Congress Needs A Pay Cut

 News organizations cultivate a reputation for demanding transparency, whether by suing for access to government documents, dispatching camera crews to the doorsteps of recalcitrant politicians, or editorializing in favor of open government.

But now many of the country’s biggest media companies, which own dozens of newspapers and TV news operations, are flexing their muscle in Washington in a fight against a government initiative to increase transparency of political spending.

The corporate owners or sister companies of some of the biggest names in journalism — NBC News, ABC News, Fox News, The Washington Post, The Wall Street Journal, USA Today, Politico, The Atlanta Journal-Constitution and dozens of local TV news outlets — are lobbying against a Federal Communications Commission measure that would require broadcasters to post political ad data on the Internet.

As we have recently detailed, political ad data is public by law but not easy to get because it is kept only in paper files at each station. The FCC has proposed fixing that by requiring broadcasters to post online the details of political ad purchases, including the identity of the buyer and the price.

(ProPublica has been inviting readers and other journalists to send in the files to be posted as part of our Free the Files project.)

Over the past few months, several major media companies have dispatched top executives or outside lobbyists to the FCC to oppose the proposed rule or to push a watered-down version, disclosure filings show. (The FCC will vote on the issue April 27.)

Among them are:

• News Corp., which owns The Wall Street Journal and Fox News;
• Walt Disney, which owns ABC News and ESPN;
• NBCUniversal, which is owned by Comcast and includes NBC News;
• Allbritton, which owns several TV stations and Politico;
• Gannett Broadcasting, a division of Gannett, which owns USA Today:
• Post-Newsweek Stations, the broadcast division of The Washington Post Co.;
• Belo Cos., which owns 20 TV stations;
• Cox Media Group, which owns The Atlanta Journal-Constitution, the Austin American-Statesman and other newspapers and TV stations;
• Dispatch Broadcast Group, which owns Ohio and Indiana TV stations;
• Barrington Broadcasting Group, which owns several TV stations around the country;
• The E.W. Scripps Co., which owns TV stations and newspapers, including The Commercial Appeal in Memphis, Tenn.;
• Hearst Television Inc., which owns 29 stations;
• Raycom Media, which owns TV stations;
• Schurz Communications, which owns newspapers and TV stations nationwide.

(ProPublica has published stories in partnership with many of these news organizations, and has an agreement with NBC's owned and operated TV stations for pre-publication access to our news apps and a contribution by NBC to ProPublica.)

In a speech this week at the National Association of Broadcasters convention in Las Vegas, FCC Chairman Julius Genachowski excoriated the broadcasters as working “against transparency and against journalism.”

The industry’s opposition to the transparency proposal has sometimes been heated.In filings submitted to the FCC in January and March, Allbritton Senior Vice President Jerald Fritz raised the specter of “’Soviet-style standardization” of ad sales if political ad files are required to be put online in a single format.

In a February meeting with the FCC, Walt Disney executives complained about the “logistics and burden” of putting the political ad information online.

That month, executives from Disney, NBC and News Corp. argued in a meeting with FCC officials that posting the political ad data would allow “competitors in the market and commercial advertisers [to] anonymously glean highly sensitive pricing data.”

Television stations must by law offer political candidates the lowest rates on ads. Broadcasters have argued that making this information available online — and not just at stations — would hurt their ability to negotiate with other advertisers.

Advocates for the online disclosure rule have countered that the political ad information is already public by law and the measure would simply make the existing disclosure rules relevant for the Internet age. Advocates have also pointed out that keeping paper files in electronic form should actually be more efficient for stations.

Allbritton, NBC and Walt Disney did not respond to requests for comment on the FCC chairman’s charge that they have positioned themselves “against transparency and against journalism.” News Corp. declined to comment.

Some media companies have also pushed a watered-down proposal to post only some of the public political ad data, and to put it up on individual station websites instead of a central FCC website.

Washington lawyers representing the other companies fighting the rule — Barrington Broadcasting, Belo, Cox, Dispatch, E.W. Scripps, Gannett, Hearst, Meredith Broadcasting, Post-Newsweek Stations, Raycom Media and Schurz Communications — lobbied FCC officials in February, March and again this week.

The group suggested that instead of putting the full, itemized political ad data online, stations would post aggregate data once a week.

"What we were saying is, if you want the public to be informed about what's being bought at what price, maybe there's a simpler way to do it," Mary Jo Manning, an attorney representing the group, told ProPublica. "Transparency is giving people information that is useful."

But when the FCC pressed the group for details on its plan, the stations said they opposed posting even the aggregate data in a single format prescribed by the FCC. They also opposed posting the data on a central FCC website, saying they wanted to post the limited data only on the stations’ own websites. If enacted, both of those stances would make it more difficult to get and analyze the data.

Since there is a one-week sunshine period ahead of FCC votes, today is the last day that interested parties will be able to lobby the commission before its public meeting April 27. 

WASHINGTON — The Consumer Financial Protection Bureau on Tuesday will consider a host of new rules that would force the nation's mortgage servicers to provide greater accountability and transparency in their dealings with borrowers.

Responsible for collecting payments on behalf of mortgage lenders, mortgage servicers typically calculate interest rates on adjustable-rate loans and handle customer service requests about taxes, escrow accounts, foreclosures and loan modifications.

But in the housing meltdown that preceded the Great Recession, mortgage servicers were strongly criticized for providing faulty information to struggling borrowers, failing to correct errors in a timely manner and generally not providing enough assistance to help homeowners avoid foreclosure.

New rules being considered by the bureau would make it easier for borrowers to get information from and communicate with their loan servicers.

"For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress. It's time to put the 'service' back in mortgage servicing," said bureau director Richard Cordray.

Proposals under consideration include requiring servicers to provide regular monthly statements with a breakdown of payments by principal, interest, fees and escrow. Another proposal would require servicers to make good-faith efforts to contact delinquent borrowers and explain their options to avoid foreclosure.

The bureau also will consider requiring servicers to provide advance warnings to borrowers about interest rate changes on their adjustable-rate mortgages. A similar advance-notice requirement is also being considered before mortgage servicers could attach costly "forced-placed" insurance on a property when borrowers fail to maintain hazard insurance. Forced-placed insurance is typically more expensive than owner-provided coverage.

The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the bureau statutory authority to draft new guidelines to address problems in the mortgage servicing industry. The bureau will seek input from consumers and industry players before finalizing the new rules in January 2013.

Other possible new rules are designed to avoid confusion and accounting errors among servicers. These proposed requirements include promptly crediting a consumer's account the same day that a payment is received. Partial payments would be retained in a "suspense account" until the amount reaches one month's payment. Then the servicer would be required to apply the amount to the earliest delinquent payment.

Another possible rule change would give servicers five days to acknowledge a suspected error when reported by a consumer and 30 days to conclude an investigation. Errors relating to foreclosures or loan payoffs would require a shorter time frame.

The bureau also may require servicers to provide consumers with easy and ongoing access to their foreclosure prevention specialists who — working with underwriters — could evaluate troubled borrowers' eligibility for a loan modification or other options to avoid foreclosure.

Said Cordray: "The mortgage servicing rules we are considering reflect two basic, common-sense principles — no surprises and no runarounds."

Occupy Wall Street sympathizers in downtown Los Angeles, California, in November 2011 | Irfan Khan / Los Angeles Times/MCT

Occupy Wall Street encampments have been swept away in most cities, but their rationales live on in the “99 Percent Spring.” That’s the new shorthand for Occupy’s heir — an ongoing protest movement that covers a range of issues and actions.

Along with organized labor, groups like MoveOn, Greenpeace and Rebuild the Dream are uniting under a big umbrella to advocate for “economic justice for all.”

It’s a movement with roots in the street demonstrations and occupation of the Wisconsin Capitol in February 2011. After Gov. Scott Walker limited public employees’ collective bargaining rights, the outpouring of populist rage captured worldwide attention and prefaced a Walker recall election set for June.

Then last September, the Wall Street protests added a real and figurative drumbeat to the “fair tax” causes now embraced by the 99 Percenters. Around the country, protests are taking various shapes. Today at some Bank of America facilities, the movement aims to create an uncomfortable Friday the 13th for the banking giant.

Nothing appears to be planned in that regard for Kansas City banking facilities, but the overall goal is to urge customers to move their money to community banks and credit unions — entities that had lesser roles in the foreclosure debacle.

Also on tap for the 99 Percent Spring is picketing at about 30 annual shareholder meetings of public companies that paid little or no income taxes.

In Kansas City, the movement includes:

• Thursday night in midtown Kansas City, at one of about 900 nonviolent protest training sessions scheduled nationwide, several dozen people registered to hear how to stage legal, peaceful demonstrations.

• Next Tuesday, this year’s Tax Day, a 3:30 p.m. rally downtown at Barney Allis Plaza is designed to prepare participants to deliver “bills for unpaid taxes” to four corporate offices near 12th and Main streets.

• A separate Tax Day rally, with labor union and community group support, is scheduled for 1 p.m. Tuesday at Washington Square Park, at Pershing and Grand boulevards. Organizers want the Bush administration’s tax cuts for the wealthy repealed and “fair share” taxes imposed on millionaires.

“We’re in a fight for economic fairness,” said Jeremy Al-Haj, an organizer with a group that will lead the Barney Allis Plaza rally. “We’re spreading the message that we’ve gone from a nation of prosperity for many to prosperity for a few.”

Although Occupy-style activities have been muted in Kansas City, the 99 Percent push is getting traction, aided by a well-oiled message machine — organized labor.

“We’re finally starting to break through to public opinion with what we’ve been saying for years,” said Lenny Jones, Missouri political director for the SEIU Healthcare union.

“There is a huge and growing economic divide in this country, and as politicians make ‘no new taxes’ pledges, more of the burden is falling on the lower and middle classes to pick up funding for our schools, our public safety workers, our social services,” Jones said.

In the Kansas City Tax Day events, organizers plan to march to downtown offices of Great Plains Energy/Kansas City Power & Light, Bank of America, AMC Theatres and Computer Sciences Corp. Their goal is to symbolically dun companies and their chief executives.

“We don’t expect any of the higher-ups in those buildings to play ball with us,” Al-Haj said. “But this is large-scale street theater to call attention to the fact that they don’t pay their fair share of taxes.”

Jones used KCP&L’s CEO as an example of why labor backed the bill: “If Michael Chesser made an $800,000 base salary last year, we’re asking why he couldn’t pay 30 percent on his earnings just like his secretary does.”

On Monday the Senate is scheduled to debate the “Buffett rule,” which would raise taxes on millionaires’ earnings to a rate on par with average workers. Most political analysts say the plan will go nowhere, but 99 Percenters applaud the conversation.

As for the focus on corporate taxes, KCP&L, like most companies criticized for not paying a “fair share,” responded that it has paid what it was required to pay.

“The claim we don’t pay our fair share is categorically unfair,” said Chuck Caisley, a KCP&L spokesman.

The utility in 2010 paid $260 million in federal, state and local taxes and $900 million from 2008 through 2011, although a portion are sales or use taxes collected from customers, Caisley said.

Protest organizers say they understand that street clashes with police alienate many of the hardworking union members — as well as non-union workers — whom they need for their economic justice campaigns to gain critical mass. That’s why nonviolent protest training is a key part of the agenda.

Planners acknowledge that they’re a collection of sometimes-strange bedfellows with clashing values. But during this election year, the 99 Percent Spring advocates say they’re trying to put differences on the back burner and make a unified noise.

Read more at kansascity.com

WASHINGTON — Moody's Investors Service has lowered the outlook for Alaska Railroad bonds from stable to negative, saying the U.S. Senate's move to gut the railroad's budget could leave it short of money to pay off debt.

The action applies to $135 million in Alaska Railroad bonds backed by federal dollars. The bonds mostly pay for track work, as well as collision avoidance technology and purchasing and renovating equipment.

Moody's said it was lowering the credit rating assigned to the Alaska Railroad bonds from A1 to a still solid A2. But it also said the rating is going to drop much further if the U.S. House agrees with the Senate plan to cut about $30 million from the railroad and the state doesn't step in with a bailout.

"The outlook is negative, reflecting the risk of future credit deterioration in the event that Congress passes (the legislation) ... Such measures would leave insufficient revenue for debt service in that event -- and in the absence of state support -- a significantly lower rating would be indicated," Moody's said.

A credit rating downgrade makes it more expensive for the railroad to borrow money in the future. The railroad hasn't heard from the other two major credit rating agencies, Fitch and Standard & Poor's, but the union that represents its train crews said last month that such a big budget cut could force the railroad to lay off a third of its employees, dramatically reduce passenger services and default on its bonds.

The management of the state-owned railroad corporation says it would try to avoid bond default all costs and is working to figure out what such a cut would mean. The railroad says the cut would reduce its Federal Transit Administration grant funding from about $35 million down to between $2 million and $10 million.

A cut of about $30 million would represent a major blow for the railroad, which last year had $13.4 million net income on total revenues of $188 million.

"We've got lots of different ways to look at it but everything comes around to the fact it's not good," railroad CFO Bill O'Leary said in an interview on Monday.

O'Leary said the railroad is working with Alaska Rep. Don Young to try and prevent the cut.

"There's a long way to go on this thing," he said. "We're going to work our darndest to make sure everyone understands the story and what the implications are."

The House and the Senate are fighting over what to do about transportation spending with no end in sight. Congress just passed a three-month extension of the federal transportation program to buy more time to sort it out.

The issue for the Alaska Railroad is language the state's congressional delegation put in the 2005 transportation bill setting up how the railroad would be funded. The Senate banking committee is taking the position that it was an earmark and that this year's transportation bill will have no earmarks.