Comcast/NBC-Universal merger greased by tens of millions in contributions and lobbyist fees
Tuesday, October 11, 2011 at 9:12 am
While many corporations seek to influence the decisions made by the government with the double whammy of campaign donations and lobbyists, Comcast pursued this strategy on what one consumer advocate described as a “grander scale.”
“Comcast did a sophisticated, well-designed, expensive lobbying campaign and it touched all the right buttons. It played its hands very well—I give them credit for using their political clout effectively,” said Andrew Jay Schwartzman, senior vice president of the Media Access Project, which campaigned against the merger. ”But the real scandal about the political process is what is legal; it’s that Comcast didn’t have to break any laws in order to get its way.”
Birth of one of the world’s largest media conglomerates
The likelihood of a Comcast and NBC-Universal merger was first reported in September 2009. It drew outrage from a spate of public advocates, including Minnesota U.S. Sen. Al Franken, who said the merger would lead to fewer options for the public.
“I am convinced that without significant changes to protect consumers, merging a company who provides programming and one who provides the pipes that carry said programming would be a raw deal for Minnesotans and independent content producers alike,” Franken wrote on his blog in February 2010.
Franken also rightly predicted that pressure would come from private interests over the merger deal.
“Fights like this one are more than worth having, they’re essential to preserving the fabric of our democracy,” Franken wrote. “I know full well that by taking positions like this, I’m inviting special interest groups to spend a lot of money to defeat me down the road. That’s OK by me—because corporations getting their way isn’t some bad medicine Americans need to swallow—we can stand, fight and win if we work together.”
A spokesperson for Comcast declined to answer answer any questions related to the company’s political activity.
But according to the company’s statement on political and trade activity, Comcast uses public policy advocacy, lobbying, political contributions and involvement in third party organizations to act on public policy issues of concern to the company: ”The political and trade association activities of the Company are directed to influencing the wide variety of public policy issues that impact the company’s business.”
That sort of activity can be expensive. Comcast has dumped tens of millions of dollars into the political system in the last decade, according to Federal Election Commission documents. Comcast has pumped more money into its political and lobbyist spending every year since 2001.
“There’s always an element of risk and gambling involved when it comes to influence peddling on Capitol Hill, what lobbyists and special interest groups and corporations do is make the odds the best they can in their favor,” said Craig Holman of Public Citizen. ”It’s all designed to buy influence and it usually does work. But not always.”
Pulling the strings of those who pull the strings
The Federal Communications Commission (FCC), appointed by the president and confirmed by the Senate, was responsible for considering the Comcast and NBC-Universal merger.
Putting pressure on an appointed group of commissioners like the FCC isn’t actually that different from pressuring Congress.
“As a matter of fact, it can be harder for the public to trace,” Holman said. “It’s quite difficult to analyze, much of the lobbying activity for instance when it comes to working with FCC commissioners or others like that doesn’t get reported, it very frequently is not disclosed as lobbying activity.”
Comcast spent more than $75 million on federal lobbyists alone in the last ten years, with much of that sum coming in recent years, according to Federal Election Commission records compiled by the Center for Responsive Politics. Last year alone, during which much of the merger process took place, the company employed 109 federal lobbyists and lobbied both houses of Congress and the FCC.
The money a company spends on lobbying is important, Holman said, but even more important is the amount of money they can stuff into political campaigns.
“Besides direct campaign contributions, which are traceable from PACs, they will do bundling activity, which is very difficult to trace, and in many cases untraceable,” Holman said. “They will also now with Citizens United do direct corporate expenditures through third party groups, which are entirely untraceable, but their lobbyists will be on the Hill letting the lawmakers know what they’re doing with their money.”
While waiting on FCC approval of the merger in the 2010 election cycle, Comcast upped the amount of money they were directly donating through their political action committee, spending $3.5 million on political campaigns (favoring Democrats).
“There can also be the direct campaign contributor factor to any lawmakers, they can pull the strings of members of Congress and get members of Congress to apply pressure on FCC commissioners to vote a certain way on various issues, and they do,” Holman said. “The agency regulations are every bit as important as lawmaking, every lobbyist worth his or her salt knows that.”
Members of the Federal Communications Commission are appointed by the president and approved by the Senate. But Congress isn’t completely powerless in regards to the FCC, as recent Republican Senate disapproval of the FCC’s stance on net neutrality shows.
In a January letter to the FCC about the Comcast merger, Reps. Greg Walden (R-Ore.) and Lee Terry (R-Neb.) condemned the “heavy-handed tactics of an overreaching FCC” and threatened that they will be “examining whether changes in the FCC’s transaction review process are needed as we exercise congressional oversight in the weeks to come.”
In fact, 88 of 97 members of Congress who sent a January letter urging immediate passage of the Comcast merger had received money from Comcast’s political action committee, according to data from the Center for Responsive Politics.
In through the revolving door
By law, there’s never more than three members of one political party on the FCC, which can lead to partisanship around close issues.
“Even though FCC commissioners are not elected officials, many of them are exceedingly loyal to the elected officials who appointed them or who are responsible for them getting their appointments, they tend to be very partisan,” Holman said. “They’re made very aware as to who the big players are on Capitol Hill.”
The FCC voted 4-1 in January 2011 to approve the Comcast and NBC-Universal merger with some conditions, eliciting an outraged reaction from Franken: ”The Commission is supposed to protect the public interest, not corporate interests. But what we see today is an effort by the FCC to appease the very companies it’s charged with regulating.”
It was only a few months after the decision to approve the merger that Comcast hired FCC Commissioner Meredith Attwell Baker, who supported the merger, was hired as the new Comcast vice president for government affairs, what’s known in Capitol circles as the “revolving door.”
“It had the appearance of something that was problematic, but I don’t have any evidence,” Schwartzman said. ”You just don’t know the impact this kind of lobbying actually has or not, but the cumulative effect is pretty clear.”
Although the company pumped millions of dollars into the political system around the time the merger was being considered, the new Comcast saw a total revenue of $14.3 billion in just the second financial quarter of 2011.