McCain Disputed On 1999 Meeting
Broadcaster Recalls Urging FCC Contact

By James V. Grimaldi and Jeffrey H. Birnbaum
Washington Post Staff Writers
Saturday, February 23, 2008

Broadcaster Lowell "Bud" Paxson yesterday contradicted statements from Sen. John McCain's presidential campaign that the senator did not meet with Paxson or his lobbyist before sending two controversial letters to the Federal Communications Commission on Paxson's behalf.

Paxson said he talked with McCain in his Washington office several weeks before the Arizona Republican wrote the letters in 1999 to the FCC urging a rapid decision on Paxson's quest to acquire a Pittsburgh television station.

Paxson also recalled that his lobbyist, Vicki Iseman, likely attended the meeting in McCain's office and that Iseman helped arrange the meeting. "Was Vicki there? Probably," Paxson said in an interview with The Washington Post yesterday. "The woman was a professional. She was good. She could get us meetings."

The recollection of the now-retired Paxson conflicted with the account provided by the McCain campaign about the two letters at the center of a controversy about the senator's ties to Iseman, a partner at the lobbying firm of Alcalde & Fay.

The McCain campaign said Thursday that the senator had not met with Paxson or Iseman on the matter. "No representative of Paxson or Alcalde and Fay personally asked Senator McCain to send a letter to the FCC regarding this proceeding," the campaign said in a statement.

But Paxson said yesterday, "I remember going there to meet with him." He recalled that he told McCain: "You're head of the Commerce Committee. The FCC is not doing its job. I would love for you to write a letter."

McCain attorney Robert S. Bennett played down the contradiction between the campaign's written answer and Paxson's recollection.

"We understood that he [McCain] did not speak directly with him [Paxson]. Now it appears he did speak to him. What is the difference?" Bennett said. "McCain has never denied that Paxson asked for assistance from his office. It doesn't seem relevant whether the request got to him through Paxson or the staff. His letters to the FCC concerning the matter urged the commission to make up its mind. He did not ask the FCC to approve or deny the application. It's not that big a deal."

The Paxson deal, coming as McCain made his first run for the presidency, has posed a persistent problem for the senator. The deal raised embarrassing questions about his dealings with lobbyists at a time when he had assumed the role of an ethics champion and opponent of the influence of lobbyists.

The two letters he wrote to the FCC in 1999 while he was chairman of the Senate Commerce Committee produced a rash of criticism and a written rebuke from the then-FCC chairman, who called McCain's intervention "highly unusual." McCain had repeatedly used Paxson's corporate jet for his campaign and accepted campaign contributions from the broadcaster and his law firm.

McCain himself in a deposition in 2002 acknowledged talking to Paxson about the Pittsburgh sale. Asked what Paxson said in the conversation, McCain said that Paxson "had applied to purchase this station and that he wanted to purchase it. And that there had been a numerous year delay with the FCC reaching a decision. And he wanted their approval very bad for purposes of his business."

The deposition was taken in litigation over the McCain-Feingold campaign finance law filed by Sen. Mitch McConnell (R-Ky.). The contradiction in the deposition was first reported by Newsweek yesterday afternoon.

"I said I would be glad to write a letter asking them to act," McCain testified, recounting the conversation with Paxson. "But I cannot write a letter asking them to approve or deny, because then that would be an interference in their activities."

Iseman's connections to McCain have come into question this week after a longtime associate of McCain's said that he had asked Iseman to distance herself from McCain and his 2000 presidential campaign to protect McCain's reputation for independence from special interests.

McCain acknowledged during a news conference on Thursday that Iseman was a friend, but he denied doing anything improper for her or her telecommunications clients.

Paxson defended Iseman as a complete professional and said she was at her best when she worked on the Pittsburgh deal. He said they turned to McCain often when they ran into interference at the FCC, but Paxson added that McCain did not always agree with him. In three other major issues, Paxson said, McCain took the opposing viewpoint.

Paxson had used Alcalde & Fay as his lobbying firm in the 1980s when he founded and ran the Home Shopping Network, an enterprise that he later sold. In the mid-1990s, when he launched a plan to create a new national network, he stayed with Alcalde & Fay. In the early 1990s, when Iseman joined the firm, she became Paxson Communications' chief lobbyist, Paxson said. Paxson, now known as ION Media Networks, has paid Alcalde & Fay more than $1 million dollars since 1998.

Paxson saw no particular significance in the meeting with McCain before his penning the FCC letters. "Vicki Iseman, probably between myself and [Paxson Communications President] Dean Goodman at that time, took us in to see a thousand senators and congressmen," Paxson said. "She was our lobbyist. She was there and helped."

Paxson said Iseman had a personal interest in the Pittsburgh transaction because she grew up in the area.

Iseman, 40, was raised on a farm outside of Homer City, Pa., and attended Indiana University of Pennsylvania, graduating in 1990 with a degree in elementary education.

She went to Washington and got a job as a receptionist at Alcalde & Fay in Northern Virginia. Within a year, she had risen to special assistant to the firm's president. She was later promoted to lobbyist and was made the youngest partner in the firm in the late 1990s. She specialized in telecom issues, and one of her primary clients was Florida-based Paxson, which was rapidly purchasing a series of broadcast stations to create a national network.

Statements from McCain's office said Iseman met only with staff and indicated that a staff member was involved in drafting and sending the letter. Thursday's statement went to lengths to say why McCain could not have met with Paxson.

"Senator McCain was actively engaged in a presidential campaign in 1999-2000, and according to his calendar, the last day he conducted business in the Senate was November 8, 1999, and was frequently absent from the Senate prior to that," the statement said. "Between November 22, 1999 and Christmas, the Senator did not return to the Senate for any substantive meetings as he was involved in a national book tour and a presidential campaign."

But according to Paxson, the issue at hand when he met with McCain in his office in the fall of 1999 was the acquisition of a television station. Paxson had purchased 60 non-network broadcast television stations across the country, most of them UHF stations that were less desirable than the VHF stations typically favored by networks.

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.

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