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It’s common knowledge that, since the founding of the Washington Times in 1982, the D.C. area has served as the power center of the media empire ruled by the Rev. Sun Myung Moon and his Unification Church. The Times has abetted the pint-size messiah’s quest for worldwide domination, providing him with a bully pulpit for his political views and a vehicle for purchasing respectability.
What is not so well known is that Moon also waged a masterful campaign of vertical integration and locked up the vast majority of D.C.-area video-production services: companies that film, edit, and provide satellite feeds to TV stations all over the United States. Of late, however, the empire has shown signs of slippage: The Times recently downsized itself; Moon’s New York publishing company, Paragon House, has been shuttered; and feeling the pinch of the recession, a Unification Church-linked video-production company has been slapped with hefty federal and local tax liens.
That company is Newslink Inc., which once supplied all of the camera crews to CNN’s Washington bureau. On April 27, 1993, the IRS filed a $634,565.75 tax lien against Newslink for failing to pay Social Security taxes withheld from employees in 1990 and 1991. This was a repeat offense for Newslink, which also owes the District about $17,000 in withholding taxes. And on March 1, 1993, the state of Delaware revoked the company’s corporate charter for failing to pay its franchise taxes.
But Newslink is more than in the red; it’s dead. Calls to Newslink are answered by Potomac Television Communications Inc. An executive at their parent company, Concept Communications, says that Newslink is out of business.
What happened to Newslink? Does its demise provide further evidence that the sun is setting on the Moon media empire? And who will pay the tax man? Tough as these questions may be to answer definitively, there’s no question that the story of Newslink—tenuously connected to a host of related organizations, gradually absorbed by other Moon outfits, and finally dismantled in all but name—is classic Moon, illustrating his favorite fiduciary tactic: muddy the waters until, when it clears, the only thing left is an abandoned company and an outstanding tax bill.
Newslink was nearly bankrupt in 1987 when Republican consultant Max Hugel, a former CIA deputy director and longtime Moon ally, rescued it. Hugel promptly attempted to use the company to advance the Moon cause, as a former Moon enterprises employee disclosed in an October 1989 Washington Post article. Hugel offered to buy a table at a Republican fund-raiser in the name of Newslink and arrange a photo-op with Vice President George Bush and Bo Hi Pak, then president of the Times. An internal memo from one of Moon’s many business fronts named the chief advantages of the Hugel offer: “1.) If we go in with a Washington Times table, it will throw up red flags to Bush and we may get stiffed on the photo. 2.) No one will associate you with Newslink, so the reception should be well attended.” Hugel’s price for this service: $50,000.
In 1988, the Moon organization set out to corner the Washington video-production business. Hugel joined forces with Jonathan Park, son of Bo Hi Pak and president of the Unification Church-financed Atlantic Video Inc. Together, the two men proceeded to establish a string of dummy companies that would mask church involvement. At the top of the chain was Crown Capital Corp., ostensibly a religious nonprofit; below that was its wholly owned subsidiary, the for-profit Crown Communications Corp. Crown Communications owned two-thirds of yet another corporate entity, Concept Communications (the remaining one-third was owned by Hugel).
It was an old Unification trick: If the IRS attempted to trace seizable assets, it would be led to a nonprofit, which is subject to less stringent disclosure laws than for-profit companies. By the end of 1989, Concept Communications had purchased Newslink. During 1989, two federal liens for $215,406.43 were filed against Newslink, which had failed to pay the government withholding taxes. The company managed to pay off $41,543 within a year.
Park and Hugel’s campaign to dominate the area’s video business proceeded as Concept bought Pyramid Video Inc. out of bankruptcy and purchased Potomac Television Communication Inc., founded in 1975 by Bruce Finland. With these acquisitions, Concept could boast the full array of video services: a White House uplink, often used by the networks; tape- and film-editing services; and an exclusive contract to supply equipment and satellite capabilities to foreign journalists located in the National Press Club building. The Concept companies served at least 100 of the 600 independent television stations around the country, even producing news segments for clients.
Potomac Television’s Finland remained in charge of his company and added the presidencies of Newslink and Pyramid to his résumé. Finland touted the business synergy of the three companies and allayed concerns of clients that the Unification Church was running the show.
“I welcome this kind of scrutiny because I know people out there are talking,” Finland told the Post in February 1990. “But there is nothing to any of the talk [about church investment]. I could not run this business, and I won’t run it, without total independence. Two years from now this will all die down because there will be nothing to support it.”
Instead, it’s Newslink that is dead. While the company registered $1.86 million in gross assets in 1990, that was the last year Newslink filed an annual report with the state of Delaware. Dan Holdgreiwe, vice president of Concept, confirms that the company is defunct and that there are no plans to revive it.
Holdgreiwe says that Newslink fell victim to the winnowing of the industry; that there wasn’t enough business to go around; and that, since Potomac and Newslink served much the same function, the death of one was inevitable.
“My understanding is that the demise of Newslink was not at all planned, but it was realized that in order to save it, a lot more money would have to be put into it. It would have been throwing good money after bad,” he says. Newslink’s lucrative CNN contract was taken over by another of Concept’s video service companies, Potomac Television Services Corp. that shares office space with Finland’s Potomac Television.
But there is still the small matter of the $815,591.94 that Newslink owes in federal, state and local taxes—plus interest and penalties. One would think that, as the owners of Newslink, Concept would be responsible for its outstanding debts, but the company has no plans to cover Newslink’s obligation, says Holdgreiwe.
“To my knowledge, Concept has not been contacted, and if it were, I don’t think it would be liable. There are no Newslink assets to collect from,” he says.
But there are the assets of Newslink’s former corporate officers. According to an IRS spokesman, if a corporation does not pay withholding taxes, “liability falls to the officer or employer who is under a duty to perform the act in respect of which the violation occurs.” In Newslink’s case that would be Jonathan Park, Max Hugel, Bruce Finland, or former Secretary Paul A. Stearns.
Newslink’s tax travails aren’t the only problems plaguing these video entrepreneurs. Stockholders in the California-based Nostalgia Network, which is the target of a Concept takeover bid, have filed suit against more than a dozen Moon entities and executives including Park (who was removed as the head of Concept and Atlantic in the spring), Stearns, Holdgreiwe, and Hugel. The suit accuses the defendants of violating Security Exchange Commission financial disclosure regulations.
Hugel resides in New Hampshire, where his number is unlisted. Stearns, until this spring, served on the boards of at least seven local Moon-linked organizations, including Atlantic Video. But he has departed those boards, and efforts to find him have been unsuccessful.
“I don’t know how you can get in touch with Jonathan [Park], to be honest,” says Finland. “The only thing I can say about Max [Hugel] is that he’s a very private person. I can give him a message; maybe he’ll call you, maybe he won’t.”
Finland, who has since left the boards of Pyramid, Newslink, and Concept, vigorously defends Potomac’s independence from Moon influence.
“I did at one time serve as Newslink’s president, because I was asked to, and for my own reasons, I resigned,” he adds.
Finland at first insisted that all taxes were paid during his five-month tenure in 1991 as president of Newslink, but conceded the point when informed that IRS documents show Newslink failed to pay withholding taxes in the last three quarters of that year.
“If taxes are owed, taxes will be paid,” says Finland. “I think you have to do that in America.”
The Rev. Moon certainly found the latter observation to be true when, in 1984, he served a 13-month prison term for conspiracy to obstruct justice and conspiracy to file false tax returns. But it appears that the reverend still hasn’t learned his lesson.