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THE MEDIA COVER-UP OF THE GORE VICTORY
PART THREE:  HITTING THE JACKPOT


 

By Carolyn Kay and David Podvin

In 2001, the natural gas industry enjoyed the spectacular benefits that resulted from both deregulation and the passive consent of a president who was an uncritical bystander as gas companies gouged the consumers of California for over twenty billion dollars in coerced lucre. It was the ultimate dream come true for every greedy business executive who had ever contributed to a presidential campaign. Kenneth Lay, chairman of the natural gas giant Enron and George W. Bush’s single biggest financial supporter, converted political donations of hundreds of thousands of dollars into unregulated windfall profits of billions of dollars. He did it by buying the allegiance of an elected official who was supposed to be looking out for the public good.

Lay was so convinced of his ownership rights in the Bush administration that he personally called the new chairman of the Federal Energy Regulatory Commission, who told The New York Times “that Mr. Lay, a close friend of President Bush's, offered him a deal: If he changed his views on electricity deregulation, Enron would continue to support him in his new job.”  This appointee has since resigned.  As calculated by the Center for Responsive Politics (opensecrets.org), the return on investment for energy companies for supporting Bush has been 52,200 percent ($36,352,000,000 in tax breaks and subsidies divided by $69,500,000 in campaign contributions).

Not a bad return at all.

Lay was not the only corporate executive who ingratiated himself to George W. Bush during the 2000 campaign with the intention of riding the deregulation gravy train once Bush was in office.

You are the CEO of a multi-billion dollar corporation.  All of your training and your experience climbing the ladder of success has taught you that the only measure of that success is net worth—your company’s, and your own.  Your compensation package is structured so that significant increases in your company’s net worth result in significant increases in your personal net worth.

Your career is dependent on constantly improving the bottom line. Your personal net worth is a measure of your power and your importance.

It is early in the year 2000, and it is becoming apparent that the two major candidates for president will be Al Gore, currently Vice President of the United States, and George W. Bush, currently the governor of Texas.  The multi-billion dollar corporation you head owns a significant media subsidiary.

You know that George W. Bush, son of a former president and a graduate of Yale University and the Harvard Business School, is running on the most pro-business platform since Calvin Coolidge. As governor of Texas, he kept the costs of polluters down with a program of “voluntary compliance” with environmental rules, and he made certain that regulatory agencies gave favorable treatment to his campaign contributors.  He also cut taxes drastically, both for businesses and for wealthy individuals. Your confidence in him is greatly enhanced by the knowledge that, in every situation that contrasted the interests of big business with the common good, Bush sided with corporations.

You have been advised of the people Bush will appoint to key governmental positions like the Federal Communications Commission, and you know that they will reduce regulations that now keep you from expanding your media empire, thereby creating great predatory opportunities for your company and yourself.

You have every reason to believe that George W. Bush, if elected president, will implement policies that will greatly enhance the value of the corporation you run. There will be spectacular profits to be made just by eliminating the rule that prohibited corporations from owning both newspapers and TV stations in the same market. Under Bush, your ability to increase the size and power of your media holdings will be accompanied by the pricing leverage that can only come with monopolizing an essential service in a geographic area.

Al Gore, on the other hand, is the son of a wealthy tobacco farmer and U.S. Senator. He has rather anti-business views.  Known as a fairly deep thinker and an energetic doer, though somewhat stiff and formal in situations where he feels uncomfortable, he wrote a book that identified him as a passionate environmentalist.  Gore believes in governmental regulation to protect workers, to force businesses to pay a minimum wage, and to protect the environment His social conscience would cost businesses like yours a great deal of money.

You are aware that Gore opposes deregulation of the communications industry. You know he believes that the federal government should have an active role in protecting the public against actions by your company that might be profitable for you but harmful to society. He steadfastly opposed concentrating media power in just a few hands, including yours.

You consider your media subsidiaries to be like any other aspect of your enterprise— They exist to maximize your profits.

As a corporate executive for a huge media conglomerate, you are confronted with a stark choice: Huge profits under a Bush Administration, or lesser revenues under Gore.

Using our 20-20 hindsight, let us look at a few of the actions and proposals made by the Bush administration, after only nine months in office, that will benefit you and your corporation.

·        Cabinet appointments and lower level staffers who are generally businesspeople, and often opponents of the objectives of the very agency they have been chosen to head.  Your company will profit by reduction in government oversight over its activities.

·        A bankruptcy bill that makes it harder for ordinary people to go bankrupt, even if their burden of debt was caused by loss of a job or huge medical bills due to catastrophic illness.  Your company, if it does any lending, will profit.  GE, for example, owns both NBC and the GE Financial Network.

·        Repeal of workplace ergonomic rules that would keep workers from suffering repetitive-stress injuries.  Your company will profit by not having to buy special furniture or design special workspaces for workers.

·        Killing the rules that allowed government officials to consider whether a business has broken the law in the past, before awarding it a government contract.  Your company will profit if you consider breaking the law, and paying fines if you are caught, merely a cost of doing business.  Companies like GE, for example, about whom GE Workers United wrote,  “It is not surprising that the Project on Government Oversight has cited GE as having defrauded the U.S. government 16 times in the 1990s, by far the largest number of any company.”

·        Proposing to partially privatize Social Security.  Your company will presumably profit (no specifics have yet been proposed) by paying a reduced employer portion to FICA.  If you are GE, you will benefit further since privatization is expected to be a bonanza for mutual funds.  GE Capital Services is one of your subsidiaries.

·        Giving a tax cut to the very richest Americans, even though the cut may endanger the Social Security pensions of the Baby Boomers.  You, who are most likely paid tens of millions of dollars a year, will personally profit considerably.

·        A proposal to reduce the capital gains tax.  Since most of your compensation consists of stock options, you will pay much less tax on the money you gain from selling your stock.

Because you run a media company, however, probably the most important action taken by the Bush administration was the appointment of Michael Powell, son of Secretary of State Colin Powell, as head of the Federal Communications Commission (FCC).  Powell has never seen a merger that he doesn’t like.  As a commissioner of the FCC, he participated in the decision to allow the AOL/Time Warner merger, even though he had a conflict of interest because his father was a member of the AOL Board of Directors at the time, and holder of a significant number AOL stock options.  Commenting on a rule that a single company may not own stations that reach more than 35% of households, Powell said, “There is something offensive to First Amendment values about that limitation.”

Never mind the offenses to the First Amendment committed by the concentrated media we see today, where heads of news divisions are indistinguishable from the suits in the home office, and where the bottom line is all that matters.

Even though six companies already own half of all communication media, you see many more lucrative outlets that you want to acquire.  With further deregulation, your company can make billions more dollars by mergers and acquisitions.  You don’t even have to do the hard work of creating new lines of business.  You can just buy them.  You can reduce costs by centralizing certain functions.  And the more media “products” you have, the more easily you can cross promote them.

Mel Karmazin of Viacom/CBS has been the master of cross promotion of products throughout his company: The top songs on an Viacom subsidiary Infinity radio station playlist dovetail with what is being shown on Viacom subsidiary MTV, which coincides with what songs appear on Viacom subsidiary Paramount movie soundtracks, which parallels the singers that are profiled on Viacom subsidiary CBS news and entertainment programs. This omnipresent cross promotion creates media-as-perpetual-commercial, public interest be damned, with the multiplier effect increasing as the conglomerate expands.

Under Bush, the pace of the hugely profitable cross promotion movement would be allowed to greatly accelerate.

If your company has broadcast outlets, deregulation is even more important to you.

·        Freedom from public service requirements would allow you to broadcast only those programs that make the most money.  Forget children’s programming.  Forget giving time to political candidates.  An added benefit of giving political candidates less airtime is that you force them to buy more advertising, thereby adding to your profits.

·        Freedom from language, sex, or violence restrictions would enable you to air any programming that earns ratings, now matter how vile, without fear of being fined.  Karmazin’s golden goose Howard Stern would have no restrictions whatever on his language or his actions.

·        Freedom from restrictions on ownership of news dissemination outlets in one city would allow you to promote your political point of view in entire markets, without any competition for those views.

As a media executive, your concern is not the disadvantages that deregulation would inure to the general public.  The pursuit of profits at the expense of journalistic integrity and editorial quality has had certain consequences for them, as well.

·        Staff reductions in the service of ever more profits have resulted in less investigative reporting, and lower quality of the reporting that does exist.  Reporters and editors rely more on press releases as sources of information, but lack the resources to check the facts asserted in them.

·        A mentality of caring for ratings above all cheapens news reporting, dumbs it down, and causes an increase in reporting on celebrities.

·        Advertisers are king in this environment.  If they do not like a topic, that topic is not published or aired, even if it is something the public needs to understand in order to make informed decisions at the polls.

·        The more concentrated the industry, the less likely news outlets are to initiate investigative reports about one another.  And your news division does not investigate other subsidiaries of your conglomerate.

·        Editors know that they have to be careful how they report on certain people because you socialize with the people your journalists cover.  Reportedly, Katherine Graham once kept a story critical of Henry Kissinger from being published in her newspaper, the Washington Post, until after she had hosted a dinner party in his honor.

According to Jerold M. Starr, writing on the website TomPaine.com, famed retired broadcaster Walter Cronkite has complained that news executives “are helpless when top management demands an increase in ratings to protect profits.”  No wonder Americans are watching and reading mainstream media less and less.

You do not have to tell the reporters and editors who work for your media empire how to report the news the way you want to see it.  You are much more subtle than that.  If you are Jack Welch, CEO of GE during this time, you make examples of certain people.  Tim Russert, for example, pleases you.  He calls the Bush campaign’s “opposition research” team every few days to find out what dirt they have invented about Al Gore lately.  And he reports their lies as fact.  You publicly praise Russert.  You make certain that everyone knows you have personally rewarded him with a multi-million dollar contract.. He is a daily reminder to his colleagues of the benefits of being an obedient employee.

Claire Shipman is another story, however.  You are not happy with her.  Her assignment is to cover the Gore campaign, but in your opinion her reporting is too favorable to the Vice President.  You chew her out publicly.   Her departure from your newsroom sends a powerful message to those who remain.

Without issuing a memo or giving verbal commands, you have insured that your journalist employees have gotten the message about how they should cover the campaign.

Still assuming that you are Jack Welch, you met with Bush at the beginning of his administration to give him your advice regarding economic policy.  You had input into an energy policy that recommends use of nuclear power, and building of nuclear plants, one of your company’s lines of business.  Bush even nominated Francis S. Blake, formerly your Senior Vice President for Corporate Business Development, as Deputy Secretary of the Department of Energy.

George Bush supported your bid to merge with the large European computer company Honeywell.  The deal did not go through only because it was stopped by the EEU.

The Bush administration has ordered a cleanup of the Hudson River, to be paid for by GE. But before the election GE had every reason to believe it would not be forced to pay the $460 million cost of the cleanup.  According to the CNN AllPolitics website, “‘GE thought it had a deal,’ says an industry lobbyist.”  After all, James Connaughton, a lawyer who represented GE in Superfund legal fights, was appointed by Bush to head the White House Council on Environmental Quality. 

Welch’s reaction:  GE is ‘paying the price for Kyoto and arsenic.’”   He understood that Bush wanted to come through for GE, but political pressure from those in his own party, including the governor of New York, prevented it. Still, the former GE chairman is ecstatic about his favorite politician’s performance thus far: “President Bush has done a great job,” said Welch. “He’s even exceeded the expectations of those of us who supported him.”

That support was in part financial. According to GE Workers United, “GE uses its enormous political war chest to lobby for greater corporate welfare and fewer benefits for ordinary American citizens.” The Center for Responsive Politics reported that GE contributed almost a million dollars to the GOP in 2000. However, a far more valuable contribution was the fawning pro-Bush coverage on NBC News. This began with NBC dutifully repeating Bush campaign slurs against John McCain in the Republican primaries, and continued nonstop through the post-election Florida contest when Tim Russert demanded that Al Gore concede even before the votes were recounted.

You, the CEO of a huge diversified conglomerate that owns a media conglomerate, had a tremendous financial interest in seeing that George Bush was elected president.  You had every reason to believe that his administration would provide great benefits to you and to your company.  Bush has begun to follow through. The decision by the FCC to eliminate the rule that limited concentrated corporate ownership of the media will, by itself, make your commitment to the Bush campaign one of the great investments in American corporate history.

You have already hit the jackpot, and there’s more to come. If FCC Chairman Michael Powell follows through on his promise to deregulate your industry “as much as possible”, then extraordinary wealth awaits the media giants who supported George W. Bush in 2000.

In business, wise decisions are defined as those that create wealth. It does not matter in the least to a hardheaded businessperson that the majority of those who voted in the 2000 presidential campaign voted for Al Gore.  It does not matter that the issues Al Gore supported are the issues supported by large majorities of the American people. It does not matter that the views of the majority are increasingly unrepresented in the mainstream media.

As A. J. Liebling once observed, “Freedom of the press is guaranteed to anyone who owns one.”

You have done everything in your power to put George W. Bush in the White House.  He has given your company huge monetary benefits in return.  Your industry has demonstrated a willingness to do what is necessary to keep Bush politically healthy, sometimes in spite of himself.  It is so important to your financial interests that he remains popular enough to effectively promote your agenda that nothing he says or does merits the pummeling you applied to his uncooperative predecessor. Looking at the coverage of Bush that you and your fellow media titans provide to the American people, no one would ever suspect that your favorite politician has been at the helm of a nine month transformation from peace and prosperity to war and recession.

If your company is a member of the Consortium of newspapers that commissioned the National Opinion Research Center of the University of Chicago to perform the definitive study of all uncounted ballots in the Florida 2000 presidential election, then your reporters in Florida have witnessed the decisive pro-Gore trend of that study. Your corporation has a tremendous financial incentive to keep the accurate results of that study from becoming public, given that the results will delegitimize the politician who is promoting your business interests.

The media conglomerates chose sides in the 2000 election based on the one and only thing that matters to multinational corporations – profit. They accurately determined that George W. Bush was the candidate who would best allow them to maximize that profit. They have a huge financial stake in the political well being of Bush. And now, they have the results of a ballot study in Florida that unexpectedly shows a decisive victory for Al Gore.

Journalistic integrity dictates that they release the accurate results of that study to the public.

Financial self-interest dictates that they do not.

Unless public pressure causes the media elite to decide that failing to release the accurate results of the ballot study would do them more harm than good, it is likely that financial self interest will trump journalistic integrity.

As usual.

 

Sources

Janine Jackson,Their Man in Washington,” Fairness and Accuracy in Media, October 2001

Jerold M. Starr, “Needed: An Independent Public Broadcasting Service”, TomPaine.com, October 5, 2001

GE Workers United, “General Electric and Corporate Political Influence”, geworkersunited.org, June 2001

Jeffrey Kluger, “Here comes the dredge,” CNN.com, undated

Media Research Center, “NBC News ‘Cheering for Gore’,” August 28, 2001

Danny Schechter, “Where Have All The Muckrakers Gone?”, mediachannel.org, October 3, 2001

Martin Lewis, “This May Be a Pre-Mortem of the 2000 Campaign,” Time, Nov. 03, 2000

Media Whores Online, “The Welch-Russert Connection,” undated

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Last changed: December 13, 2009