Bush and Kerry fundraisers: What have they gotten, and what do they want?
The John Kerry Telecom Fundraisers
What they gave: At least $450,000 (Goldman, Kerry, Leiter and Schlager have raised at least $100,000 each; Wheeler has raised between $50,000 and $100,000).
TOTAL: $ 450,000
What they got: The want a competitive advantage in setting policies and laws that govern the use of new telecommunications technologies, as well as telecommunications changes that will drastically alter the nation's media landscape.
The Story:
 Leslie J. Goldman Partner, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, DC |
 David J. Leiter Vice President, Government Relations, ML Strategies LLC, Washington, DC |
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 Cameron F. Kerry Attorney, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, Boston, Mass. |
 Ivan A. Schlager Partner, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, DC |
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Former president, Cellular Telecommunications and Internet Association, Washington, DC |
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Cost to the Public: Increased media consolidation, greater monopolization of cable, satellite, Internet and telephone services; less broadcasting designed to serve the public interest as the number of broadcasting options increases; potentially fewer consumer protections for cable customers.
As a senator, John Kerry has had a long history of working with the telecommunications industry. With big changes ahead in telecommunications, will that history help or hurt the American public if Kerry is elected president?
In his 20 years in Congress, Sen. John Kerry (D-MA) has been a longtime supporter of campaign finance reform. He has become one of the most outspoken critics of political action committees, refusing to accept donations from PACs during his four races for the Senate.
He has also spoken out against taking money from special interests. "When somebody sitting on a particular committee has to go out and raise money from people who have business before that committee, or when someone in the Senate has to ask for money from people who have legislative interests in front of them on which they will vote, there is almost an automatic cloud," he said in a March 2001 speech.
Yet during his Senate career – and his race for the 2004 Democratic Party nomination for president – Kerry has pulled in major financial support from telecommunications companies and the legal firms or lobbying shops that represent them. Key among those donors has been the law firm of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, where the senator's younger brother, Cameron Kerry, works. In its recent book, "The Buying Of The President 2004," the Center for Public Integrity reported that Sen. Kerry has raised more than $30 million for his campaigns since 1995, with his top donors coming from the ranks of telecom companies, related lawyers or lobbyists.
"Kerry's position on media issues and his silence so far are deeply reflective of the relationship he has with telecommunications and cable interests," said Jeffrey Chester, executive director of the Center for Digital Democracy, an organization that works to ensure the public interest has a place at the table as new advances are made in communications. Indeed, a look at Kerry's record shows the senator has balanced the needs of consumers with those of telecommunications firms during his career. But Kerry is receiving significant financial support from telecommunications lawyers and industry lobbyists. While that support could be considered payback from the industry for his work as a member of the Senate Commerce, Science and Transportation Committee, it also raises questions of how independent a Kerry administration could be from the telecommunications interests.
A March 2004 report by The New York Times raised similar questions of whether Kerry, with his ties to telecommunications interests, could be counted on to protect consumers. "In general, John Kerry has been a very strong consumer advocate when it comes to telecommunications issues," Consumers Union public policy director Gene Kimmelman told the Times. But on the regulation of cable television prices for consumers, Kimmelman said, Kerry "was not in favor of capping skyrocketing cable rates or promoting more competition among cable monopolies."
In his career, Kerry has been relatively active on telecommunications matters. Some of the moves Kerry has made on behalf of telecommunications companies include lobbying the Federal Communications Commission (FCC) to approve the 1999 merger between Bell Atlantic and GTE Corp. that created Verizon Communications. According to the Times, Kerry "has been at the nexus of some of the most high-stakes lobbying wars in Washington over telecommunications and cable television policy, and like most other lawmakers involved in these issues has raised significant campaign money from corporate interests with a stake in the legislation."
Kerry has intervened for companies like Bell Atlantic and Verizon on cable television rates; lobbied for telecom firms' access to new Internet markets and sought to delay an airwave spectrum auction that reportedly could have cost Verizon about $1 billion. Kerry has also written the FCC more than three dozen times on various issues, ranging from helping Massachusetts residents with their telephone bills to voicing his opposition to new media ownership regulations approved in 2003.
While in the Senate, Kerry has taken positions on telecom issues that favored clients of Mintz, Levin, which is based in Boston. Kerry's younger brother, Cameron, is a Kerry "vice chair" – meaning he has raised at least $100,000 in contributions for the senator's campaign – and Mintz, Levin partner. The firm has built its Washington practice around telecom law and FCC issues. Another Mintz, Levin employee is David Leiter, who served as Kerry's chief of staff for six years and is also a Kerry "vice chair." (Mintz, Levin is one of three Boston law firms with Washington ties that would be expected to benefit from a Kerry victory. The other two are Ropes & Gray and Hale and Dorr.)
Some supporters have portrayed Kerry as a strong consumer advocate on telecommunications issues. In one such instance, Kerry has tried to end tax breaks for broadband Internet service providers while Mintz, Levin and its consumers supported an extension of those breaks.
But he has occasionally sided with Mintz, Levin on other telecom issues. In 1992, during debate on a bill to regulate cable prices, he unsuccessfully sought an amendment that would have weakened protections for consumers and favored large cable companies or networks that provided content for cable. The amendment was supported by Continental Cablevision of Massachusetts as well as Mintz, Levin. Three years later, Kerry tried to lift caps on cable television rates during debate on the Telecommunications Act of 1996. Five days before the Senate passed the bill, Kerry took in about $50,000 at a fundraiser arranged by a Mintz, Levin partner.
Some of the industry ties built over Kerry's Senate career have carried over to Kerry's fundraising. Tom Wheeler, the former head of the Cellular Telecommunications and Internet Association (CTIA) the trade group for large cellular telephone companies, is now one of Kerry's "co-chairs" who have raised at least $50,000 for Kerry.
In May 2002, Kerry signed a letter with 15 other senators to Federal Communications Commission Chairman Michael K. Powell. The letter dealt with an upcoming auction of wireless spectrum; they called for and got a delay of the auction. Large cell-phone companies like Verizon, which already had $1 billion tied up in down payments on wireless spectrum space, wanted the auction delayed to avoid a bidding war that they said would have bankrupted them while benefiting broadcasters.
Kerry cosponsored a bill to delay the auction, while CTIA and Mintz, Levin lobbied for the delay at the same time. Yet consumer groups also sought the delay, calling it an unearned financial windfall for broadcasters.
One of Kerry's top career patrons is Skadden, Arps, Slate, Meagher & Flom – the nation's largest law firm, which counts numerous corporations among its lobbying clients, including News Corp. and Time Warner. Two of Kerry's vice chairs– Ivan Schlager and Leslie Goldman – work for this firm. Schlager, a former chief counsel on the Senate Commerce Committee, is a partner at Skadden, Arps' telecommunications practice. He has, on occasion, volunteered his law offices to host meetings of Kerry's lobbyist supporters. His clients include Verizon, the National Association of Broadcasters and News Corp. According to a list of lobbyist meetings provided by the Kerry campaign, Schlager came to Kerry's office in March 2002 to discuss broadband issues. At the time, Schlager represented SBC Communications and AOL Time Warner on telecommunications policy.
In 2003, Schlager and Goldman teamed up with another pair of Kerry "vice-chairs" – John Merrigan, a lobbyist from the Washington lobbying firm Piper Rudnick who now serves as Kerry's finance chairman for the Mid-Atlantic, and former ambassador Dan Spiegel, a partner at Washington lobbying powerhouse Akin, Gump, Strauss, Hauer & Feld – to hold a Washington fundraiser that raised about $600,000 for Kerry. The four also attended a fundraiser in Hyannisport, MA, that was hosted by Sen. Ted Kennedy (D-MA) and a strategy session at Kerry's summer home on Nantucket Island.
What Lies Ahead For Telecommunications?
The Bush Administration has a troubling track record in the area of media consolidation. For instance, in June 2003, the Federal Communications Commission approved rules changes that will allow larger media companies to own more radio and TV stations. (Those rules are currently being challenged in court.)
But Kerry's own ties to the telecommunications industry are cause for concern. That's because the stakes have never been higher in telecommunications. Pending changes and new technologies in the field in the next few years present a critical opportunity for future Congresses and administrations to reshape the way our mass media will serve the public in coming decades. If they fall short, the American public will lose as the nation's telecommunications system will become increasingly concentrated and dominated by companies that put profit before the public interest.
Foremost among these changes is a long-awaited broadcasting conversion that will usher in the age of digital television in the United States. (The Federal Communications Commission has yet to order a date for the transition to digital TV.) Another issue is "digital must-carry" – whether cable companies and satellite providers must carry the additional broadcast TV channels digital television will create. Public interest groups and members of Congress, meanwhile, continue to fight media ownership rules adopted by the FCC last year.
Congress must also further shape the playing field for cable companies, Internet service providers and telephone companies that will compete with each other in offering customers Internet, cable and telephone service. In addition, Congress is expected to begin a rewrite of the Telecommunications Act of 1996 – the mammoth bill that set many of these changes in motion – as early as next year. Some critics have described the Telecommunications Act of 1996 as a "large corporate grab bag" as big firms sought to rewrite the rules in their favor, and Chester predicted the same interests will gear up to try again.
Chester said the nation's cable companies, a key player in the telecommunications game, opposes a la carte programming (where consumers pay for only the channels they want to watch). The broadband and cable industries also oppose the regulation of voice-over-Internet protocol (VoIP) technologies that will allow consumers to make telephone calls over a data network like the Internet. Should those companies win, they will have the ability to develop VoIP services free of the regulations telephone companies must face.
And the cable industry, facing a backlash from legislators and viewers over indecency, opposes plans to extend broadcast indecency standards to cable. Telecommunications firms also oppose tighter media ownership regulations that might force them to sell off properties.
In his campaign, John Kerry has sought to distance himself from "special interests." Yet, his alliance with large media interests illustrates the way members of both parties in Congress are sometimes captured by those same special interests, said Chester of the Center for Digital Democracy. He warned that if Kerry is elected, the public and public interest organizations will likely have a steep fight on their hands in battling media consolidation. "It's very likely that a Kerry administration will roll over for the big media lobby," Chester said. "They have their hooks into John Kerry."