The Center for Public Integrity

The nation's top broadcasters have met behind closed doors with Federal Communications Commission officials more than 70 times to discuss a sweeping set of proposals to relax media ownership rules, the Center for Public Integrity has discovered.

The private sessions included dozens of meetings between broadcasters and the agency's five commissioners and their top advisors. A June 2 vote is scheduled on the controversial proposals, which critics fear will touch off a major new round of media consolidation. See a list of the media ownership proposals.

The 71 meetings FCC officials have held with top broadcasters were in stark contrast to the number of private sessions with Consumers Union and the Media Access Project, the two major consumer groups working on the issue. Those two groups have had only five such sessions with commissioners and other agency officials since the proposals first surfaced eight months ago.

Media moguls Rupert Murdoch of News Corp., which owns Fox, and Mel Karmazin of Viacom, which owns CBS, virtually dashed from one FCC office to another for a series of private meetings with commissioners and top staff in late January and early February, as the agency was crafting the controversial proposals.Rather than send their lobbyists to the closed door meetings, many of the broadcasting behemoths who stand to benefit the most from the pending relaxation of the ownership rules have sent their top executives to lobby the agency personally.

When the Federal Communications Commission decides on June 2 whether to dramatically loosen restrictions on media ownership, it will be relying largely on analyses based on proprietary databases not freely available to the public.

The FCC's reliance on non-government, private data is so ingrained that when public interest groups asked for access to data underlying a series of media ownership reports last fall, the FCC relented only after issuing a quasi-judicial "protective order" meant to keep the information secret.

While the FCC has a legal responsibility to protect proprietary data it buys from other sources, an investigation into the data it does acquire raises the question of whether relying so heavily on that information is such a good idea in the first place.

When the Center for Public Integrity was constructing its database of media companies, staff researchers were repeatedly referred by FCC staff to private companies for basic information on ownership, audience reach and cable subscribers. Getting market share information, which is key when reviewing whether broadcasters are within existing FCC regulations that limit the number of households any one owner can reach, was all but impossible without going outside the agency.The agency argues that, in some cases, Congress itself specifies what data should be used to conduct certain studies and that it doesn't make economic sense to collect information already available in the private sector.

Mark Cooper of the Consumer Federation of America creates his own databases to keep track of what's going on in the marketplace. "To me the outrage is that on an ongoing basis they don't do a very good job of making it user friendly," he said. "It's there, but it's almost impossible to find."

Federal Communications Commission officials have been showered with nearly $2.8 million in travel and entertainment over the past eight years, most of it from the telecommunications and broadcast industries the agency regulates, a new study by the Center for Public Integrity has found.

The FCC is preparing to relax several longstanding ownership rules for broadcasters and other media outlets. Those rules are widely credited with preventing the complete takeover of local and national media outlets by huge conglomerates such as Viacom, Tribune Co. and Rupert Murdoch's News Corp. Critics are particularly incensed the commission has held only one official public hearing on the controversial proposals, which are expected to touch off a major new round of media consolidation.

The officials often serve as speakers or panelists at the events, but many times go only as attendees. They often stay for the entire event at glitzy hotels such as the Bellagio in Las Vegas, even though they are only scheduled to give a single speech or serve on a single panel, FCC travel records show.The $2.8 million paid for FCC commissioners and agency staffers to attend hundreds of conventions, conferences and other events in locations all over the world, including Paris, Hong Kong and Rio de Janeiro.

The three largest local phone companies control 83 percent of home telephone lines. The top two long distance carriers control 67 percent of that market. The four biggest cellular phone companies have 64 percent of the wireless market. The five largest cable companies pipe programming to 74 percent of the cable subscribers nationwide.

Those findings come from the Center for Public Integrity's unprecedented examination of the telecommunications industry, the centerpiece of which is a first-of-its-kind, 65,000 record, searchable database containing ownership information on virtually every radio station, television station, cable television system and telephone company in America.

The database reveals that broadcasting and cable behemoths such as Viacom, Clear Channel and Comcast already dominate many of the nation's media markets, even as the Federal Communications Commission moves to further relax media ownership rules at a meeting scheduled for June 2. To illustrate this trend, the Center analyzed current media ownership in the hometowns of the five FCC commissioners—though any American can get similar information from the database about his or her hometown with a few simple key strokes.

As Federal Communications Commission Chairman Michael Powell mulls over whether the FCC should loosen rules on media ownership, he might want to take a ride through Birmingham, Ala., the town of his birth.

If he flips on his car radio, he will find that of 40 commercial radio stations within a 40-mile radius of the city, 15 are owned by three giant out-of-state companies. (Another eight are gospel or Christian stations.) If he stops at a diner to read the paper and watch the news, he will find that one of the largest private media companies in America owns the Birmingham News and the local cable television system.

For those few people left in the city who receive their television signal over the air, of the four major commercial network affiliates in Birmingham, one is owned by Media General Inc., the second by General Electric, the third by Australian billionaire Rupert Murdoch's News Corp. and the fourth by Allbritton Communications.

A survey of the hometowns of each of the five FCC commissioners by the Center for Public Integrity reveals a heavy concentration of ownership by large, out-of-town media companies in four of them. Only Commissioner Jonathan Adelstein's hometown of Rapid City, S. Dak., is still mostly in local hands.All are huge media companies. None is from Birmingham.

The experience of those who live in the home cities of the commissioners is not unique. Similar situations can be found in virtually every mid-sized and larger market in the nation, the Center discovered.

"Hired Guns" is an analysis of lobby disclosure laws in all 50 states. The Center for Public Integrity created a ranking system that assigns a score to each state based on a survey containing a series of questions regarding state lobby disclosure.

The questions addressed eight key areas of disclosure for state lobbyists and the organizations that put them to work:

Definition of Lobbyist Individual Registration Individual Spending Disclosure Employer Spending Disclosure Electronic Filing Public Access Enforcement Revolving Door Provision Each question had a multiple choice answer, with each answer assigned a numerical value. The answers with the highest values reward full disclosure, public access and accountability. The maximum number of points a state could receive was 100.

Center researchers developed 48 questions, and sought answers for them by studying statutes and interviewing officials in charge of lobbying agencies in each state. Most questions required the researchers to find the information in the state statute and then use public officials for confirmation.

Because only one state scored an 80 or above, scores of 70 and higher are considered relatively satisfactory. Scores of 60 to 69 are considered marginal. Scores below 60 are considered failing.

Definition of Lobbyist (7 points maximum)

1. In addition to legislative lobbyists, does the definition recognize executive branch lobbyists?

No – 0 points Yes – 3 points

While lobbyists and their employers in 39 states spent more than $715 million wining, dining and generally influencing state lawmakers in 2002, many details about how those dollars were spent remain hidden from public view, according to a comprehensive analysis released today by the Center for Public Integrity.

More than half the states received a failing grade for their registration and spending disclosure requirements filed by legislative lobbyists. In fact, no state received an "A" on the Center's 48-question survey. Washington State came in at the top, garnering 87 out of a possible 100 points. Pennsylvania scored a zero because the state's court system rendered the lobby statute null and void in 2002, leaving lobbyists virtually unregulated and the public completely in the dark. 

The general lack of scrutiny comes at a time when many states are struggling with their worst fiscal crises since World War II and vested interests are expending more energy to protect their turf in the marbled halls of capitols across the country. More than 34,000 of those interests—companies, issue organizations, labor unions and others—hired a whopping 42,000 individuals to do just that, averaging almost 6 lobbyists—and almost $130,000—per legislator.

One way for the public to trace the fingerprints left on the 29,000 bills states enacted in 2002 is by looking at the disclosure reports lobbyists or their employers are required to file. These reports should show where lobby money came from, where it went, and why it was spent. They are, in short, a critical measure of external influences on both legislation and legislators. But trying to follow that trail with many states' current disclosure mechanisms is a daunting, and sometimes fruitless, challenge.

In the state where government of the people, by the people and for the people was born, the backdoor to the Capitol is wide open. Because of a recent decision by the Pennsylvania Supreme Court, there is no regulation of lobbyists in the House of Representatives. That means no registration, no reporting, and no accountability—a lobbyist could lavish a representative with expensive meals and gifts, or pass along a few tickets to the first Eagles home game played in the new Lincoln Financial Field in Philadelphia this fall, and wouldn't need to report doing so to anyone. The only remaining checks are the internal ethics rules, which place sole responsibility for reporting gifts on the legislators themselves.

In 1998, the legislature approved, and then-governor Tom Ridge signed into law, lobby disclosure regulations similar to those of other states. They were to take effect in 1999. However two lawyer/lobbyists challenged the Lobby Disclosure Act as unconstitutional, claiming that it violated attorney-client privilege by requiring them to report on their activities as lawyers. The case went to the Commonwealth Court, where judges ruled in favor of the lawyers. Pennsylvania Attorney General Mike Fisher appealed the ruling, and in October of 2002 the state Supreme Court declined to hear the case, thus eradicating all existing regulations. Not long after, the Pennsylvania Senate adopted internal lobbyist regulations but the House failed to follow suit. Ever since, it's been open season for lobbyists.

Barry Kaufman, director of Pennsylvania's Common Cause chapter, called the Commonwealth Court's ruling absurd. "[The] lawyers said they couldn't tell the difference between practicing law and lobbying. If they can't make that decision, maybe they're in the wrong profession," Kaufman said. "Lawyers all over the country seem to be able to make that distinction."

Though federal laws are often considered more stringent than state laws, this is not the case with the federal lobby disclosure law. The Center for Public Integrity survey shows that only three states—New Hampshire, Pennsylvania and Wyoming—have lobby disclosure rules that are as weak as or weaker than those applying to the hired guns registered to lobby Congress. See Federal Lobby Disclosure Report Card below.

More than 25,500 lobbyists spent at least $1.6 billion lobbying Congress in 2002, according to PoliticalMoneyLine, a Washington, D.C., research and consulting organization. That is 48 lobbyists and more than $3 million per legislator. With 4,269 bills and resolutions introduced and 241 public laws enacted last year, the power lobbyists have in helping to interpret—and thereby enact—legislation cannot be overestimated.

The Center survey included 48 questions with weighted points totaling 100. It focused on eight areas of lobby disclosure regulation: definition of lobbyist; individual registration; individual spending disclosure; employer spending disclosure; electronic filing; public access; enforcement; and revolving door provision. The federal laws received 36 points.

On the whole, federal law demands much less than state law because it lacks many basic elements that most states possess:

The Federal Communications Commission has adopted new rules aimed at cleaning up financial fraud and abuse within a multi-billion-dollar program that helps wire schools and libraries to the Internet.

A January 2003 Center for Public Integrity report chronicled widespread fraud and a lack of proper government oversight of the FCC's schools and libraries program, also known as E-Rate. (See the Center report, which drew on documents acquired under the Freedom of Information Act and an FCC Inspector General's investigation.)

Two of the most powerful members of Congress who oversee telecommunications issues—Rep. W.J. Tauzin, R-La, and Sen. Conrad Burns, R-Mont.—announced investigations and hearings on the $2.25 billion a year program soon after the Center report was released. The program is funded by universal service fees, which are paid by virtually anyone who uses a telephone.

Top among the reforms adopted by the FCC were new rules allowing the suspension of contractors convicted of criminal or civil fraud against the program.

Four of the five members of the FCC, including FCC Chairman Michael Powell, said the reforms they approved were "a good first step" in cleaning up the program.