Buying influence: Telecom companies, execs invest in candidates, push interests

Telecommunications companies are hedging their bets in the 2000 presidential race by contributing to the likely party nominees and the likely losers. Both hold powerful sway over the industry in Congress.

Democratic front-runner Al Gore leads with $219,300 in donations so far. George W. Bush, the potential Republican nominee, follows with $153,650 (Figure 1).

Democratic candidates Gore and Bill Bradley do not accept political action committee (PAC) donations, but they take money from individuals - including wealthy telecom executives.

But even runners-up in the presidential campaign are seeing plenty of money from the telecom industry. Sen. John McCain, R-Ariz., who heads the Senate Commerce Committee that guides much telecom legislation, has received $122,738 from industry PACs and employees. From seven major telecom PACs alone, he's raised $32,000 - more than twice the amount the group has given Bush (Figure 2).

"They win either way. They've invested in Al Gore as the likely nominee. They've invested in John McCain, who chairs the Commerce Committee," said Ellen Miller, executive director of Public Campaign, a campaign finance reform group based in Washington.

"Even though [McCain] may not be the next president, he'll continue to chair the Commerce Committee," said Sheila Krumholz, research director at the Center for Responsive Politics, a nonprofit research group that tracks political giving. "If you haven't supported the chairman, you may be dead in the water."

All figures in this story are based on federal PAC reports compiled by CRP and reflect 1999 campaign contributions through Sept. 30, 1999.

The communications and electronics industries have become major forces in "efforts to buy access and influence," according to a Public Campaign online newsletter last month. Contributions to candidates and political parties rose to $54.5 million in 1997-98, nearly double the $28 million donated in 1993-94, the group reported.

In the current presidential campaign, BellSouth is Gore's third-largest contributor at $69,375 and McCain's fourth-largest contributor at $25,763. U S West is McCain's No. 2 contributor at $43,725. These amounts are total donations from employees and corporate PACs.

Telecom PACs tend to be pragmatic in their political giving, Krumholz said. "They're more likely to give to whomever's in power" rather than along ideological or party lines, she said.

"It's not betting on the best candidate, it's betting on the candidate they think will help them best later on," regardless of his chances of winning the presidency, said CRP researcher Holly Bailey.

PACs don't buy favorable legislation directly, but their campaign contributions help the sponsoring companies' lobbyists gain access to members of Congress, she said.

That reasoning may explain several carriers' PAC contributions to Sen. Orrin G. Hatch, R-Utah. Although he dropped out of the GOP primary race, he remains chairman of the powerful Senate Judiciary Committee, which oversees antitrust matters, including proposed telecom mergers.

The four PACs of AT&T, whose merger with MediaOne is pending, did not give money to McCain or Bush during the first three quarters of last year. But three of the PACs - including that of Tele-Communications Inc., which AT&T bought last year - collectively gave more than $8000 to Hatch's Senate re-election campaign. They did not contribute to his presidential campaign, said an AT&T spokeswoman.

McCain's sway over telecom issues is well known. During the past few years, he wrote letters to the FCC on behalf of several campaign donors, including BellSouth, SBC Communications and Ameritech, according to published reports.

The senator also is sponsoring a bill that would strip the FCC of its authority to approve mergers, a measure that would benefit U S West, MCI WorldCom and other contributors involved in mergers.

A spokesman for GTE, whose merger with Bell Atlantic is pending, would not comment on his company PAC's contributions except to say, "We like what McCain stands for. We like what Bush stands for."

Individuals can legally contribute up to $1000 per candidate per election. PACs are limited to $5000.

The chairmen and chief executives of three major telecom companies have donated $8000 so far to the four major presidential contenders. The biggest spender among them was Bell Atlantic Chairman and CEO Ivan Seidenberg, who personally gave $2000 to Bush, $1000 to Gore and $1000 to McCain. The two $1000 contributions to Bush, however, exceed the legal limit and are apparently an error, said a CRP researcher. One of the contributions must be returned or recorded in another person's name.

Former Ameritech Chairman and CEO Richard C. Notebaert contributed $1000 each to McCain, Bush and Bradley. Charles R. Lee, chairman and CEO of GTE, donated $1000 to Bush.

Companies can contribute "soft money," or unlimited donations to six national party committees that finance "issue ads" and other efforts to support political parties but not electoral candidates. Soft money has become a big factor in presidential campaigns, critics said.

Major telecom companies - the big three long-distance carriers, GTE and the RBOCs - and their employees spend big when it comes to soft money, CRP figures show. In total, they donated $2.7 million last year, including $1.6 million (59%) to Republican parties and $1 million (41%) to Democratic parties.

AT&T was the biggest soft-money donor of the telecom group - and among all soft-money contributors - giving more than $1 million, mostly to the GOP.

Others in the top 10 of soft-money contributors are the Communications Workers of America, which ranked fifth by giving $530,000, all to Democrats, and No. 8 SBC, which gave $452,466, mostly to Republicans.