McCain Group Got Big Cable Donation

WASHINGTON - Sen. John McCain (news, bio, voting record) pressed a cable company's case for pricing changes with regulators at the same time a tax-exempt group that he co-founded solicited $200,000 in contributions from the company.

Help from McCain, who argues for ridding politics of big money, included giving the CEO of Cablevision Systems Corp. the opportunity to testify before his Senate committee, writing a letter of support to the Federal Communication Commission and asking other cable companies to support so-called a la carte pricing.

Cablevision is the nation's eighth largest cable provider, serving about 3 million customers in the New York area.

The pricing plan is opposed by most of the cable industry. It would let customers pick the channels they want rather than buy fixed-price packages. Supporters, like McCain and Cablevision, say it would lower prices for consumers, but recent congressional and private studies concluded it could make cable more expensive.

McCain's assistance in 2003 and 2004 was sandwiched around two donations of $100,000 each from Cablevision to The Reform Institute, the tax-exempt group that touts McCain's views and has showcased him at events since his unsuccessful 2000 presidential campaign.

The group also pays $110,000 a year to McCain's chief political adviser, Rick Davis, who ran the senator's 2000 presidential campaign. Cablevision's money accounted for 15 percent of the institute's fund raising in 2003, according to its most recent tax filing.

The Arizona Republican said he saw nothing wrong with the group raising money from a company whose issue he championed, because the donations didn't go to his re-election campaign. McCain and documents provided by his office show he has supported a la carte pricing since at least 1998, well before Cablevision advocated it.

"If it was a PAC (political action committee) or if it was somehow connected to any campaign of mine, I would say to you, that's a legitimate appearance of conflict of interest. But it's not," McCain told The Associated Press.

"There's not a conflict of interest when you're involved in an organization that is nonpartisan, nonprofit, nonpolitical."

Specialists on political ethics, who usually applaud McCain's efforts to overhaul the campaign finance system, said they didn't see any distinction.

"I think there is an appearance issue anytime you have a company or an interest giving large donations to any organization associated with a member (of Congress)," said Larry Noble, the former chief lawyer for federal election enforcement who now heads the Center for Responsive Politics.

Charles Lewis, a longtime ethics watchdog, said McCain's case shows "there are different ways for purveyors of influence to show their gratitude and express their friendliness. And it's not just PACs, it's not just campaign committees."

Davis acknowledged he went to New York and personally asked for the donation from Cablevision chief Charles Dolan after hearing from another donor that Dolan might be willing to give. The solicitation occurred one week after Dolan testified before McCain's Senate Commerce Committee in May 2003 in favor of the a la carte pricing. The company made its first $100,000 donation in July 2003.

The senator wrote a letter to the Federal Communications Commission (news - web sites) chairman advocating Cablevision's position in May 2004 and quoting the company's chief. McCain also sent letters to other cable companies, urging them to follow Cablevision's lead and support a la carte pricing.

Cablevision gave a second $100,000 donation in August 2004. Twelve days later, McCain wrote Dolan about the pricing issue, urging him to "feel free to contact me to discuss these issues further."

"Thank you for sharing your views on potential reforms to address rising cable rates, including the merits of an a la carte pricing option for consumers," McCain wrote Dolan on Aug. 18.

McCain said he was involved in the issue well before Cablevision started pushing a la carte pricing, and that his goal was to help consumers.

"I have been fighting the cable companies for years on the issue of cable rates and I after numerous hearings came to the conclusion that we should not force people to pay for programs that they don't want to see, and that's why I supported a la carte."

McCain continued pushing the FCC (news - web sites) to adopt the policy favored by Cablevision even after the Government Accountability Office, Congress' main auditing arm, concluded such a system might lead to higher prices.

McCain, who requested the study, said he considered its methodology flawed because the audit looked at al la carte pricing in isolation rather than as one of several options.

Craig Moffett, a cable analyst at Sanford C. Bernstein & Co. in New York, said his firm also studied the plan.

"I don't know why he remains so stubbornly wedded to the idea," Moffett said of McCain. "I just think it sounds very populist, and there's nothing more appealing than saying, `I'm going to lower your cable bills' as a way to make voters happy."

Consumers Union, however, has worked closely with McCain and shares his view that the approach would help consumers.

In his interview with AP, McCain also sought to put some distance between himself and The Reform Institute, saying he considers himself simply an adviser.

Davis acknowledged McCain is closely identified with the institute, and said the group often uses the senator's name in press releases and fund-raising letters and includes him at press conferences because McCain attracts coverage.

But he said McCain had nothing to do with soliciting Cablevision's money. "I think John McCain avoids the appearance of impropriety with not being involved in any way with the solicitation of any of these funds," Davis said.

Cablevision, whose support for a la carte cable is paired with a push for changes in FCC broadcasting rules, said it didn't believe its donations influenced McCain.

"Mr. Dolan is a longtime supporter of Senator McCain," Cablevision spokesman Charlie Schueler said. "Our experience has been that Senator McCain makes up his own mind on every issue and, over the years, he has disagreed with some of our positions, agreed with others, and been indifferent to most."

McCain and four other senators were caught up in the Keating Five scandal in the early 1990s, taking significant criticism for giving assistance to and taking donations from failed savings and loan executive Charles Keating.

After that, McCain became a champion of overhauling the political money system, seeking to end "soft money" donations from corporations, unions and wealthy executives. His decade-long fight helped lead to enactment in November 2002 of a campaign law bearing his name.

Documents for this story can be viewed at http://wid.ap.org/documents/mccain.html

Captains Quarters blog has this story and more under a blog entry called Mr. Clean? There is quite a bit more links and info in the 5 updates the Captain has added. I'll post most of them here for reference.

UPDATE II: Why doesn't Cablevision appear on this list of donors? Perhaps because Cablevision hid the donations in its subsidiary, CSC Holdings. Notice that the Tides Foundation also donates to the RI, to the tune of over $50,000. Tides, of course, received millions of dollars from Teresa Heinz Kerry, meaning that Rick Davis -- McCain's chief political advisor -- benefits financially from the wife of the erstwhile Democratic nominee. No wonder McCain played footsie with Kerry about the VP slot for a while. (h/t: CQ reader JR Pascucci)

Front Page Magazine has more on Tides:

Teresa Heinz Kerry has financed the secretive Tides Foundation to the tune of more than $4 million over the years. The Tides Foundation, a “charity” established in 1976 by antiwar leftist activist Drummond Pike, distributes millions of dollars in grants every year to political organizations advocating far-Left causes. The Tides Foundation and its closely allied Tides Center, which was spun off from the Foundation in 1996 but run by Drummond Pike, distributed nearly $66 million in grants in 2002 alone. In all, Tides has distributed more than $300 million for the Left. These funds went to rabid antiwar demonstrators, anti-trade demonstrators, domestic Islamist organizations, pro-terrorists legal groups, environmentalists, abortion partisans, extremist homosexual activists and open borders advocates. And now we find out that they fund McCain's chief political advisor, too. How coincidental.

UPDATE III: The Chartwell Charitable Foundation also has donated over $50,000, but a Google on this shows them much more interested in promoting the arts. Why the interest in McCain's reform politics? And here's the Educational Foundation of America making a mid-five-figure or more donation, too. The site describes their interests:

Areas of interest include, but are not limited to, the environment, the crisis of human overpopulation and reproductive freedom, Native Americans, arts, education, medicine, and human services. That makes two of its major financial backers who support abortion, an unusual position for a group that employs the chief political advisor of a pro-life Senator.

UPDATE IV: Speaking of EFA, here's what they have to say about their efforts to promote Peace and Security in 2003:

In this issue area of increasing national and global importance, EFA is firmly committed to reducing irresponsible military spending, avoiding unnecessary violent conflict, and preventing the use of deadly (nuclear/chemical/biological) weapons. By joining and respecting the terms of international conventions, maintaining pathways of meaningful dialogue, and recognizing the role for a balanced military presence, the United States can work towards a peaceful, safe, and fair world community. And on reproductive rights, where NARAL makes a prominent appearance ($220,000 over 2 years):

It is EFA’s goal in the area of Population to fund programs that ensure reproductive health services are available to all, regardless of race, religion, or economic status. EFA’s funding in 2003 assisted programs that work to: promote abortion training and build a new corps of abortion providers; address legal challenges to abortion access; provide reproductive health services to uninsured/underinsured women; train new pro-choice activists, particularly through campus organizing; organize physicians that favor reproductive choice; mobilize pro-choice voters; and provide essential reproductive education and services to teens. And yet, they've funded the pet non-profit of a supposedly pro-life Republican and helped pay the salary of his chief political advisor. Hmmmm. I note that The Reform Institute doesn't appear in its 2001-3 annual reports, which leaves 2004 for their donation.

UPDATE V: Another major donor to Rick Davis' salary is the Proteus Fund. Proteus also supports gay-marriage initiatives around the US to the tune of $935,000. They gave $75,000 to stopping the Yucca Mountain nuclear fuel storage initiative, a legislative priority of the Bush administration.

UPDATE VI: OSI and its Constitution and Legal Policy Program also gives big bucks to Rick Davis and the RI. Guess who funds OSI? George Soros.

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