Has the federal government embarked on an illegal payola scam with the nation's television networks? And has the nation's drug czar blown smoke at Congress to escape ongoing congressional oversight?
A Salon exclusive published Thursday described a hidden government campaign to insert anti-drug messages into TV programs. The arrangement was concocted by the office of the nation's drug czar, Gen. Barry R. McCaffrey, and its ad buyer and was carried out by the six networks: ABC, CBS, NBC, the WB, Fox, and, this TV season, UPN.
As disclosed Thursday, the scheme began in fiscal year 1998, when Congress appropriated nearly $200 million a year over five years for paid anti-drug advertising. But there was a catch: Congress said the networks had to give the government a two-for-one deal on the ads. Instead, the networks and government officials decided that anti-drug themes and stories in prime-time TV shows could take the place of the free ads. Ultimately, promulgating government-approved propaganda afforded the networks the opportunity to earn buckets of extra cash.
The arrangement raises legal questions. Some observers think the government may have run afoul of the nation's anti-payola regulations. Payola entered public consciousness during the 1950s, when rock 'n' roll impresarios were convicted of bribery for paying DJs and radio stations to play specific records.
The payola laws that followed require broadcasters to reveal any financial considerations, direct or indirect, that yield on-air exposure. Today, in the arrangement uncovered by Salon, the networks are earning millions in financial incentives from the government in exchange for inserting anti-drug plots in TV shows.
Is the practice illegal? Perhaps.
Clearly federal law requires that anyone financially influencing or contributing to programming content be revealed at the time of broadcast. That's why game-show credits include disclosures like, "Joe Game-Show Host's suits provided by Botany 500." The drug-policy office's financial incentives certainly could be construed as, to quote the law, "matter for which money, service or other valuable consideration is either directly or indirectly paid or promised to, or charged or accepted by such station ..."
Andrew Jay Schwartzman of the Media Access Project says there's a "rigid requirement" to disclose direct or indirect sponsorship. While he couldn't say for certain, Schwartzman believes "It's likely it's a violation."
An FCC enforcement bureau official says, "I was not aware [of the ONDCP financial incentives]." He adds, "We haven't received any complaints yet. If we do receive a complaint, we'll proceed from there."
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Whether or not the deal is illegal, it's clear that it wasn't exactly what Congress had in mind when it authorized the drug-ad funding. And until recently, no one in Congress knew much about what the drug czar's office had been up to -- and many still don't.
Rep. Jim Kolbe, R-Ariz., chair of the House subcommittee that appropriates funds for the drug office, says he had no idea until late last year that anti-drug shows were being used to free up half-priced ad time owed to the government. Alan Levitt, the official who runs the campaign for the drug-policy office, can name no members of Congress who knew of the arrangement prior to this fall, two years after the campaign's initiation.
In the past, before both the House and the Senate, McCaffrey has referred to the deal only obliquely, making reference to "entertainment venues" or "pro bono programming." In March 1999, for example, he called the arrangement "an equal added dollar's worth of anti-drug public service, pro bono activity." Nowhere did he tell Congress that his office was horse-trading valuable advertising time for TV shows that promulgated the government's anti-drug messages.
After Kolbe learned of the deal from this reporter, he summoned McCaffrey for explanation, and the snow job continued. McCaffrey appeared before Kolbe's appropriations subcommittee in October 1999. There McCaffrey made his most direct, if brief, statement yet: "We allow public affairs and programming to count as part of a network's public service contributions," he said. But even this was buried in a complex discussion of formulas, and he did not make it clear that the practice frees up millions of dollars in advertising time for the networks.
Following the hearing, Kolbe declared himself "satisfied that it's legitimate." Nonetheless, he marvels at the unusual Hollywood-government pact: "I never thought of it before, and I'm still not sure that Congress intended it."