NEW YORK – Air America (search) has agreed to put the entire $875,000 it received from a Bronx-based Boys & Girls Club into an escrow account while the controversial loan is investigated by the city, the network's bosses announced Wednesday.
The owner of the left-leaning radio network had previously agreed to repay the money in installments.
Last month it made the first down payment into an escrow account controlled by the station's lawyer, rather than directly to the Gloria Wise Boys & Girls Club (search), a nonprofit social-services organization.
The city's Department of Investigation, which is scrutinizing the bizarre loan, wanted all the money in escrow until it end its probe and authorizes payment.
Wednesday, Danny Goldberg, CEO of Air America, announced that the board of directors of the network's owner had accelerated its payment schedule and deposited the full $875,000 into the escrow account.
The city yanked $9.7 million in government contracts from the club earlier this year as it launched an investigation of its finances and whether club officials falsified documents.
State Attorney General Eliot Spitzer is also investigating the Air America-Gloria Wise connection.
The escrow move comes as it was disclosed Wednesday that Air America's star, Al Franken (search), signed an agreement last year to repay the entire loan.
The comedian and liberal commentator said last month he didn't know of the loan until late July, adding Air America's decision to repay it was a "moral obligation."
But it was reported Wednesday that Franken and Air America's former chairman, Evan Montvel Cohen, were among the signers of a confidential agreement in November 2004 in which Air America agreed to repay the Gloria Wise loan.
Cohen said no one at the network knew of the money transfers from Gloria Wise when they happened, apparently between October 2003 and March 2004.