FCC plans to nix industry-paid travel

Introduction

Bowing to pressure from a powerful member of the House Appropriations Committee, the Federal Communications Commission says it plans to largely eliminate its longtime practice of accepting free travel and entertainment from the communication industries it regulates.

U.S. Rep. Frank R. Wolf, R-Va., who oversees the agency’s budget, sent a letter to FCC Chairman Michael Powell in late July asking him to “take steps internally to end this practice.” Wolf wrote that the practice “creates a perception of conflict of interest.”

Wolf is a member of the House Appropriations Committee and chairman of the House subcommittee that oversees the FCC’s budget.

In a response dated August 18, Powell said he would seek an increase of about $500,000 in the agency’s fiscal year 2005 travel budget so it could “largely eliminate [industry-funded travel and entertainment] in cases involving those we regulate.”

Wolf indicated yesterday he would support an increase. “He’s committed to working to provide adequate funding so we don’t revisit this problem,” said Dan Scandling, the congressman’s chief of staff.

In the interim, Powell said he had begun a review of the FCC’s travel program to “substantially reduce” industry-funded travel and entertainment and “to guarantee that all travel is necessary to advance the agency’s mission.”

Wolf’s action on the issue came in response to a report released by the Center for Public Integrity on May 22 entitled “Well Connected: A report on the frequent travels of the FCC and other telecommunications issues. (A version is available by going to www.openairwaves.org.)

In addition, an investigator from the General Accounting Office—Congress’s investigative arm—recently asked for and received a number of copies of the report.

The report chronicled how FCC officials had been showered with nearly $2.8 million in travel and entertainment expenses over the past eight years, most of it from the telecommunications and broadcast industries the agency regulates. That report covered travel and entertainment through February 2003.

Travel Patterns Continue

An update of that report just completed by the Center—covering travel and entertainment from March 1 through June 12, 2003—shows that FCC officials have continued to take advantage of industry largesse.

FCC officials took 83 industry paid trips costing $84,334 during that 15-week period.

The National Association of Broadcasters paid $26,309 to bring 17 FCC officials to its annual convention in Las Vegas in April, including all five FCC commissioners.

In June, the National Cable and Telecommunications Association paid $19,974 to bring 21 FCC officials to its convention in Chicago, including FCC Chairman Michael Powell and Commissioners Kevin Martin and Jonathan Adelstein.

In addition, Commissioner Martin and members of his staff took a pair of trips sponsored by investment firms during the period, the update shows.

J.P. Morgan spent $5,496 to bring Commissioner Martin and a special assistant to a technology and telecommunications conference in San Francisco in May. SunTrust Robinson Humphrey, an investment firm, spent $989 to bring Martin and another assistant to a media conference in New York, also in May.

Adequate Travel Budget

In his letter to Powell, Wolf took particular issue with contentions by both FCC and communication industry officials that the agency did not have an adequate travel budget.

“For the record, the FY 2003 budget request for the FCC was fully funded and represented more than a 100 percent increase over what your agency spent on travel in FY 2001,” wrote Wolf. “Nevertheless, if money remains an issue, I would be willing to work with you to address the problem.”

Wolf also said he hoped Powell would “put this issue on the commission’s agenda” and “consider it when crafting your future budget requests.”

“In this town, perception often becomes reality, so I sincerely believe it would be in the best interest of the FCC—and the American public—if the travel of FCC commissioners and staff were only through appropriated funds,” wrote Wolf, pointing out that is the policy of the Securities and Exchange Commission.

In his response, Powell said the FCC had adhered to all ethics laws and guidelines related to travel, but he conceded that “certain travel paid for by industries that we directly regulate can create an appearance of impropriety, even when such travel is fully authorized by federal law.”

“Travel to industry conventions, trade shows and academic symposiums are important to our mission,” wrote Powell. “I believe, however, as you do, that such travel would be better funded by government appropriations so as to remove any hint of impropriety.”

Letter Followed Failed Legislative Effort

Wolf’s letter to Powell, which was dated July 25, came just days after the House passed a funding bill for the FCC and other government agencies that would reverse a decision made by the FCC on June 2 regarding media consolidation.

The House voted 400-21 to set a 35 percent cap on total audience reach for a single television broadcasting company. The FCC voted to raise the limit to 45 percent. A diverse coalition of groups oppose increasing the cap, claiming it will hurt local control of the media and allow large media companies to become too powerful.

The lopsided vote was a stunner from the GOP-controlled House and bucks the position of the White House, which threatened to veto the spending bill if the rollback provision remains.

Earlier versions of that appropriations bill contained language that would have banned industry sponsored travel by the FCC.

The language was stripped from the bill at the request of Rep. Fred Upton, R-Mich. Upton, who chairs a subcommittee with jurisdiction over the FCC, said the language did not belong in the appropriations bill since his committee had not authorized it.

Upton is a member of the House Committee on Energy and Commerce and is chairman of the subcommittee on telecommunications and the Internet. He has been vocal in his support of the FCC’s June 2 action to loosen media ownership rules.

Wolf was highly critical of industry-funded travel when he defended his provision on the House floor, prior to agreeing to have the language stripped from the final appropriation bill.

“One commissioner, who has only been a commissioner since July 2001, took 12 trips valued at over $14,000,” Wolf said, referring to figures from the Center report. “One career employee took 104 trips valued at $150,000, including (trips) to France, Japan, Singapore, the United Kingdom and Sweden. That means the regulatees are paying for the trips of the regulators.”

Rep. Tom Davis, a Virginia Republican who chairs the House Committee on Government Reform, said he was also concerned about industry-funded travel by FCC officials.

“Obviously, if somebody goes on a paid-for trip, is put up in a hotel, gets their golf game paid for, and it is paid for by an interest group that is regulated by the FCC, we should stop it,” said Davis.

Other Legislation Pending

Legislation has also been moving in the Senate that could roll back the media ownership rules and eliminate industry sponsored travel by FCC officials.

The Senate Energy and Commerce Committee passed a bill written by its chairman, Sen. John McCain, R-Ariz., that would eliminate industry paid travel by FCC officials and impose other new rules on the agency, such as a one-year ban on lobbying by former employees.

It is unclear when—or if —that bill will be taken up by the full Senate.

On another front, Sen. Byron Dorgan, D-N.D., has introduced a rarely used legislative tool called a “resolution of disapproval” that would overturn all of the new media ownership rules passed by the FCC on June 2. If passed by the Senate, that legislation would move directly the House floor for debate and a vote.

But like McCain’s legislation, it remains unclear when Dorgan’s legislation will be taken up by the Senate.