Wednesday, May 26th, 2010
This story was published jointly with Politico.
Comcast Corp. has been snapping up ex-government officials to help win approval of its proposed takeover of NBC Universal Inc., including former congressmen and congressional staff members, ex-government antitrust lawyers and former aides to the Federal Communication Commission’s most impassioned critics of media mergers.
In all, 78 former government employees registered as Comcast lobbyists in the final quarter of 2009 and the first quarter of 2010, according to an analysis by the Investigative Reporting Workshop. The most common background among those identified in the Workshop investigation is congressional staff, but there are also four former members of Congress: Reps. Robert Walker (R-Pa.), who is referred to as “Congressman Walker” on his firm’s website; William Gray(D-Pa.); Chip Pickering (R-Miss.), and former Sen. Don Nickles (R-Okla.).
Meanwhile, General Electric, which stands to make $6.5 billion from selling its stake in NBC Universal, has hired former House Majority Leader Richard Gephardt, D-Mo., along with 18 other ex-government officials, to lobby for the deal, according to a review of records.
Walker and Gephardt list the transaction as a specific lobbying issue while the other three ex-members of Congress give vague descriptions of their activity that could include the merger.
The Comcast/NBC deal will require approval from the Department of Justice’s Antitrust Division , which studies its effect on competition, as well as the FCC, which must approve the transfer of GE’s broadcast licenses and is concerned with the public interest. In its army of lobbyists, Comcast now employs former staff from both.
At the FCC, commissioner Michael Copps and former commissioner Jonathan Adelstein have been the most visible and vocal opponents of relaxing limits on media ownership.
Comcast has hired two of their former aides: Jordan Goldstein, who worked for Copps; and Rudy Brioche, who worked for Adelstein.
Rick Chessen, another former aide to Copps, now works for the National Cable and Telecommunications Association, whose biggest member is Comcast. His job is to oversee NCTA’s “relationship” with the FCC, according to his association bio.
Former FCC lawyers who work in the private sector are not required to register as long as they stick to legal chores and not lobbying, Today, Goldstein is “senior director, regulatory affairs” for Comcast and is doing legal work on the proposed combination. Brioche is Comcast’s senior director of external affairs and public policy counsel.
There are several former DOJ antitrust lawyers and advisers to the House and Senate judiciary committees working on the merger. David Urban, of American Continental Group, was chief of staff for Sen. Arlen Specter, D-Pa.; James Flood of Brownstein Hyatt Farber Schreck, LLP was counsel to Sen. Chuck Schumer, D-N.Y. Schumer and Specter are both members of the antitrust subcommittee.
According to the Investigative Reporting Workshop analysis, 54 former government workers list the Comcast-NBC transaction as a specific lobbying issue on their disclosure forms, while 14 describe their activity ambiguously enough that it could include the merger. Another 10 list Comcast as a client, but don’t appear to be working on the deal.
It is an unusually ambitious lobbying operation, reflecting the high stakes the merger represents for the company. But hiring former government employees with expertise in navigating the federal government’s regulatory system is a common practice.
“People use the expertise they’ve gained in government generally to get around the government’s rules and to financially benefit a private business,” said Melanie Sloan, executive director for Citizens for Responsibility and Ethics in Washington, and a frequent critic of the revolving door.
In a statement, Comcast defended its hiring. “Comcast faces a competitive, complex legislative and regulatory environment, and we hire those with the best expertise and experience to help us navigate Washington. Having representation in Washington is important for our customers, our 107,000 employees and our shareholders.”
Comcast and GE announced the intent to create the Comcast-controlled joint venture on Dec. 3, 2009. The merger would combine Comcast’s cable networks like E! the Entertainment Network, with NBC Universal, which is 80 percent owned by GE. Comcast would end up with a 51 percent stake in the new organization.
Comcast is both the nation’s largest cable television company, with about 24 million customers, and the No. 1 broadband company, with about 16.3 million high-speed customers. AT&T Inc. runs a close second in broadband. Opponents to the deal fear it will give Comcast too much control over programming, which could lead to higher prices for consumers.
Televised programs are increasingly being viewed over the Internet, and cable customers are increasingly “cutting the cord.” Comcast and other cable companies have a financial incentive to block Internet access to programming for fear of losing cable customers.
In addition, there are concerns —similar to those expressed in the days when movie studios were still permitted to own movie theaters — that Comcast might favor its own cable networks and programming over competing networks on its cable systems.
If past mergers are an indicator, it is unlikely either the Justice Department or the FCC agency will reject the deal outright. Chances are there will be approval with negotiated conditions — which may include divestitures of properties.
On the day of the announcement, Copps was alone among the five FCC members in releasing an official statement and for Comcast it must have raised alarm bells.
“While I look at each proposed transaction on its individual merits, my long-standing skepticism about the harms imposed by so few controlling so much persists,” it read, in part.
Now Goldstein, who as Copps’s media adviser helped him in his unsuccessful opposition to a 2003 decision that loosened media ownership restrictions, is among the lawyers whose names are on the signature page of Comcast’s 749-page document seeking FCC approval of the venture.
In all, at least seven names on the signature page of the document seeking approval for the merger are former FCC employees.
Copps did not return a call seeking comment for this story. He did release a statement when Chessen left government for the NCTA in late August. Copps noted that Chessen’s “deep commitment to the public interest made his one of the most productive careers ever at the FCC.”
He joked at the time about Chessen’s shift to industry, noting that “I think perhaps he did too good a job and thereby attracted covetous looks from many outside government!”
The law restricts the speed with which a government employee can move into the influence business.
Former "senior" government employees may not represent clients before their former agencies for one year after they leave their jobs. At the FCC, “senior” includes FCC commissioners and bureau chiefs as well as senior advisers to the commissioners. Chessen and Brioche are in their one-year waiting period and cannot lobby. Goldstein is well-past the limit, but is not registered. All three referred calls for comment to their press offices.
“People use the expertise they’ve gained in government generally to get around the government’s rules and to financially benefit a private business,” said Melanie Sloan, executive director for Citizens for Responsibility and Ethics in Washington.
Meanwhile, Comcast is facing opposition to the merger from someone the company would prefer to forget — Kevin Martin, who caused a continuous case of heartburn for the cable industry in his 2005-2009 tenure as FCC chairman, culminating in his push to punish Comcast for violating the FCC’s policy on Internet discrimination. (A decision that was rejected by a federal appeals court.)
Martin, a partner at Patton Boggs LLP, is not a registered lobbyist, according to records, but his name is on a document filed at the FCC on behalf of Bloomberg LP. Bloomberg owns a business news network that competes with NBC-Universal’s CNBC and has signaled that it will oppose the merger.
He is also one-third of the staff listed on the website of the National Coalition of African American Owned Media, which has written a letter to Sen. John D. Rockefeller, D-W.Va., chairman of the Senate Commerce Committee, opposing the merger, citing its potential to further shut African American-owned media out of the market.”
Martin could not be reached for comment.