Networks of influence

Introduction

Note to readers: This story has been reposted. Since the report was originally released, the Center for Public Integrity has changed the way it calculates lobbying expenditures to reflect a more stringent methodology for determining the total amounts. The change was made to correct the potential overstatement of totals. Figures or relevant text that have been changed are indicated with asterisks. (2/28/2006)

A new Center for Public Integrity investigation of campaign contributions, lobbying expenditures and other spending shows that the communications industry has spent at least $900 million* since 1998 to affect election outcomes and influence legislation before Congress and the White House.

The report focuses on the three primary communications industry sectors that control the information pipelines in the United States – broadcasting, cable television and telecommunications. Researchers also examined lobbying and contribution activity of other companies regulated by the Federal Communications Commission, including satellite television and radio companies.

In addition to corporate spending on lobbying and campaign contributions, the total includes industry-funded trips for members of the House and Senate committees that oversee the FCC. Center researchers also undertook an unprecedented study of former key FCC and congressional officials who left their government jobs for positions in the communications field.

A breakdown shows:

• Total lobbying expenditures from 1998 through mid-2004 by the industry were more than $764 million.* In comparison, the oil and gas industry less than $400 million over the same period, the Center has found.
• Campaign contributions from 1998 through September 2004 were $145.6 million. The total includes both hard and soft money donations from industry employees, labor unions representing employees in the communications industry and political action committees.
• The Center identified 450 industry-funded trips valued at $704,229 from 2000 through March of 2004.

The study is part of the Center’s ongoing examination of the companies that control the nation’s airwaves, telephone and cable lines and the hundreds of millions of dollars they spend to influence policies that affect how electronic communications are regulated in the United States. The survey took roughly eight months and involved the work of as many as a dozen researchers.

The influence of these industries is particularly important given that they control the information that helps all Americans formulate their views on everything from who to elect for president to what movie they want to see this weekend.

In addition to studying political spending, researchers were able to identify 311 former top congressional aides and FCC officials who have left government service and gone to work in the communications industry.

In an effort to help both journalists and citizens better understand the staggering influence the industry has on government, the Center has created “Influence Tracker,” a searchable database that includes information on contributions, lobbying, frequent flyers and employees who have stepped through the revolving door between government and industry.

The database used for this report contains 105,991 records, including 74,302 contribution records and information from roughly 9,000 lobbyist disclosure reports.

Of the three sectors, traditional telecommunications companies spend far more on contributions and lobbying than broadcasters or cable companies. A sector breakdown shows:

• Telephone companies like Verizon Communications Inc. and AT&T Corp. spent $398 million* on lobbying, $60.5 million on campaign contributions and $276,000 on trips for an overall total of at least $455 million.* (See information on telecommunications spending)
• Broadcasters spent more than $186 million* on lobbying and $26.5 million on campaign contributions and $165,000 on trips for a total of at least $210 million.* (See information on broadcast spending)
• Cable television providers spent more than $88 million* lobbying, $20.5 million on contributions and $226,000 on trips for a total of more than $100 million.* (See information on cable television spending)

Lobbying

While contributions to politicians are a major expense for communications companies, it pales in comparison to the amount that is spent on making sure the legal and regulatory climate remains favorable.

The money* spent by the industry affected legislation ranging from local telephone competition to media consolidation to the deregulation of the cable television industry. The survey shows that spending on lobbying by communications companies rose from more than $118 million* in 1998 to more than $126 million* in 2003.*

Among the top spenders on lobbying:

• General Electric Co., which owns 80 percent of NBC Universal in addition to a number of cable networks, topped the lobby spending list at more than $85 million.* (The total includes all lobbying by the giant conglomerate, even though it draws only a portion of its revenue from broadcast operations. Federal disclosure rules do not require companies to separate lobbying expenditures by subject.)
• Second by a small margin was Verizon Communications Inc., the nation’s largest phone company. The former regional Bell operating company spent more than $77 million* from 1998 through mid 2004. Verizon has key financial interests in local and long-distance phone regulation, spectrum allocation for its wireless division and a multitude of other issues.
• Third* on the list of top lobby spenders was SBC Communications Inc. at more than $56 million.*

SBC is followed by competitors AT&T Corp. (more than $48 million*) and Sprint Corp. (more than $46 million*).

The Center also looked at the top communications industry lobbying shops in Washington.

Number one on the list in billings was Patton Boggs at $10.9 million; second was Akin Gump Strauss Hauer & Feld at $9.6 million; third was PodestaMattoon at $9.3 million. Fourth was Piper Rudnick at $8.8 million and rounding out the top five was Hill & Knowlton at $8.4 million.

Contributions

The partisan preference of the communications industry as a whole has leaned toward the Democratic Party. Total contributions were split 56.2 percent for Democratic candidates and party organizations and 43.2 percent for Republicans. That does not extend to the two current candidates for the White House: President Bush leads Sen. John Kerry by a wide margin, $1.8 million to $1.1 million.

The two largest contributors over the study period were both labor unions.

• The International Brotherhood of Electrical Workers spent $12.5 million since 1998.
• Second was the Communication Workers of America at $12.1 million.
• Third on the list of top contributors was Verizon Communications at $10.7 million.

Verizon is followed by another former Bell, SBC Communications Inc., at $10.5 million. Media conglomerate Time Warner Inc., with holdings in publishing, film production, the Internet and cable television, was fifth at $8.2 million.

A significant portion of the union total (24 percent from the IBEW, 43 percent from the CWA) came from unregulated “soft money” contributions. Such contributions are now banned by the McCain-Feingold Bipartisan Campaign Reform Act which went into effect late in 2002.

Bush’s top communications patron is SBC Communications Inc., the San Antonio-based former Bell operating company that has waged a long battle with the government over the Telecommunications Act of 1996, which was supposed to create competition in local phone service. SBC has donated $178,000 since 1998. Bush’s second biggest booster from the communications business is Time Warner ($167,000) and third is General Electric ($151,000).

Kerry’s top communications patron is Time Warner, which has donated $242,000 over the same period. Second is broadcast giant and owner of CBS, Viacom Inc., at $118,000. Verizon is third at $116,000.

Behind Bush and Kerry on the list of recipients of the most communications dollars is Senate Minority Leader Tom Daschle (D-S.D.), who received $951,000. He is followed by Rep. Dick Gephardt (D-Mo.) at $940,000. New York Democratic Sen. Hillary Rodham Clinton, despite her status as a freshman legislator, was next on the list, having collected an impressive $920,000. Sen. John McCain (R-Ariz.), chairman of the Senate Committee on Commerce, Science and Transportation, came in fifth at $905,000.

Then there were the bundlers. At least 10 figures in the communications industry raised $100,000 or more for President Bush’s reelection, including the top executives at the largest and second largest telephone companies in the nation.

On the list of “Pioneers” were Salem Communications CEO Edward Atsinger; IDT Corp. CEO James Courter; lobbyist Ronald Kauffman, senior managing partner of the Dutko Group; Liggett Communications CEO Robert Liggett; lobbyist and former member of Congress Bill Paxon of Akin Gump Strauss Hauer & Feld; Univision Communications CEO Jerry Perenchio; Edge Wireless CEO Wayne Perry and Verizon CEO Ivan Seidenberg. SBC Communications CEO Edward Whitacre was named a “Ranger” for hitting the $200,000 mark.

Trips

Closely related to lobbying was the much criticized Washington practice of “fact-finding trips” by lawmakers and staff, which are also referred to more derisively as “junkets.”

Since 2000, the communications industry has sponsored 450 trips for members, family and staff of the Senate Committee on Science, Commerce and Transportation and the House Committee on Energy and Commerce. The top sponsor marks the first entry of the cable industry into a top five category of influence in the Center survey of communications companies.

The National Cable and Telecommunications Association funded 102 trips since 2000 worth $198,727. Second was another lobbying group, the United States Telecom Association, with 62 trips at $106,689. Third was SBC Communications Inc. with 47 trips valued at $76,327. Fourth was the National Association of Broadcasters with 43 trips at $99,084 and fifth was the Cellular Telecommunications & Internet Association with 41 trips valued at $57,044.

Last year, the Center did a survey on members of the FCC and staff who accepted free travel from industry. Over the eight-year period covered in the survey, businesses paid for $2.8 million in free travel for FCC staff. Since the publication of that report, the practice has largely ceased.

The frequent flyer award among members of Congress was no contest. The top recipient was retiring Louisiana Rep. Billy Tauzin, former chairman of the House Committee on Energy and Commerce. Tauzin and members of his office staff went on 69 trips valued at $107,424. Tauzin’s office was top traveler in every communications sector examined by the Center.

A distant second is Sen. Conrad Burns (R-Mont.) at 31 trips valued at $41,529 and in third place is Rep. Fred Upton (R-Mich.) with 14 trips worth $27,398.

Revolvers

The Center also examined the practice of government officials leaving their jobs to work for the industries they used to regulate. It is a common practice in Washington and has been the subject of recent reports on the U.S. Department of Agriculture and the Department of Defense.

The practice raises concern for a number of reasons, the most serious being that a federal employee may be tempted to show a regulated company favorable treatment in hopes of getting a job at the end of his government service.

The U.S. Office of Government Ethics has rules on post-employment activity by former federal workers, but they are narrowly drawn and easily sidestepped.

While the Center study did not find any former FCC or congressional employee who appeared to violate those rules, researchers found that an extraordinary number of them—398, in fact—have gone to work for companies they used to regulate.

For example, all eight previous chairmen of the FCC have either worked for or represented corporations that are regulated by the agency. Two are registered lobbyists.

Among some of the others:

• Republican Commissioner Kathleen Abernathy, once worked for Baby Bell USWEST (now part of Qwest). She is on at least her second time through the revolving door between the FCC and the phone companies. In the 1990s, she was a lobbyist for private companies with business before the FCC after having served in senior staff roles to the FCC and two FCC commissioners.
• Lyndon K. Boozer, BellSouth‘s vice president of federal relations, is an FCC alumnus who worked as a special assistant in the agency’s Office of Legislation and Intergovernmental Affairs before leaving for his lucrative job at BellSouth.
• Peter Davidson, Verizon’s senior vice president of federal government relations, has passed twice through the revolving door between government and industry. After serving as policy director to then-House Majority Leader Dick Armey (R-Texas), he worked for Qwest, then worked under the U.S. Trade Representative in the Bush administration until taking his position with Verizon last year.
• Marsha MacBride, currently the executive vice president for legal and regulatory affairs with the National Association of Broadcasters, has gone from the industry to the FCC, back to the industry, back to the FCC again and then once more into the industry. Over the course of 13 years, she has occupied positions at the uppermost echelons of both media corporations and organizations and the government agency that regulates them.

The Center for Public Integrity is a nonprofit, nonpartisan, tax-exempt organization that conducts investigative research and reporting on public policy issues in the United States and around the world.

This project was made possible thanks to funding from the Ford Foundation and partial funding from the Open Society Institute.