This is a story about "friends and family", GOP-style - which means it revolves all around money and power.
There's no "smoking gun" here, just a stench: It seems every time you pick up a GOP rock, slimy things crawl out from under it, usually dragging bags of money behind them.
This particular story begins with Rep. Eric Cantor (R-VA), the GOP Deputy Whip. Rep. Cantor's wife, it turns out, is going to be getting a nice cushy Board seat at Media General, a Richmond, VA-based media conglomerate that leans heavily Republican. By the time the story wends its way to a close, it's touched upon Tom DeLay's pal Jack Abramoff and a Florida-based utility involved with Enron. But I'll start at the beginning:
I started looking into Media General after reading a Kos post by "kaineforgovernor". He (she?) was livid about Media General's lack of coverage of some particularly rancid local political corruption in Virginia, where the company operates numerous newspapers and TV stations. Apparently, there'd been some "Boss Hog" style electoral corruption in rural Scott County, which happens to be the home of GOP Gubernatorial hopeful (and former State Attorney General) Jerry Kilgore: In fact, it appears that Kilgore's own mother, the County Voter Registrar, though not a target of the criminal probe, may have been in cahoots with people accused of manipulating the absentee ballot system.
http://dailykos.com/story/2005/4/7/6659/57250
"Kaineforgovernor" was steamed not just by the minimal coverage given to the story, but by Media General's announcement that they were appointing Rep. Eric Cantor's wife to a seat on their Board. "Kfg" thought that reeked a bit: Media General, after all, has been lobbying to get rid of FCC rules banning same-market ownership of TV stations and newspapers. Although Cantor doesn't sit on the House Commerce Committee, which oversees the FCC, he's nonetheless a very powerful House Republican.
My first thought upon reading this was: Who the heck is Eric Cantor? I have to admit, I'd never heard the name before. It turns out he's a GOP wunderkind: Elected to the House in 2000 from Virginia's 7th District (Richmond suburbs and areas west), he was immediately assigned a seat on the powerful Way & Means Committee. Three years later, he was appointed Deputy Majority Whip, the 4th highest-ranking GOP member in the House. According to the Weekly Standard, the choice was widely seen as a "stroke of genius": As the only Jewish Republican in the House, Cantor could help the GOP, "translate its ardently pro-Israel message into votes and financial support from Jews, a group Democrats have dominated at the ballot box for generations". (It's amazing how many ways the Republicans can find to exploit religion.)
Weekly Standard article: http://yjlpac.org/dc/cantor.html
Apparently a friendly sort, Cantor struck up a relationship with at least one of Tom DeLay's sleazy friends: Jack Abramoff. In 2003, Cantor, along with DeLay, Dennis Hastert, and Roy Blount, signed a letter to Interior Secretary Gale Norton in which they asked for favorable treatment for one of Abramoff's clients, Louisiana's Coushatta Indian tribe. According to "Raw Story", Abramoff held a fundraiser for Cantor at a deli he owns, "Stacks", in January 2003. The $500-a-plate affair--at which Abramoff named a sandwich in honor of Cantor--came under scrutiny when a newspaper reported that Cantor had not reimbursed Abramoff for catering expenses, making it an in-kind donation that likely violated campaign finance laws (after the story came out, Cantor's campaign committee hurriedly reimbursed Abramoff). Eight months after the sandwich-naming fundraiser, Cantor returned the favor, appearing as a "Special Guest" at a $1,000-a-plate dinner hosted by Abramoff to raise money for the Republican Congressional Campaign Committee, which, propitiously, took place during the same period Abramoff was trying to get legislation benefiting his Indian tribe clients. http://rawstory.com/news/2005/index.php?p=176
So that's Eric Cantor, ethically-challenged GOP boy wonder. What about Cantor's wife and her new gig at Media General?
Now to be completely fair, Diana F. Cantor, is no slouch professionally-speaking. A lawyer and CPA, she'd been at Goldman Sachs before marrying Cantor and moving to Richmond. For the last 10 years, she's been Executive Director of the Virginia College Savings Plan, the entity operating the State's "529" college tuition programs - by all accounts, she's done a fine job. (True, she apparently got the job during Republican George Allen's tenure as Governor but, still, she was apparently well-qualified. Now whether being the wife of Eric Cantor, the ambitious scion of a wealthy, politically-active Richmond family, had anything to do with it, that I can't say.)
So, one might ask, what's wrong with Media General, headquartered in Richmond, appointing Diana Cantor, an accomplished Richmond-area resident, to its Board?
Well, for one thing, Media General seems to be stuffing its Board with pro-Republican Directors at the very same time it's trying to influence FCC regulatory matters affecting its business model. And this isn't chump change we're talking about with these Board seats: If I'm reading Media General's SEC filings right, Directors get $60K or so worth of stock grants every three months.
Thanks to Media General's proclivity for appointing those with a decidedly Republican bent to its Board, Rep. Cantor's wife will feel right at home at Board meetings. She can sit next to two fairly recent additions to the Board:
C. Boyden Gray (appointed in 2003):
*Bush I's White House Counsel and high-powered Washington attorney
*Member, Bush II transition team, Justice Advisory Committee
*Co-founder, with Dick Armey, of Citizens for a Sound Economy
*Member of the Heritage Foundation and the Federalist Society
Walter E. Williams (appointed in 2001):
*Chairman of the Department of Economics at George Mason University in Fairfax, Va.
*"Nationally renowned" conservative newspaper columnist and broadcast commentator.
*Occasional substitute host on the "Rush Limbaugh" show.
*Member of various boards: The Reason Foundation, Hoover Institution, Cato Institute (adjunct scholar), Landmark Legal Foundation, Heritage Foundation, etc.
You've got to say this for Media General, at least they lay their cards on the table: With those guys on the Board, no one would accuse them of being flaming liberals, or even "fair and balanced".
The company's conservative political predilections may have something to do with the political leanings of its Chairman, J. Stewart Bryan, the 4th Bryan to run the family publishing business. Like his father before him, Bryan was at one time an Overseer of the Hoover Institution, valiant defender of the private enterprise system and advocate of "market-based solutions to public policy problems".
But this isn't just about a media company having a conservative political orientation. Media General clearly has a specific agenda, and it's none too shy about trumpeting it. Consider this statement from the first page of Media General's 2004 Annual Report, which follows a description of its efforts to get changes in FCC ownership rules (Media General, by the way, owns three large Southern newspapers - the Tampa Tribune, the Richmond Times-Dispatch, and the Winston-Salem Journal - as well as 22 other daily Southern newspapers, 100 weekly newspapers and other publications, and 26 network-affiliated television stations, which together reach more than 30 percent of the television households in the Southeast):
.............. "While this process continues, the Company is seeking license renewals and waivers from the FCC for several of its television stations where the Company's cross-ownership remains an issue under the 1975 regulations".
Gee, what a great idea for a company that needs a few FCC waivers: Use your Board seats like a corporate piñata, showering goodies on a favored few. Putting money right into a Congressman's pocket, well, how very thoughtful!
The hypocrisy is really galling in light of another person who sits on the Media General board: Thompson "Tom" Rankin, a descendant of Tampa's richest family, the Lykes, whose company, "Lykes Bros" has extensive business interests in the citrus, shipping, and cattle industries (the company currently produces orange juice under the FloridaGold and Sunkist brands). Rankin, the retired CEO of the family company, is apparently on the Board due to his deep Tampa roots, home of Media General's largest media properties.
With all the conservative talk about the importance of the free enterprise system, one would think Media General would take care to put on their Board only those who best exemplify its virtues, right?
Wrong. Tom Rankin is yet one more poster child for corporate malfeasance. Since 1997, Rankin has been a Director of TECO Energy, headquartered in Tampa, a company with a less than stellar ethical track record (Rankin got his TECO Board seat when Lykes Brothers sold TECO its gas utility back in 1997). While Rankin sat on the Board, TECO decided to get in on the "merchant energy" business, collaborating on several power plant construction deals with Enron. Lo and behold, the deals went sour. TECO Energy, however, never told its investors. In fact, the CEO and CFO lied their faces off, concealing the company's full exposure to the demise of Enron for over a year. It wasn't until early 2003, after the CEO and CFO unloaded $4.2 million of their own stock, that the whole thing unraveled: Finally admitting that the company's exposure was a wee bit higher than the $3.5 million they'd publicly reported a year earlier, TECO eventually took a $762 million impairment charge, causing the price of its stock to plummet from $28 to $13. Needless to say, investors who'd bought TECO stock during the period the company was concealing its massive Enron-related liabilities were not pleased. There ensued a flurry of class action lawsuits against TECO's CEO and CFO.
And what was the TECO's Board's response to this rather glaring corporate malfeasance? Did they initiate a full investigation?? Nope, not quite. They circled the wagons instead: The Board granted the CEO a $6 million departure payoff and appointed one of the Board members the new CEO, thereby quashing a thorough internal review of what had gone on. The other corporate officers, including the CFO named in the lawsuits, stayed on: The CFO, in fact, was given additional responsibilities. TECO notes in its latest annual report that the lawsuits have been consolidated and are still in the initial pleading stages: They state they "intend to vigorously defend" all the proceedings.
To date, there is apparently no SEC investigation of what went on at TECO. The company's latest press release says they are near the end of a financially disastrous period and hope to post strong earnings for 2005: To help get it's financial house in order, they've cut 238 jobs at the utility. (Just as an aside: TECO's Ocean Shipping division turned a profit in 2003, benefiting from a $7.2 million USAID contract to provide "emergency ocean freight" shipping to Iraq.)
http://www.publicintegrity.org/wow/bio.aspx?act=pro&ddlC=57
And what were Tom Rankin's duties on the TECO board? As it turns out, he was a member of both the Audit and Finance committees. And what are his duties on the Media General board? He's a member of the Audit committee!
So tell me, why would Media General reappoint someone like Tom Rankin to their Board? He sure ain't no financial whiz from the looks of it: He apparently missed spotting more than a half-billion dollars worth of liabilities at his other board gig!
Corporate governance, however, is clearly not high on Media General's priority list. High-paying Board spots, Media General has figured out, are the way to "win friends and influence people". Now they've hit upon a new twist: Bringing family members in on the profit-sharing. The "conservative" money machine, it appears, knows no bounds.
This is what the Hoover Institution must mean by "market-based solutions to public policy problems". Got a problem with government regulations? Buy yourself some political influence, perhaps even a Congressman.