BUSH, KERRY LEAD IN MASS MEDIA POLITICAL FUND RAISING

The biggest winners so far among presidential candidates recruiting mass media donations are President Bush, Sen. Kerry (D-Mass.) and Rep. Gephardt (D-Mo.). The donations come at a time when candidates are actively fund-raising for a front-loaded primary season that kicks off in Jan. with the Ia. caucuses. Colby College Prof. Anthony Corrado said it had changed the primary process this time from “a marathon… to a sprint.” This story is part of a 5-part series (CD Aug 27 p4).

Hard-money donations from individuals never have been more important, political analysts said, given that the Bipartisan Campaign Reform Act (BCRA) eliminated soft-money donations to political parties, which in the past used that money to support presidential candidates. FEC data compiled by the Center for Responsive Politics show content-related companies gave $53.7 million in soft money in the 2000 and 2002 election cycles. The BCRA also doubled the amount of hard money individuals could give to campaigns, to $2,000 each for the primary and general election cycles, emphasizing even more the importance of recruiting individual donations. Political observers, including Corrado, estimate candidates need to raise at least $20 million by Nov. to be viable in the primaries.

The focus on individual donations is even more apparent when looking at political action committees (PACs) or, more specifically, the lack of such donations. NAB’s PAC has given $1,500 to Sen. Lieberman (D-Conn.), although Pres. Edward Fritts personally gave $2,000 to Bush. Charter Communications gave $5,000 in PAC money to its home-state congressman Gephardt. Hughes Electronics gave no PAC money to presidential campaigns, but its parent General Motors gave $5,000 to Bush. Otherwise, mass media PACs have remained on the sidelines so far in the presidential campaign. The PACs include Adelphia, Cablevision Systems, Clear Channel, Comcast, Disney, EchoStar, General Electric (NBC parent), Loral, MGM, NCTA, Paxson, RIAA, Sinclair, Sony, Viacom and Vivendi Universal. Former Vt. Gov. Howard Dean (D), Sen. Edwards (D-N.C.), Rep. Kucinich (D-O.), former Sen. Carol Braun (D-Ill.), Rev. Al Sharpton (D), Lieberman and Bush each has raised 96% or more of their funds from individual donations, which don’t include PAC money.

Many issues of critical importance to broadcast, cable, satellite and studio companies have surfaced in Washington this year, including revised FCC media ownership rules and the continuing threat of peer-to-peer networks involving copyrighted content. However, those issues haven’t surfaced in the presidential candidates’ stump speeches or even merited mention on campaign Web sites.

Bush has done well with mass media company executives, less so with lower level employees or those in creative professions such as directors, writers or actors. Among his donors are AOL Time Warner CEO Richard Parsons and board member Steve Case ($2,000 apiece), while AOL Vice Chmn. Ted Leonsis gave $1,000 to Kerry and $500 to Sen. Graham (D- Fla.). (Executives of AOL Time Warner units differed greatly in their giving, and are featured in a separate story in this issue.) At least 12 Disney executives gave Bush $2,000 apiece, including Washington lobbyist Preston Padden. At least 8 News Corp. executives gave Bush the maximum $2,000, including Rupert, Wendi and Lachlan Murdoch. Two Fox News Channel officials were among the $2,000 Bush donors.

Also prominent among Bush donors were Fritts, Pax TV Pres. Timothy Johnson, and executives of BMI, Clear Channel and Oxygen Media, but missing were executives of Vivendi Universal and Viacom. Both of those companies have a reputation for giving to Democrats, but in the past that largely had been driven by soft-money contributions by a few key executives. However, Vivendi recently hired a Republican lobbyist, recruiting Linda Bloss-Baum from the House Commerce Committee. Loral CEO Bernard Schwartz gave $250 to Bush, despite giving $2,000 to Democrat Kerry. (From 1997 to 2000, Schwartz gave nearly $500,000 in soft money to various branches of the Democratic Party.)

Kerry Leads Democrats in Recruiting Prominent Donors

Kerry received numerous other $2,000 donations from key mass media executives. MPAA Jack Valenti, a longtime Democrat and Johnson Administration veteran, gave $2,000 each to Kerry and Gephardt. Sony Chmn. Howard Stringer gave $2,000 to Kerry, while at least 11 Fox executives gave him at least $1,000. Viacom money seemed to be going Kerry’s way, with Viacom Entertainment Chmn. Jonathan Dollen and Paramount Pictures Vice Chmn. John Goldwyn giving $2,000 apiece. At least 13 executives gave at least $1,000, largely from Viacom’s Paramount division. Sheridan Bcstg. Chmn. Ronald Davenport gave Kerry $2,000. CTAM Senior Vp-Mktg. Seth Morrison gave Kerry $1,000, as did NCTA State Policy Dir. Richard Cimerman and Discovery Channel Vp Lynn McReynolds.

Gephardt has many friends at the YES Network, including Chmn.-CEO Leo Hindery. He gave $2,000 to Gephardt, as did 3 other YES executives, while a 5th gave $1,000. “There was not a YES Network fund-raiser, but there was a Gephardt for President fund-raiser to which some YES executives were invited,” a YES spokesman said: “Some attended, some didn’t, some couldn’t make it.” Hindery has a long history of support for Democratic candidates. Among Gephardt’s other $2,000 donors were USA Networks Chmn. Barry Diller, Dreamworks co-founder Jeffrey Katzenberg, Bcst. Capital Chmn. John Oxendine (who also gave $2,000 to Lieberman) and Valenti. Charter Communications, based in Gephardt’s home state, gave him $5,000 in PAC donations. Those giving $1,000 to Gephardt included TV Guide CEO Jeffrey Shell and Miramax Co-Chmn. Harvey Weinstein.

Other Democratic candidates have made less headway with mass media executives. Lieberman in the past has been critical of Hollywood’s content, and that probably affected his fund-raising there. But he did do better with cable executives, receiving $1,000 apiece from Cal. Cable TV Assn. Pres. Spencer Kaitz and Vp Gerald Yanowitz (that Assn. hosted the annual Western cable show). Rainbow Media’s Josh Sapan gave $2,000, and Lieberman received $2,000 from a Bravo executive. He also received $2,000 apiece from Cablevision Systems Pres. James Dolan and Vp Kristin Dolan. His cable donations were somewhat surprising, given that Lieberman boasts in his campaign literature of many fights in Congress to keep cable rates in check both through legislation and by working with the FCC.

Dean received $2,000 donations from executives of NBC, New Line Cinema and Castle Rock, while Discovery Pres. Judith McHale gave $1,000; he also received modest donations of several hundred dollars apiece from lower-level employees at Vivendi Universal, AOL Time Warner and Disney.

While Dean hasn’t netted 4-figure donations at the same rate as his key competitors, he does have one advantage over them. In raising $10.5 million, 3rd on the Democratic money list, he is competing well in fund-raising, but because he receives most of his money in smaller donations, he is eligible for more matching funds: Federal matching funds match only the first $250 of a donation. However, after Dean campaign manager Joseph Trippi announced Tues. that Dean probably would nearly double his fund-raising in the 3rd quarter ending Sept. 30 with at least $10.3 million in additional donations, Trippi said his boss may forgo matching funds to avoid its corresponding spending limits. That is a strategy the Bush campaign is pursuing; the spending limit for the primaries where matching funds are accepted is $45 million, but Bush is eschewing matching funds to avoid a spending limit and aims to raise at least $180 million during the primary season.

Democracy 21 and Common Cause have proposed increasing the $250 match to $500 to encourage candidates to keep receiving the funds rather than opting out; the $250 limit predates BCRA and wasn’t increased along with the maximum donation. The groups also support a 3- or 4-to-1 match, with higher primary spending limits. “We would like to see substantially more of the primary system publicly funded than has existed in the present system over the years,” Democracy 21 Pres. Fred Wertheimer said at a Campaign Finance Institute forum earlier this year, calling the current system “a fraud.”

Edwards Not Emphasizing Committee Assignments

Edwards sits on the Senate Judiciary Committee, and in the 107th Congress was on Senate Commerce, the 2 most critical committees for mass media companies. Among his $2,000 donors were Katzenberg, Emmis Communications Chmn.-CEO Jeffrey Smulyan and Vivendi Universal’s Edgar Bronfman Jr., formerly head of Universal. (The younger Bronfman traditionally gives to Democrats, but he gave $1,000 to Bush’s 2000 presidential campaign.) Despite his committee assignments, however, Edwards has declined to address mass media issues in his campaign. For example, on Tues. he issued a statement calling on China to “play fair.” Hollywood has long accused China of rampant piracy, but Edwards didn’t mention that. Instead, he faulted China for flooding the U.S. market with textiles and “illegal currency manipulation.” An analysis of the former trial lawyer’s approximately 10,000 individual donations through June 30 revealed gifts mostly from law firm employees and their family members.

Major mass media companies seemed to have their own favorites in the presidential race. Viacom executives largely favored Kerry and ignored Bush, but Gephardt and Lieberman also landed some donations. The company is headed by 2 Democrats, Chmn.-CEO Sumner Redstone and Pres.-COO Mel Karmazin. While those 2 prodigious Democratic donors haven’t given to a presidential campaign yet, Karmazin in the past has given to Kerry, while Redstone has given to both Kerry and Gephardt. In 2000 Redstone gave $20,000 in soft money to the Democratic Congressional Campaign Committee, and in April gave $5,000 in hard money to the Democratic Senate Campaign Committee.

Sony executives seemed almost wholly focused on Kerry. News Corp., however, saw a split between its executive ranks, who favored Bush, and its studio personnel, who largely preferred Kerry. Vivendi Universal’s Bronfman liked Edwards (although he has given to Kerry’s Senate campaign in the past), but other executives gave to Dean, Gephardt, and Kerry (none, apparently, has yet given to Bush). The company has experienced some turmoil, with some entertainment assets of the French company having been sold and others on the auction block (Bronfman is working with GE and other investors to purchase directly some of those assets; a board member, he has been excused from overseeing the sales). Vivendi is also in court regarding its termination of former Chmn.-CEO Jean- Marie Messier.

Disney executives favored Bush heavily, but Edwards, Dean and Gephardt each received at least one donation. Comcast executives spread money to the Dean, Kerry and Bush campaigns, while Cablevision Systems executives gave to Dean, Lieberman, Kerry and Bush. Among satellite companies, Loral’s Schwartz gave to Kerry and Bush, but other executives also gave to Edwards, Gephardt and Lieberman. Sirius CEO Joseph Clayton gave $2,000 to Kerry, while Comsat Chmn. Brian Thompson gave $1,000 to Lieberman. Edwards received $1,000 from Russ Daggatt of Teledesic.

Graham has received little from mass media executives, but did receive $2,000 apiece from Pax TV Chmn. Lowell Paxson and his wife Marla. Sharpton received $1,000 from BET Pres. Louis Carr and Kucinich $1,000 from Tonia Young-Bilderbeck of Warner Bros. -- Patrick Ross Editor’s Note: -- This is part of a 5-part series. Also in this issue is a separate analysis of AOL Time Warner donors. Tomorrow Communications Daily will focus on telecom donations, while our affiliated publication Washington Internet Daily (WID) will examine Internet industry donations. (To get a trial subscription to WID, go to www.warren-news.com/widtrial.htm.)