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DAVID CONNELL
This year's presidential and congressional races have been dogged by talk of campaign finance reform and questions about which companies and "special interests" are giving cash to the parties. In response to pressure from finance reform advocates, some cable companies have tried to create self-imposed rules limiting the amount of dollars, and the kind of cash, they will donate.
However, the Federal Election Commission rules governing the process are so convoluted and filled with loopholes that executives from these operators may make contributions that could appear to run counter to their pledge.
Take the case of Time Warner and America Online, which attempted to use the campaign finance reform issue as leverage in getting Congress to look favorably on their merger. Time Warner CEO Gerald Levin told the Senate Judiciary Committee in March that the company would no longer make soft money donations, and AOL Time Warner would continue with that commitment after their deal was consummated.
Then in June, Time Warner president Richard Parsons made a $50,000 soft money donation to the Democratic Senatorial Campaign Committee.
Prior to that contribution, a Houston competitive local exchange carrier (CLEC) owned in part by Time Warner made a $3,637 soft money donation to the same committee April 25.
The Parsons contribution was technically not a violation of Time Warner's anti-soft-money pledge because it was made by an individual company executive and not the company itself. While the CLEC donation could be seen as a violation, according to a company spokesman, Time Warner only has a 40% ownership stake in it and therefore doesn't count the donation as coming from its coffers.
"It's not a company that's controlled by Time Warner and is not part of Time Warner's corporate structure," the spokesman says. "To indicate that, that would go against our policy would not be fair or accurate."
The donations from Parsons and the Texas CLEC may not violate Time Warner's self-imposed pledge to eliminate soft money contributions, but they do serve as examples of what could happen when individuals and subsidiaries dabble in the funding of political campaigns. The regulations governing campaign donations are hard enough to follow without creating public, self-imposed rules that might be broken down the line. Perhaps this is why companies such as AT&T give generously to political campaigns and candidates without an apology or regret.
"We've pretty much followed a philosophy that we support candidates who favor competition over regulation," company spokesman Jim McGann says. "Our employees do understand the importance of the government's role in our industry and the importance of the process. I think that understanding can be traced back to the break-up of the Bell companies."
McGann also says the company does not generally support one political party over another but looks at where candidates fall on the issues. AT&T also tries to spread some of its wealth evenly between the two parties, he adds.
"As far as soft money giving is concerned, we pretty much try to give equally to both parties," McGann says. "We've (also) had associations with both conventions for a long time."
He adds that the company views the massive donations AT&T has made to the political conventions as "supporting the process," rather than attempting to gain political influence.
"Historically, we've supported the conventions," he adds.
The view that supporting the Republican and Democratic National Conventions is charity giving is one shared by the government and the FEC. Companies and individuals do not have to report those donations to the FEC, and those gifts, whether in cash or services, are tax deductible.
McGann adds that AT&T does not have a position on campaign finance reform efforts.
"That's a matter for the policy makers to wrestle with," he says. "But we are scrupulous in following the rules as they are currently written."
Like Time Warner, Comcast has a set of self-imposed rules that govern its campaign donations, according to Joe Waz, VP-external affairs. The cable operator donates "the bulk" of its contributions through the company PAC, and those dollars are only dispersed to candidates for the House and Senate. Like AT&T, Comcast attempts to give cash to candidates from both the Republican and Democratic parties.
"We look at the candidate first, and the party is a secondary consideration," Waz says. "Do the candidates know what we do for the public? Do they have a willingness to look at both sides of an issue? Those are the types of things we look at."
Comcast also donated heavily to the Republican National Convention this year because, Waz says, it was held near the company's headquarters in Philadelphia. Comcast's convention contributions included "in kind" donations to "services the host committee said they would provide," he adds.
According to Waz, the company does not believe campaign donations should have the stigma they commonly do now but instead should be viewed as part of the political process.
"Political fund raising is an essential and inevitable function of the political process," he says. "The PAC is the best structure we've come up with to make donations because it's very open and public. On an individual basis, we encourage everybody (at Comcast) to participate in the process, whether it's through volunteering or direct personal donations. We encourage it in their own individual capacity, not necessarily as representatives of the company."
Comcast has also not come out with a position on campaign finance reform but believes the best and most positive way for cable companies to influence the political process is by offering election coverage.
"We try to create opportunities for candidates to appear on air as much as possible and not just through advertising," Waz says. "That's the best way to contribute to the public discourse."
The Numbers With donations coming from so many different directions - companies, individuals and PACs - it's difficult to calculate exactly how much any one cable company is giving to a campaign, which is why those who track the money, such as the Center for Responsive Politics (CRP), say they try to track the "economic interest" a company might have in a candidate, rather than the amount of money given, especially since companies technically aren't allowed to make hard money donations directly to political candidates.
"We don't claim that it's Comcast (for example) that is giving the money," Steve Weiss of the CRP says. "We're tracking the economic interest. Basically this is what (a company) and its employees are giving. The fact is, too, that a lot of the time it's the top executives who are giving the money. They more than, say a computer programmer, are giving to help their company."
That said, the CRP has compiled an impressive array of statistics that attempt to show how the cable industry has spent its money in the political arena during this election cycle and in the past.
At presstime, the industry had made a total of $5.88 million in political contributions this year, with $1.7 million coming from individuals and $721,637 coming from PACs. The majority of the money, $3.5 million, has come from soft money donations. Of the total money given from the industry, roughly 50% has gone to Democrats and 50% to Republicans. That money includes the following contributions:
- $1.25 million from Time Warner, with 66% going to Democrats;
- $838,114 from AT&T, with 61% going to Republicans;
- $671,450 from Cablevision, with 54% going to Democrats;
- $437,512 from the National Cable Television Association, with 65% going to Republicans;
- $400,000 from CSC Holdings, with 88% going to Democrats;
- $385,700 from Comcast, with 51% going to Republicans.
As a comparison, Seagram has donated $1.8 million; Walt Disney has pitched in a little less than $1.1 million; and the National Association of Broadcasters has donated $677,004 to the political process during this election cycle.
These numbers, however, do not even come close to telling the whole story for some companies, such as AT&T and Comcast, which have donated huge sums of money to the political parties, committees and the "host committees" of the national party conventions. Both AT&T and Comcast donated a cool $1 million to the Republican National Convention, and AT&T also pitched in a million to the Democratic National Convention.
Individual recipients of cable dollars break down as followed: - Vice President Al Gore has received $152,075;
- Republican presidential candidate George W. Bush has received $145,590;
- Senate Commerce Committee Chairman John McCain, R-Ariz., has received $100,250;
- Mike Oxley, R-Ohio, who some say could be the next Chair of the House Commerce Committee, has received $19,199;
- House Telecommunications Subcommittee Chairman Billy Tauzin, R-La., has received just under $13,000.
While Oxley ranks second on the list of incumbent House members who have received donations from cable companies and Tauzin ranks sixth, Oxley ranks 13th on the top 20 list of candidates supported by the cable industry, and Tauzin is not on that list at all.
New Jersey Rep. Steve Rothman, a Democrat, has received the most money from the cable industry among incumbent House members.
One anomaly on the cable industry's list is the amount of money given to New York Senate candidate Hillary Rodham Clinton, who has received $104,900 from the industry, ranking third overall on the list of recipients.
This is most likely attributable to Clinton's high-profile campaign and donations from Cablevision (a longtime supporter of the Democrats) and cable programmers, some of which are included in the industry's numbers and have supported the Clintons in the past.
Clinton has received $41,450 from Cablevision, $23,500 from Time Warner and $23,450 from Viacom.
The only major cable donor to the Democratic Party itself this year has been AT&T, which pitched in $1.3 million to the party and $405,400 to the Democratic National Committee. AT&T tops the list of donors to the Republican Party and the Republican National Committee, giving a little more than $2 million and $728,995 respectively.
superscript *Editor's Note: All donation figures cited in this article were provided by The Center for Responsive Politics. They can be accessed at www.opensecrets.org.
Under Federal Election Committee rules, individuals are permitted to donate a total of $2,000 directly to one candidate during an election cycle.
However, donors must split that gift and give $1,000 during the primary and $1,000 during the general election. Individuals also are permitted to contribute $5,000 to any one political action committee (PAC) per calendar year and $20,000 per calendar year to a national party committee.
Individuals are permitted to make multiple donations of $1,000, $5,000 and $20,000 donations in those categories, but they are only permitted to donate a total of $25,000 per election cycle.
Conversely, there is no limit to the amount of money PACs can donate to political campaigns in one year or one election cycle. PACs are permitted to donate $5,000 per year to one candidate and $15,000 per year to a national party committee.
They can also donate $5,000 per year to any other PAC, again with no cap on the total amount of funds dispersed throughout the election cycle.
Companies are not permitted to give campaign donations directly to candidates but instead funnel their money through PACs, often set up in a company's name. They can also give soft money donations and donations to the "host committees" of national conventions.
Soft money donations are unregulated by the FEC, are given to the political parties and are ostensibly used for "party building" activities such as voter registration and get out the vote drives, but are often used for "issue ads" that outline a candidate's position and sometimes malign an opponent.
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