --
Foothills principal Frank conceded they
suffered from "signitis" without more, are
insufficient to warrant disqualification.
Isis Broadcast Group. On the basis of the
evidence above, we cannot find that
Foothills misrepresented its corporate
structure or deliberately backdated
documents.
29. Nor is there persuasive evidence to
demonstrate that Foothills is not bona
fide or has misrepresented Respess’role in
the application. Respess’ active
participation in the prosecution of the
application after the applicant formally
organized itself as a two-tiered
corporation does, however, require
attribution of his non-integrated
interests in calculating integration
credit, as conceded by Foothills, See
Royce International Broadcasting, 5 FCC
~76a-
Rcd 7063, 7064 para. 9 (1990), recon.
denied, 6 FCC Rcd 2601 (1991).
Notwithstanding that attribution, an
applicant’s failure to meet its burden of
demonstrating reasonable assurance that
its proposal will be effectuated as
described, does not, without more,
establish that the applicant has committed
disqualifying misconduct. Evansville
Skywave, Inc., 7 FCC Rcd 1699, 1700 para.
14 (1992). Disqualification must involve
deceptive or abusive conduct. 7 FCC Rcd at
1702 ("Taken to its extreme, the failure
to define the limits of disqualifying
misconduct would lead to a finding of
misrepresentation or abuse of conduct in
every case in which [the FCC] rejected an
applicant’s claim of comparative credit").
Id. A fortiori, a mere affirmative
certification that: "no limited partner
will be involved in any material respect
in the management or operation of the
proposed station," Question 3 (a), Section
II, of FCC 301, does not, as a matter of
law, require a finding of
misrepresentation, as claimed by Gateway
and Ochoa, simply because the applicant
later fails to show that its passive
principal has not been involved, as here,
in the prosecution of the application.
30. In the case at bar, there has been
no showing that the nominally active
principals have not been involved in the
prosecution of the application or that
they will not honor their integration
commitments. Beall prepared the
application and is providing 50% of the
funds for its prosecution. He is also the
only person authorized to sign checks on
a
-77a-
behalf of the corporation. Tr. 294, 299,
302. Frank, in turn, initiated the efforts
to get the instant frequency allocated to
Lenoir and found the transmitter site, Tr.
259-260, 416, and is an experienced
broadcaster. For his part, Respess has
primarily confined his post-formation
activities to areas in which his legal
background has a bearing. Thus, for
example, he testified that he was asked by
communications counsel to assist Frank in
contacting the U.S. Marshall’s office to
secure a subpoena for Reta Thorn because
he was an attorney and neither Frank nor
Beall knew who to call or what to do. Tr.
1105. Respess testified that he had
informed Beall and Frank at the outset
that he had no time or interest to
participate in the day-to-day operation of
the radio station, or the prosecution of
the application, except to the extent he
was asked to do so. Tr. 514. He also
testified that he never attended any
corporate meetings, other than the initial
one in June 1989 when the principals
discussed the corporation’s formation. Tr.
1103. Based on the foregoing, we are
unable to find any deceptive or abusive
conduct that would warrant Foothills’
disqualification under issue two. In light
of the disqualifications of both Ochoa and
Gateway, supra, we need not reach
Foothills’ comparative claim that it is
entitled to 10% full-time and 40% part-
time quantitative integration credit for
the equity interests of Frank and Beall.
31. MISCELLANEOUS. Gateway notes in
passing an exception to the ALJ’s MO&O,
FCC 91M-1604, rel. May 10, 1991, denying
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its motion too add a site availability and
related misrepresentation issues. The ALJ
reasoned that the motion was untimely and
that an option to purchase or lease
agreement that Foothills relies on for its
site is still in force. Foothills’
opposition to the motion to enlarge also
included a declaration under penalty of
perjury by the site owner which avers
that the site is still available.
Foothills Opposition, filed April 30,
1991. The ALJ correctly denied the
motion.
32. ACCORDINGLY, IT IS ORDERED, That the
application of Foothills Broadcasting,
Inc. (File No. BPH- 890616MR) for a
construction permit for a new FM station
at Lenoir, North Carolina IS GRANTED; and
that the applications of Maria M. Ochoa
(File No. BPH-890615ME) and Gateway Media
Limited Partnership (File No. BPH-
890616MN) ARE DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Joseph A. Marino
Chairman, Review Board
CONCURRING STATEMENT OF BOARD MEMBER
NORMAN B. BLUMENTHAL
In Richardson Broadcast Group, 7 FCC Rcd
1583 (1992), the Commission disqualified
an applicant for "lack of candor" and
"evasiveness" notwithstanding (1) that no
disqualifying issue had been added or
tried against that applicant;/1 and (2)
that neither the ALJ nor the Board had
found that applicant’s conduct to be
TRS reer 3 E Leia L ERIN
-79a-
basically disqualifying. Relying upon RKO
General, Inc. v. FCC, 670 F.2d 215, the
Commission disqualified that applicant
after finding that its conduct warranted a
terminal remedy even without an issue
designed specifically to elicit that
applicant’s intent. /2
In the case at bar, and in the wake of
Richardson, my majority colleagues wrestle
with the question of whether the ALJ erred
in disqualifying Maria M. Ochoa without
first adding a disqualifying issue.
Comparing the conduct of Ochoa with that
of the applicant disqualified by the
Commission in Richardson, the majority
concludes: "We can do no less here." Ante
at para. 10.
The Commission has informed the court
that:/3 an applicant may be disqualified
for misconduct without a specific issue,
where the misconduct occurs "before the
judge’s own eyes," [but] such conduct
"should be of such blatant and
unacceptable dimension that its existence
cannot be denied."
Because I cannot find Ochoa’s conduct to
be any less "blatant" than that of the
disqualified applicant in Richardson, I
must concur with tne majority’s conclusion
as to Ochoa.
As to Foothills Broadcasting, and in
view of Commission precedent cited ante,
para. 25, I find it hard to dispute the
majority’s resolution there as well.
-80a-
FOOTNOTES TO STATEMENT
/1 In the Board’s Richardson decision,
it found it unnecessary to decide the
question of whether a discrete issue was
necessary prior to disqualification under
the facts of that case because it
concluded that, in any event, the
applicant did not display a lack of candor
anywhere near the magnitude necessary to
disqualify. It did, in passing however,
suggest a comparison between: Silver Star
Communications- Albany, Inc., 3 FCC Rcd
6342, 6349-6350 (Rev. Bd. 1988) (Board,
citing West Coast Media, Inc. v. FCC, 695
F.2d 617 (D.C. Cir. 1982), declines to
find intentional misrepresentation sans
issue) with WCVQ, Inc., FCC 90-224, rel.
June 26, 1990 ("the truthfulness and
candor of an applicant’s testimony are
always at issue in FCC proceedings,"
citing William M. Rogers, 92 FCC2d 187,
199 (1982)). See Richardson Broadcasting
Group, 5 FCC Rcd 5285, 5285 & n.3 (Rev.
Bd. 1990). The Commission addressed this
question in its reversal of the Board in
its own Richardson decision.
/2 Nancy Naleszkiewicz, 7 FCC Rcd 1797
(1092), where the Commission disagreed
with the ALJ and the Board that an
applicant’s conduct warranted dismissal,
and it remanded the proceeding back to the
ALJ for a specific truthfulness issue to
elicit the applicant’s intent, if the All
found that the evidence so warranted.
/3 Brief for Appellee at 45 (citation
and footnotes omitted), LBC, Inc. v. FCC,
865 F.2d 1329 (1988).
Pe rE eaete yy
-8la-
APPENDIX E, MEMORANDUM OPINION AND ORDER,
FCC 93-221, rel. May 10, 1993, 8 FCC Rcd
3135 (1993)
By the Commission:
1. We have before us an application for
review of the Review Board’s decision in
this case, Maria M. Ochoa, 7 FCC Rcd 6569
(1992), filed by Maria M. Ochoa on
November 12, 1992. The decision under
appeal holds that Ochoa is disqualified
for giving deceitful testimony, that
Foothills Broadcasting, Inc. is. not
disqualified, and hence that Foothills’
application should be granted. (A thira
applicant that was also found disqualified
has filed no appeal.) Ochoa contends that
the Board should have exonerated her of
the charge of misrepresentation and should
have found Foothills disqualified,
instead./l1 We disagree with Ochoa’s
contentions and affirm the Board’s
disposition of the two remaining
applications.
/1 Foothills filed an opposition to the
application for review on November 25,
1992. On December 10, Ochoa filed a motion
to strike the opposition. Foothills filed
an opposition to the strike motion on
December 17, and Ochoa filed a motion to
strike that, pleading on December 21. We
will dismiss both strike motions. The
first alleges that Foothills’ opposition
improperly contends that Ochoa did not
demonstrate the reliability of her
integration proposal. Because our
resolution of this case involves. no
consideration of such a contention,
-82a-
Ochoa’s first motion to strike, Foothills’
opposition, and Ochoa’s second motion to
strike are moot.
2. Foothills: Ochoa objects that the
Board ignored allegedly false testimony by
Foothills’ non-voting stockholder, Wallace
Respess, that he is merely a passive
investor and also overlooked the alleged
fact that Foothills falsely denied in its
exceptions that any of its principals had
ever represented that Respess is a passive
and insulated investor. The portions of
the record that Ochoa cites, however,
reveal that these assertions are baseless.
Respess did not testif, at Tr. 514, as
alleged, that he is a "passive investor"
but rather that he had no intention of
participating in daily station management,
and Ochoa does not point to any proof that
this testimony was fallacious. And it
appears that Foothills merely stated the
plain truth when it asserted in exceptions
that it had never alleged that Respess was
a “nassive" or insulated" investor but
rather that he is a non-voting stockholder
who does not intend to participate in
daily station management.
3. Ochoa: The other issue in contention
is whether in responding to examination
concerning statements to former co-workers
about her intentions regarding
implementation of her integration
proposal, Maria Ochoa was a truthful and
candid witness. Ochoa has claimed
integration credit on the basis of
representations that she would participate
full-time in daily management of her
proposed Lenoir FM station. Accordingly,
Perens
‘va
-83a-
in her direct written case she pledged to
quit her then-current position as sales
manager of WMXC-FM, Charlotte, and move to
Lenoir in the event the FCC granted her
application. Id. 6569, para. 2. Opposing
counsel sought to raise doubt as to the
sincerity of the pledge by questioning her
at the hearing about what she had told
others at WMXC about her actual intentions
and by presenting past and present WMXC
employees as rebuttal witnesses.
4. In light of the evidence thus
developed. the ALJ found that Ochoa had
never intended to move to Lenoir and she
deserved no integration credit. 7 FCC Rcd
1861,1866, paras. 76-78. Further, he
concluded that she had testified falsely
concerning her conversations with other
WMXC employees. Id. at 1866 79, 1869 22.
Thus, invoking the principle that it is
unnecessary to formulate a hearing issue
to put an applicant on notice of the duty
to testify truthfully, the ALJ held that
Ochoa should be disqualified for
misrepresentation, notwithstanding that no
misrepresentation issue had been formally
specified against her. Id.23-26.
5. Ochoa argued in exceptions that she
could not fairly be disqualified for the
alleged misrepresentations absent previous
specification of a pertinent formal
hearing issue. She contended, moreover,
that the ALJ had erred in finding that she
had testified inconsistently about her
conversations with WMXC employees
concerning her Lenoir application and its
bearing on her career plans. 7 FCC Rcd at
6571, para. 7, and asserted that the
testimony of the rebuttal witnesses was
-84a-
tainted by bias. The Board denied her
appeal, confirming the finding that she
had lied in testimony and agreeing with
the ALJ that it is fair to disqualify her
for that reason despite the absence of
advance formal notification that this
might be done. Id. at 6571-72, paras.
8-10. The Board affirmed the
misrepresentation finding because it found
that Ochoa had asserted in the first
instance that she had told her former
supervisors and co-workers that she would
move to Lenoir if her application were
granted and had later "disavowed" her
testimony to that effect during her final
appearance on the stand. Id. at 6571 9.
The Board indicated that it did not rely
on the testimony of the rebuttal
witnesses, however, and hence declined to
address the exceptions concerning their
bias or veracity. Id. at 6572, para. 11
6. In her application for review Ochoa
contends, again, that it is unfair to
disqualify her based on evidence compiled
in the absence of a formally-specified
character issue. That argument has already
been refuted for good and sufficient
reason, the crux of which is that the
absence of formal notice in this instance
is a mere technicality, as Ochoa had
actual notice that the veracity of her
testimony regarding her pertinent comments
to WMXC employees was at issue and had
ample opportunity thereafter to adduce
evidence bearing on that question. 7 FCC
Rcd at 6571, paras. 8-9.
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7. Ochoa’s other main contentions --
that her testimony was not, in fact,
self-contradictory, contrary to what the
lower decisions have found, and that the
conflicting testimony of the four rebuttal
witnesses is not credible -- warrant
comment but do not justify a change in
result.
8. As to the consistency of Ochoa’s
testimony, there is a Significant
difference between the account of relevant
conversations that she gave before the
appearance of the rebuttal witnesses and
the one she gave afterward. Her initial
account, which she gave without knowing
that her former associates at WMXC would
be called as witnesses, was Clearly more
self-serving. Thwarting attempts to elicit
admissions that would undermine her
integration pledge, Ochoa repeatedly
affirmed under cross examination at the
first hearing session that she had told
her supervisors at WMXC that she was
proposing to leave WMXC if her Lenoir
application was granted. Tr. at 82, 104.
She also categorically denied having said
that she never intended to work at the
proposed station or that she would
withdraw her application in return for
payment from the other applicants in a
settlement. Tr. at 113-114, 116-17. She
gave no indication that she had said
anything that could have caused anyone to
Suppose that she did not mean to carry
out her integration pledge. But in
redirect examination after the rebuttal
witnesses had testified that she had told
them that she had no intention of moving
-86a-
to Lenoir, she admitted that she had
deliberately lead them to believe that
there was little or no chance that she
would leave WMXC in order to work full-
time at the Lenoir station. Tr. at 970-
71, 989-90. 1002-03. In light of these
discrepancies. it is plain that Ochoa’s
initial testimony about her remarks to her
former associates was deliberately
misleading. Although Ochoa quarrels with
this reading of her testimony, we conclude
that the Board ruled correctly in holding
her disqualified.
9. In addition to arguing that her
testimony was not’ self-contradictory,
Ochoa also argues that she should not be
found guilty of deceit based on the
testimony of other witnesses. We disagree.
Ochoa categorically denied that she had
told Jake Gurley, her former supervisor,
that she had no intention of moving to
Lenoir because she planned to withdraw in
exchange for a settlement payment or else
sell the station. Tr. at 113-17. Ochoa
also asserted that she had told Gurley and
another supervisor, Reta Thorn, that she
did intend to move to Lenoir if she got
the grant. Tr. at 1005-07, 1009. This
testimony is squarely contradicted by the
detailed and mutually consistent testimony
on point from four witnesses, which is not
disputed by any witness other than Ochoa.
See Tr. at 360-61, 366-68, 372, 377-79,
606, 618, 658-59, 702, and 709-10 and the
testimony cited at 7 FCC Rcd 6570 5. The
ALJ, who heard the impeaching testimony,
plainly indicated by his findings that he
found it credible, 7 FCC Rcd at 1866 77,
WALD BR RET DROOL AT ERI ST
2
=
1
4
4
-87a-
and that determination of credibility is
not to be lightly cast aside. See
Universal Camera Corp. v. NLRB, 340 U.S.
474, 496 (1950), and NLRB v. Stor-Rite
Metal Products, 856 F.2d 957 (7th Cir.
1988).
10. Ochoa’s attempt to pass off the
contradiction as merely due to
misunderstanding cannot be credited in
light of the undisputed fact that all four
rebuttal witnesses understood her to say,
on various occasions, that she had no
intention of moving to Lenoir because she
planned to take a settlement payment or
sell after receiving a grant. Her
assertion that she had merely told them
that her chance of prevailing was slim and
that the proceeding would not be resolved
soon is squarely belied, moreover, by
testimony of Thorn and Gurley that they
had pointedly asked her what she would do
if she did get the grant and that she had
replied that in that event she would sell
the station. Tr. at 359-60, 377-78, 659,
702.
11. Ochoa argues that the testimony of
those four witnesses is not to be believed
because the record shows that they are
biased against her. We conclude, however,
that this contention is ill-founded. She
asserts that the record shows that Sue
Litaker disliked her. In fact, the
evidence merely shows that Litaker had a
poor opinion of Ochoa’s performance as
sales manager. Tr. at 749-51, 765-66,
768-69, 842. Whatever her feelings toward
Ochoa may have been, moreover, Litaker
evidently had no burning desire to testify
against her: she appeared under compulsion
~88a-
subpoena after having refused to testify
voluntarily. Tr. at 780. Ochoa stresses
that Reta Thorn "fired" her. The record
shows that Thorn demoted Ochoa, prompting
her to resign, which Ochoa may have
resented but which did not give Thorn any
clear cause to bear a grudge, and the
weight of the evidence indicates that
Thorn demoted Ochoa because she was
dissatisfied with her performance rather
than for a spiteful motive. Tr. at 121,
361-62. Moreover, Thorn, like Litaker,
refused until compelled by subpoena to
cooperate with counsel who solicited her
testimony as a witness against Ochoa. Tr.
at 376-77, 380. Ochoa asserts that Edward
Jablonski disliked her, that she had tried
to get him fired, and that she had
prevailed upon Gurley, then the general
manager, to cut Jablonski’s salary in
half. Ochoa cites no evidence, though,
that Jablonski knew that she had asked
anyone to fire him, and Jablonski and
Gurley testified that the salary cut was
accompanied by a raise in Jablonski’s
commission rate and that Jablonski
expected to realize an increase in total
income as a result. Tr. at 614, 713.
Finally, Ochoa asserts that Gurley had
been fired six months before the hearing
because she had accused him of sexual
harassment. In fact, there is no evidence
that Gurley was fired or that Ochoa
accused him of sexual harassment. The
record merely shows that she threatened to
sue him for "harassment and hostile
environment" after he had asked her to
resign or accept a demotion and that
Gurley himself subsequently resigned
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-89a-
after being denied permission to fire her.
Tr. at 689-90, 986-89, Gurley testified
that he had previously decided that he
would leave the company and that the
falling-out with Ochoa had merely brought
matters to a head, that he did not regret
having given up his former position at
WMXC, that he had recently praised Ochoa
in conversation with her current employer,
that although he no longer liked her he
bore her no ill-will, and that his
testimony was not skewed because of his
feelings about her. Tr. at 718-19.
12. In sum, there is no persuasive
evidence that Litaker or Thorn had any
serious motive for bearing false witness
against Ochoa, and, although Jablonski and
Gurley may harbor some ill-feeling toward
her as a result of past antagonism in the
course of their employment at WMXC, their
detailed testimony on point is facially
credible and is materially corroborated by
Litaker’s and Thorn’s. There is no reason
to conclude here that four mutually
corroborative witnesses with little or no
apparent motive for lying all per jured
themselves in testimony that the ALJ found
credible when the only evidence at odds
with their sworn statements is equivocal
and uncorroborated testimony from a
witness who had a strong self-serving
motive for contradicting them and who did
not her- self accuse them of lying when
asked to account for the discrepancies
between their testimony and hers but
instead offered an implausible explanation
that they had misunderstood her.
-90a-
13. Aside from alleging bias, Ochoa
grasps at other straws in her attempt to
discredit the impeaching testimony. She
asserts, citing the record, that Gurley’s
memory is admittedly poor, that he had no
written record of his pertinent
conversations with Ochoa, that his
affidavit in evidence was not drafted by
him but by an attorney who is a principal
of another applicant, and that’ the
affidavit was admittedly inaccurate. None
of the evidence to which Ochoa thus refers
is materially significant. The only
acknowledged inaccuracy in the affidavit
is an immaterial mis-dating of an event
that it mentions. Although Gurley admitted
that the affidavit was not of his own
composition, he said that he had reviewed
it carefully before signing it and that it
was correct except for that one
inaccuracy. Tr. 666, 668-69, 671. Gurley
admitted that he had a poor memory for
dates, but said that he had no particular
difficulty in recalling events. Tr. 668-9.
There is no indication that his testimony
on crucial points, which is distinct and
unequivocal, was skewed by faulty
recollection.
14. Ochoa asserts that Sue Litaker
conceded, at Tr. 748, that she had "never"
heard Ochoa say that she hoped to make
money from a settlement. This distorts the
record. What Litaker actually says at Tr.
748 is merely that she had not heard such
a remark on one particular occasion, and
she says at Tr. 744-45 that she did hear
Ochoa make such remarks on two other
occasions.
15. Ochoa alleges, citing Tr. at 603-
-9la-
07, that Jablonski conceded that Ochoa had
not explicitly stated her intentions to
him and that he had merely gathered an
impression about them. But the concession
refers to only one of two conversations
with Ochoa that Jablonski mentioned, and
he testified that she had explicitly told
him in the other conversation that she did
not intend to move to Lenoir. Tr. at 604,
606, 618. Ochoa asserts that Jablonski
denied that he had ever talked to Gurley
about Ochoa’s Lenoir application or that
he knew how Gurley might testify, but that
Gurley’s testimony belies these denials.
Here, again, Ochoa distorts the record.
Jablonski did not deny having mentioned
Ochoa’s application in conversations with
Gurley; on the contrary, he said that they
had talked about it in two instances but
had not discussed its details, Tr. at 637,
and his testimony in this respect is fully
consistent with Gurley’s. Jablonski’s
testimony to the effect that he did not
know, when he told Gurley that Reta Thorn
had been subpoenaed to testify in this
case, what relevant information Gurley
might have to impart is also consistent
with Gurley’s testimony. Tr. at 640,
672-74.
16. Ochoa asserts that Reta Thorn’s
testimony is self-contradictory and
inconclusive, but the hearing transcript
discloses that these assertions are
baseiess. Ochoa further contends that
Thorn gave false testimony, noting that
she said that she had not talked to Gurley
about Ochoa’s activities as a WMXC
employee, whereas Gurley testified that
they had discussed that subject in one
-92a-
instance; Ochoa insinuates, moreover, that
Thorn’s testimony in this regard is
further impeached by testimony by
Jablonski and Gurley that Thorn had asked
Jablonski to tell Gurley that she had been
asked to testify against Ochoa. The
portions of the record that the appellant
cites as support for the latter assertion
do not record any testimony to the effect
that Thorn had asked Jablonski to tell
Gurley anything, however, and the noted
inconsistency between Thorn’s testimony
and Gurley’s about a peripheral detail
doesn’t undermine their credibility.
17. Ochoa contends that reversible
error was committed when the ALJ denied a
motion by her attorney for issuance of a
subpoena to compel testimony from Vanessa
Key, another WMXC employee. We do not
agree that the denial of this motion was
reversible error, as Ochoa made no showing
that Key could provide material evidence
that could not be adduced from one of the
nine other witnesses that appeared at the
rebuttal session. FCC 91M-1475, rel. April
26, 1991, Tr. 783.
18. ACCORDINGLY. IT IS ORDERED that the
application for review filed by Maria M.
Ochoa on November 12, 1992 and Ochoa’s
strike motions filed on December 10 and
21, 1992 ARE DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Donna R. Searcy
Secretary
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-93a-
APPENDIX F, MEMORANDUM OPINION AND ORDER,
FCC 93-526, rel. Dec. 28, 1993, 9 FCC Rcd
56 (1993)
By the Commission:
1. Maria M. Ochoa has filed a petition
for reconsideration of our affirmance of
the Review Board’s decision that she is
disqualified for testifying deceitfully
and that the competing application of
Foothills Broadcasting, Inc. should be
granted. Maria M. Ochoa, 8 FCC Rcd 3135
(1993)./1 She has also filed four motions
to reopen the vecord and add hearing
issues concerning Foothills’ basic
qualifications. /2 We will deny the
petition for reconsideration, but two of
the petitions to reopen raise questions
that warrant further investigation. We
will therefore add hearing issues and
remand the case for further proceedings.
I. The Petition for Reconsideration
A. The veracity of Foothills’
representations about the role of Respess
2. The Review Board held that the
interest of Foothills’ non-voting
stockholder, Wallace Respess, who did not
propose to be integrated in daily station
management, would have to be taken into
account for purposes of calculating
integration credit because of his
assistance in the prosecution of
Foothills’ application. 7 Fcc Rcd 6569, at
6575, para. 29 (Rev. Bd. 1992). On the
other hand, though, the Board held that
-94a-
fa Ochoa filed the petition for
reconsideration on June 9, 1993. Foothills
filed an opposition on June 23, 1993 and a
corrected opposition on June 28. Ochoa
-filed a reply on July 6, 1993.
/2 Ochoa filed the first motion to
reopen and enlarge on June 15, 1993.
Foothills filed an opposition thereto on
June 30. On July 13, Ochoa concurrently
filed a reply to the opposition and a
motion to strike the opposition because it
lacked a summary. Foothills filed an
opposition to the strike motion and a
summary for its June 30 opposition on July
16. On August 9, Ochoa filed a motion to
strike the opposition to its strike motion
of July 13, asserting, inter alia, that
the opposition contained matter that was
not germane to the prior strike motion.
Ochoa filed the second motion to reopen
and enlarge on July 15, 1993. Foothills
filed an opposition to that petition on
July 28, and Ochoa filed a reply on August
9. Ochoa filed the third motion to reopen
and enlarge on August 16, 1993. Foothills
filed an opposition to it on August 25,
and Ochoa filed a reply on September 7.
Ochoa filed the fourth motion to reopen
and enlarge on November 26, 1993.
the evidence did not support a finding
that Foothills’ principals had tried to
deceive the Commission as to the nature of
Mr. Respess’s activities on its behalf or
as to the nature of his prospective
involvement in station operation. Id. at
29-30. In her application for review, the
-95a-
petitioner argued that the Board should
have found Foothills disqualified for
misrepresentation because, according to
her: (1) Respess had testified that he was
a "passive" investor, and this testimony
was belied by the evidence of his
involvement in prosecution, and (2)
Foothills had falsely denied having ever
alleged that Respess was a passive and
"insulated" investor. We affirmed the
Board’s resolution of the
misrepresentation question, pointing out
that Respess had not, in fact, testified
that he was a "passive" Owner, but rather
that he did not plan to participate in
day-to-day station management. We found,
moreover, that Foothills had not, in fact,
alleged that Respess was a passive and
insulated investor and hence that there
was no basis for the petitioner’s second
misrepresentation charge. 8 FCC Rcd at
3135, para. 2.
3. Mrs. Ochoa now contends that we
ignored a hearing exhibit disclosing that
Foothills’ application contains a
certification statement that is
semantically equivalent to an allegation
that Respess was a "passive and insulated"
investor, and she further contends that
Foothills’ principals likewise represented
in deposition testimony that he was
passive and insulated. We continue to
believe, as did the Board, however, that
there is no basis for finding that the
certification statement was a
misrepresentation. See id. at 29. The
partial deposition transcript that the
petitioner has submitted, moreover, does
not record any testimony to the effect
-96a-
that Respess was a passive and insulated
investor.
4. The petitioner also asserts that a
written statement obtained recently from
an individual named Allen R. Hennessee
proves that Respess, contrary to his
testimony, would be involved in daily
station management. Hennessee’s statement
merely indicates that Respess contacted
him on Foothills’ behalf as to the
possibility of securing a right-of-way
across his property for access to its
transmitter site. Thus, there is, again,
no showing of an inconsistency with
Foothills’ assertion that Respess will not
participate in day-to-day station
management.
B. The Holding that Ochoa is
Disqualified for Misrepresentation
5. We found from discrepancies in her
own testimony that the petitioner had been
less than candid in responding in the
initial hearing session to cross-
examination concerning her remarks to
Supervisors and co-workers as to whether
she actually intended to carry out her
proposal to move to Lenoir and manage a
new FM station there. She repeatedly
affirmed at the first session that she had
told her supervisors that she was
proposing to move to Lenoir if her
application were to be granted and denied
having told them that she did not really
intend to carry out that ostensible plan.
But after opposing counsel elicited
impeaching testimony from four of her
former supervisors 3°« co-workers, she
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conceded that she had deliberately lead
them to believe that there was little
likelihood that she would ever quit her
current job and move to Lenoir. 8 FCC Rcd
at 3136
€. Furthermore, we found in light of
the impeaching testimony that the
petitioner had lied outright in (1)
denying that she had told a former
Supervisor, Jake Gurley, that she had no
intention of moving to Lenoir and planned
instead to drop her application in
exchange for a settlement payment or else
sell out after securing a construction
permit and (2) in testifying that she had
told Gurley and another former Supervisor,
Reta Thorn, that she did intend to move to
Lenoir if she got a construction permit.
14; #8: od
6. The petitioner maintains that our
affirmance of the holding that she is
disqualified for misrepresentation goes
against requirements of due process and is
contrary to the evidence. Some of her
arguments merely repeat objections to
which we have already spoken, ignoring the
reasons that we gave for rejecting them;
there is no need for us to respond
Specifically to such contentions. See
WWIZ, Inc., 37 FCC 685 (1964), aff’d sub
nom. Lorain Journal Co. vy. FCC, 351 F.2d
824 (D.C. Cir. 1965), cert. den., 383 U.S.
967 (1966).
+ gs Miscellaneous objections: The
petitioner complains that we ignored
evidence that she really does intend to
move to Lenoir in the event of receiving a
construction permit. We did not mention
that evidence because it had no material
-98a-
bearing on the misrepresentation issue,
which does not go directly to the veracity
of her integration pledge but rather to
the veracity of her testimony as to what
she told certain people. Whatever her
actual plans may have been, she had
compelling motives, by her own admission,
for leading those persons to believe that
she would never move to Lenoir. 7 FCC Rcd
at 1866 75.
8. The petitioner disputes our assertion
that the ALJ indicated that he found the
impeaching testimony credible, 8 FCC Rcd
at 3136 9, but the assertion is correct.
The findings in 77 of the initial decision
necessarily imply that the impeaching
testimony was credible, as there is no
evidentiary basis for those findings aside
from that testimony, which testimony the
ALJ recounted in detail elsewhere in his
decision. The petitioner next contends
that we erred in dismissing her motion to
strike Foothills’ opposition to her
application for review, which assertedly
raised new arguments that could not be
fairly considered. Id. at 3135, n.1. AS
she does not allege that we relied on any
of those arguments, however, it has not
been shown that the ruling was
prejudicial.
9. The petitioner also complains of
racial and sexual discrimination in
violation of the U.S. Constitution. She
bases the accusation on the premise that
we have treated her, a minority woman, and
Foothills in a disparate manner, allegedly
straining to find her guilty of
misrepresentation while discounting proof
that Foothills’ principals, who are white
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and male, are guilty of similar offenses.
We see no merit in this contention. We
affirmed the denial of the petitioners
application because the evidence clearly
establishes that she repeatedly lied about
material facts in hearing testimony,
whereas she failed to show that there were
grounds for reversing the Board’s
favorable resolution of the previously
specified misrepresentation issue against
Foothills.
10. Argument concerning procedural
fairness: The petitioner argued in her
application for review that she could
not properly be found disqualified,
inasmuch as no pertinent misrepresentation
issue had been formally specified. We
held, in agreement with the Board, that
the absence of a formally specified issue
was only a technicality, because the
petitioner had actual notice that findings
would be made as to the veracity of her
testimony about her statements to former
supervisors and co-workers and had ample
opportunity after this became obvious to
adduce evidence bearing on that question.
Id. at 3136, para. 6. She now contends,
however, that Commission policy and the
Administrative Procedure Act bar us from
finding her disqualified for
misrepresentation based on evidence
received in the absence of a formally
specified misrepresentation issue. She
adds that the misrepresentation finding
was unfair not only because of the absence
of formal specification of the issue but
also because there was no explicit
allocation of the pertinent burdens of
proceeding and proof. Furthermore, the
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petitioner disputes the premise that she
had actual notice that she was at risk of
disqualification, alleging that she was
lulled into believing otherwise by remarks
by the ALJ at the end of the hearing that
supposedly indicated that he was (as she
puts it) "satisfied with [her] testimony."
11. It is well-settled that applicants
may properly be disqualified for lying in
hearing testimony in the absence of
previous formal notification that findings
would be made as to whether the testimony
was deceitful. See RKO General, Inc. v.
FCC, 670 F.2d 215, 235 (D.C. Cir. 1981),
and Richardson Broadcast Group, 7 FCC Rcd
1583, 1585, para. 9 (1992), aff’d sub non.
Younts v. FCC, No. 92-1119 (D.C. Cir., May
10, 1993). RKO holds that such action may
be warranted provided that: (a) the
misconduct before the agency is so blatant
that its existence cannot be denied; (b)
the disqualified party had some form of
prior actual notice and was not prejudiced
by surprise; and (c) the disqualified
party was afforded an opportunity to
defend against the charge. All three
conditions were clearly met in this
instance.
12. The petitioner’s complaint that she
is a victim of "trial by ambush" is belied
by the record. The ALJ made it clear
during the hearing that the discrepancies
between the petitioner’s testimony and
that of the four impeaching witnesses
(Reta Thorn, Jake Gurley, Sue Litaker, and
Edward Jablonski ) were decisionally
significant and that findings would be
IS ON BE ARI EL PIE A.
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-10la-
made as to whether she had testified
truthfully in this regard; she was
permitted to present further testimony of
her own on point after having heard the
impeaching testimony; and she was afforded
ample opportunity to cross-examine those
witnesses and call others to discredit
them or corroborate her own version of the
facts. The petitioner and her counsel
demonstrated at the rebuttal session,
moreover, that they were alert to the
implications of the conflict between her
initial testimony and the contrary
testimony of those others. Her counsel
tried to discredit the impeaching
witnesses by developing evidence of bias,
and she tried to explain away the
discrepancies by suggesting that they had
all misunderstood her. /3
13. How the burden of proceeding should
have been assigned is entirely academic at
this point, as the record indisputably
contains prima facie evidence that Mrs.
Ochoa lied in the testimony in question.
Nor does it matter who is chargeable with
the burden of proof, as her guilt is
established by more than a bare
preponderance of the evidence.
14. Objection to denial of a request for
Subpoena: The petitioner contends that the
ALJ committed reversible error by denying
a motion to subpoena another WMXC-FM
employee, Vanessa Keys, who was allegedly
"the only disinterested person to the
conversations in question." In denying the
motion, the ALJ found that the petitioner
had made no showing that Keys’ testimony
would be "an essential plank in Ochoa’s
-102a-
version of the facts" or would include
information that could not be obtained
from one of the nine witnesses already
scheduled to appear at the rebuttal
session. FCC 91M-1475 (rel. 4~26-91)./4
There is nothing before us that indicates
that he was mistaken in that finding. The
petitioner has not alleged that Keys would
have materially contradicted any of the
impeaching witnesses concerning the
petitioner’s remarks to them about her
intentions. In renewing the request at the
rebuttal session, petitioner’s counsel
merely said that Key would testify that
Sue Litaker disliked the petitioner. Tr.
at 783. Although relevant, such testimony
would have been essentially cumulative.
See Tr. at 766-69 and 840-42. In short, it
has not been shown that the ALJ erred in
thus exercising his discretion under 47
C.F.R. 1.243 and 1.352.
15. Credibility of the impeaching
testimony: In our previous ruling in this
case we rejected as ill-founded the
petitioner’s argument that the impeaching
testimony of Gurley, Thorn, Litaker, and
Jablonski is unreliable due to bias. 8 FCC
Red at 3136, paras. 11-12. The petitioner
contends that we reached this holding
based on erroneous findings and without
considering important evidence. In
particular, she asserts, inter alia, that
we overlooked evidence that: (a) Gurley
was fired after the petitioner had accused
him of sexual harassment; (b) the WMXC-FM
staff was sharply divided after Gurley’s
departure into pro-Gurley and pro-Ochoa
factions and Litaker and Jablonski were
-103a-
both solidly in the pro-Gurley, anti-Ochoa
camp; (c) Jablonski referred to persons in
Sympathy with the petitioner as "the
enemy"; (d) Jablonski knew that the
petitioner had tried to have him fired;
(e) Litaker revealed to a fellow employee
that she was eager to testify against the
petitioner; and (f) Gurley, Thorn,
Litaker, and Jablonski discussed their
testimony with each other before the
hearing. The petitioner contends,
moreover, that there is no. material
discrepancy between her testimony and
Litaker’s testimony that she had heard the
petitioner say that she hoped to make
money from a settlement. Furcher, the
/3 The remarks at Tr. 1018-19 that the
petitioner cites as proof that the ALJ
indicated at the hearing’s conclusion that
he believed her, do not, in fact, imply
that he was satisfied that she had been
entirely honest in her testimony about her
statements to supervisors and co-workers.
In any case, nothing that he might have
said at the end of the hearing could have
hindered or dissuaded her from developing
evidence in her favor while the hearing
was in progress. Although he said in an
order issued prior to the rebuttal session
that "a narrow comparative point"
("namely, whether Maria Ochoa really
intends to move to Lenoir") was at issue,
this did not relieve her of the risk, made
clear by settled precedent, of
disqualification for testifying
deceitfully. The record of the rebuttal
Session shows that she was aware of that
-104a-
risk and attempted to overcome it.
/4 The ALJ evidently also regarded the
motion to subpoena Vanessa Key as
untimely, as it was filed only one week
before the scheduled commencement of the
rebuttal session. He had previously issued
two subpoenas for the rebuttal session on
the petitioner’s behalf.
petitioner maintains that we erred in
holding that an inconsistency between
Thorn’s and Gurley’s testimony is
immaterial.
16. Many of these assertions are
incorrect or misleading. To begin with,
Litaker did not merely testify that she
had heard the petitioner say that she
hoped to make money from a settlement.
According to Litaker’s testimony, the
petitioner made it perfectly clear by her
remarks to Litaker and others on two
occasions that she had no intention of
constructing and operating an FM station
in Lenoir. Tr. at 743-45. We also
reaffirm our conclusion as to the
insignificance of the discrepancy between
Thorn’s and Gurley’s testimony as_ to
whether they had ever talked to each other
about the petitioner. See 8 FCC Rcd at
3137, para. 16. As there is no evidence
that they said anything to each other
about the petitioner of any material
relevance to this proceeding, there is no
support for a finding that Thorn
deceitfully denied recalling a
conversation concerning her in order to
avoid arousing suspicion that Gurley had
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incited her to testify against the
petitioner.
17. None of the evidence that the
petitioner cites indicates that any of the
impeaching witnesses ever told one another
how they intended to testify. It appears
that Gurley told Jablonski that the
petitioner had no intention of operating a
Lenoir FM station and that Jablonski
therefore had reason to assume that Gurley
would so testify, Tr. at 673- 74, but this
does not raise any material question about
the veracity of either’s testimony. It
also appears that Sue Litaker told Karen
Barnes that the petitioner had testified
falsely and that she, Litaker, was going
to contradict her and "make sure that [the
truth] came out." Tr. at 843. This lends
no support to the petitioner’s theory that
the four impeaching witnesses conspired
together to supply testimony against her,
however, as Barnes was. one of the
petitioner’s own witnesses, nor does the
reputed remark betray any intent on
Litaker’s part to testify falsely.
18. Contrary to the petitioner’s
contention, none of the evidence that she
cites shows that Jablonski knew that she
wanted him fired. The petitioner also
exaggerates the importance of Karen
Barnes’ testimony about Jablonski’s
calling her "the enemy." It appears that
on encountering Jablonski on the airplane
on the way to Washington, D.c. to testify
in this proceeding, Barnes invited him to
sit with her and that Jablonski replied
facetiously that he shouldn’t sit with the
enemy -- meaning that it was better that
-106a-
they not sit together because they had
been called to testify by opposing
litigants. Barnes admitted that the remark
had not been malicious. Tr. at 635 and
849.
19. Contrary to our previous finding, 8
FCC Rcd at 3136, para. 11, there is some
evidence that Gurley was fired in the wake
of his falling out with the petitioner,
but there is also evidence that he merely
resigned, which the petitioner fails to
acknowledge. Tr. at 119, 690, 911, 1003,
and 1072. It appears, moreover, that
Gurley, Jablonski, Litaker, and Thorn.
among others, had a poor opinion of the
petitioner’s performance as sales manager,
that there was considerable antagonism
between the petitioner and Gurley,
Jablonski, and Litaker during her tenure
in that position, and that the petitioner
may have persuaded officers of the
licensee of WMXC-FM to fire Gurley or
press him to resign. It is not clear,
however, that the petitioner caused any
serious harm to Jablonski’s interests, and
there is no evidence that she ever did any
injury to Litaker or Thorn. Nor is there
any evidence that there was any overt
antagonism between Thorn and the
petitioner; on the contrary, the
petitioner testified that she had no
problem in getting along with Thorn. Tr.
at 121. And despite the petitioner’s
assiduous efforts to highlight their
Supposed biases, it is not evident that
any of the impeaching witnesses had an
ulterior motive for testifying against her
that was nearly as compelling as her own
-107a-
obvious motives of self-interest for
denying before this agency that she had
uttered the crucial remarks that they
attributed to her. In sum, as we held
before, there is no reasonable basis for
_ G@isregarding the plausible and mutually
corroborative testimony of these witnesses
on the theory that they conspired to
commit perjury for spiteful motives. 8 FCC
Rcd at 3137, para. 12./5
II. Ochoa’s Petitions to Add a
Transmitter Site Suitability Issue and
Related Misrepresentation and Concealment
Issues against Foothills
20. On June 15, 1993, Mrs. Ochoa filed a
petition t
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