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Increase your reach to The Globe audience with your online campaign!
globeandmail.com Web Centre delivers up-to-the-minute news and financial information to over 2.3 million users/month.* Its award-winning suite of Web sites provides many exclusive tools and info to Canada's most affluent, influential and web-savvy consumers:


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Businesspeople are smart. And smart people read, no matter how many cell phones or personal digital assistants they may have. Report on Business magazine is the premier business publication in Canada. So if you're looking for business leaders and business readers, this is where you'll find them.

Report on Business magazine is written by experts for experts. It's for the people in power at Canada's top corporations. As Lass Turnball, our new editor, says: "It's pro-business, pro-Canada, pro-reader."

Everything you need to know about advertising with The Globe. We want to make your campaign easier with The Globe, we hope your clients will love you for it! Here you'll find quick access to all our rate cards, contact info, and even learn how to send your creative to our FTP server.

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Double Page Spread $28,511 $27,673 $27,077 $26,482 $24,964

Double 1/2 Spread $19,029 $18,434 $18,071 $17,718 $17,299



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Businesspeople are smart. And smart people read, no matter how many cell phones or personal digital assistants they may have. Report on Business magazine is the premier business publication in Canada. So if you're looking for business leaders and business readers, this is where you'll find them.

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the U.S. State Department has added Republican Sinn Féin to groups it has listed as a "Foreign Terrorist Organization."

In a statement released last week, the State Department also applied that designation to the Continuity Irish Republican Army in tandem with its alias, the Continuity Army Council.

The CIRA on its own joined the Real Irish Republican Army on the State Department's list of organizations considered beyond the political pale at the end of 2001.


But while the addition of CIRA to the list raised barely a stir at that time, the additional inclusion of Republican Sinn Féin prompted immediate and critical comment on both sides of the Atlantic.


The party's president, Ruairi O Bradaigh, who has been barred from obtaining a U.S. visa for three decades, said in a statement that his party had no military wing and was not the political wing of any other organization.


Speaking separately on the "Radio Free Eireann" show on WBAI in New York last Saturday, O Bradaigh said that the State Department's determination with regard to RSF -- which remains a legal political party on both side of the border in Ireland -- amounted to "a total misrepresentation of the facts."


The State Department said that as part of ongoing U.S. efforts against terrorism, the secretary of state had designated "the terrorist group Continuity Irish Republican Army, along with its aliases Continuity Army Council and Republican Sinn Fein, as a foreign terrorist organization under the Immigration and Nationality Act."


O Bradaigh traces his party's lineage to the founding of Sinn Féin in 1905 and has long disputed the identical claims of the far larger Gerry Adams-led Sinn Féin.


Regardless of the argument in Ireland, the State Department designation now


makes it illegal for people in the U.S., or subject to U.S. jurisdiction, to knowingly provide material support to the CIRA, the CAC or RSF.

The designation requires U.S. financial institutions to block the assets of all three and it provides a basis for the U.S. to deny visas to representatives and members of the groups, a policy that has been long in place anyway.

The statement said that the CIRA had "originally formed as the clandestine armed wing of Republican Sinn Fein" and had been active as a terrorist group since 1994.


John McDonagh, co-presenter of the "Radio Free Eireann" show, said that the designation was so broad in its language that it would affect people who had never broken the law in Ireland.


"You could have an 18-year-old kid with no criminal record joining RSF, a legal political party, and being immediately barred from the U.S. as a result," McDonagh said.


While the show has given airtime to O'Bradaigh and other RSF members, it was not formally linked to the party in any way, McDonagh added.


"Nobody has ever raised money for RSF or CIRA," he said.


But he acknowledged that the Irish Freedom Committee, of which he was a member, raised funds in the U.S. for the republican prisoner aid group Cabhair, which gives money to the families of CIRA prisoners.


Cabhair, which is the Irish world for "help," had its own separate bank account, McDonagh said.


"We're going to continue fundraising. As far as we know this has no effect on us at all," McDonagh said in reference to the IFC's activities.


"Even at the height of the Troubles, the U.S. never took this view of Provisional Sinn Féin. It too was a legal political party," he said.


He said that the State Department move would be met by an effort to secure resolutions in various city councils that would take issue with the adding of RSF to the terror list.


He also said that court action, most likely in Washington, D.C., was also being considered.


One of RSF's most prominent supporters in the U.S. is onetime IRA gunrunner George Harrison.

Harrison, who is 89, said he would redouble his efforts to help the party as a result of the State Department designation.

"If the Bush administration wants to jail me, I'm ready," Harrison said. "The State Department has taken the wrong turn. They are trying to finish us off altogether, but that will never happen."


Meanwhile, the State Department has expressed confidence that the designation of Republican Sinn Fein as a foreign terrorist organization will withstand any legal challenge.


A spokesman said the department had been working on the designation for a year, adding: "Those who do not abide by this new ruling risk being arrested and jailed.


"If certain activities continue to be pursued by individuals here then law enforcement officials are likely to go after them," he added without elaborating on the nature of such activities.

(Susan Falvella-Garraty in Washington, D.C., contributed to this report.)

This story appeared in the issue of July 21-27, 2004

To write a letter to the editor, click here. Please include your name, address and a day-time phone number for verification.

"DeLay is a pro-gun, anti-abortion, antigovernment, born-again Christian zealot who sees his mission in life as the protection of small business and, of course, pork barrel projects for his home state,"

READ DISCLAIMER AT BOTTOME

And he's no stranger to controversy and hardball politics. According to Bryce, after the GOP took control of Congress in 1995, DeLay "put together a list of the 400 largest political action committees and the amounts of their contributions to each party... [and] invited the heads of those PACs to his office, where he showed them how their outfit -- and their lobbyists -- were classified by the new rulers of the House... There were two groups: 'friendly' and 'unfriendly."

Out of these meetings came the "K Street Strategy" -- named after the street in Washington where many lobbying companies have their offices -- which included "purging all known Democrats from trade associations, political action committees, and lobby firms that work on Capitol Hill," Bryce writes.

It's not easy going head-to-head with Majority Leader Tom DeLay, the most powerful member in the House, but that's exactly what Houston Democratic Congressman Chris Bell is doing. According to the Associated Press, in mid-June, Rep. Bell "claimed DeLay illegally solicited campaign contributions in return for legislative favors and laundered illegal corporate contributions for use in Texas elections. Bell also alleged that DeLay improperly used his office to solicit help from federal agencies in searching for Democratic legislators who slipped out of Texas during last year's redistricting fight."

After Republicans, with support from DeLay, took control of the Texas legislature for the first time in well over 100 years, the Texas GOP redrew the state's congressional map -- a plan aimed at taking at least five House seats from Democrats in November. Democrats in the state legislature left the state to avoid voting on DeLay's redistricting plan, but eventually returned and were unable to kill the remapping effort. While they were out of state, Rep. Bell charges that Delay illegally used the Federal Aviation Administration to track down the legislators.

Rep. Bell's charges are slated to be taken up by the House Committee on Standards of Official Conduct, also known as the House ethics committee. Will Rep. Bell get a fair hearing? It might be difficult, seeing as how four of the five Republicans on the committee "have received campaign contributions from DeLay's political action committee," according to Sheila Krumholz, the research director for the nonpartisan government watchdog group, the Center for Responsive Politics. She told Alternet that the four ethics committee members received $27,004 in contributions from DeLay entities.

From 1997 through May 2004, according to Federal Election Commission records, DeLay's political action committee, Americans for a Republican Majority (ARMPAC) and the Tom DeLay Congressional Committee contributed $14,777 to Rep. Kenny Hulshof of Missouri; $8,053 to Rep. Steven LaTourette of Ohio; $2,764 to Rep. Judy Biggert of Illinois; and $1,410 to Rep. Doc Hastings of Washington. Rep. Joel Hefley of Colorado, the ethics committee chairman, received no money from DeLay's political action committee.

Phone calls by Alternet to the Congressional offices of all four Representatives who received contributions from DeLay were not returned. Sarah Sheldon, Rep. Hefley's Press Secretary, told me that "the Congressman had no comment on Rep. DeLay's contributions to the other Republican members on the ethics committee." Thus far, during this election cycle, ARMPAC has raised nearly $3 million and has generously given over $600,000 to 75 House candidates, many of them incumbents. Unfortunately, there's no sunshine law that covers the gatherings of the 10-member ethics committee -- the only House committee divided equally among Republicans and Democrats: "Panel meetings are closed to the public and investigations are rarely acknowledged," the AP reported. In addition, all participants, including clerks and secretaries "must swear to reveal nothing confidential."

Rep. Bell was assisted in drafting his complaint by Citizens for Responsibility and Ethics (CREW) in Washington, a coalition of government watchdog groups that includes Judicial Watch, the Campaign Legal Center, Democracy 21, Public Citizen, Common Cause, The Center for Responsive Politics and Public Campaign. CREW's Executive Director Melanie Sloan stated: "No other member of the House has consistently shown this much disrespect for the rule of law and the honor of Congress and the country should thank Congressman Bell for his courage."

DeLay recently acknowledged that he had "attorneys all over the place," the Houston Chronicle recently reported. "I consult attorneys before I leave my office and make sure I am doing everything legally and ethically," he said. Over the past three years DeLay "has maintained a legal defense fund and paid legal expenses to Bracewell & Patterson, a Houston-based firm." The firm's Washington office is "representing him" in the ethics complaint filed by Rep. Bell.

According to Roll Call, Ed Bethune of the Bracewell & Patterson law firm "has served as a registered lobbyist for Burlington Northern Santa Fe Corp... one of the companies under scrutiny by the Travis County District Attorney in Austin, TX, in a criminal investigation of DeLay's Texans for a Republic Majority Political Action Committee. Roll Call cites IRS records that show Burlington Northern contributed $26,000 to that PAC." In Austin, DeLay has criminal defense attorneys Bill White and Steve Brittain "watching what's going on my behalf," the Majority Leader said. (For more on this and other DeLay affairs check out the web site takingontomdelay.com.)

The House Majority Leader's fundraising activities are getting mega press attention these days. A Washington Post article over the past weekend revealed that DeLay had solicited "$100,000 in donations to his political action committee from Enron's top lobbyists in May 2001 so he could help bankroll the redistricting" effort. Amy Goodman, the host of Pacifica Radio's "Democracy Now!" show reported that the $100,000 was in addition "to the $250,000 the company had already pledged to the Republican Party that year."

In a July 13, interview with Goodman, Lou Dubose, the author of the forthcoming political biography, The Hammer: Tom Delay, God, Money and the United States Congress, commented on the latest allegations against DeLay: Dubose described a relationship between DeLay and Enron that went back to 1994, when Enron donated $250,000 to DeLay just as his ARMPAC was getting off the ground.

Commenting on Rep. Bell's chances with the House ethics committee, Dubose told Goodman that for all practical purposes the ethics committee has been moribund: "For the past seven years, it's done nothing."

According to the AP, "The committee's next public step will be to dismiss the charges or to create an investigative subcommittee -- with two Republicans and two Democrats -- a decision that must be made by the first week of August, though more time can be requested." For more please see the Bill Berkowitz archive.


Bill Berkowitz is a longtime observer of the conservative movement. His WorkingForChange column Conservative Watch documents the strategies, players, institutions, victories and defeats of the American Right.


 


Dubose told Goodman that for all practical purposes the ethics committee has been moribund: "For the past seven years, it's done nothing."






(c) 2004 Working Assets Online. All rights reserved

Opinions expressed on this site are not necessarily those of Working Assets, nor is Working Assets responsible for objectionable material accessed via links from this site.






How pub/nspprs are dealing with polit ads revenue


Myth No. 1: This is the breakout year for political ads online.

Sure, in dollars spent, this year might end up a record year for political advertising online. The problem is that in percentage of total ad money spent by candidates, the Net is a miniscule slice. Larry Purpuro, a consultant who founded Rightclick Strategies and formerly ran the e-GOP initiative in 2000, is skeptical about the mindset of the presidential campaigns online.

"I think at the end of the day, they're still not serious about the Web," he told me. "What they're doing is a lot of CYA (cover your ass) tactics to look like they're Web savvy. Their notion of online advertising is essentially banner ads. Both campaigns are still at a level of Online Advertising 101, it's a very basic level. They might be spending incrementally more dollars, but all spending is up across the board."

Purpuro made one salient point: Neither of the main ad-buying agencies for the major candidates have online expertise. Unlike most mainstream ad agencies, which have online departments or subsidiaries, these ad buyers are focused almost exclusively on TV, and take a very low-risk approach to other ad formats.

The Bush re-election campaign touted a big online ad campaign in May that featured a Web video from first lady Laura Bush on education. However, a source close to the campaign said the ad was targeted at the wrong audience, women, at the wrong time -- when the Abu Ghraib prison scandal was making headlines. Instead of following up with other big ad campaigns online, Bush-Cheney has pulled back and is waiting for the fall season, the source said. (Bush-Cheney representatives did not respond to my queries by press time.)

Kerry, however, has been more prolific advertising online so far. According to Nielsen//NetRatings, Kerry purchased more than 70 million ad impressions in June, compared to just 94,000 for Bush-Cheney and 234,000 for the Republican National Committee. But of those ads, the vast majority were aimed at a Democratic base for fundraising and organizing -- and not for winning over voters.

Still, when I asked consultant Sanford Dickert, who was formerly the chief technology officer for the Kerry campaign, just what the percentage of online media buys compared to TV, he said, "It's not even worth calculating." When I asked if he saw more money shifting online over time, he was a bit more positive. "Online spending will definitely increase over time -- especially as candidates and consultants get familiar with the power of online and how it can be used in specific geographic areas to target their campaigns. But, in terms of dollars, broadcast will almost always dominate online spending."

Myth No. 2: Readers understand the separation of advertising and editorial online.

Not always. Because Kerry has bought more online ads than Bush, some media outlets have appeared to be favoring Kerry to some readers. At the San Francisco Chronicle's SFGate site, an influx of Kerry ads to reach the Bay Area's mainly liberal audience touched off complaints by Bush supporters who say the site isn't being neutral in the election. The site's editor, Vlae Kershner, told me via e-mail that he tried to explain to readers that SFGate is open to ads from all sides.

"I don't think most TV stations have to worry about only getting ads from one party or the other," Kershner said. "The potential problem for our industry is that our readers -- who don't always make the distinctions among news, opinion and advertising -- will increasingly view our Web sites as espousing a political point of view based on the advertising they see."

Kershner said he might ask the Chronicle readers representative to write something in his column about the online ad situation. When Glenn Reynolds ran Kerry and Democratic ads on his right-leaning Weblog, InstaPundit, he said he also got a few outraged e-mails from Republicans about the ads, "but their concern doesn't trouble me."

USAToday.com, which has a mainly moderate readership, has taken steps to make sure political ads aren't misread by its readers, according to publisher Jeff Webber. He said the site will not run any political ads in its politics section. When I glanced at the section, however, I noticed there were still "Related Advertiser Links" for political groups at the bottom of each page.

Michael Henry, director of sales for The Wall Street Journal Online, said his sites had no restrictions on where political ads could run, including on its conservative opinion pages. "If an advertiser came to us and said they would spend $1 million, but you can't take ads from my opponent, we wouldn't do that," Henry told me. "I think the USAToday.com knee-jerk reaction might just be because it's talking about the campaign, and doesn't want the readers to be confused about what is ads and what is editorial. And it's very clear on our site what's editorial and what's advertising."

Henry notes that OpinionJournal.com even has a "Soapbox" paid editorial space, where advertisers can basically write an editorial for a price. He thinks it would make a lot of sense for political candidates to buy that space, and doesn't think it would blur the ad/edit line.

Myth No. 3: Ads on blogs aren't making money for anyone yet.

One little known fact is that John Kerry's campaign was the first to purchase political advertisements through the new BlogAds network -- back in November when Howard Dean was getting all the attention. According to BlogAds honcho Henry Copeland, Kerry has run four waves of ad campaigns via BlogAds, which places ads on a variety of top-tier political Weblogs.

Dickert, who was with the Kerry campaign during its first BlogAds buy, says the blogging community was the perfect activist audience for the early groundwork of firing up the base. "Why were BlogAds appropriate?" Dickert said. "One is that the pricing was good for the reach. And two was that people seeing these ads were very passionate about issues. And if we were able to connect with the readers, then we could get them involved in the campaign."

Dickert said the BlogAds were instrumental in helping Kerry get more than 200 percent return on their total ad spending in that online campaign (which combined blog ads with other online ads). In other words, the candidate raised three times more than it spent for the campaign.

And who gets enriched by BlogAds? Well, BlogAds itself keeps 20 percent of the ads it sells, a pretty small slice for an ad network. Copeland told me the business was profitable as of the first quarter, and that his lean operation includes just one U.S. salesperson and three other employees who work from Hungary. "Suffice it to say that January's revenues equaled all of 2003, and we now have single days that equal January's revenues," Copeland said via e-mail, saying this says as much about how slow things were in '03 as anything.

There have been 60-odd political candidates who have advertised on BlogAds, with more than 100 political causes buying ads, but it's been dominated by Democrats. "Conservatives have been much less active in blog advertising," Copeland said. "I don't have any theories, but can say that 95 percent of blog advertising so far has been liberal. The Republicans have some catching up to do, and I know that conservative bloggers wish they would get on the bus."

InstaPundit blogger Reynolds says that he's made somewhere in the "low thousands per month" in BlogAds, with an art gallery being his single biggest advertiser, and The New Republic magazine coming in at No. 2. Political ads are still significant, he says, with Democratic ads outnumbering Republican ones. Markos Moulitsas Zuniga, who runs the Daily Kos liberal blog, says he has averaged about $6,000 per month with BlogAds, but the main plus was not having to beg readers for donations.

"I hate asking for money," Moulitsas told me. "My bandwidth costs were really growing. I was spending all this time and energy and it was costing me money. If the ads went away tomorrow, I'd be satisfied. I was able to get out of debt, start a college fund for my son. If nothing else, it got my wife to stop nagging about my blogging."

BlogAds seems to have made a lot of "blogging widows" happy. Copeland, too, said his wife is no longer questioning his sanity at trying to make a business from blogging. "Two and a half years ago my wife thought I'd gone insane," he said. "Blogs? Who the hell reads blogs, much less tries to build a business around them? A year ago she was still pretty convinced I'd drunk one too many Web Kool-Aid mixes. Today, she's willing to admit this blog stuff is real and not a phantasm."

Blog ads -- and online ads -- might be a reality for political campaigns, but they are still in the experimental stages for the huge national campaigns, who are still focused on TV. Until a younger, wired set can really become a political force in the voting booth, change will come slowly when it comes to paid political messaging.



Political Quotables

"If we get 15 years out from now, when the teens of today are doing the wage earning, we don't know what communication technology will be in their hands. At present, we don't have SMS (short message service) marketing or mobile instant messaging or satellite radio in the mix. But TV, which is currently the prevalent media channel, will always be significant."

 -- Sanford Dickert, former CTO for John Kerry for President, and current director of Internet strategy for Deutsch for U.S. Senate

"Until online political marketing professionals have a few campaigns tucked under their belt, and until the top media consultants see online marketing as an integral part of their strategy and not an experiment, you'll see few ad dollars flow to the interactive arena. Right now (Internet specialists) are mostly carrying out a predetermined strategy. We're not playing a hand in creating it."

 -- Jonathan Trenn, consultant for Pericles Communication, worked with Bush-Cheney campaign on online ads

"Our Internet ads are banner ads, and our goal is to go out to the widest possible audience. They are on sites that are all very popular, high-traffic Web sites. Our goal is not a targeted message, it's designed to reach out to the broadest audience possible."

 -- Christine Iverson, spokeswoman for the Republican National Committee, which has placed ads on 1,400 sites, but hasn't run any TV ads yet

"The research I've seen on our site is we are very moderate, which is good and bad in terms of political advertising. We're probably not as good for fund raising, but we're better for convincing voters later on, and that's what I think we'll see. It's just a question of timing."

 -- Jeff Webber, publisher of USAToday.com

"I was asked (by the Associated Press) if the bloggers would have an impact in the ground game of the Iowa caucus, and my reaction was that they were mainly in their bathrobes and couldn't get out the vote. They were all incensed, but the proof was in Howard Dean's showing. If they had had a dramatic impact on Iowa, he wouldn't have shown up third in Iowa. They did a great job nationally helping raise dollars, but at the end of the day, that didn't get people to show up in the voting booth."

 -- Larry Purpuro, consultant for Rightclick Strategies, and former leader of the e-GOP online initiative in 2000 for the RNC


After they're nominated, Kerry and Bush can transfer any leftover campaign funds to the political party committees. Democratic vice presidential candidate, John Edwards, 51, took in more than $4 million on an eight-state campaign trip after being tapped by Kerry.

Under FEC rules, the two presidential nominees can coordinate about $16 million in spending directly with their campaigns. They can spend additional funds on ads for the party that aren't coordinated with Kerry and for voter mobilization efforts. Federal Election Commission records.

Democrats will be helped by independent anti-Bush groups such as America Coming Together and the Media Fund, which are mobilizing voters and airing advertisements in ``battleground'' states such as Ohio and Pennsylvania that both the Bush and Kerry campaigns agree will swing the November election.

These two groups had at least $9.7 million in cash at the end of June, according to Internal Revenue Service records. They are barred from coordinating with the Kerry campaign.

``The Kerry campaign can't coordinate with these groups, but they read the papers like everyone else, and with a little notice they can help compensate during August for the lack of Kerry campaign advertising,'' said Quin Monson assistant director of the Center for the Study of Elections and Democracy at Brigham Young University in Provo, Utah.

The Bush campaign is ``confident'' that they'll have the money they need for the remainder of the campaign, spokesman Scott Stanzel said.

``We have always indicated that we would by outspent by the Democratic nominee, the Democratic Party and the liberal special interest groups that are working to defeat the president,'' Stanzel said.




Political Fundraising -- Among top GOP fund-raisers, those who have gathered at least $300,000 in contributions for the party, are Robert Nardelli, chief executive of Atlanta-based Home Depot, and Eric Tanenblatt, former chief of staff for Gov. Sonny Perdue and head of the National Government Affairs Group for McKenna Long & Aldridge, an Atlanta-based law and lobbying firm.

The RNC is calling its top fund-raisers Super Rangers, following the lead of a highly successful fund-raising drive for the Bush-Cheney campaign that designated the top fund-raisers Rangers and Pioneers.

Nardelli, who held a fund-raiser for President Bush at his Buckhead estate in May, shares the Super Ranger designation with his wife, Sue.

The Democrats have set up their own network, with Trustees, those who have have collected at least $250,000, and Patriots, who have raised $100,000 or more.

Georgia boasts no Trustees yet. But there are four Patriots: Kirk Dornbush, an Atlanta biotech executive; David Cofrin, an Atlanta attorney; John Lee of Atlanta, whose occupation could not be confirmed; and Rick Yi of Alpharetta, a retired U.S. Army colonel active in Democratic fund-raising.

The list was published before Yi's recent resignation as a finance vice chairman of the Kerry campaign. The New York Times reported that the Democrat's campaign had returned two questionable $2,000 donations Yi solicited from South Korean donors, but quoted a campaign spokesman as saying Yi had resigned for personal reasons.

Yi could not be reached for comment this week. The Kerry campaign and DNC also did not return phone calls.

Matthew C. Quinn writes for The Atlanta Journal-Constitution.

Financing the Election


Soft Money Out, Bundling In
Corporate Backers Spend More, Get More

by Bill Mesler, Special to CorpWatch
July 22nd, 2004

Next week John Kerry will accept the Democratic nomination to run for United States President at a gathering in Boston that will cost over $95 million to produce, the most expensive political party convention in history. The Fleet Center, a sports and entertainment arena where the meeting is being held, is named after the powerful FleetBoston Corporation, the biggest donor to Kerry's Congressional career, a company typical of the corporate benefactors floating the Democratic and Republican parties ever higher on a sea of special-interest cash.

Kerry may denounce the corrupting influence of special interests and big business and he may praise the Federal Election Campaign Act banning "soft money," the unchecked expenditures of special-interest money that distorted past elections and subverted federal limits on campaign contributions. But he may be a little more bashful about the $1.25 million dollar donation by Fleet Boston Financial to the Democratic convention host committee.

Fleet, which recently merged with Bank of America, has been Kerry's biggest backer during his congressional career, support Kerry has reciprocated over the years. In 1999, Kerry used his position on the powerful Senate Finance Subcommittee to support the merger of Fleet and BankBoston, even though the merger was opposed by local Democratic leaders and resulted in the layoff of 2,500 workers. In the presidential campaign, Fleet/Boston's chairman Chad Gifford is participating in a dubious effort to skirt federal rules designed to stop the flow of huge sums of special interest cash.

This will be the first presidential election since congress passed the Federal Election Campaign Act--better known as McCain/Feingold, after its two principal sponsors in the Senate, John McCain (R-Arizona) and Russ Feingold (D-Wisconsin)--in March 2002. The bill was widely viewed as one of the most important pieces of campaign finance legislation in decades.

But two years later, special interest cash continues to find its way into the campaign coffers of Republicans and Democrats. As of May, the two campaigns had raised over $364 million-more than Bush and Gore had raised by this point in the 2000 campaign when soft and hard money were allowed. Instead of an election less dominated by cash, and consequently by those able to supply that cash, the 2004 presidential election is shaping up to be the most expensive in American history. Meanwhile, corporate influence has become so pervasive that the very concept of impartial governance has been turned on its head: lobbyists have become government officials; and government officials have become lobbyists.

"If we know anything about the development of campaign finance laws," says Derek Willis, who tracks campaign finance for the Washington-based watchdog group the Center for Public Integrity, "it is that people will find holes."

The soft money of past elections has simply morphed into new avenues of political influence: through political organizations, ostensibly outside the party apparatus, but in fact playing the role the DNC and RNC played in past elections; through huge convention funds with budgets that rival what used to be spent on entire elections; and through powerful Washington lobbyists. During the current election, the largest sums of corporate cash are flowing to candidates through a process called bundling.

Political advertisers will shell out a record $1.3 billion for TV time nationwide this year, nearly 50 percent higher than the $910 million "spend" of four years ago, estimates Legg Mason analyst Sean Butson.

Another estimate suggests that ad spending may surge more than 60 percent, to $1.47 billion.

Not all broadcasters are benefiting equally, of course. That's why in 2004, as in other recent election years, the billion-dollar question for the broadcast industry and investors is, where will the money be spent?

The Kerry and Bush forces have been focusing their ad spending in a handful of swing states considered up for grabs, while largely ignoring those where one side or the other holds a wide lead.

Depending on who is doing the counting, there are about 17 swing states. But the four states drawing maximum attention are Ohio, Florida, Pennsylvania and Michigan. In fact, stations in those four crucial states are expected to soak up half of the nearly $700 million that the two presidential campaigns are projected to spend on TV.

"The battleground states in the presidential race are clearly getting an intense amount of campaign advertising already," said Kenneth Goldstein, professor of political science at the University of Wisconsin in Madison and head of the Wisconsin Advertising Project, which tracks political advertising nationwide.

The spending spree is being fueled by a number of unique political and legal developments, as well as new trends in campaign strategy.

For the first time ever, for example, both major presidential candidates have opted to forgo public matching-funds campaign support, a maneuver that freed them from any regulatory limits on their ad spending in the period prior to the party conventions.

Thus, "It's spend it or lose it" for John Kerry and President Bush, said Gary Belis, a spokesman with the broadcast-industry trade group Bureau of Television Advertising. "That's why you're seeing such an early spend this year."

Advertising campaigns also launched early because Kerry emerged as the Democratic Party's choice so early in the primary season, providing Republican strategists with a clear target.

But the river of political cash for broadcasters really began to hit flood stage in mid-May, when the Federal Election Commission decided to delay a decision on whether to restrict the so-called soft-money fundraising activities of groups known as "527 organizations."

Such advocacy groups, which are separate from the political parties but affiliated with them, have emerged as a way around campaign-finance reforms enacted two years before. And although the issues before the FEC may have been complex, the implications of the commission's decision to defer a ruling were immediately crystal clear to Wall Street.

"To TV broadcasters, the FEC's (non) decision amounts to a windfall," Harris Nesbitt analyst Leland Westerfield told investors at the time. With the ruling, he continued, "the last serious impediment to a landslide of political advertising goes away."

"Political advertising: Prepare for the `soft dollar' arms race," Bear Stearns analyst Victor Miller echoed in an enthusiastic report exploring the FEC decision.

Wall Street's focus on an issue that on the surface would seem of interest only to political analysts underscores the growing bottom-line impact political advertising has on the broadcast sector.

Over the past few decades, as television has become the principal medium by which campaigns reach voters, investors have learned that broadcasters' profits will show a predictable little bulge in the final quarter of even-numbered years. That financial boost reflects the revenue contribution of ads for congressional races, as well as the occasional fight for a senate seat or the governor's chair.

But the serious political money comes every fourth year, during the extravaganza that is the American presidential campaign.

From about Labor Day through early November, the airwaves in most cities are saturated with ads touting not just the two major parties' presidential candidates but also would-be state and national representatives, senators, sewer commissioners, judges and a host of other politicians.

Presidential campaigns used to advertise on network TV, picking up spots on "Monday Night Football" or "NYPD Blue" as they reached out to their target demographic groups. But since the mid-1990s, candidates have dropped the use of national TV almost completely. Instead, seeking to get the most bang out of their funds, they buy spots on individual TV stations in select markets.

---


The new targeting strategy acknowledges that because of the electoral-college format, a presidential election is, in effect, 50 winner-take-all elections. That means national advertising is less efficient than advertising keyed to specific undecided states.

"All politics is local," said Westerfield, "and all candidate marketing is, therefore, local."

In placing their ads, candidates generally pick the two most-watched local news shows in a TV market, on the theory that people who watch the news are the most likely to vote. Or a campaign trying to reach women voters might pick up spots on whatever local station is airing the syndicated "Oprah" show.

As a result, the smaller stations in a city generally get a much smaller piece of the political advertising pie.

Thanks to the peculiar structure of the TV advertising market, however, just because such stations don't carry political ads doesn't mean they can't get a piece of the action when the political dollars wash into town.

If a magazine gets a big surge in advertising, it simply adds more pages to the next issue. But TV stations always have the same number of advertising minutes available to sell.

What changes is the price. Broadcasters often say that political campaigns "tighten up the inventory" by introducing an aggressive new bidder for the finite number of ad slots available. That sends prices higher.

"Classic supply and demand," observed Belis of the broadcast trade group.

Because the political season is short and intense, political ads are generally more lucrative for TV stations. For scheduling flexibility, stations often give their regular advertisers a discount if the buyers agree that the station can reschedule individual ads at the last minute. For the local grocery stores, furniture outlets and other regular advertisers, having their spot delayed is no big deal.

But politicians, faced with a looming voting day, don't have that luxury. As a result, they usually buy ad slots that are guaranteed to run at specific times. And that generally means they pay a higher price, just like business travelers who buy airplane tickets on the day of the flight.

---

The result? During the campaign season the pols' demand for airtime is so great that their ads often displace the stations' regular advertisers. Those bread-and-butter ad customers then turn to rival local stations, driving their profits higher even though they're not directly getting political money.



"Ads will start getting bumped to the third and fourth stations in a market," said Belis. "It's a rising-tide-that-lifts-all-boats situation."

There are fine points, of course. Even in states that are largely being ignored by the presidential campaigns, such as Illinois and California, broadcasters can make out very well from political advertising if there's a hot battle for senator, governor or a key congressional district.

But, in general, financial observers are figuring that broadcast companies with a big presence in the swing states, whether their stations are carrying political ads or simply reaping the spillover benefits in their local market, stand to do best.

Because CBS owns a number of stations in the hot regions, CBS owner Viacom Inc. will enjoy a bump in second-half earnings. So will General Electric Co., which owns the NBC network and has a number of company-owned stations in the battleground states.

But those corporate parents are so huge that even the inrush of political ad money will be a minor factor in overall earnings. Several other media companies also are well positioned in the pay zone that the swing states have become, including Meredith Corp., Gannett Co., and Belo Corp.

For the stock-pickers who are trying to handicap the financial winners of the election-spending blitz, one company stands out: Hearst-Argyle Television Inc.

New York-based Hearst-Argyle has stations in 9 of the 17 swing states, including one in New Hampshire that also benefited from hefty primary-season ads.

More impressive to analysts, Hearst-Argyle has a presence in three of the four crucial battleground states. And two of those states, Pennsylvania and Florida, are expected to see hotly contested U.S. Senate races that will generate saturation-level advertising.

Companies in such a situation, said Belis, in a sense "have hit the trifecta."

Hearst-Argyle is also small enough that the political ad money it is reaping has a significant bottom-line impact.

In sum, said Legg Mason's Butson, "Hearst-Argyle is the best positioned of any company in the media universe to benefit from political (advertising) this year."

---


© 2004, Chicago Tribune.


Punitive Articles of the UCMJ



Article 88—Contempt toward officials

“Any commissioned officer who uses contemptuous words against the President, the Vice President, Congress, the Secretary of Defense, the Secretary of a military department, the Secretary of Transportation, or the Governor or legislature of any State, Territory, Commonwealth, or possession in which he is on duty or present shall be punished as a court-martial may direct.”

Elements.

(1) That the accused was a commissioned officer of the United States armed forces;

(2) That the accused used certain words against an official or legislature named in the article;

(3) That by an act of the accused these words came to the knowledge of a person other than the accused; and

(4) That the words used were contemptuous, either in themselves or by virtue of the circumstances under which they were used. Note: If the words were against a Governor or legislature, add the following element

(5) That the accused was then present in the State, Territory, Commonwealth, or possession of the Governor or legislature concerned.


Explanation. The official or legislature against whom the words are used must be occupying one of the offices or be one of the legislatures named in Article 88 at the time of the offense. Neither “Congress” nor “legislature” includes its members individually. “Governor” does not include “lieutenant governor.” It is immaterial whether the words are used against the official in an official or private capacity. If not personally contemptuous, ad-verse criticism of one of the officials or legislatures named in the article in the course of a political discussion, even though emphatically expressed, may not be charged as a violation of the article.

Similarly, expressions of opinion made in a purely private conversation should not rdinarily be charged. Giving broad circulation to a written publication containing contemptuous words of the kind made punishable by this article, or the utterance of contemptuous words of this kind in the presence of military subordinates, aggravates the offense. The truth or falsity of the statements is immaterial.


Lesser included offense. Article 80—attempts

Maximum punishment. Dismissal, forfeiture of all pay and allowances, and confinement for 1 year.

Note: While only commissioned officers can be charged under this article, DOD Directive 1344.10 - POLITICAL ACTIVITIES BY MEMBERS OF THE ARMED FORCES ON ACTIVE DUTY, extend these same requirements to all individuals on active duty. Enlisted members and warrant officers who violate these provisions can be charged under Article 92 of the UCMJ, Failure to Obey an Order or Regulation.

Next Article > Article 89—Disrespect toward a superior commissioned officer >

Above Information from Manual for Court Martial, 2002, Chapter 4, Paragraph 12



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