McCain pressed FCC in case involving major contributor

Email|Print| Text size + By Walter V. Robinson
Globe Staff / January 5, 2000

Days before Senator John McCain joined hands with Senator Bill Bradley last month to decry the noxious influence of special interest campaign donors, McCain pressured the Federal Communications Commission to vote on an issue that cleared the way for a major contributor to his presidential campaign to buy a Pittsburgh television station.

McCain, in his bluntly worded Dec. 10 letter to the FCC, did not urge a vote favoring the contributor, Paxson Communications. But he acted at the request of the company's lobbyist, during a period when he used Paxson's corporate jet four times to travel to campaign events - where he almost always attacks monied special interests.

McCain's intervention in the case drew a speedy, scolding response from William E. Kennard, the FCC chairman, who deemed the Senator's letter ''highly unusual'' and suggested it was inappropriate. The Senate Commerce Committee, which McCain heads, oversees the FCC.

Angela J. Campbell, the attorney who represents opponents of the sale to Paxson, went much further, asserting in an interview yesterday that McCain's action was improper, unethical, violated FCC rules barring such contacts on pending FCC matters, and appeared designed to assist a major contributor.

''Senator McCain said, `Do it by December 15 or explain why,' and the commission jumped to it and did it that very day. The senator's intent was for the FCC to grant the'' transfer of the TV license, said Campbell, a Georgetown University law professor. McCain's intercession, she added, ''may well have tipped the decision.''

A spokesman for the senator, noting that McCain often sees the FCC deliberative process as molasses-like, said there was no connection between Paxson's political support for McCain - $20,000 in two concentrated doses from Paxson and its law firm - and his intercession with the FCC.

But McCain's close ties to Paxson were abundantly clear on the key dates surrounding the FCC decision. The day before he sent the Dec. 10 letter, McCain used Paxson's jet for a trip from New York to Florida. The day after the letter, he took the company jet from Florida to Washington. The campaign reimbursed the company at first-class airfare rates - well below the actual cost of the charters.

The Globe was told about McCain's intercession on the Paxson case in the course of preparing an article about a stinging rebuke McCain sent to Kennard of the FCC last May 12, accusing the FCC of bias toward SBC Communications and Ameritech, two regional Bell operating companies that were seeking to merge.

The night before McCain sent that letter, SBC's Washington lobbyist held a fund-raising dinner for McCain that raised close to $20,000 for his campaign. On March 30, Ameritech's chairman cohosted another fund-raiser at which McCain raised $88,000. In addition, the two companies also funneled $10,000 to McCain's campaign from their political action committee.

McCain was unavailable for comment on the Paxson issue. But in an interview last week about the SBC/Ameritech merger, McCain said he took no action because of the donations. ''Never, under any circumstance, was there ever a quid pro quo,'' McCain said.

Speaking generally, however, McCain said, ''People give money to buy access. We're all tainted by this system.'' From time to time, he said, he has agreed to meet with major donors. ''They have access, and therefore they have influence. It corrupts the system. And I'm a victim of it too,'' said McCain, who was ensnared but later cleared in the so-called Keating Five scandal nearly a decade ago. He was one of five senators who interceded with federal banking regulators on behalf of Charles Keating, whose name became synonymous with the savings and loan scandal that cost taxpayers billions of dollars.

To cleanse the system, McCain advocates a ban on so-called soft money, unlimited donations that can be made to the political parties for party-building activities but that are often funneled to campaigns. The senator is opposed to any limit on so-called hard money, the $1,000-and-under individual contributions that are often ''bundled.''

It is a paradox that underlies McCain's quest for the presidency: As he savages special interests from almost every podium, those interests, ever pragmatic, have lavished attention and donations on the powerful chairman of a committee that has vast reach over the rapidly evolving and often regulated commercial marketplace. If anything, many of the special interests are underwriting McCain's campaign for president - and his rhetorical war against them.

But for campaign audiences who come away believing McCain has constructed a wall to keep influential donors at bay, the Paxson and Baby Bell incidents suggest that McCain remains vulnerable to special interests he says have corrupted Washington.

McCain's insistent urging that the FCC vote on the Pittsburgh issue had the effect - if not the intent - of benefiting Paxson, a West Palm Beach, Fla., network of 73 family-oriented stations and the nation's largest owner of independent television stations. Through the end of September, Paxson's top officers and their family members - and even the personal assistant to the wife of the company's founder, Lowell W. Paxson - contributed $12,000 to McCain. In 1998, Paxson officials gave $9,000 to McCain.

And in July, as Paxson lobbyists were asking members of Congress to exert pressure on the FCC, 13 members of Paxson's law firm, Dow, Lohnes & Albertson, contributed more than $8,000 to McCain on a single day, according to campaign finance records.

B. Dwight Perry, the law firm's managing partner, said yesterday that the firm's same-day donations had nothing to do with its work for Paxson, though he refused to say how or why the contributions were made.

''I'm not going to tell you why,'' Perry said. ''People made them because they wanted to contribute to John McCain.''

''We often make contributions to officials who are sympathetic to us,'' Perry said. Such a practice, he added, ''is not uncommon, for God's sake.''

Nancy Udell, a Paxson spokeswoman, also said that contributions by company officials and their family members were unrelated to the Pittsburgh issue.

Similarly, Dan Schnur, the campaign's communications director, said yesterday that there was no connection between the donations and McCain's two letters seeking an FCC vote on the Pittsburgh issue. Schnur acknowledged that Paxson's lobbyists asked McCain aides for a letter supporting the sale, but that McCain only asked the FCC take a vote. Several other members of Congress, most from Pennsylvania, wrote the FCC urging approval of the transaction. But as far as the FCC is concerned, McCain is the most influential member of Congress.

Sometime between McCain's first letter on Nov. 17 and his more insistent letter on Dec. 10, Paxson made its four-engine jet available to ferry McCain and his entourage from New Hampshire to Washington on Dec. 3, a day after McCain declared in a New Hampshire appearance: ''It is very clear to all the lobbyists and the special influence people that run Washington now that if John McCain is president of the United States, things are going to be a lot different.''

Schnur said the campaign followed federal rules on each of the four occasions Paxson's jet was used, reimbursing the company for first-class airfare for everyone aboard.

McCain is among many federal officeholders who fly on corporate jets for a fraction of the actual cost, a legally permissible perquisite that is widely viewed as a backdoor way for corporations to help politicians they favor.

For example, first-class airfare from Manchester to Washington is $406 one-way. Though Schnur did not have the reimbursement figures available, the fare suggests that McCain's Dec. 3 entourage of 10 would have paid Paxson about $4,000 for the flight. To charter a jet of that size would have cost close to $10,000, according to estimates by charter experts.

Though McCain's committee has oversight of the FCC, there is no evidence that his May criticism affected the FCC's decision to allow the mammoth SBC merger. Two weeks later, however, McCain filed legislation to strip the agency of its say in telecommunications mergers.

But on the Pittsburgh issue, officials familiar with the decision said McCain's involvement was more problematic.

The swing vote in the 3-2 decision was cast by Susan Ness, one of three Democrats on the five-member FCC, who joined the two Republicans in approving the sale. President Clinton last July nominated Neff for a second five-year term, but her confirmation is up to McCain's committee. The committee has yet to schedule a hearing on her nomination. Ness declined requests for an interview.

The issue, which the FCC wrestled with for nearly three years, was one of its most complex involving a license transfer. WQED, the Pittsburg public broadcasting outlet, wanted to sell the license for its sister station, WQEX, to Cornerstone TeleVision, a religious broadcaster that owns Channel 40 in Pittsburgh.

Cornerstone, in turn, would sell its license to Paxson, with Cornerstone and WQED splitting the $35 million Paxson had agreed to pay. Pittsburgh has been the only one of the top 20 television markets without a Paxson station.

While the FCC has never turned down a local market license transfer, the Pittsburgh case was almost without precedent: It involved passing a noncommercial license held by a public television station to a commercial operator. In Pittsburgh, there was substantial local opposition.

Against that backdrop, McCain noted in his Dec. 10 letter that the commission had apparently ignored his Nov. 17 request that the FCC vote on the transfer on Dec. 15. He asked that each of the five members ''advise me, in writing, no later than close of business on Tuesday, Dec. 14, 1999, whether you have already acted upon these applications. ... ''If your answer to the latter question is no, please state further whether you will, or will not, be prepared to act on these applications at the open meeting on Dec. 15. If your answer to both of the preceding questions is no, please explain why,'' McCain wrote.

As he had in his earlier letter, McCain emphasized he was not suggesting how the commission vote, only that it vote. But within the agency, according to sources, his letters were widely interpreted to favor the complicated transfer.

Kennard, the chairman, objected. In his Dec. 14 reply to McCain, he wrote, ''I must respectfully note that it is highly unusual for the commissioners to be asked to publicly announce their voting status on a matter that is still pending.

''I am concerned,'' Kennard continued, ''that inquiries concerning the individual deliberations of each commissioner could have procedural and substantive impacts on the Commission's deliberations and, thus, on the due process rights of the parties.''

Commissioner Gloria Tristani, who joined Kennard in refusing to vote for the transfer, wrote to McCain, saying she would not answer his query ''in order to preserve the integrity of our processes.''

Schnur, McCain's spokesman, said the senator's involvement was benign. ''What you have here is a case where a senator with a history of writing the FCC when they don't act quickly writes the FCC to ask that it act quickly,'' he said.

Schnur added: ''It gets down to appearances, and there's nothing beyond the appearances.'' He said he doubts that many voters would be troubled by McCain's use of the Paxson jet even as he was urging action, at its lobbyists' request, on a matter involving the company.

To others, including some who sympathize with McCain's crusade for reform, McCain has placed himself in an awkward position.

Larry Makinson, the executive director of the Center for Responsive Politics, which tracks political contributions, said candidates like McCain who support reforms are likely to falter for want of campaign funds unless they tap into the system.

Asked about the SBC/Ameritech donations, Makinson said: ''It's very difficult for a candidate like McCain to maintain his political independence when he is taking such large contributions from special interests. He's hoisted by his own petard: He cannot say the money influences everyone else, but it doesn't influence me.''

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