The Trump administration nominee to head U.S. international broadcasting agencies is facing scrutiny over the financial relationship between his nonprofit organization and his for-profit documentary company.
Conservative filmmaker Michael Pack is president of Manifold Productions, which he founded in 1977. He has been nominated by President Donald Trump to become chief operating officer of the U.S. Agency for Global Media (USAGM,) which oversees government-funded news media that include the Voice of America.
Pack is also principal officer of The Public Media Lab, a tax-exempt, nonprofit, charity organization registered in Washington, D.C. The nonprofit's mission, listed on its 2017 tax filing, is "to receive and award grants to develop, promote, and support educational documentary films and film makers."
Tax forms from 2008 to 2017 for The Public Media Lab indicate the nonprofit received over $2.4 million in donations, and awarded grants of $1.6 million to Manifold Productions. Manifold Productions is the only film company listed to receive funding from The Public Media Lab.
In 2017, The Public Media Lab received donations of $900,000. It issued only one grant that year — $300,000 to Manifold Productions.
The relationship between Pack's nonprofit organization and Manifold Productions, where he is the principal officer in charge of both organizations, could raise concerns with the Internal Revenue Service, say nonprofit tax attorneys contacted by VOA, one of whom agreed to speak on the record.
"If he is in control of both organizations, that no other production company has ever received any contract, that is almost, on its face, an improper transaction," said Marcus Owens, an attorney who represents a broad range of nonprofit organizations, and a partner with the law firm Loeb & Loeb in Washington, D.C.
The IRS, said Owens, generally requires officers of a charitable organization to recuse themselves from decisions involving their for-profit companies, and that a transparent competitive bidding process be conducted to ensure that donor funds are used in a responsible manner.
"If the processes set aren't followed, it creates almost the presumption that the transaction is not appropriate," said Owens, who was also a past director of the IRS's exempt organizations division.
The large financial grants from The Public Media Lab to Manifold Productions also raise concerns that he may have inappropriately profited from charitable donations.
Generally, IRS rules prohibit officers, directors and other insiders from gaining an unfair benefit from a nonprofit's income or assets.
At Thursday's confirmation hearing before the Senate Foreign Relations Committee, Pack discussed his involvement with Manifold to produce documentaries for public broadcasting, "our nation's founding fathers, the entertainment industry, the history of America's political parties, Congress, great engineers and scientists, and much more."
Pack did not bring up his involvement in the nonprofit organization.
Democratic Sen. Bob Menendez, ranking member of the Senate Foreign Relations Committee, asked Pack to affirm that he would respond to recently posed questions from his staff on undisclosed topics.
"The breadth of the questions made it impossible to answer quickly," said Pack. "They require adequate research, consultation, going back over some relative documents. But I absolutely commit that I will get you the answers as expeditiously as possible."
A spokesperson for the Senate Foreign Relations Committee confirmed Tuesday to VOA that some of the questions the senator's staff posed to Pack focused on his use of nonprofit funds.
Pack also did not respond to requests for clarification over the financial relationship between his nonprofit and for-profit entities.
It is unclear how Pack's financial dealings will affect his prospects for Senate confirmation.
Owens also said that other public foundations reporting charitable contributions to The Media Lab must ensure their funding is used for charitable purposes.
The Charles Koch Foundation, which often promotes conservative causes, donated $250,000 in 2017 for "general operating support" to The Public Media Lab.
The Thomas D. Klingenstein Fund also donated $100,000 that year to Pack's nonprofit to produce a documentary on conservative Supreme Court Justice Clarence Thomas, which Manifold Productions recently produced.
The Alfred P. Sloan Foundation provided The Public Media Lab a grant in 2010 for $797,836 to produce and broadcast the PBS documentary "Admiral Rickover and the Nuclear Navy," which was also produced by Manifold Productions.
Aside from his financial dealings, concerns have been raised that Pack might seek to impose a conservative political bias on government news agencies that are required by law to be objective and balanced.
During last week's hearing, Menendez questioned Pack's ties to Steve Bannon, the former White House chief strategist for Trump and former head of Breitbart News, which is widely seen as an advocate for nationalist, conservative causes. Bannon and Pack worked together on documentaries examining the Iraq war ("The Last 600 Meters") and the Rickover film.
In a 2017 article he wrote for The Federalist news site, Pack praised Bannon as "a successful conservative documentary filmmaker," while complaining of a liberal bias in the documentary film industry.
Pack affirmed he would uphold the journalistic integrity of government-funded news networks, saying, "The whole agency rests on the belief the reporters are independent."
With a budget of $628 million, the USAGM oversees the VOA, which broadcasts in over 40 languages around the world; TV and Radio Marti broadcasting into Cuba; Arabic-language networks Alhurra TV and Sawa radio; Radio Free Europe/Radio Liberty; and Radio Free Asia.