John McCain and the Telecoms

Making a Killing in Iraq

By NIKOLAS KOZLOFF

It’s no secret that John McCain has been a longtime friend of the telecom industry. Indeed, the Arizona Senator has had important historic ties to big corporations like AT&T, MCI and Qualcomm. In return for their financial contributions, McCain, who partly oversees the telecommunication industry in the Senate, has acted to protect and look out for the political and economic interests of the telecoms on Capitol Hill.

Such connections are well known, yet few have paused to consider how Iraq fits into the wider jigsaw puzzle. Prior to the war in Iraq, McCain was one of the biggest boosters of the invasion. While it’s unclear whether the telecoms actually lobbied McCain on this score, they certainly benefited under the subsequent occupation.

To get a sense of the sheer scope of McCain’s incestuous relationship with the telecoms, one need only log on to the Web site of the Center for Responsive Politics. In the 1998 electoral cycle, AT&T gave $34,000 to McCain. In the 2000 cycle, the telecom giant provided $69,000, in 2002 $61,000, in 2004 $39,000, in 2006 $29,000 and in 2008 $187,000. Over the course of his career, AT&T has been McCain’s second largest corporate backer.

What’s more, AT&T has donated handsomely to McCain’s International Republican Institute (IRI), a private/public organization that carries out the far right’s foreign policy agenda in Iraq and elsewhere (for more on McCain and his relationship with the IRI, see my previous column, “Promoting Iraqi Occupation For ‘a Million Years,’ McCain and The International Republican Institute,” June 9, 2008. In 2006, the company gave the IRI $200,000. AT&T spokesman Michael Balmoris declined to elaborate on why the international telecommunications provider wrote a big check. “AT&T contributes to a variety of charitable organizations," he said flippantly.

If all that money was not enough to secure the Arizona Senator’s allegiance, AT&T may also count on an army of lobbyists who are now allied to the McCain campaign. Take for example campaign adviser Charlie Black, whose lobbying firm BKSH has represented AT&T for the past decade. Then there’s Mark Buse, McCain’s Senate Chief of Staff, who worked as a lobbyist for AT&T Wireless from 2002 to 2005.

Other companies such as MCI and Qualcomm have also played a role in the Arizona politician’s Senate career. Take for instance Tom Loeffler, McCain’s campaign co-chairman and former Congressman of Texas. Loeffler, through his lobbying firm Loeffler Group, has represented Qualcomm since 1999. All told, Qualcomm employees, spouses and political action committees have given tens of thousands of dollars to the McCain campaign. Meanwhile Kirck Blalock, a McCain campaign fundraiser, lobbied MCI from 2002 to 2005 through his firm Fierce, Blalock and Isakowitz.

Though McCain routinely derides the influence of "special interest lobbyists," his ties to the telecom lobbyists undermine any such claims. Of the 66 current or former lobbyists working for the Arizona senator or raising money for his presidential campaign, 23 have lobbied for telecommunications companies in the past decade.

McCain is a senior member of the Senate Commerce Committee, which oversees the telecom industry and the Federal Communications Commission (FCC). The Arizona Senator has repeatedly pushed industry-backed legislation. McCain’s efforts to eliminate taxes and regulations on telecommunications services have won him praise from industry executives. In the late 1990s, the Arizona Senator wrote the FCC, urging the agency to give serious consideration to the idea of allowing AT&T and MCI to enter the long-distance market. Four months later, AT&T wrote a check for $25,800 to McCain.

If that was not enough, high-up McCain officials such as Charlie Black secretly lobbied Congress to approve a measure wiping out all private lawsuits against the telecoms for assisting the U.S. intelligence community's warrantless surveillance programs. McCain himself became an “unqualified” supporter of telecom immunity, claiming in a statement to the National Review that “neither the Administration nor the telecoms need apologize for actions that most people, except for the ACLU and the trial lawyers, understand were Constitutional and appropriate.” Needless to say, McCain voted in favor of granting amnesty to AT&T and other telecoms at exactly the time that his close adviser Black was taking money from AT&T to influence Congress on its behalf.

Making a Killing in Iraq

Even as McCain was lobbying hard for the Telecom industry in the late 1990s, the Arizona Senator worked overtime to build up the case for war in the Middle East. McCain served as the “honorary co-chair” of the Committee for the Liberation of Iraq, a group which helped push for official government as well as public support for the invasion of Iraq after the 9/11 terror attacks.

In the aftermath of the invasion, the telecoms scrambled to get a piece of the action as Iraq was opened up for business. Cellular giant Qualcomm managed to exert political influence over the Pentagon which in turn pressured the Coalition Provisional Authority to change an Iraqi police radio contract to favor Qualcomm’s patented cellular technology.

What’s more, the Pentagon hired MCI---the former World Com, which had declared bankruptcy amidst an accounting fraud scandal in July, 2002---to build a small wireless phone network in Iraq. Incensed, Democratic Senator Ted Kennedy urged major federal agencies to stop doing business with bankrupt telecom giant MCI and explain why its record $9 billion accounting fraud should not disqualify the company from receiving lucrative government contracts.

As it turned out Kennedy was right to harbor suspicions about the dodgy company. After the Coalition Provisional Authority issued MCI cell phones to U.S. personnel in Baghdad’s Green Zone, problems arose. Reportedly, cell phone owners received monthly bills as high as $10,000. The individuals had never received bills, leaving the impression that the phone calls, which cost $1.25 a minute, were free. The U.S. State Department subsequently decided to shut the phone calls down.

AT&T, McCain’s second largest corporate backer, also fell into controversy. After the invasion, the telecom giant received an exclusive contract to provide pre-paid calling cards to military personnel stationed in Iraq. But U.S. soldiers quickly complained about the exorbitant prices they had to pay under the arrangement.

According to the Newark Star Ledger, many pre-paid AT&T cards bought in the United States and shipped to soldiers in Iraq allowed only a fraction of the minutes promised on the cards. Even the cards bought in Iraq, which an AT&T spokesman said were a better bargain for the troops, cost between 19 and 21 cents a minute for a call.

House Representative Frank Pallone, Democrat of New Jersey, was disturbed by the price gouging. “AT&T should be required to provide a clear and straightforward system of calling time that will make it easier for our troops to call home,” Pallone said in a statement. “It disturbs me to think that companies are more interested in making a buck on our soldiers in Iraq than providing the quality services they have been paid to provide.”


Truly, it can be said that the telecoms have been making a killing in Iraq, their war profiteering greased by their long-time ally, John McCain.

Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave-Macmillan, 2008)