McCain Disputed On 1999 Meeting

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In 1998, Paxson launched PaxTV, his national network, which featured reruns of "Touched by an Angel" and other family-friendly fare. There was a major hole he wanted to fill in his network: Paxson had no presence in one top-20 market -- Pittsburgh.

The transaction called for the Christian broadcaster Cornerstone TeleVision of Wall, Pa., to take over the noncommercial license of WQEX, the sister station to public broadcaster WQED. Cornerstone would then sell its commercial license to Paxson for $35 million. The money would be split between Cornerstone and WQED, which was operating in the red.

The proposed station swap was highly contentious in Pittsburgh and involved a multi-pronged lobbying effort by the parties to the deal. Local activists and some community leaders had objected to one of their public TV stations being turned over to a religious channel.

The public opposition caused a long delay at the FCC, and by late 1999, it had been 30 months since the deal was offered for FCC approval. "What you had was the FCC normally taking a year to approve the transfer of stations, but they took two years," Paxson said.

Lobbyists for Paxson and WQED gathered to plan a strategy to put pressure on the FCC. The group decided to ask McCain for a letter, and Iseman volunteered to get it, according to a participant in the meeting who asked to remain anonymous because of the sensitivity of the issue. Lobbyists say Iseman regularly talked about her access to McCain and his office.

Lanny Davis, a member of that group and a former aide to President Bill Clinton, said the lobbyists wanted a strong letter urging that the commission approve the deal.

McCain's letters did not go that far but were considered an anomaly for a senator who has become an advocate of ethical boundaries. McCain, as head of the committee overseeing the FCC and its budget, had significant sway.

On Nov. 17, McCain sent a letter to FCC Chairman William E. Kennard saying, "I write today to express my concern about the Commission's continuing failure to act" on the three-station deal involving Paxson.

McCain had flown on Paxson's corporate jet four times to appear at campaign events and had received $28,000 in campaign donations from Paxson and its law firm.

The second letter came on Dec. 10, a day after the company's jet ferried McCain to a Florida fundraiser aboard a yacht in West Palm Beach, Fla. The fundraiser was arranged by Hector Alcalde of Alcalde & Fay and was hosted by a cruise line that Alcalde had represented, Paxson said. Paxson said he attended the fundraiser.

The second letter was sent to other members of the FCC after McCain had not received a reply from Kennard.

"The sole purpose of this request is to secure final action on a matter that has now been pending over two years," McCain wrote. "I emphasize that my purpose is not to suggest in any way how you should vote -- merely that you vote."

This letter was crucial because the deal among Paxson and the two other parties was set to expire. Without action by mid-December, the deal could be dead, Paxson said.

McCain wrote that he expected the commissioners "to advise me in writing no later than close of business Tuesday, December 14, 1999."

On Dec. 14, Kennard wrote back, warning McCain that he had breached FCC policy.

"Your letter," Kennard wrote, "comes at a sensitive time in the deliberative process as the individual commissioners finalize their views and their votes on this matter. I must respectfully note that it is highly unusual for the commissioners to be asked to publicly announce their voting status on a matter that is still pending."

Another commissioner, Gloria Tristani, who now practices law in Washington, said McCain's interference was offensive. She noted that, in the Paxson matter, the commission was serving as a quasi-judicial body.

"It was just not proper," Tristani said. "It is like going to a court and saying, 'Tell us before it is final how you voted.' "

McCain's request for a vote by a certain date also rankled. "It was highly contentious and could impinge on the process," Tristani said. "It was very controversial."

After the letters became public in 2000, they were widely criticized. Kennard's predecessor, however, defended McCain, saying he did not find the letters objectionable. A subsequent review by the FCC General Counsel's Office determined that McCain had violated the commission's ex parte rules, though the breach was deemed inadvertent.

Five days after McCain's second letter, the FCC voted 3 to 2 to approve the deal. The commission also imposed a condition prohibiting Cornerstone from "proselytizing." Cornerstone would not agree to those terms, and the deal collapsed.

Research editor Alice Crites contributed to this report.