Center for Public Integrity

Journalists shower Hillary Clinton with campaign cash

Conventional journalistic wisdom holds that reporters and editors are referees on politics’ playing field — bastions of neutrality who mustn’t root for Team Red or Team Blue, either in word or deed. But during this decidedly unconventional election season, during which “the media” has itself become a prominent storyline, several hundred news professionals have aligned themselves with Clinton or Trump by personally donating money to one or the other.

In all, people identified in federal campaign finance filings as journalists, reporters, news editors or television news anchors — as well as other donors known to be working in journalism — have combined to give more than $396,000 to the presidential campaigns of Clinton and Trump, according to a Center for Public Integrity analysis. Nearly all of that money — more than 96 percent — has benefited Clinton: About 430 people who work in journalism have, through August, combined to give about $382,000 to the Democratic nominee. About 50 identifiable journalists have combined to give about $14,000 to Trump. (Talk radio ideologues, paid TV pundits and the like — think former Trump campaign manager-turned-CNN commentator Corey Lewandowski — are not included in the tally.)

DSL providers save faster internet for wealthier communities

When noncable internet providers — outlets like AT&T or Verizon — choose which communities to offer the fastest connections, they don’t juice up their networks so everyone in their service areas has the option of buying quicker speeds. Instead, they tend to favor the wealthy over the poor, according to an investigation by the Center of Public Integrity.

The Center’s data analysis found that the largest noncable internet providers collectively offer faster speeds to about 40 percent of the population they serve nationwide in wealthy areas compared with just 22 percent of the population in poor areas. That leaves tens of millions of Americans with the choice of either purchasing an expensive connection from the only provider in their area, typically a cable company, or just doing the best they can with slower speeds. Middle-income areas don’t fare much better, with a bit more than 27 percent of the population having access to a DSL provider’s fastest speeds. The Center reached its conclusions by merging the latest Federal Communications Commission data with income information from the U.S. Census Bureau.

Chattanooga asks FCC for help in spreading broadband

City officials in Chattanooga (TN), petitioned the Federal Communications Commission to pre-empt a Tennessee law that bans the city from expanding its high-speed Internet network.

The Electric Power Board, which runs the network, has received requests to expand its broadband service to nearby communities, said Danna Bailey, the board’s vice president of corporate communications.

A state law passed in 1999, however, prohibits Chattanooga from offering Internet service beyond the area where it provides electric power. This restriction “frustrates” the intent of Congress, which is to ensure that every American has access to broadband, the petition said. The city asked the FCC to “pre-empt and declare unenforceable” the portion of the state law that prohibits the EPB’s broadband service from being offered outside its service area.

Chattanooga wants feds to pre-empt broadband ban

Chattanooga (TN) officials plan to ask the federal government to allow it to expand the super-fast Internet service it offers city residents, a move that will likely unleash a torrent of lobbying and lawsuits by telecommunications companies that have spent years convincing states to curb city-run networks.

The city’s Electric Power Board, which operates a fiber-optic Internet service that competes with companies such as Comcast and Charter Communications, will petition the Federal Communications Commission in the next couple of months to pre-empt the Tennessee law that prohibits the city from expanding the network, Danna Bailey, vice president of corporate communications for the EPB, said.

“We continue to receive requests for broadband service from nearby communities to serve them,” Bailey said. “We believe cities and counties should have the right to choose the infrastructure they need to support their economies.” The move by Chattanooga will be a first salvo in an effort by municipalities and the FCC to reverse the laws in 20 states that ban or severely restrict local governments from offering Internet service to residents.

Potential Sprint, T-Mobile marriage threatens consumer gains

[Commentary] Sprint Corp and T-Mobile USA, which only weeks ago were arguing that the government should increase competition in the wireless market by allocating new airwaves to smaller companies like them, are switching sides and looking to join the giants through a merger.

Sprint’s plan to buy T-Mobile for $32 billion is aimed at making the combined company a more formidable competitor to giants Verizon Communications and AT&T, which together claim 68 percent of US wireless subscribers, respectively. The purchase of T-Mobile would almost double Sprint’s market share to about 30 percent.

Just recently, T-Mobile and Sprint succeeded in convincing the Federal Communications Commission to ensure that smaller wireless companies had a shot a buying valuable new wireless airwaves by limiting how much Verizon and AT&T can buy at an auction in 2015. Now the rules that Sprint and T-Mobile fought for may come back to hurt them.

Adding T-Mobile’s spectrum holdings with Sprint’s may put the combined company over the limit that bars it from bidding on the reserved portion of spectrum, which comprises prime frequencies that can travel long distances and penetrate buildings. The Sprint purchase of T-Mobile “certainly would impact the combined company's ability to bid,” Matt Wood, policy director at Free Press, an advocacy group in Washington, DC, that supports the spectrum limits, said. Jeff Silva, an independent telecommunications analyst in Washington, DC, agreed that the merger could make Sprint too big to bid on the reserved frequencies. “That means they won’t get as much spectrum,” he said.

The purchase would also eliminate T-Mobile, the one company that has put pressure on carriers to lower prices. In the last year T-Mobile has cut prices, eliminated two-year contracts and roaming charges, and offered to pay early termination fees for customers who switch from a competitor. Since the company began offering the promotions in the second quarter of 2013, the number of its subscribers increased 11 percent to 49 million compared with a 3.2 percent growth to 122 million for Verizon and a 7.5 percent increase to 116 million for AT&T during the same period, according to data compiled by Strategy Analytics, a technology consulting firm.

Comcast-Time Warner deal may hinge on anemic low-cost Internet plan

Comcast offered Internet Essentials shortly before its last big acquisition, when it bought NBC Universal in 2011.

To ease federal approvals of the transaction, the company promised that it would offer low-priced Internet connections and computers to low-income families. But the Federal Communications Commission, which approved the merger, didn’t set any participation requirements, or metrics to define success.

Now the cable and broadband giant, wants to buy Time Warner Cable, and again in an attempt to show regulators the deal is in the public interest, is offering to extend the program indefinitely and offer it to all Time Warner's customers too. The deal, if approved, will give Comcast control of about 40 percent of US Internet users.

The program makes for good public relations, but its real impact on the persistent problem of low-broadband adoption rates among the poor is negligible and is a weak substitute for a national strategy, advocates say. Of the 7.2 million low-income people in Comcast’s service area, only 2.6 million are eligible for Internet Essentials, according to data compiled by the Center for Public Integrity.

The program requires the participant’s household to include a child who is eligible for the federal school lunch program. Of that 2.6 million, only 300,000, or 12 percent, have signed up since Internet Essentials was launched in 2011. The low participation rate suggests that relying on merger conditions to make private companies provide what has become an essential tool to participate in society may not be the best approach to bridge the digital divide.

Nearly $100 million in campaign cash sits idle

Nine former congressional members and congressional candidates who are no longer seeking federal office each retain $1 million or more in leftover campaign cash, a Center for Public Integrity analysis of federal campaign finance disclosures and Center for Responsive Politics data indicates.

Dozens of other former members and congressional also-rans, both Democrats and Republicans, are squatting on six-figure surpluses. The former congressional candidates have several options for their accumulated campaign cash, and no law requires them to divest of this money or even close down their committees.

“Donating surplus money of this nature to a credible, charitable organization only makes sense,” said Randi Law, a spokeswoman for Veterans of Foreign Wars. “Unused funds, sitting idle, do nothing to perpetuate the cycle of support that America relies on.”

Tech super PAC startups could tap billions

A for-profit university bankrolled by prominent tech firms and co-founded by futurist Ray Kurzweil is behind four separate super political action committees or PACs formed, according to interviews and documents filed with the Federal Election Commission.

Randi Willis, an official at Singularity University, confirmed to the Center for Public Integrity that leaders at her institution will later in 2014 begin determining how to best use these new political committees, which could tap into the wealth of tech industry titans.

"Instead of waiting for people in office to come to us, the idea is, 'Let's put people in office,'" said Willis, the executive programs director for the university who also serves as the super PACs' treasurer. "We have a number of millionaires and billionaires who come through here and who we believe would consider contributing."

While hardly a household name, Singularity University is supported by a slew of corporations that are. Its listed "corporate founders" include Google, Cisco, Genentech, Nokia and Autodesk. Google co-founders Larry Page and Sergey Brin have personally associated themselves with Singularity University. "Corporate partners" include General Electric, the Credit Union Roundtable and pharmaceutical company Celgene.

What the FEC's Bitcoin ruling means

The Federal Election Commission, in voting 6-0, ruled in a relatively narrow fashion on an request from a single political action committee known as Make Your Laws PAC.

So what does the ruling mean both for this one PAC -- and all others? A primer:

  • The FEC decided that federal political committees may accept $100 worth of Bitcoin per election, per contributor. Committees "should value that contribution based on the market value of bitcoins at the time the contribution is received," the ruling states.
  • What if Bitcoin skyrockets in value after a political committee accepts its $100 worth? Bully for the committee. ´
  • There's a catch: The FEC isn't allowing committees to make purchases with actual Bitcoin. But it isn't prohibiting them from doing so, either.
  • In a related matter, the FEC ruled that "purchasing goods or services with bitcoins" that a political committee has purchased with campaign cash is "not permissible under Commission regulations."
  • Federal law states candidate committees may this cycle accept $2,600 per election from individuals. But the FEC's Bitcoin ruling only OKs acceptance of $100 worth of Bitcoin. In other words, accept more than $100 per election at your own risk.
  • How about super PACs, which may raise unlimited amounts of money to advocate for or against politicians? Could they accept unlimited amounts of Bitcoin? Again, the FEC's decision did not speak to this issue.
  • Must Bitcoin contributions be disclosed publicly? Yes, the FEC ruled, regardless of whether Bitcoin users want to remain anonymous.
  • One important caveat, however: Since the FEC didn't rule on whether committees are allowed to directly spend Bitcoin on goods and services, it states in its ruling that "the Commission is not addressing how such purchases might be reported."
  • Will the FEC consider Bitcoin contributions to be currency? Cash? And in-kind political contribution? That's not crystal clear.
  • Could the FEC further regulate Bitcoin? Most certainly, although there's no immediate indication that it will.

The 'McCutcheon' decision explained -- more money to pour into political process

Just when we learned what “Citizens United” and “super PACs” were all about, the Supreme Court has again roiled the world of campaign finance, voting 5-4 to allow even more money into a political process that is pretty well saturated with it.

So what does it all mean? In essence, the Court said that the government cannot prevent citizens from giving campaign contributions to as many different candidates and political parties as they want. Previously, they were capped under the “aggregate limit” rule.

Does that mean donors can give a candidate as much as they want? No. The maximum amount one donor can give each candidate is still $2,600 per election, or $5,200 counting the primary and general election. The maximum contribution to a national party committee is still $32,400, and the maximum PAC contribution is still $5,000.

But the rules have changed since the Federal Election Campaign Act of 1971, when aggregate limits were introduced. Now, if one donor used a network of affiliated PACs to fund a single federal candidate, he or she would be breaking the law. Candidates can now more easily band together and raise big money from the same individuals through legal entities called “joint fundraising committees.” These committees let contributors write a single large check to an umbrella group, which, in turn, splits the money up among several beneficiaries.

Senate power players quarrel over fate of e-filing

Millions of Americans e-filed their income taxes, but when senators submitted required reports about their campaign fundraising and expenses, most ignored computers in favor of paper.

Just 21 lawmakers voluntarily e-filed copies of their first-quarter reports to meet the filing deadline. That’s about a three-fold increase from 2011 -- although it’s far from a majority in the august body that has long cherished its old-school traditions. Neither senators nor Senate candidates are required to e-file their campaign finance reports -- unlike the thousands of political action committees, presidential candidates or their colleagues in the US House of Representatives.

Currently, senators must submit their campaign finance reports on paper to the secretary of the Senate, where they are scanned and then forwarded to the FEC. In a process that lasts weeks, the agency subsequently prints the documents and delivers them to a private contractor, which performs the data entry work necessary to make the information searchable and sortable in electronic databases. A bipartisan bill sponsored by Tester, however, would change that. The switch would save taxpayers about $500,000 a year, according to the Congressional Budget Office.

Wireless companies fight for their futures

Jonathan Spalter, the chairman of Mobile Future, sat at the witness table along with the big wireless carriers and well-known consumer advocates to tell senators how the government should auction valuable airwaves that the telecommunications companies say they need to keep up with the exploding use of smartphones and tablet computers.

Spalter told the senators that the best way to ensure a successful auction -- one that would best serve customers and promote innovative technologies -- is to allow all wireless companies to bid without restrictions on as many frequencies as they want.

What Spalter didn’t reveal is that Mobile Future, which describes itself as “a coalition of cutting-edge technology and communications companies and a diverse group of non-profit organizations,” is funded in part by wireless giants AT&T and Verizon, which are also advocating for an auction free of limits.

FEC wants millions in new cash to fix security woes

The Federal Election Commission is asking Congress for nearly $3 million to address what it says are serious security breaches and an obsolete IT system. The requests follow an investigation by the Center for Public Integrity that in December revealed Chinese hackers infiltrated the agency’s computer systems.

Among the FEC’s requests contained in a 41-page budget request it submitted to Capitol Hill:

  • $1.51 million for “IT security enhancement.”
  • $650,000 for “cyber security related hardware.”
  • $522,000 for implementation of a “trusted Internet connection.”
  • $178,000 for “website incursion prevention and detection.”
  • $130,000 for a staff member “dedicated to IT security.” The FEC is also asking for $545,000 dedicated to filling “critical vacancies.”

The agency has reduced its workforce by 8 percent since 2010, and during fiscal year 2013, left empty 19 of 24 vacant positions.

[March 7]

Comcast, Time Warner rivals may see opportunity in mega-merger

When Comcast, a Washington lobbying powerhouse, fires up a campaign to convince lawmakers and regulators to support its $45 billion purchase of Time Warner Cable, don’t expect much opposition from the companies' biggest rivals.

Instead of fighting the deal -- which would create a cable TV and broadband Internet provider with 30 million customers and a television network -- rivals like Cablevision Systems and Cox Communications will likely try to use the merger of the No. 1 and No. 2 cable companies to extract their own concessions from the government, including seeking permission for their own mergers and lighter regulation. Charter Communications, which was close to buying Time Warner Cable before Comcast undercut it with the deal, would be viewed as a sore loser if it chose to oppose the merger. The company is already looking around at other cable companies to buy, including Cox.

Rather than fighting, the companies are likely to say, “’We need scale to compete with Comcast,’” so approve our deals, said Harold Feld, a senior vice president at Public Knowledge. AT&T and Verizon Communications, the biggest wireless companies, are likely to lie low for the same reason. “AT&T and Verizon typically have had a gentlemen’s agreement that, ‘We don’t comment on your merger and you won’t comment on our merger,’” Feld said.