He Wuz Rob-bed

Deep-pocketed political donor Rob Glaser undertook his biggest-ever political investment in 2004 when he handed over $10 million to prop up lefty talk-show network Air America Radio, giving him 36.7 percent ownership. But while the founder and CEO of Seattle-based RealNetworks Inc. successfully helped fund the 2006 Democratic revolt in Congress, he has been bloodied attempting a similar revolution in progressive talk radio. The network's challenge to Rush Limbaugh and other conservative talkers for the nation's hearts, minds, and ad revenues has ended up in bankruptcy, and Glaser, chair of the Air America board the past two years, faces millions in personal losses.

He had already surrendered his network chairmanship by the time Air America Radio (AAR) and its parent corporation, Piquant LLC—Glazer's investment group—filed for Chapter 11 bankruptcy in October hoping to stay on the air while it reorganized and worked out a deal with its creditors, the biggest of which is Glaser. According to federal court records in New York, the network has $20.2 million in liabilities and $4.3 million in assets. Glaser's investment share is listed at $9.8 million, which he most likely will lose, in addition to $475,000 he loaned the company—albeit small change to Glaser, whose personal worth is estimated by Fortune at close to $1 billion. His company, RealNetworks, is also owed $85,000, and former RealNetworks exec Eileen Quigley of Seattle is owed $29,000 in back wages and compensation, according to the filings.

AAR spokesperson Jaime Horn says a new network buyer has signed a letter of intent and a deal will be completed "any day now," likely allowing Air America to exit bankruptcy. The rumored purchaser is Terry Kelly, who helped found the network and served as its board chair until he was replaced by Glaser, though he stayed on as a partner in Piquant.

But even new ownership will have a struggle to keep the network together. Aside from the financial hole it has dug—including more than $300,000 in back rent on its New York studios, according to court filings—its talk headliner, comedian and author Al Franken, is expected to resign this year and run for the U.S. Senate from Minnesota. (He's also listed in the 25 pages of network creditors as seeking more than $360,000 in back pay).

Michael Hood, Seattle editor of broadcast blogsite BlatherWatch (and a past Seattle Weekly contributor), sees no light at the end of this tunnel. "It looks like it's over to me," he says.

Besides the bankruptcy action, the network faces a half-dozen other lawsuits, mostly by ex-employees or affiliates over contractual and employment issues, the bankruptcy filing reveals. Among them is an $11 million defamation suit by CACI International, a government contractor that helped operate Abu Ghraib prison. At issue is whether on-air personality Randi Rhodes was fair and accurate when in 2005 she accused CACI employees of raping and murdering Iraqi civilians at the prison. A U.S. District Court judge had earlier dismissed the case, though CACI is appealing. Now the bankruptcy court has ruled the suit can proceed. To Hood, that "makes it even less likely that timid investors might want to seriously reorganize and stick with it," although AAR's insurance carrier would likely pay any civil settlement.

Glaser's 2004 investment bought him not only the chairmanship but the opportunity he coveted to help spread the liberal viewpoint. "I think some people—Glaser may be among them—got into it for political reasons after the 2004 election," says Hood, "but found themselves in a tough business which happened to go into a serious downturn shortly after their launch." Radio growth is sluggish anyway, Hood says, and for AAR, "it was a poor environment for a new company, with a new format, and investors with not much experience in the business."

As the network's chief moneybags, Glaser could have a more direct role in progressive politicking compared to the supporter role he'd played as campaign donor. Based on a review of public disclosure reports, Glaser has been the largest single local donor to national political campaigns and causes in recent years—$2.4 million since 2003, almost exclusively to Democrats. That includes $1.9 million to America Coming Together, a Democratic get-out-the-vote drive, and $250,000 to America Votes, a progressive grassroots voter effort. He gave thousands as well to presidential campaigners Ralph Nader, John Kerry, and John Edwards and to a host of Democratic U.S. senators including Patty Murray and former RealNetworks exec Maria Cantwell.

Glaser doesn't want to discuss his Air America role. "Rob has not been conducting interviews on this topic," says RealNetworks spokesperson Bill Hankes. But Glaser, 44, is sensitive to the drawbacks of mixing politics and business: When the former Microsoft executive launched RealNetworks in 1993, he initially dubbed it Progressive Networks, planning to deliver some sort of "socially conscious" content, as he called it, over the Internet, then had second thoughts when customers became more interested in the company's technology. In 1995, Glaser and partner David Halperin broadcast the first live event on the Internet: a socially progressive Mariners-Yankees baseball game. (Glaser is a part-owner of the M's.) Real's steady success has been pegged to its RealPlayer media-streaming software, though Glaser has recently introduced gaming and MP3 technology ("celestial jukeboxes" in Glaser's words) to its product line. In November, Real reported record 3rd-quarter revenue of $94 million and profit of $42 million.