Pulp Friction

"Isn't it funny," he asked himself, "how the voice of the independent press has gotten me into a situation where I'm biting my tongue?"

The official explanation for the IPA's money troubles seems simple: The distribution business was doomed from the start, and poor accounting systems prevented IPA executives from discovering the truth until it was too late. Anner had promised that BigTop would have the leverage to collect payments quickly for clients, but Landry says that with just 70 clients, IPNS is too small to pressure large chains into paying up on time. (Large distributors have hundreds of clients.) Meanwhile, board Treasurer Cheryl Woodard says that a suitable IPNS accounting system might have cost as much as $500,000, a significant chunk of the IPA's entire 2004 expense budget of $2.8 million.

The IPA's founders admit they lacked financial know-how; in fact, at one point Anner asked the board to send him to business school. "There was a general concern about the finances and an inability to completely understand what was happening with the finances," says Schulman, who rejoined the IPA as a board member from 2000 until 2005. "We all suspected integrating BigTop would involve a level of financial management and bookkeeping none of us was well prepared for."

Landry joined the IPA about a year after Anner fired its chief financial officer, and the books were still disorganized, according to Daniel Leibsohn, IPA board treasurer from 2002 until 2005.

Other IPA funds obscured the fact that BigTop already had debts, according to current and former employees.

Sugarman — BigTop's founder — as well as Anner and early IPA staffers provide an alternate version of the unit's troubles. Sugarman says the accounting and computer systems IPNS inherited from BigTop kept the business balanced while she was in charge.

"We were never a day late. If we were, we would've closed our doors," she says. "Even if I couldn't figure out how to pay the phone bill or buy stamps, I thought we should still pay publishers."

Anner says that when he left the IPA, he was unconcerned about BigTop, even though it was a far more complex business, having expanded its distribution reach to large booksellers like Barnes & Noble.

"We had staff in place who had long-term experience both at BigTop and IPA," he says. "I may well have put the seeds of destruction in place, but when I left, everything was more or less fine."

Anner pleads ignorance of events after 2003, but several former staff and board members place some blame for the problems with Landry and the current board.

During the interim period between Anner and Landry, foundations didn't make any large grants to the IPA, a situation common during periods of change in a nonprofit's leadership. When Landry took over, though, he raised far less money than Anner had. The IPA received just $475,000 in 2004 grants, during Landry's first full year, versus $1.3 million in 2002, Anner's last full year, according to the organization's IRS filings. Landry says that that data doesn't reflect "public support throughout the year," but the audited financial statements he cites still show a 21.5 percent decline in grant income and contributions during the same period. (The IPA has not yet made its audited 2005 finances public.)

"Richard [Landry] doesn't like to fundraise," says former board Treasurer Leibsohn. "So that fell off — which is fine; we knew fundraising wasn't his strength. But you need to come up with a business model that's going to replace or fill in for whatever your weakness is, so it doesn't fall off the planet."

Although Landry was hired in part to whip the IPA's accounting practices into shape, several former employees say he was unable to repair its financials.

"Frankly, I couldn't get viable financial reports out of the [San Francisco] office," says Abby Scher, former director of IPA in New York. "That was really troublesome."

Until last fall, Landry was also unsuccessful in ending the confusing accounting practices of the previous years, including paying magazines their BigTop income out of non-BigTop funds.

"Instead of not paying magazines right away, they were loaning to magazines upfront without telling us," says Jo Ellen Green Kaiser, a senior editor at the Berkeley spiritual/political magazine Tikkun and IPA consultant from mid-2004 until late 2005. "They started a pyramid scheme, pulling some of the money coming in to pay people they owed. They got more and more behind and eventually started owing lots of magazines so much money that the whole thing started collapsing."

IPA had created a loan fund to help publishers with direct-mail campaigns, but in 2004 the company began offering "emergency" loans from the fund. Several publications owed money by BigTop, including Bitch, got loans to cover that debt, according to interim Executive Director Smith, who was in charge of the loan fund from 2000 through 2005.

Although Landry and board member Richard Lawton contend that IPNS is too small to pressure big distributors into paying up, some independent publishers — including Anne Niven of SageWoman — do survive without a national distributor like IPA. BigTop founder Sugarman says the failures of IPNS aren't structural; they're due to a shortage of industry knowledge. "I believe Richard Landry doesn't understand newsstand distribution," Sugarman says. "I believe that wholeheartedly."