Disney Moves Aggressively to Increase Political Clout : Business: The company and its leaders are boosting their campaign contributions and lobbying efforts.
They may not call it Mickey Mouse Goes to Washington, but the Walt Disney Co. is moving aggressively to raise its profile in the nation’s capital and in statehouses and city halls.
In a departure from years of aloofness from heavy lobbying, the company is dramatically increasing campaign contributions to key lawmakers and intensifying its efforts to influence legislation and government regulation.
At the national level, Disney, its executives and employees pumped $477,391 into congressional races and political committees in 1989 and 1990, according to a Times computer-assisted study of records filed with the Federal Election Commission. That number is a significant increase over the previous two-year cycle. The funds went largely to lawmakers who were in positions to assist Disney by shaping legislation.
Meanwhile, Disney has hired its first full-time Washington lobbyist, Richard M. Bates, former executive director of the Democratic Congressional Campaign Committee, at a salary of $150,000 a year. The company has also retained other Washington lobbyists to handle specific issues and regularly flies top executives to Washington to testify or lobby.
Establishing a Washington presence--and making large campaign contributions--is not unusual for prominent entertainment firms that have high stakes in regulatory and legislative battles. Companies such as Paramount Communications Inc. and Time Warner Inc. have maintained lobbyists here for years, and their executives and political action committees contribute large sums to lawmakers. If anything, Disney has come relatively late to the Washington game.
But Disney--which has more diverse and far-reaching interests than its competitors--has quickly set itself apart from the others through the largess of its senior executives’ campaign contributions. The country’s premier family entertainment firm has become one of the leading practitioners of the corporate art of “bundling"--collecting personal contributions for a single lawmaker from top executives and pooling the money to enhance its impact.
Even so, in recent months, Disney has found that the road from the Magic Kingdom to the corridors of power can be lined with political pitfalls.
For all its determination and deep pockets, Disney stumbled in two early tests of its governmental prowess. Its effort to win $395 million in federal funds for a highway project that would benefit a proposed expansion near Disneyland ran into a barrage of criticism, embarrassing allies in Congress and raising questions about the firm’s lobbying tactics. And the company sparked controversy over its efforts to push through a bill in Sacramento that would permit it to fill in the coastal waters off Long Beach for its Port Disney project.
Disney’s bid to increase its political clout comes as the entertainment giant is acquiring a full plate of legislative objectives. It is seeking to keep foreign markets open for its films and television shows, to enforce copyright protection for its lucrative movies and retail products and to prevent television networks from rolling back a rule that prohibits them from owning the programs they show.
Disney has also weighed in against proposals by groups concerned about feature-length commercials for children’s toys that would place a temporary ban on the sale of merchandise related to children’s television programming. The company maintains that its animated shows should not be included under the definition of programs designed to sell products.
Moreover, Disney is trying to expand its entertainment empire in Southern California and Florida. The company saw phenomenal growth in the 1980s under Michael D. Eisner, its chairman and chief executive officer, and Frank G. Wells, its president. Now, Eisner boasts, the 1990s will be the “Disney Decade.”
Actions by Congress and the Bush Administration could have a major impact on that goal. As a result, Disney--whose tight-fisted management traditionally has been loathe to increase the company’s budget markedly--decided after lengthy deliberations to establish its own full-time Washington presence. Before that, Disney had relied heavily on the Motion Picture Assn. of America and other trade associations to represent its interests in theme parks and resorts, consumer products and film and cable television.
“Our three lines of business are frequently impacted by developments in legislation, regulation and international trade,” said Joseph Shapiro, Disney’s senior vice president. “Washington is a focal point for those areas of activity.”
Disney’s move into Washington was part of a broader decision by top management at the company’s headquarters in Burbank--known as “Team Disney"--to increase the firm’s influence in governmental decision-making in key locations nationwide. The team also has hired new executives to carry out Disney’s lobbying efforts in California and Florida, home of Disney World.
A sharp increase in campaign contributions has been an integral part of Disney’s strategy wherever the company has trained its sights. In 1990, Disney boosted contributions to California officeholders to $95,000 and spent another $73,000 on statewide initiatives--more than a tenfold increase over the yearly average that the firm contributed in the 1980s. The company also gave another $303,238 to local initiatives and political campaigns.
In Washington, where limits on federal campaign funding restrict the amount that Disney can contribute through its political action committee, Disney channels large sums to lawmakers through individual donors--the firm’s top executives and scores of its employees. In the 1989-90 campaign cycle, for example, while the Disney PAC itself gave $83,519 to federal candidates, Disney employees gave $260,490 to candidates and another $133,382 to political parties and other PACs. In 1987-88, the Disney PAC gave $63,000, while individual contributions totaled $213,593.
In the process, Disney executives have emerged as some of the most generous individual congressional donors in the country. Wells and his wife, Luanne, gave $171,996 during the four-year period. Eisner and his wife, Jane, and their two children contributed $118,000. Three other top executives and their wives gave a total of $208,994.
Although it is perfectly legal, this technique of “bundling” enables companies to skirt federal limits on contributions.
Disney’s track record puts it “in the very upper stratosphere of bundlers,” said Larry Makinson, research director for the Center for Responsive Politics, a think tank that studies campaign finance issues closely. The company ranked eighth nationally--and first among movie studios--in contributions by its corporate executives and their immediate families in 1989-90, a Times study found.
Bundling has several advantages. Contributions by individuals bear less of a stigma than PAC money. And members of a corporation’s top brass can collectively give as much money as they want to political campaigns, as long as none of them individually donates more than $2,000 to a single congressional candidate. By contrast, PACs are prohibited from giving more than $10,000 to a single candidate.
“Clearly, this kind of activity is another route around the limitations,” said Ellen Miller, director of the Center for Responsive Politics, which monitors campaign contributions. “The vast majority of Americans cannot afford to give these kind of contributions.”
Shapiro, who is responsible for Disney’s governmental relations operation, also plays the key role in its fund-raising operations. Colleagues describe the 44-year-old Harvard Law School graduate and former corporate attorney as Disney’s “worldwide deal-maker” and a man with a “Steve McQueen-type intensity.” His duties include overseeing development of the $2.7-billion Euro Disneyland, scheduled to open outside Paris in April, 1992.
Shapiro declines to discuss Disney’s campaign giving in any detail, saying only that the Disney PAC decides through its board of directors who will receive contributions and otherwise it’s “an individual executive’s choice” on whether to make a contribution. He insists that no Disney employee is ever pressured to make contributions.
But last year, Shapiro acknowledged to The Times that Disney--like MCA Inc., Time Warner, Paramount and other entertainment companies--funneled contributions from employees to key lawmakers in a coordinated fashion.
Sometimes co-workers mail in their own contributions, but frequently Shapiro gathers the checks in a single envelope. “If you set out to raise $6,000 for Sally Smith, you collect all the checks and then mail them out all at once,” he said.
While the sums that individual executives gave are significant in the context of congressional contributions, their largess nonetheless represents only a small portion of their earnings at Disney. Eisner, his wife and his children, for example, gave a total of $68,500 in 1989-90, but his salary and bonuses in 1990 totaled $11.2 million.
Wells and his wife gave $77,417; his salary and bonuses totaled $5.6 million. Wells, a liberal Democrat, also has environmental and other political interests outside of Disney. All told, five top Disney executives and their families gave a total of $276,757 in 1989-90.
The company’s approach has generated controversy. In Anaheim, where Disney is proposing a new $3-billion resort development, the company and its top executives contributed $25,250 to City Council members in 1989 and 1990--a 75% increase over their contributions in each of the two previous years. It also provided dozens of council members and city department heads with free tickets, meals and an annual fishing and golf trip to the Hotel del Coronado in San Diego.
“The tactic Disney uses is co-opting people,” said former Anaheim Mayor William Thom, who has taken Disney-sponsored trips to Santa Catalina Island and San Diego. “The wining-and-dining, the trips to San Diego . . . it’s an obvious attempt to co-opt public officials. If you accept it and go along with it, people have every right to think you’ve been bought off.”
In Florida, the Reedy Creek Improvement District--a special regional agency that Disney persuaded the Legislature to create in 1967 to govern the Disney World property--has the kind of sovereignty over its land that has been compared to the Vatican’s. Nowhere else does Disney have such clout.
Disney has also revved up its lobbying operations with state and local governments in connection with the two Southern California expansion proposals--with decidedly mixed results. Early bids to win crucial government assistance in Washington and Sacramento foundered, bringing unfavorable publicity for the image-conscious company.
‘New to the Game’
“We’re new to the game,” acknowledged Kate Bartolo, Disney’s recently hired vice president for governmental relations, who oversees the firm’s lobbying in California. “As a result, all of the actions that Disney takes in the political arena have garnered attention that is disproportionate to the issue. That will change when people get to know us better.”
Disney has announced that it will either proceed with the Anaheim project--which includes new hotels and Westcot, an updated, West Coast version of Disney World’s Epcot Center--or with a $2-billion, 414-acre ocean theme park in Long Beach called Port Disney. The two municipalities are competing for the projects--each of which could mean tens of thousands of new jobs and millions of dollars in new tax revenues.
As part of the Anaheim plan, Disney has proposed a $395-million highway project that includes construction of new exits off the Santa Ana Freeway, high-tech parking garages and a monorail near Disneyland. Disney executives argue that this would be a model demonstration project that would ease traffic congestion, reduce air pollution, create 28,000 permanent jobs and bolster business at the Anaheim Convention Center, nearby Anaheim Stadium and the proposed Anaheim Arena.
But Rep. Robert K. Dornan (R-Garden Grove), whose district includes Disneyland, introduced a similar, though more modest, $175-million request for the city of Anaheim.
The House Public Works and Transportation Committee left both proposals out of a $153-billion transportation bill drafted in July. Rep. Norman Y. Mineta (D-San Jose), chairman of the House surface transportation subcommittee, said the panel was unable to tell which parts of the proposal benefited Disney alone, rather than the public at large. And even some of those lawmakers who backed the $395-million Disney proposal now say they wish they had not.
“In hindsight, there are some useful public aspects to this, but it had too much direct benefit for one company,” said Rep. Howard L. Berman (D-Panorama City), one of five California Democrats who signed a June 21 letter supporting the project. “I made a mistake.”
Rep. Vic Fazio (D-Sacramento), another signatory and one of the entertainment industry’s most influential congressional supporters, concedes that the issue was handled ineptly. “In retrospect, this would sensitize us to ensure that we know more about the project before we sign the letter,” Fazio said.
The Democrats’ letter originated when Disney’s lobbyist, Bates, approached aides to Rep. Mel Levine (D-Santa Monica), a prospective 1992 U.S. Senate candidate who has personal ties to Disney executives Wells, Eisner and Shapiro. Levine, in turn, circulated the letter among his Democratic colleagues. Rep. Carlos J. Moorhead (R-Glendale), whose district includes Disney’s corporate headquarters, says he also submitted a letter of support to the public works panel.
Levine received a total of $20,750 from Disney and its employees between 1987 and 1990--more than any other House member. He also got another $21,000 from Disney executives and $5,000 from the Disney PAC in the first six months of this year--a time when he was raising money for his expected Senate race and when Disney was pursuing the highway authorization.
Levine says his support for the project was based on Disney’s representations that it had bipartisan support and would “get California its fair share of highway dollars--which we haven’t been getting--eliminate smog and congestion and that it would benefit the public.” The lawmaker maintains that the contributions--from individuals and the Disney Co., for which he says he has high regard--were not a factor.
Highway Plan Funds
Shapiro agrees. “The recent increase in Mel’s fund raising is attributable to the fact he is running for the Senate,” he said.
Disney wasn’t completely shut out of the highway bill in the House. The public works panel approved $4 million to study a connection between the proposed Disney park and the Long Beach terminus of the Metro Rail Blue line, a light-rail system that connects Long Beach with Los Angeles. Cliff Madison, a veteran Washington lobbyist with extensive transportation contacts, was retained to work on both highway projects with Bates.
“I really don’t think it’s a sin to ask the federal government for federal money for transportation, particularly when representatives from all 50 states in the union are doing it at the same time and when it’s for an environmentally sound project,” Shapiro said.
Disney will eventually need numerous other federal regulatory approvals for the Long Beach or Anaheim project. Shapiro says if the company goes ahead with the construction of Port Disney, for example, it will require a sign-off by 27 different regulatory agencies at various levels of government--including the federal Environmental Protection Agency and the U.S. Army Corps of Engineers.
Disney also ran into roadblocks in Sacramento when the company sought legislation last spring to clarify the California Coastal Commission’s authority to approve the landfill that would be required for the Port Disney project. Environmentalists contended that the California Coastal Act does not allow landfill for amusement or theme parks, and they complained that Disney was asking for a precedent-setting exception. The Disney project would require at least 250 acres of ocean fill in Queensway Bay.
Disney’s rush to push the measure through in one year proved unsuccessful--though the company did make progress in legislative negotiations and is expected to renew its efforts in January. In the process, however, critics say the firm and its lobbyists were, at times, “arrogant” and “stumble-footed.”
Joe Caves, chief aide to state Sen. Gary K. Hart (D-Santa Barbara), who followed the process closely, said members of Disney’s top brass “operated just as they operated everywhere else, and it just wasn’t appropriate up here. They assumed they were Disney and everybody loved them and they would come in here and, while there might be some negotiating, everyone would just go along with them.”
Disney officials contend that the timing of consideration of the bill--during the state’s budget crisis--and the complexity of the environmental issues it raised prevented quick passage. “We behaved with appropriate courtesy to all people at all times,” Shapiro said.
In Sacramento, Disney retained the lobbying firm of Donald BrOwn, one of the capital’s heavy hitters, to push the landfill measure. They also used attorney Richard Jacobs, who handled environmental matters as a deputy to former Atty. Gen. John K. Van de Kamp, and William Boyd, former chief counsel of the California Coastal Commission.
The Disney Team
Bartolo was hired in March as vice president for government relations to oversee lobbying in the state. A veteran Democratic activist and developer of affordable housing and commercial real estate who has been an informal adviser to state Treasurer Kathleen Brown and ex-San Francisco Mayor Dianne Feinstein, Bartolo beat out 200 applicants for the coveted position.
Bates, 40, meanwhile, was executive director of the Democratic Congressional Campaign Committee for nearly four years before taking the new Disney post. He helped raise and parcel out campaign funds and provide assistance to candidates nationwide. His campaign committee boss was Rep. Beryl Anthony Jr. (D-Ark.), for whom Bates had worked on the House Ways and Means Committee.
“Richard is an extremely qualified guy,” Shapiro said. “He essentially grew up in Washington.”
Fellow lobbyists describe Bates as well-informed and well-connected to Democratic lawmakers and staffers--particularly those on the influential House Ways and Means panel, which handles tax issues. But one key California Democratic lawmaker--a Disney ally--complains that Bates has not even paid him a courtesy call since his appointment. And Orange County Republicans--particularly Dornan--called Disney’s approach to the highway bill partisan. Disney rejects this assertion.
Bates, however, is by no means Disney’s only Washington presence. Thomas F. Railsback, a former lawmaker and lobbyist who has represented Disney for years, continues to handle some theme park and copyright issues. Railsback, a former Republican congressman from Illinois, left office in 1983.
And Disney executives themselves periodically make their voices heard in the capital. Disney Studios President Richard Frank has testified against allowing television networks to own the shows that they broadcast and in opposition to European quotas on American and other foreign programs. Wells sits on an advisory committee to U.S. Trade Representative Carla Anderson Hills. And Eisner is a board member of the Points of Light Foundation--a private organization set up to promote President Bush’s call for voluntary efforts to help tackle social problems.
“People listen to you,” said Shapiro, who also makes frequent visits to Washington on various issues. “They think we know what we’re doing.”
Staff writer Dwight Morris, researcher Stephanie Grace and librarian Caleb Gessesse contributed to this story.