McCain Link To Donor Questioned

A senator promotes a government policy sought by a corporation while a tax-exempt group closely tied to him solicits and gets $200,000 from the same company.

Campaign finance watchdogs say that creates the appearance of a conflict of interest. To their surprise, the senator is Arizona Republican John McCain, whom they usually praise for advocating campaign finance restrictions.

McCain's help to Cablevision Systems Corp. included letting its CEO testify before his Senate committee, writing a letter of support to the Federal Communication Commission and asking other cable companies to support so-called a la carte pricing.

McCain had expressed interest in exploring the a la carte option for years before Cablevision advocated it but did not take a formal position with regulators until after the company's first donation.

Most of the cable industry opposes the flexible pricing plan, which would allow customers to pick the channels they want rather than buy fixed-price packages. McCain, Cablevision and other supporters say it would lower prices for consumers, but congressional and private studies conclude it could make cable more expensive.

The nation's eighth largest cable provider, Cablevision serves 3 million customers in the New York area.

McCain's assistance in 2003 and 2004 was sandwiched around two donations of $100,000 each from Cablevision to The Reform Institute, a tax-exempt group that touts McCain's views and has showcased him at events since his unsuccessful 2000 presidential campaign.

The group also pays McCain's chief political adviser, Rick Davis, $110,000 a year. Cablevision's donations accounted for 15 percent of the institute's fund-raising in 2003, tax records show.

McCain said he saw nothing wrong with the group's raising money from a company whose issue he championed because the donations didn't go to his re-election campaign. He said — and documents provided by his office show — he expressed interest in a la carte pricing since at least 1998, well before Cablevision advocated it.

"If it was a PAC (political action committee) or if it was somehow connected to any campaign of mine, I would say to you, that's a legitimate appearance of conflict of interest. But it's not," McCain told The Associated Press.

"There's not a conflict of interest when you're involved in an organization that is nonpartisan, nonprofit, nonpolitical."

Specialists on political ethics said they didn't see any distinction.

"I think there is an appearance issue any time you have a company or an interest giving large donations to any organization associated with a member (of Congress)," said Larry Noble, the former chief lawyer for federal election enforcement who now heads the Center for Responsive Politics.

Davis, who ran McCain's 2000 presidential campaign, said he went to New York and personally asked for the donation from Cablevision chief Charles Dolan after another donor said he might give. The solicitation occurred one week after Dolan testified before McCain's Senate Commerce Committee in May 2003 in favor of a la carte pricing. The company made its first $100,000 donation in July 2003.

The senator then wrote to the Federal Communications Commission chairman advocating Cablevision's position in May 2004. McCain also wrote to other cable companies, urging them to support a la carte pricing.

Cablevision gave a second $100,000 donation in August 2004. Twelve days later, McCain wrote Dolan about the pricing issue, urging him to "feel free to contact me to discuss these issues further."

McCain said he was involved in the cable pricing issue as far back as 1997, well before Cablevision pushed a la carte pricing.

"I have been fighting the cable companies for years on the issue of cable rates, and I, after numerous hearings, came to the conclusion that we should not force people to pay for programs that they don't want to see."

McCain continued pushing the FCC to adopt the policy even after the Government Accountability Office, Congress' auditing arm, concluded such a system might produce higher prices.

McCain, who requested the study, said he considered its methodology flawed because the audit looked at a la carte pricing in isolation rather than as one of several consumer options.

Craig Moffett, a cable analyst at Sanford C. Bernstein & Co. in New York, said his firm studied a la carte pricing and concluded it could hurt customers.

"I don't know why he remains so stubbornly wedded to the idea," Moffett said of McCain. "I just think it sounds very populist, and there's nothing more appealing than saying, 'I'm going to lower your cable bills' as a way to make voters happy."

Consumers Union, however, shares McCain's view that a la carte pricing would help consumers.

In his interview with AP, McCain also said he considers himself merely an adviser to The Reform Institute.

Davis acknowledged the institute often uses the senator's name in press releases and fund-raising letters and includes him at press conferences because McCain attracts more coverage, but he said McCain had nothing to do with soliciting Cablevision's money.

Cablevision said it didn't believe its donations influenced McCain.

"Our experience has been that Senator McCain makes up his own mind on every issue," Cablevision spokesman Charlie Schueler said. "Over the years, he has disagreed with some of our positions, agreed with others, and been indifferent to most."

McCain and four other senators were criticized in the early 1990s for taking donations from and providing assistance to failed savings and loan executive Charles Keating.

After that, McCain began championing an end to large election campaign donations from corporations, unions and wealthy people. In November 2002, Congress passed a campaign finance law bearing his name.
By Sharon Theimer