Non-Profit Watchdog Group Says FCC Officials Should Be Investigated for Owning Stock in Companies They’re Supposed to Regulate
The Federal Communications Commission (FCC) is supposed to protect Americans from the telecom industry. Unfortunately, it has a long history of not doing, hence being labelled a “captured agency” (see 1, 2). Need some examples? It continues to approve billions in funding for high-speed broadband despite the fact that a 2020 lawsuit that proved Americans have already paid for it to be provided with safer connections – not Wi-Fi and 5G. In fact, it continues to approve and often fund the launching of tens of thousands of broadband satellites despite poor reviews, opposition, and increasing warnings from the Federal Aviation Administration (FAA), the U.S. Government Accountability Office (GAO), and the satellite companies themselves (see 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12). It continues to support 5G deployment despite numerous issues associated with it – including aviation and cybersecurity risks. In regard to health risks, a federal court ruled in favor of organizations and petitioners that sued the agency for NOT adequately protecting Americans from wireless radiation exposure including 5G! So, of course, FCC employees owning stock in telecom companies might be worth investigating.
From Ars Technica:
FCC officials owned stock in Comcast, Charter, AT&T, and Verizon, watchdog says
US law prohibits FCC employees from owning stock in firms regulated by the agency.
The Federal Communications Commission should be investigated for letting employees own stock in Comcast, Charter, AT&T, and Verizon, nonprofit watchdog group Campaign Legal Center told government officials.
“Federal law specifically bans FCC employees from owning ‘any stocks, bonds, or other securities of [any company] significantly regulated by the Commission,'” the nonprofit group said last week in a letter and detailed report sent to FCC Acting Inspector General Sharon Diskin. “Despite this ban, the most recent financial disclosures publicly available show that ethics officials allowed multiple FCC employees to own stock in telecommunications and other companies that appear to fall under the prohibition.”
The letter, sent by Campaign Legal Center General Counsel Kedric Payne and two other lawyers at the group, urged the FCC Office of Inspector General (OIG) to “investigate whether the FCC’s ethics officials took appropriate action to enforce the ethics laws… The ethics officials responsible for enforcement must explain to OIG and the public why they allowed employees to hold stocks in FCC licensed telecommunications and computer companies in apparent violation of the law.”
Citing the most recent financial disclosure reports, which cover the Chairman Ajit Pai-era years of 2018 and 2019, the Campaign Legal Center report said FCC official Rosemary Harold owned Comcast stock with a value between $3,003 and $45,000. Harold was the FCC Enforcement Bureau chief during that time and is now a deputy chief with the FCC Media Bureau. The report also said former FCC official Lisa Hone, then a deputy bureau chief, owned Charter Communications stock worth between $4,004 and $60,000.
Hone and former FCC Chief Information Security Officer Andrea Simpson owned AT&T stock, with the two employees’ AT&T holdings adding up to somewhere between $2,203 and $31,001, the report said. Harold and former Chief Technology Officer Eric Burger reportedly owned Verizon stock with a combined value between $7,007 and $105,000. The wide stock value ranges are a result of how employee stock holdings are reported in financial disclosure forms.
Carriers got away with false reports in 2019
The FCC has a shaky track record when it comes to punishing Internet providers. In December 2019, the FCC decided not to punish Verizon, T-Mobile, and US Cellular for exaggerating their 4G coverage in official government filings despite FCC staff writing that overstatement of “mobile broadband coverage misleads the public and can misallocate our limited universal service funds, and thus it must be met with meaningful consequences.”
While the FCC chair and commissioners make the biggest policy decisions, FCC staff are responsible for investigations and play a big role in enforcement.
Our recent reporting shows that Comcast and other ISPs submitted false coverage data to the FCC’s new and improved broadband map system. Comcast initially insisted the false data was accurate even after residents filed challenges at addresses where it was impossible to order Comcast Internet service. Even though Comcast didn’t admit mistakes until our reporting, an FCC spokesperson told us the challenge process was working as designed.
The FCC has said there are “multiple ongoing” investigations into data submitted by ISPs, but it isn’t clear whether Comcast or other providers will be punished for the false reports.
The FCC’s most prominent regulatory role is in telecom, but the Campaign Legal Center also raised concerns about FCC employees owning stock in Dell, Garmin, HP, IBM, and Sony. “The FCC’s laws and regulations indicate that the above-listed stocks held by FCC officials fall into two categories covered under the stock ownership ban: telecommunications companies and FCC-licensed computer companies,” the report said.
The group said it appears that all nine stocks “were held by FCC officials in violation of the Communications Act. If the FCC ethics officials issued a waiver or determined that the clear language of the regulations do not apply to the stocks, such waivers or legal analyses should be made public to help restore confidence in the ethics program of the agency.” The FCC chair and ethics officials are required to enforce the laws related to employee stock ownership, the group’s report said.
US ethics office is also urged to investigate
The Campaign Legal Center also sent a letter to the US Office of Government Ethics on Monday this week, asking the federal office to investigate whether FCC “ethics officials took appropriate action when allowing officials to own and trade stock in companies ‘significantly regulated by the Commission.'”
“The ethics officials responsible for enforcing this law apparently approved these trades without issuing a waiver as required,” the letter said.
Agency ethics officials may “waive the applicability” of the stock-ownership law “at the employee’s request and at the recommendation of the head of the employee’s office or bureau,” but in such cases “the FCC must publish a notice of the waiver in the Federal Register and provide notice to the appropriate congressional committees,” the Campaign Legal Center’s report said. “The notice must include the person who receives the waiver’s identity, their position, and the nature of their financial interests.”
The Campaign Legal Center was founded in 2002 and describes itself as a nonpartisan group that uses “litigation, policy advocacy and communications to make systemic impact at all levels of government,” with a commitment “to democracy, not to political parties or electoral results.” It was founded by Trevor Potter, a Republican who was chairman of the Federal Election Commission from 1991 to 1995.
FCC says employees “in full compliance”
We contacted the FCC today and will update this article if we get any response.
The Wall Street Journal covered the Campaign Legal Center’s letter yesterday, quoting an FCC spokesperson as saying “that the agency’s ethics officials believe that the individuals identified in the complaints ‘have taken all necessary steps in order to ensure they were and are in full compliance with all relevant ethics conflict of interest rules.'”
“Each of the public financial reports that disclosed the stock holdings was signed by ethics officials at the FCC, an indication that the agency believed the investments complied with the rules,” the WSJ also wrote.
The WSJ previously published a series of articles about government officials at various agencies owning stock in companies they regulated or had dealings with. A December 2022 article said one FCC senior official owned at least $100,000 in Alphabet stock during “a period when she was working on FCC plans that affected the company.” Alphabet is the owner of Google, which was pushing for more wireless spectrum to be devoted to Wi-Fi.
The employee inherited the stock from her deceased son in December 2017 and said she was told by the FCC’s general counsel that she didn’t have to sell it. “An FCC spokeswoman said Google isn’t considered primarily regulated by the agency and therefore employees are permitted to invest in the company,” the WSJ reported at the time.
Disclosure: The Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications, which also owns Ars Technica parent Condé Nast.
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