The Face Of Corruption: Corporate Campaign Contributions In The Comcast/NBC Merger

The long rumored and often dreaded merger of Comcast and NBC Universal is poised to happen in the next couple weeks despite predicted higher prices and detrimental effects on Net Neutrality.  While 84 of the 97 Congressmen who signed a letter urging that the FCC approve the merger without conditions received donations from Comcast, this is a glimpse of a far larger problem that threatens our democracy.

Cable giant Comcast has been trying to acquire a majority stake in NBC Universal for over a year.  The proposed deal will give Comcast a 51% stake in the merged corporation, and GE a 49% stake.  P2Pnet sums it up: “The FCC and DoJ are in the final stages of their regulatory reviews of Comcast’s proposed acquisition of 51 percent in NBC Universal and people both for and against are reportedly making some last-minute efforts to make sure their arguments are heard.”

Smaller cable networks like The Tennis Channel are very concerned that the deal will inevitably harm them.

According to Ian Paul atPCWorld, “According to the valuation of the deal by the two companies, the new Comcast-NBC Universal entity would create a media company worth just over $37 billion. While a significant amount of money, the deal is a far cry from the $350 billion valuation of the AOL Time Warner deal nine years ago. No doubt many parallels will be drawn between Thursday morning’s deal and the now-failed AOL Time Warner merger, which is still considered the largest corporate merger in history. But these two deals are not the same, and are operating in vastly different environments especially where online media is concerned. I would argue that Thursday’s deal has the potential to reshape the American entertainment landscape in a way that AOL Time Warner never could.”

Public Knowledge, who floated a petition to stop the merger writes about the potential dangers of the deal: “The proposed merger of NBC Universal (NBCU) and Comcast presents potential harms not just to the competitive media landscape, but also to the public interest in the diversity of media voices, technological advancement, and promotion of the public interest, convenience, and necessity. Our primary concern, however is the enormous threat that this merger—compounded by the issue of Net Neutrality—poses to competition in the online video space.”

The LA Times adds, “Last week, Comcast Chief Executive Brian Roberts met personally with Republican FCC Commissioners Robert McDowell and Meredith Attwell Baker as well as Edward Lazarus, the chief of staff for FCC Chairman Julius Genachowski. A few weeks ago, Genachowski’s office circulated a draft of conditions it wanted put on Comcast and NBC as part of an approval.”

There was an article that recently gathered a lot of traction in the blogosphere titled, “What Corruption Looks Like: 87% Of Congressional Reps Supporting Comcast/NBC Merger Got Money From Comcast.”  An excerpt: “it comes as little surprise to find out that 84 of the 97 Congressional Reps, who signed a letter urging that the FCC approve the merger without conditions, received campaign contributions from Comcast.   Now, this is not to say that those 84 are corrupt. But, as Larry Lessig has pointed out, whether or not there is actual corruption here obscures the point that it certainly looks corrupt, and certainly decreases citizens’ willingness to trust that their government is acting in the interests of the people they’re supposed to represent.”

Cantor, Eric (R-VA) House $33,950
Cantwell, Maria (D-WA) Senate $500
Cao, Joseph (R-LA) House $6,000
Capito, Shelley Moore (R-WV) House $8,000
Capps, Lois (D-CA) House $2,000
Capuano, Michael E (D-MA) House $5,500

A full list of every member of Congress who accepted campaign donations from Comcast is well document at OpenSecrets.org.  The counterpoint that conservatives quickly fought back with was based on a statistical analysis of the larger picture that demonstrated the following:

84/97= 87% received money from Comcast and signed the letter
460 Total number of Congressmen that received money just from Comcast
435 representatives and 100 senators = 535 Congressmen on capitol hill
460/535= 86% Total Members of Congress getting money from Comcast

There was also statistically insignificant differences on the average amount contributed to those who signed the pledge urging unconditional approval of this corporate merger to those who did not sign.  There was a larger difference when the median contribution for all recipients was factored in: $3500 for non-signers compared to $4250 for signers of the pledge.

The rationale that there is no contrast in corruption between those who signed the pledge and those who did not is besides the point.  The point is that 86% of the entire US Congress is getting campaign contributions from a large corporation that has a personal stake in something members of Congress must vote on.  This is by definition corruption.

Even before Citizens United opened up the floodgates of corporate campaign donations into politics courtesy of the most right wing activist Supreme Court in a century, our democracy has been threatened by the corrupt influence of corporate campaign contributions.

This problem is not confined to campaign contributions either.  There is also the issue of out of control lobbying.  There were 6 lobbyists for every member of Congress during the health care reform debate.  Fix Congress First reports that:

* University of Kansas researchers recently showed that the return on investment from lobbying to change the American Jobs Creation Act of 2004 was a whopping 22,000%; and
* political scientists in California recently showed* that for every $1 large firms spend in lobbying, they reduce their tax costs by between $6 and $20.

Serious campaign finance reform is likely the only solution to the selling off of our democracy to the highest corporate bidder, who will always outspend individual donors when they need to.  Whether that be the Fair Elections Now Act, the DISCLOSE Act, or a number of other measures, something must be done before it is too late.  Perhaps the only solution that most Americans can relate to would to be requiring members of Congress to wear patches with their sponsors like NASCAR.

UPDATE: The corporate merger has been approved today.  From Al Franken.

A big disappointment today: The FCC and the Department of Justice have signed off on the Comcast/NBC merger, paving the way for a single enormous media conglomerate to obtain unprecedented control over the flow of information in our country.

I’ll be candid with you: This is an awful development for those of us who care about media consolidation. It will restrict your freedom of choice and raise your cable and Internet bills. And it could pave the way for even more media mergers and even less room for independent voices in the media.

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5 Responses to The Face Of Corruption: Corporate Campaign Contributions In The Comcast/NBC Merger

  1. +3 Vote -1 Vote +1Liam Fox
    January 17, 2011 at 4:08 pm

    “…out of this modern civilization, economic royalists [have] carved new dynasties…. It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over government itself. They created a new despotism and wrapped it in the robes of legal sanction…. And as a result the average man once more confronts the problem that faced the Minute Man…. These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power…But, our allegiance to American institutions requires the overthrow of this kind of power!” ” Franklin D. Roosevelt

  2. +1 Vote -1 Vote +1Chris Taus
    January 19, 2011 at 1:10 am

    Yeah, Comcast sucks, and so does this merger, but seeing Alec Baldwin ham it up in the Kabletown spoofs on 30 Rock almost makes up for said suckage.

  3. +1 Vote -1 Vote +1Mo Maghari
    January 19, 2011 at 4:55 pm

    Why would we blame Comcast or any big company for doing what Comact did. We are the ones who vote these crooks ( politicians) in power. The same old power hungry from both sides ( republicans and democrats) keep getting elected. If some of the old crooks are voted out, most of the time they get replaced with new crooks. Let us face it, to win elections, you have to spend lots of money. To get that money, you have to give something back. that is why our politicians have no soul. Their souls were sold to the highest bidder.

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    Vote -1 Vote +1HIKARO

  5. Vote -1 Vote +1Jeff
    January 21, 2011 at 6:09 am

    Just saw Obama appointed the head of GE to some sort of economic recovery panel. If one looks at the traditional definition of fascism, it includes State and Corporate business interests working as one, an element of xenophobia, and a tendency to use military action to further the country’s interests. These are just more indicators that the US is a fascist country. Mergers, especially in the communication and “entertainment” industries, are also carefully orchestrated between State and Corporations. What else can one say except for everyone to ask themselves do they really want the US to be fascist? Maybe the answer is yes, just as the Germans and Italians for the most part did in the last century.