McCain interceded for donors, data show

By Anne E. Kornblut and Walter V. Robinson, Globe Staff, 1/9/2000

ASHINGTON - Senator John McCain raised nearly $90,000 from broadcast and telecommunications companies in four instances shortly before or after he interceded on their behalf with federal regulators in 1998 and 1999, according to campaign records reviewed yesterday.

Aides released about 500 letters that McCain has written as chairman of the Senate Commerce Committee since 1997, and it appeared last night that only 15 involved contributors to his campaigns. McCain, who has built his presidential candidacy around denunciations of special-interest money in Washington, said yesterday that his only concern was to protect consumers.

But in several cases, according to federal campaign finance records that were matched against the letters, the correspondence to the Federal Communications Commission, which McCain's committee oversees, coincided with substantial fund-raising efforts by the companies that stood to benefit from his actions.

In one case, officials of BellSouth Corp. donated $16,750 to the Arizona senator at a fund-raiser on May 6, 1998. Four months later, McCain asked the FCC in a letter to give ''serious consideration'' to allowing BellSouth to enter the long-distance market.

Although McCain has long favored the so-called Baby Bells, he also wrote to the FCC on behalf of AT&T, Sprint, and MCI Worldcom in June 1998. Two weeks later, Sprint officers donated $2,000. In October 1998, McCain raised another $25,800 from AT&T officials at a fund-raiser.

The records show that McCain also interceded on behalf of two major satellite television companies, Echostar and DirecTV, in an effort to help them win permission to carry local broadcast signals. Echostar's chairman raised about $25,000 for McCain in a period between two McCain letters on his behalf.

McCain was put on the defensive last week, when The Boston Globe reported that he interceded last month with the FCC on behalf of Paxson Communications, which owns or operates 73 television stations. McCain's letter-writing began soon after the company helped him raise $20,000, and while he was using Paxson's corporate jet.

After the report last week, McCain canceled a fund-raiser that Paxson's chairman, Lowell Paxson, was to have held for him yesterday in Florida, an event that was expected to raise $50,000.

The Globe also reported last week that McCain last May rebuked the FCC for bias against two Baby Bells, SBC Communications and Ameritech, which were seeking FCC permission to merge. Just before that May 12 letter, officials of the two companies contributed or solicited donations of about $120,000 to McCain's campaign.

The letters made public yesterday also include an April 1999 letter McCain wrote to the FCC on Ameritech. That was just after the company's chairman at the time, Richard Notebaert, a friend of McCain's, cohosted a Chicago fund-raiser for the senator.

Dan Schnur, the McCain campaign's communications director, said yesterday that McCain's contributors get access to him, but not preferential treatment. ''Big-money contributors to both parties get access that other people don't,'' Schnur said. But, he said, McCain ''and the people who work for him do their level best to make sure those contributors are not given different treatment.''

McCain has often criticized the campaign finance system, saying it leaves lawmakers beholden to business interests that provide the funds.

Although McCain has said he too is a victim of the system, his rhetoric often suggests that he himself has been scrupulous in not taking actions that benefit campaign donors.

The campaign records examined yesterday include funds that McCain raised for his presidential campaign during the first three quarters of 1999, and funds donated to his 1998 Senate reelection camapaign. In 1998, McCain faced only token opposition, and was able to transfer about half the $4 million he raised to his presidential campaign.

Officials of BellSouth are among his largest contributors. In 1999, officials of the regional Bell operating company, contributed nearly $30,000 to McCain's campaign.

BellSouth wanted entry into the long-distance business, and petitioned the FCC to that end. The FCC was then required to judge whether there was enough competition in the local market to warrant such a step. McCain wrote two letters - one on March 6, 1998, and the other on Sept. 15, 1998 - arguing that wireless service should be taken into account as competition.

The $16,750 fund-raising event was on May 6, 1998.

In the September letter, McCain said: ''I encourage you to give serious consideration'' to whether wireless service ''is providing competition to the local exchange market.'' He said the FCC ''should be focused on implementing the Telecommunications Act to encourage competition.''

''He wrote to the commission to express his view as to the law,'' said Mark Buse, the Commerce Committee staff director. ''The FCC ignored this, and denied BellSouth's petition in 1998.''

Echostar Chairman Charles W. Ergen has long sought permission to broadcast the network affiliate programming into homes. The company was stymied by a 1998 court case. McCain wrote a letter on Aug. 19, 1998, to the FCC chairman, William E. Kennard, to ''raise our concerns.''

McCain wrote that the case - which led to a ruling in favor of the networks and against the satellite companies - ''threatens to undermine the progress we have made in promoting competition.''

Kennard replied that he essentially agreed. Correspondence led to the Satellite Home Viewers Act, passed last fall.

''Echostar and DirecTV did both come in and meet the chairman,'' Buse said. ''They did not ask him to do anything specific.''

AT&T and long-distance competitors had a far different concern, according to Buse - the so-called ''Gore tax'' on long-distance carriers. The money goes to install the Internet in schools and libraries.

The big three long-distance carriers wanted to be able to itemize this tax on phone bills, so customers would know this was not a rate increase by the phone companies. The FCC wanted the companies to bury the tax in the bill.

McCain wrote a letter on June 2, 1998, on behalf of the long-distance carriers arguing that ''consumers have an absolute right to know how much their bills are going up and why their bills are going up.''

But, Buse said, ''None of these companies came to us on this subject.''

The letters released yesterday also show that McCain's letters to the FCC for Paxson Communications last month and in November were not the first time he wrote to the FCC on a matter related to the company.

Paxson and Sinclair Broadcasting, another major contributor to McCain, were limited in acquiring local television stations under an FCC restriction limiting them to owning one station per market.

That restriction was lifted late last year. But in a letter to the FCC on Dec. 1, 1998, just before the commission met to address TV ownership issues, McCain wrote that he understood the FCC was planning to make the rules even more stringent.

In his letter, McCain scolded the commission, warning them such action would be ''clearly not in the spirit'' of the 1996 Telecommunications Act.

Buse said McCain was simply trying to encourage the FCC to review the 1996 law.

In the months before the Dec. 1, 1998, letter, Paxson and Sinclair officials donated about $17,000 to McCain's Senate re-election campaign, according to records.

That figure does not include the $20,000 that Paxson raised for McCain's presidential campaign in the months after the letter, and another $5,450 that Sinclair officials donated within four months after the letter.

McCain has consistently said, as he did again yesterday while campaigning in South Carolina, that his only goal has been to prod the FCC, which often moves slowly, to take action. He has also insisted that there has been no connection between the fund-raising and any action he has taken as Commerce Committee chairman.

Buse said the coincidence between the fund-raising and the letters to the FCC is only that - coincidence.

McCain aides said the best example of McCain's even-handed approach to requests for help may involve KRIL-AM, a radio station in Odessa, Texas, that was being bought by an outside entity. McCain wrote to the FCC on July 26, 1999, over an FCC delay in processing broadcasting station assignment applications, even though, Buse said, the parties involved had ''never given money.''

''He did exactly the same for a Texas company that had no campaign contributions, that, to be honest, he had never heard of,'' Buse said.