Commentary: Profiteering from democracy

Introduction

In his January 1998 State of the Union address, after decrying the campaign-fund-raising “arms race,” President Clinton proposed a major new policy that would address a big part of the problem—the high cost of campaign commercials.

“I will formally request the Federal Communications Commission act to provide free or reduced-cost television time for candidates,” the president said. “The airwaves are a public trust, and broadcasters also have to help us in this effort to strengthen our democracy.”

Within 24 hours, Federal Communications Commission chairman William Kennard announced that the FCC would develop new rules governing political ads.

But days later, the powerful broadcast corporations and their Capitol Hill allies managed to halt this historic initiative. In the Senate, Commerce Committee Chairman John McCain, the Arizona Republican, and Conrad Burns, a Republican from Montana and the chairman of that panel’s communications subcommittee, announced that they would legislatively block the FCC’s free air time initiative. “The FCC is clearly overstepping its authority here,” McCain said.

In the House of Representatives, 17 Republicans, including Majority Whip Tom DeLay, Appropriations Chairman Bob Livingston, future House Speaker Dennis Hastert, and Billy Tauzin, chairman of the House Commerce Committees telecommunications subcommittee, sent a blunt letter to Kennard. “Only Congress has the authority to write the laws of our nation, and only Congress has the authority to delegate to the Commission programming obligations by broadcasters,” they wrote.

Ranking House Commerce Committee member John Dingell, the Michigan Democrat, also sent an opposing letter to Kennard. Faced with the very real threat that his agency’s budget would be cut, Kennard had no choice but to retreat from the proposed rulemaking.

FCC, White House flattened like pancake

It was a humiliating and metaphorical moment for the FCC. In a very public way, the agency and the White House had been flattened “like a pancake,” recalls former FCC chairman Reed Hundt, Kennard’s immediate predecessor. But the threat of a shrunken budget and a congressional backlash (”[T]he likes of which would not be pleasant to the Federal Communications Commission under any circumstances,” was the way Livingston described it), caused the FCC to back down. Free air time went from the fast track to the back burner.

Many politicians in power tend to fear free air time for the leg up it would give to challengers. And more than that, free air time for political candidates would affect the bottom line of a very important industry and Washington player — the media industry. It would cost broadcasters millions of dollars in lost advertising revenue. They were not about to allow a direct affront to their financial self-interest to become law.

Indeed, the media’s success in handling the threat of free air time for candidates is but one of a stack of proposals that media companies have flattened like pancakes in Congress and the White House in recent years. Which is why the media is widely regarded as perhaps the most powerful special interest today in Washington — not that you are likely to read, see or hear much about it in national news media stories.

Winning friends the old-fashioned way

How do media corporations win friends and influence people in our nation’s capital? As the Center reports in its new study Off the Record, they do it the old-fashioned way, by using the time-honored techniques with which business interests routinely reap billions of dollars worth of subsidies, tax breaks, contracts and other favors. The media lobby vigorously. They give large donations to political campaigns. They take politicians and their staffs on junkets.

The intermeshing of public and private sectors has, of course, been an endemic problem in Washington for years, and the social and professional interaction between the media business and the government that regulates it is, not surprisingly, quite extensive. For example, Podesta & Associates, also known as Podesta.com, is the outside lobbying firm representing the widest array of media behemoths. Since 1996, the company has received $1.5 million as the Washington representative for Viacom, Time Warner and NBC. It is headed by Tony Podesta, whose brother John happens to be the White House chief of staff. Twenty-three members of its staff of 33 formerly worked on Capitol Hill, for either party. One of them, Kimberley Fritts, is the daughter of the president of the National Association of Broadcasters.

NAB thrives on congressional ties

No media organization spends more money lobbying or has more people covering Washington than the National Association of Broadcasters, which has spent $16.9 million to persuade government officials since 1996. NAB President Eddie Fritts was a college classmate and is a close friend of Senate Majority Leader Trent Lott, and on occasion this relationship has been immensely helpful to the broadcasters. There are 20 registered lobbyists at the NAB, seven of whom came through the revolving door from congressional staffs, the FCC and the Federal Trade Commission. Until recently, their ranks included Kimberly Tauzin, daughter of Billy Tauzin.

Media corporations have spared no expense in Washington, hiring all of the “usual suspects” kind of big-name lobbyists: former Republican Party chairman Haley Barbour (CBS); Patton Boggs Tommy Boggs, son of long-deceased House Majority Leader Hale Boggs and U.S. Ambassador to the Vatican Lindy Boggs, and brother of ABC News correspondent Cokie Roberts, (National Cable Television Association; Magazine Publishers of America); former Reagan White House chief of staff Ken Duberstein (Comcast, National Cable TV Association, Time Warner); former Nixon White House aide Tom Korologos (Cox Communications Corporation); former Carter White House aide Anne Wexler (Comcast, Univision Communications Inc.); and former FCC chairman Richard Wiley (CBS). After all, from copyright issues to broadband access to media ownership rules, billions of dollars were at stake for the transforming media industry.

Former Republican Arizona Sen. Dennis DeConcini, now a partner at his own lobbying firm, said that during his time in Congress, media lobbyists were omnipresent. “I was lobbied a lot by media companies when I was in Congress,” DeConcini, who left the Senate in 1995, said. “The 18 years I was there, there were very complex, sophisticated issues that demanded the time of professionals interested in this area.”

Even the CEOs lobby

Frequently, of course, corporate executives are directly involved in lobbying process, and media moguls are no different. In his recent memoir You Say You Want A Revolution, former FCC chairman Hundt recounts important conversations he had with Turner Broadcasting System, Inc., chairman and president (at the time) Ted Turner; QVC Network, Inc., chairman Barry Diller; TCI chairman John Malone; DreamWorks executive Steven Spielberg; and Disney vice president (at the time) Michael Ovitz.

Hundt candidly describes the atmosphere of influence peddling at his agency. “I learned quickly that the volume of lobbying defined the major issues before the agency,” he wrote. “A single company might send soldiers from its regiments to the Commission as many as 100 times, visit or phone the chairman on a dozen occasions, call some member of the chairman’s staff perhaps daily. Congressional staffers made tens of thousands of telephone calls to the Commission staff. Congressmen wrote letters on behalf of different parties, up to 5,000 or more a year. Sometimes, when the members wanted a particular result, they phoned the commissioners to solicit votes as they might call each other on the Hill. Smart and well-financed lobbyists also ran media strategies to persuade the Commission to write rules in their favor. Industries might spend millions of dollars on television advertising to influence a handful of commissioners.”

The nature of the media’s political power remains fascinating to Hundt. “The media industry does not mobilize great numbers of voters and it actually is not comprised of America’s largest, economically most important companies . . .” The media’s significance and political clout, he argued, comes “from its near ubiquitous, pervasive power to completely alter the beliefs of every American.” Members of Congress and presidential candidates, he believes, are afraid to take on the news media directly for fear that they will simply “disappear” from the TV or radio airwaves and from news columns.

Still, no single recent media issue more poignantly portrays the clash between public and private interest than the debate over free air time for political candidates. In early 1998, before the president and FCC chairman made their rule-making move, the broadcast networks, ABC, CBS and NBC, were already targets of criticism. They were excoriated for reaping potentially billions of dollars in 1997, when Congress gave them for free their government-owned digital spectrum to use for the next generation of technology. There was a rising public clamor around the question, “Do broadcasters have public interest obligations anymore?”

Ads will net $600 million

Against this backdrop, television stations and networks separately have been making a financial killing from political advertising. According to data collected by a firm called Competitive Media Reporting, local and national TV political advertising will earn broadcasters $600 million this year. In fact, income from political ads has been steadily rising for twenty years—from $90.6 million in 1980 to $498.9 million in 1998. In the first four months of this year, TV stations in the top 75 media markets took in $114 million for 151,000 commercials from the candidates alone.

At the same time, around the nation, news coverage of political candidates is becoming minuscule. For example, the Annenberg School of Communication at the University of Southern California discovered that, in the final three months of the 1998 California governor’s race, local TV news on the subject comprised less than one-third of 1 percent of possible news time. In 1974, the amount of gubernatorial coverage in California was 10 times greater. Another USC Annenberg finding: The 19 top-rated TV stations in the top 11 markets broadcast, on average, only 39 seconds a night (from 5 p.m. to 11:30 p.m.) about political campaigns. Top stations in Philadelphia and Tampa averaged six seconds a night.

As Robert McChesney, a University of Illinois professor, wrote in Rich Media, Poor Democracy, “Broadcasters have little incentive to cover candidates, because it is in their interest to force them to purchase time to publicize their campaigns.”

Recent research seems to bear this out. For example, in the New Jersey Senate primary, in which Jon Corzine spent more of his own money than any Senate candidate in U.S. history, local television stations in New York and Philadelphia made $21 million from political ads. The last two weeks of the campaign, citizens watching top Philadelphia and New York TV stations were 10 times more likely to see a campaign ad than a campaign news story.

Broadcasters, says Paul Taylor, founder and executive director of Alliance for Better Campaigns, “are profiteering from democracy.” Since 1996, his group, co-chaired by former presidents Jimmy Carter and Gerald Ford and by former CBS News anchorman Walter Cronkite, has been calling for the networks and 1,300 TV stations to give at least five minutes of political news coverage a day during the last month before the 2000 election. So far, only 2 percent of the broadcasters have agreed.

The FCC still seems to hold some interest, as do a few members of Congress, who have included proposals requiring broadcasters to provide free air time to political candidates in campaign finance reform measures in the current Congress. But industry lobbyists do not give an inch on any of them. In formal comments before the agency in March, the National Association of Broadcasters “respectfully submits that there is no lack of political news and information available for persons who have any interest in obtaining such information. Thus, a voluntary or mandatory requirement for broadcasters to offer additional free time for political candidates is unnecessary.” The Radio and Television News Directors Association stated, “Proponents of mandatory air time for political candidates would prefer that the FCC ignore altogether the First Amendment rights of broadcasters. They would have the Commission turn its back on political coverage decisions made by experienced, professional journalists.”

Some newspaper editorials about the free air time proposal have been curiously consistent with the extent of their ownership of broadcasting properties. The Los Angeles Times, with no TV stations, wrote supportively of the free air time initiative. The Chicago Tribune, owned by the Tribune Co., which recently purchased the Los Angeles Times and Times Mirror, and also contributes to political candidates and parties and owns 19 TV stations, saw the issue differently.

The newspaper wrote in 1998, “It might be good if candidates didn’t have to raise and spend so much money to finance broadcast ads. In that case, let Congress provide public funds to subsidize campaigns. If the public stands to gain from improved candidate access to the airwaves, the public ought to bear the cost.” In other words, let the citizens pay for the ads they increasingly must watch.

$11 million to defeat free-air-time bills

The dirty little secret is that from 1996 through 1998, the NAB and five media outlets — ABC, CBS, A.H. Belo Corp., Meredith Corp., and Cox Enterprises—cumulatively spent nearly $11 million to defeat a dozen campaign finance bills mandating free air time for political candidates. One company lobbyist willing to talk to us was Jerry Hadenfeldt, who represents Meredith, owner of a dozen TV stations, 20 magazines, and publisher of more than 300 books. “Free political ads are basically picking the pockets of a select group, namely television broadcasters,” he says, “They [candidates] already get the lowest available rates, and that’s the way we believe it should stay.”

Rep. Louise Slaughter, a New York Democrat, introduced one of the free air time bills he opposed. She apparently did not realize the extent of the industry maneuverings against her. When told that $11 million had been spent lobbying against her bill and others like it, she said, “Oh, good Lord . . . It seems excessive to me. I am absolutely astonished. They paid $11 million to kill it? Well, it sure worked, didn’t it?”