NEW YORK, NY (09/23/2013)(readMedia)-- Today, Common Cause/NY released a new "Moreland Monday" analysis of the political contributions of New York's "Big Telecom" providers. AT&T, Cablevision, Comcast, Time Warner Cable, and Verizon – and their two primary trade organizations, the Cable Telecommunications Association of NY and New York State Telecommunications Association- are among the largest political donors in the state, giving a combined total of nearly $12 million since 2005.
Big Telecom maximizes its giving by exploiting two key weaknesses in New York State's campaign finance law – the "Soft Money" loophole and the "LLC Loophole" – which allow companies to bypass the $5,000 annual limit on corporate contributions. Donations enabled by these two loopholes account for nearly 70% of Big Telecom's contributions. As with other industry giving, Telecom targets power by giving to the Albany leadership – the majority conferences in the Legislature, the state party committees, and the Governor.
In exchange, numerous bills to further regulate the telecommunications industry and enhance consumer benefits never see the light of day despite bi-partisan support. Such bills repeatedly die in committee or never make it to the active list, while special tax breaks on cable and internet service that cost the state nearly half a billion in annual revenue continue to grow. Multi-million dollar campaign contributions clearly help Big Telecom maintain the status quo of corporate control, high prices, and lax regulation.
"Big Telecom exemplifies the pay to play culture which has come to define Albany, giving generously to the leadership in exchange for veto power over bills which favor the public interest. But thanks to New York's lax campaign finance laws, democracy doesn't have to interfere with the corporate oligarchy. Add Big Telecom to the long list of why we need campaign finance reform now, so that average people don't get sold out for more expensive and poor quality telecommunications service," said Susan Lerner, Executive Director of Common Cause/NY.
"Here's the evidence that giant telecom companies are taking advantage of huge loopholes and lax regulations so they can increase profits, often at the expense of everyday New Yorkers," said Karen Scharff, Executive Director of Citizen Action of New York on behalf of the Fair Elections for New York campaign. "It's time for our leaders in Albany to acknowledge the ever growing wealth of evidence that we need to fix our broken campaign finance system and pass a comprehensive Fair Elections system centered around publicly financed elections."
Analysis
"Big Telecom" Donor | NYS Contributions 2005- July 2013 |
Cablevision | $5,320,555.10 |
Time Warner Cable | $2,251,301.54 |
Verizon | $2,073,602.93 |
AT&T | $1,231,177.44 |
Cable Telecom Assoc. of NY | $733,371.48 |
Comcast | $213,675.95 |
NYS Telecom Assoc. | $119,922.92 |
TOTAL: | $11,943,607.36 |
Big Telecom: Soft Money and LLC Loophole Contributions by Donor
"Big Telecom" Donor | Soft Money Contributions | Soft Money % | LLC Loophole Contributions (2) | LLC % | PAC Contributions (3) | PAC % |
Cablevision | $1,814,337.53 | 34% | $1,534,136.23 | 29% | $1,939,255.51 | 36% |
Time Warner Cable | $1,582,324.58 | 70% | $140,300.00 | 6% | $479,227.54 | 21% |
Verizon | $1,694,156.08 | 82% | $0.00 | 0% | $293,410.89 | 14% |
AT&T | $650,037.93 | 53% | $0.00 | 0% | $570,527.38 | 46% |
Cable Telecom Assoc. of NY | $607,751.64 | 83% | n/a | n/a | $113,746.82 | 15.5% |
Comcast | $125,000.00 | 59% | $84,200.00 | 39% | $0.00 | 0% |
NYS Telecom Assoc. | $0.00 | 0% | n/a | n/a | $112,600.00 | 93.9% |
TOTAL: (4) | $6,473,607.76 | 54% | $1,758,636.23 | 15% | $3,508,768.14 | 29% |
What Does Big Telecom Get in Exchange?
Compared to most other developed nations, broadband internet and wireless access in the United States is slower, more expensive, and less widely available. In many areas, including most of New York, there is only a single monopoly provider of broadband access. Many low-income households can't afford broadband and wireless access and many rural households are shut out of the network entirely. (5)
In New York, multi-million dollar campaign contributions appear to be essential tools in helping Big Telecom build political power to maintain the status quo of corporate control, high prices, lax regulation, and generous subsidies.
Campaign Contributions Give Big Telecom Veto Power in Albany
In New York State, we see examples every year of public interest telecom bills that have bi-partisan support, but are opposed by the industry, die in committee or not be allowed a floor vote.
In 2013, Big Telecom companies lobbied on the following bills:
The massive soft money donations to the party leaders by Big Telecom are playing a key role in killing these bills. Despite bipartisan support, telecom bills in the public interest never seem to gain the support of the leadership.
Three Big Telecom Tax Breaks, $500 million in lost revenue
Since 1990, cable television service has been exempt from sales tax. (6) This exemption cost $260 million in 2010 and is predicted to cost $305 million in 2013. (7)
New York State imposes an excise tax on telecommunications services, but receipts from the sale of cable television service excluded from this tax. (8) This exclusion dates from 1995; it cost the state $121 million in 2009 and is forecast to amount to $128 million in lost revenue this year. (9)
Property used in the sale of telecommunications services or Internet access services is exempt from sales tax. (10) This exemption, which dates from 2000, cost the state $69 million in 2010 and is expected to cost $76 million in 2013. (11)
Issues for Further Investigation by the Moreland Commission
Big Telecom: Contributions to Statewide Candidates and Committees
Statewide Candidates and Committees |
Big Telecom Contributions (2005-July2013) |
Soft Money/Hard Money | Contributors |
1. NYS Senate Republican Committee |
$2,819,529.55 | $2.4 M soft money, $414,000 hard money | AT&T ($243,700) , CTANY ($296,403), Cablevision ($1,152,650), NYS Telecom Assoc. ($12,500), Time Warner Cable ($503,704), Verizon ($610,572) |
2. New York State Democratic Committee |
$1,476,000.00 | $1.46 M soft money, $20,500 hard money | AT&T ($90,000), CTANY ($65,000), Cablevision ($476,500), Comcast ($125,000) NYS Telecom Assoc. ($1,000), Time Warner Cable ($375,000), Verizon ($343,500) |
3. NYS Democratic Assembly Campaign Committee | $1,241,669.74 | $1.07 M soft money, $178,000 hard money | AT&T ($243,138), CTANY ($159,184), Cablevision ($307,130), NYS Telecom Assoc. ($5,000), Time Warner Cable ($316,218), Verizon ($211,000) |
4. NYS Democratic Senate Campaign Committee | $906,641.26 | $730,000 soft money, $177,000 hard money | AT&T ($153,800), CTANY ($27,248), Cablevision ($322,250), Time Warner Cable ($263,641), Verizon ($138,702) |
5. Governor Andrew Cuomo (D) |
$607,615.89 | n/a | AT&T ($46,500), Cablevision ($345,000), Comcast ($58,500), NYS Telecom Assoc. ($2,000), Time Warner Cable ($112,800), Verizon ($42,816) |
6. Republican Assembly Campaign Committee |
$233,871.33 | $210,000 soft money, $23,000 hard money | AT&T ($43,400), CTANY ($20,932), Cablevision ($6,250), NYS Telecom Assoc. ($2,850), Time Warner Cable ($94,200), Verizon ($66,240) |
7. New York Republican State Committee |
$223,662.96 | $219,000 soft money, $4,000 hard money | AT&T ($20,300), CTANY ($3,863), Cablevision ($43,000), Time Warner Cable ($45,000), Verizon ($111,500) |
8. Attorney General Eric Schneiderman (D) |
$161,000.00 | n/a | Cablevision ($81,000), Comcast ($25,000), Time Warner Cable ($55,000) |
9. The IDC Initiative | $83,000.00 | n/a | Cablevision ($30,000), Time Warner Cable ($53,000) |
10. Comptroller Tom DiNapoli (D) |
$64,000.00 | n/a | AT&T ($6,000), Cablevision ($51,000), NYS Telecom Assoc. ($2,000), Verizon ($5,000) |
11. Working Families Party | $45,236.90 | $45,000 soft money, $236.90 hard money |
CTANY ($45,000), Verizon ($236.90) |
Big Telecom: Top Ten Legislators Currently in Office
Top 10 NYS Legislators Currently in Office |
Big Telecom |
Office | Location | Contributors |
1. Dean Skelos (R) | $117,700.00 | Senator | District 9 – Nassau County |
AT&T ($20,800) , CTANY ($3,500), Cablevision ($37,850), NYS Telecom Assoc. ($4,350), Time Warner Cable ($28,500), Verizon ($22,700) |
2. George Maziarz (R) | $79,718.02 | Senator | District 62 -- Niagara, Buffalo and Rochester suburbs | AT&T ($18,950), CTANY ($4,368), Cablevision ($12,750), NYS Telecom Assoc. ($5,050), Time Warner Cable ($16,600), Verizon ($22,000) |
3. Tom Libous (R) | $57,150.00 | Senator | District 52 -- Southern Tier, Binghamton Area |
AT&T ($21,750), CTANY ($5,500), Cablevision ($6,750), Comcast ($500), NYS Telecom Assoc. ($400), Time Warner Cable ($14,750), Verizon ($7,500) |
4. Jeff Klein (D-IDC) | $49,450.00 | Senator | District 34 – Bronx-Westchester |
AT&T ($6,200), CTANY ($1,950), Cablevision ($22,500), Time Warner Cable ($18,300), Verizon ($300) |
5. Kevin Parker (D) | $34,444.00 | Senator | District 21 – Brooklyn | AT&T ($10,200), CTANY ($1,000), Cablevision ($5,500), NYS Telecom Assoc. ($850), Time Warner Cable ($9,744), Verizon ($7,400) |
6. Sheldon Silver (D) | $32,749.61 | Assembly | District 65 – Lower Manhattan |
AT&T ($9,295), CTANY ($500), Cablevision ($6,100), NYS Telecom Assoc. ($5,500), Time Warner Cable ($7,000), Verizon ($4,355) |
7. Charles Fuschillo (R) | $24,200.00 | Senator | District 8 – Long Island |
AT&T ($4,250), CTANY ($1,200), Cablevision ($14,700), NYS Telecom Assoc. ($400), Time Warner Cable ($1,500), Verizon ($2,150) |
8. Lee Zeldin (R) | $22,650.00 | Senator | District 3 – Long Island |
AT&T ($2,500), Cablevision ($6,900), Time Warner Cable ($8,250), Verizon ($5,000) |
9. David Valesky (D-IDC) | $21,550.00 | Senator | District 53 – Central NY |
AT&T ($5,800), CTANY ($2,550), NYS Telecom Assoc. ($1,000), Time Warner Cable ($11,100), Verizon ($1,100) |
10. Carl Heastie (D) | $21,500.00 | Assembly | District 83 - Bronx | AT&T ($7,850), CTANY ($500), Cablevision ($8,950), Verizon ($4,200) |
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(1) Not including contributions made by LLC's to soft money accounts.
(2)Contributions to soft money accounts by LLCs are included in soft money tally. "LLC Loophole Contributions" does not include Cablevision and Time Warner Cable's LLC contributions to supercharge their own PACs.
(3) Not including soft money contributions made by PACs.
(4) For an additional 1.7% of spending, it is unclear whether the contributor is a corporation, LLC, or PAC
(5) Susan P. Crawford, Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age. Yale University Press, 2013.
(6) N.Y. Tax. Law § 1105(c)(9).
(7) New York State Division of the Budget and Department of Taxation and Finance, Annual Report on New York State Tax Expenditures: 2013-14 State Fiscal Year 99, http://publications.budget.ny.gov/eBudget1314/fy1314ter/TaxExpenditure2013-14.pdf.
(8) N.Y. Tax Law § 186-e(2)(b)(2).
(9) New York State Division of the Budget and Department of Taxation and Finance, Annual Report on New York State Tax Expenditures: 2013-14 State Fiscal Year 74, http://publications.budget.ny.gov/eBudget1314/fy1314ter/TaxExpenditure2013-14.pdf.
(10) N.Y. Tax Law §§ 1115(a)(12-a), 1105(c)(3)(x).
(11) New York State Division of the Budget and Department of Taxation and Finance, Annual Report on New York State Tax Expenditures: 2013-14 State Fiscal Year 100, http://publications.budget.ny.gov/eBudget1314/fy1314ter/TaxExpenditure2013-14.pdf.