CPB bans list dealings with politicos
Reputation, funding may be affected by outcome of multiple investigations
Originally published in Current, Aug. 2, 1999
By Steve Behrens
To continue receiving CPB aid, public stations must now certify that they don't exchange member or donor names with political groups, or sell names to them, or buy names from them.
"Our goal is to restore the public's trust in the work public broadcasting does every day," said CPB President Bob Coonrod.
The new grant rule, issued July 30 , responds to congressional condemnations of the mailing list dealings that apparently involved dozens of public TV and radio stations in recent years. A CPB survey of the 75 largest public TV stations found that 26 had exchanged member or donor lists with political groups and 33 had rented lists from political groups, Coonrod told Congress the week before. Current found that the major stations in the 10 top markets all said they had dealt in swapped or rented lists, though some did it quite infrequently [related story].
Investigators are collecting more complete data on the practices.
- CPB Inspector General Kenneth Konz has sent questionnaires to 575 station grantees to determine exactly the extent of the list deals with political groups, and aims to report to Congress late in August.
- The House Commerce Committee has asked stations and national organizations to answer a separate set of questions--what they know about the list practices, when they learned about them, and what they know about their legality and appropriateness.
- The Internal Revenue Service, alerted to the issue by Boston's WGBH, may determine whether stations broke the law against political activities by nonprofits.
"Some of the stations' actions probably fell into a gray area," acknowledged Ken Johnson, spokesman for House telecom subcommittee Chairman Billy Tauzin (R-La.), "but when we're done [writing legislation], it will be black and white."
Tauzin and his spokesman predicted that the subcommittee will not only forbid pubcasters to make list deals with political groups, but also reduce his proposed CPB funding ceilings to more realistic levels. Tauzin and other Republicans said they still support federal aid for pubcasting's digital transition, however.
The subcommittee, which has jurisdiction over consumer protection issues, may also expand its interest in list practices to other kinds of nonprofits in separate hearings, Tauzin's spokesman said.
After a day-long hearing on the list issue July 20, the chairman was looking for selective punishment of stations. If federal aid is to be diminished, he told reporters, perhaps the cuts should be felt by stations that did the list deals.
How Congress reacts will depend heavily on what the investigations find, he said. If a minority of stations were involved, he said, that's one thing; if a majority is, "that is very different."
"A crime, a sin and a shame"
Tauzin opened the hearing by saying he was outraged and "deeply disappointed" in pubcasters in two respects--because trading "private information" about donors "should be outlawed," and because "cozying up to any political party" ... "further deepens suspicions" that the system is politically allied with the left.
"To have tarnished [public broadcasting] in this way is a crime, a sin and a shame," he said.
Ranking Democrat Edward Markey (Mass.) agreed that list dealings with political groups should be outlawed, but urged that Congress not starve pubcasting in retribution.
Other representatives read quotes from newspapers--the Washington Post titled an editorial "Public Broadcasting Stupidity."
And they got no arguments on that from the presidents of CPB, PBS and NPR. (Since the issue was then confined to TV, NPR's Kevin Klose got off easy.)
"We blew it," Coonrod told the subcommittee, adding later, "We have to dig ourselves out of this hole."
But Coonrod wouldn't buy the idea of sanctions. When Rep. Christopher Cox (R-Calif.) asked about sanctioning WGBH and other stations that did political list deals, Coonrod replied: "There does not seem to be anything that violated any IRS regulation."
PBS President Ervin Duggan asserted that the swapping was motivated by fundraising, not partisanship, but it was nevertheless "downright stupid." Both Coonrod and Duggan supported the idea of a review of the situation by an independent panel of citizens.
Why didn't CPB call in other station managers and "ask the hard questions"? Tauzin wanted to know.
Coonrod, who had been satisified by WGBH's quick apology for the first reported incident, didn't quiz other stations because the Boston list deal "was such a manifestly stupid thing to do, it never occurred to me that other people were doing it."
If stations had announced to their viewers and members that they were going to trade names with a political party, Tauzin asked, "do you think for a second that there would not have been a public outcry?"
Who's the better Republican?
The list issue arose last month at an awkward moment for Tauzin. On June 29 he had introduced a long-awaited reauthorization bill proposing major boosts for CPB funding and going along with pubcasting's requests for digital transition aid [earlier story]. Having "stuck his neck out" for public broadcasting, the congressman felt "betrayed," his spokesman said, when he saw the initial Boston Globe report that WGBH had swapped lists with the Democratic National Committee.
The timing is especially bad for Tauzin because he's running for chairman of the full Commerce Committee. He's in line to succeed Chairman Thomas Bliley (R-Va.), who has held the job for the maximum six years. But Rep. Michael Oxley (R-Ohio) also seeks the chairmanship, according to Hill reporters and other sources, and Tauzin has the disadvantage of being a recent convert to Republicanism. G.O.P. leaders gave Tauzin the subcommittee chairmanship over Oxley, mere months after he came over from the Democrats.
There was Tauzin with his name on a generous CPB bill, while Oxley (even before the Boston news) was arguing for the dollar amounts to be cut back to the levels proposed by the Clinton Administration.
"Certainly, there's been some behind-the-scenes jockeying going on," acknowledges Tauzin's spokesman. But he says the chairman knew from the start that his proposed CPB dollar amounts would be brought down toward realistic appropriation levels.
With the list scandal burgeoning, this was no time to be soft on public broadcasting. Tauzin cancelled a routine mark-up session on the CPB bill, scheduled for July 14, and called the July 20 hearing, where he and Republican colleagues laid into the presidents of CPB and PBS all morning long.
(Tauzin didn't call WGBH officials to answer questions, he told reporters, because he cautiously did not want to quiz people who might have broken laws.)
No one could top Oxley's controlled anger as he questioned Bob Coonrod and Ervin Duggan. But Oxley played the privatization card, pointing out that he had tried for more than a decade to get pubcasters off the federal budget and earning more commercial revenues.
Rep. Clifford Stearns (R-Fla.) tried to expand the issue, as the Washington Times had, objecting that San Francisco's KQED and Washington's WETA had shared lists with such advocacy groups as Planned Parenthood. (Apparently responding to the objection, CPB's inspector general asked stations to list "public advocacy groups" and "self-interest groups" in addition to partisan outfits with which they've had list dealings.)
List swapping was not the only complaint. Rep. Steve Largent (R-Okla.) took the opportunity to object to "federally funded massages" that are given to PBS employees as an "extravagant perk." (PBS said the backrubs are a minor, $3,000-a-year anti-stress remedy in its staff health insurance package.)
And then Largent showed an excerpt from the gay-sympathetic documentary "It's Elementary" as an "example of the need for reform at CPB." (Later he suggested that bringing more commercial interests into public TV would have the beneficial effect of reducing aid to programs like "It's Elementary.") But Largent insisted that the hearing "should not be viewed as a partisan attempt to defund CPB." He said, quotably: "Big Bird is nearly 30 years old, and it's time to leave the federal nest."
After ranking Democrat Edward Markey (Mass.) compared PBS programs favorably to commercial TV's trashy talk shows, Rep. Robert Ehrlich (R-Md.) responded by favorably citing such cable programs as Amazing Animals, Firefighting and Tales of the FBI. "There's quality on cable television today," he said.
A second panel of witnesses in the hearing addressed program quality, including producer Ken Burns [text of prepared remarks].
Do's and don'ts
The new grant rules that CPB put out last week were its second dictate on the subject. On July 16, four days before the House hearing, CPB had announced it would require grantees to certify that they are in compliance with "all applicable federal laws and regulations relating to nonprofit organizations and political activity."
That seemed a weaker approach. If the criticized list practices turn out to be legal, as fundraisers argue and as Coonrod himself contended, the earlier CPB rule would have missed the target. Coonrod explained last week that the earlier rule was "quick to do and clear-cut." CPB needed more time for legal research and consultation before issuing the later rules.
Last week's rules [full text] require stations certify not only that they're obeying the law, but also that they:
- "not sell, rent, lease, loan, trade, give, donate, transfer or exchange their membership or donor names to, with or from any candidate for public office, committees or organizations supporting a candidate, political parties, or organizations that solicit funds for use in political campaigns of any purpose whatsoever;"
- "maintain active control of their membership and donor lists, and take all appropriate measures to ensure against unauthorized use ... ;"
- "periodically inform members/donors of any potential for sale, rental ... or exchange of their names; and offer a means by which the names can be suppressed upon request; and suppress names as requested;" and
- "maintain complete and accurate records of all uses of membership and donor lists for fundraising purposes," and furnish those records on request.
Stations that violate the rules will be disqualified from receiving CPB grants.
PBS's Development Advisory Committee and public radio's Development Exchange Inc. (DEI) also issued recommendations. DEI's Catherine Harvanko, associate director of its Center for Membership Support, published a seven-page recommendations and model policy [full text].
"DEI recommends that you do not rent your list to or exchange names with political candidates, partisan political organizations, or organizations that spent more than 30 percent of their time and money on lobbying." Ditto renting lists from such groups. Even if these practices are legal, the public may perceive them as political acts, Harvanko wrote.
DEI urged stations to be "very selective" in dealing with lists. "If you do not allow an organization to underwrite, then you should not be renting their list or arranging list trades with them."
With top pubcasters conceding readily that their fundraising colleagues had made stupid, politically insensitive mistakes, there were few defenders of development personnel.
"I can't imagine anyone having honestly anticipated this flare-up in Congress, because it's so unreasonable," says one fundraising consultant, who declines to be named in print. The politicians see partisanship where some fundraisers see only routine methods of acquiring prospective donors' names and addresses.
"You have individuals under significant pressure, trying to not only increase support for their organization, but also to do it absolutely as efficiently as they can," said the consultant.
Criticism "has been particularly harsh on station staff--calling them dumb and stupid, when in fact they are not," said David Brugger, president of America's Public Television Stations. "They may not be politically alert, but that's not their job. If anything, there may have been laxness in [management] oversight at the stations."
But were the swaps illegal? Though some politicians have asserted that WGBH's list dealings broke the law, and some reporters have picked up that view, the tax laws and IRS rules don't say so specifically.
The pertinent law says nonprofits "may not participate in or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office."
An IRS spokesperson would not say how the agency would interpret this law in relation to the Boston case, which WGBH itself reported to the agency when the issue became public in May. But the IRS spokesperson pointed to an excerpt from an internal training book for its agents that may shed light on its past thinking.
The training guidelines say a nonprofit "that regularly sells or rents its mailing list to other organizations will not violate the political campaign prohibition if it sells or rents the list to a candidate on the same terms the list is sold or rented to others, provided the list is equally available to all other candidates on the same terms."
Using a list broker, as many public stations do, suggests that the lists are available on a commercial basis, wrote Washington attorney Charles M. Watkins, who analyzed tax laws for the Association of Direct Response Fundraising Counsel.
Watkins concluded that rental or exchanges of lists between a nonprofit and an unrelated political committee doesn't violate the tax law if it's done "on a nonpartisan basis, at fair rental value, and under circumstances that provide fair and impartial treatment of all committees wishing to rent or exchange a mailing list" with the nonprofit.
To Current's home page
Earlier news: Tauzin introduces CPB authorization bill, June 1999.
Earlier news: List controversy explodes, mid-July 1999.
Related coverage: The major public TV stations in the top 10 markets all had rent or swap deals with political groups, judging from a Current poll. But in stations' views, renting and swapping aren't the same thing.
Related document: Text of new CPB grant rules on political mailing list, July 30, 1999.
Related document: Recommended list procedures issued by Development Exchange, Inc.
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