Dialing for Presidential Dollars

How and Why the Communications Industry Is Investing in the Presidential Race

In supporting 2008 presidential hopefuls, the political action committees (PACs) that fall under the banner of “telephone utilities” favored Republicans, while computer and Internet PACs overwhelmingly endorsed Democrats. However, as this issue went to press in early October, Democrats claimed a slight lead in such donations.

By the end of June, they had received more than $1.4 million from PACs formed on behalf of telephone utilities, and computer and Internet interests. Republicans reported $971,472.

These stats reflect fundraising data submitted to the Federal Election Commission for the first six months of 2007. The Center for Responsive Politics, a Washington, D.C.-based non-partisan, non-profit research group that tracks money in politics, compiled the information by industry and candidate. Updated numbers were scheduled for release after this issue of xchange went to press.

The Center for Responsive Politics splits the communications market into two industries: telephone utilities, and computer and Internet. It calculates overall contributions by lumping money from PACs — made up of individuals, employees and national donor networks — with gifts of more than $200 from individuals. The center also lists each candidate’s top 20 contributors (see chart). Those are company-affiliated PACs, not direct company backers, which explains why industry PAC totals don’t match top 20 donor totals.

Arizona Sen. John McCain was the sole Republican to pull in six figures — $147,000 — from telephone utilities PACs. He obtained a little less from computer/Internet PACs. Sens. Hillary Clinton, D-N.Y., and Barack Obama, D-Ill., on the other hand, had better luck with those entities, recording more than half a million dollars each. Their success with phone utilities PACs wasn’t as pronounced. Collectively, Clinton and Obama received about $162,000 from those groups.

Rankings for both parties were determined by the amount of money raised by the end of June. The three leading Republicans at press time were Mitt Romney, former Massachusetts governor; Rudy Giuliani, former New York mayor; and McCain. The principal Democrats were Clinton, Obama and John Edwards, a former Congressman and 2004 presidential aspirant.

Making the Connections

McCain received $72,150 from IDT Corp. and $79,500 from Univision. His tie to IDT is Jim Courter, CEO and vice chairman of the board. A former New Jersey Congressman, Courter serves as McCain’s national finance co-chair. McCain’s other finance co-chair is Univision chairman Jerrold Perenchio.

Meanwhile, Giuliani recorded $34,600 from phone utilities PACs and $214,045 from computer and Internet PACs. None of his major backers, however, comes from either of those industries.

Romney obtained $13,200 from phone utilities PACs and $434,577 from computer and Internet PACs. His ninth-highest contributor was a PAC for Compuware Corp. Compuware is a Michigan-based software developer and IT services provider. Its PAC gave Romney $73,650. Romney reportedly is friends with Compuware founder and CEO Peter Karmanos Jr.; Romney’s brother, G. Scott Romney, sits on the Compuware board.

On the Democratic side, Clinton outshone her counterparts in terms of money from phone utilities PACs. She accepted $82,050, slightly more than Obama at $79,865, and significantly more than Edwards at $16,500.

Yet, she was second to Obama on the computer/Internet PAC side. Clinton collected $550,770; Obama garnered slightly more, at $554,648.

Of Clinton’s top contributors, three were from communications PACs. Cable provider Cablevision Systems Corp. was sixth at $116,575; film studio and television network owner Viacom Inc. was ninth at $102,500; and media colossus Time Warner was eleventh at $98,100. Each of those companies is headquartered in New York, the state Clinton represents as a senator. A Time Warner PAC also helped fund Clinton’s campaign for re-election to the Senate last year.

Obama, meanwhile, also counted the Time Warner and Viacom PACs among his biggest supporters. Time Warner’s committee had given the Illinois senator $92,400 by press time, making it Obama’s 15th-highest advocate. Viacom’s PAC ranked 19th with its $80,200 in contributions.

Time Warner and Viacom long have financed Democratic politicians, along with the occasional Republican.

For his part, Edwards received $16,500 from phone utilities PACs and $131,660 from computer and Internet PACs, none of whom were among his 20 main underwriters.

The 2008 elections are critical on a number of levels. For the telecom industry, a Democratic win could mean a halt of the FCC’s deregulation free-for-all. Telecom, under the Bush regime, has undergone a marked change from the competitive principles promised by the Telecommunications Act of 1996. UNE-P rules are extinct, special access isn’t far behind, and the continued granting of Bell forbearance petitions is eroding the law’s ideology.

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