Telecom Group Key Player in Immunity Battle

By Matt Renner

t r u t h o u t | Investigative Report

Thursday 31 January 2008

A think tank with close ties to the telecommunication industry has been working with a key Democrat in the Senate on a domestic surveillance bill that would provide telecommunications companies with retroactive immunity for possibly violating federal law by spying on American citizens at the behest of the Bush administration.

Third Way, a non-profit "progressive" think tank that is funded and controlled by hedge fund managers, corporate lawyers and business executives has advised Sen. Jay Rockefeller on a domestic surveillance bill that includes immunity for telecommunications companies with which Third Way board members have close ties.

Rockefeller is the chairman of the Senate Intelligence Committee and has been the leading Democratic proponent of granting immunity to telecommunication companies that allegedly gave spy agencies access to their communication networks and databases without a warrant.

"I think we will prevail," Rockefeller told the Politico on January 23, referring to the disagreement over retroactive immunity for telecoms, "it's a pretty bad idea to appear cocky ... I'm not pessimistic."

Democrats connected to Third Way were integral in defeating a bill, supported by a majority of Senate Democrats, which might have prevented the telecoms from getting immunity.

This immunity provision is the major sticking point in the battle over the Foreign Intelligence Surveillance Act (FISA) legislation that is currently stalled in the Senate. The Bush administration has threatened to veto any FISA update that does not contain retroactive immunity. Civil libertarians and a majority of Democratic senators oppose the retroactive immunity, in part because the provision would cut off lawsuits against the telecom providers. These suits have been the most effective vehicles for uncovering the details of the Bush administration's potentially criminal surveillance activities.

"We have advised Senator Rockefeller on messaging and have talked to his staff regarding FISA," Matt Bennett, vice president of Third Way said. "We believe there should be immunity and have been cooperating with [Rockefeller's staff]."

Rockefeller's committee was tasked with drafting a FISA update bill after the House of Representatives passed a version of the legislation that intentionally did not include telecom immunity.

During the crafting of the Intelligence Committee bill, Bennett met with a frequent contact of his, Clete Johnson, Rockefeller's legislative aide for military and national security issues, to discuss the FISA legislation. At the meeting, Bennett advised Johnson on talking points to help make the case for telecom immunity.

"I told him that we thought it would be helpful for [Rockefeller] to talk about the reasons for providing immunity to the telecoms," Bennett said. "We thought it would be a bad idea to allow these companies to be held legally liable for cooperating with the government ... you want to encourage the cooperation of not just the telecom industry, but all other industries in the future."

This talking point stuck, and remains one of the main arguments made by proponents of granting retroactive immunity.

Rockefeller communication director Wendi Morigi confirmed the meeting and said members of Rockefeller's staff "meet periodically" with members of Third Way. She said Third Way "had no input in the process in drafting the [FISA] bill or anything related to it. They did not help write anything nor did anyone in Third Way meet with anyone writing the legislation."

Critics of the immunity provision argue the telecoms should have known their cooperation with the Bush administration could put them in legal jeopardy because the administration did not go through the proper channels and did not get warrants for the information they were requesting.

The Bush administration may have subverted the law by going around the established FISA court that was designed to oversee the spying activities of the executive branch in the wake of the Watergate scandal. Under the law, Telecoms that cooperate with FISA court warrants are protected from legal action.

At least one major telecom provider, Qwest Communications, refused to cooperate with the Bush administration's spy program because of legal concerns.

Third Way and Telecoms

Third Way operates behind the scenes in Washington, DC, influencing the agenda of the Democratic Party by meeting with legislative staff, conducting research and hosting policy forums. They have deep political connections within the Democratic party and are a leading voice in favor of so-called "free trade" economics.

The organization's roughly $4.5 million operating budget comes from the private sector, mostly from their board of trustees, which also serves as the Third Way board of directors and has exclusive legal control over the company.

While the board members themselves provide the majority of the funding for Third Way, approximately 35 percent of their money comes directly from corporate donors. Third Way does not make a list of their corporate donors public. Bennett would not comment when asked if telecommunications companies were among Third Way's donors.

"Not a single member of the board told Third Way what to do regarding telecom immunity," Bennett said, adding, "day to day operations are handled by the senior staff."

The Third Way board is made up of wealthy hedge fund managers, major corporate law firm executives, corporate executives and Washington, DC, insiders. An investigation by Truthout revealed deep connections between some board members and telecommunications companies.

Thurgood Marshall Jr., the son of the late Supreme Court justice, is a partner at the Bingham McCutchen law firm and a principal at Bingham Consulting. In 2004, Bingham McCutchen represented AT&T Wireless Services in its $41 billion merger with Cingular Wireless. While not registered as a lobbying firm, Bingham Consulting "helps national and global companies create and execute effective multistate legal political strategies." Their lawyers have "played a role in nearly every significant development in the communications industry in the past quarter century, in the United States and internationally," according to their web site.

Reynold Levy is a former senior officer of AT&T in charge of government relations. He also headed the AT&T Foundation.

Bernard L. Schwartz served for 34 years as CEO and chairman of the board for Loral Space and Communications Inc. until 2006. His former company owns and operates a large portion of the world's telecommunication satellite infrastructure.

Robert Katz is chairman of the board of iPCS Inc., a wireless communications company affiliated with Sprint. The company did not respond to inquiries about their policy on cooperation with government spying.

John L. Vogelstein is a senior adviser and past president of Warburg Pincus, a multi-billion-dollar private equity firm with major investments in the telecommunication industry.

Third Way Democrats Block Attempt to Stop Immunity

Twelve Democrats broke with their party and joined Republicans by voting against the Senate Judiciary version of the Foreign Intelligence Surveillance Act legislation on Thursday, January 24. The bill would have stripped out the retroactive immunity for telecoms.

The Judiciary bill was drafted after the Intelligence Committee version and was brought up as a substitute amendment. The Judiciary bill did not contain retroactive immunity for telecoms.

Five of the 12 Democratic senators who voted to kill the Judiciary bill are recognized by Third Way as "Honorary Senate Chairs". They are Sens. Evan Bayh (D-Indiana), Tom Carper (D-Delaware), Mark Pryor (D-Arkansas), Ken Salazar (D-Colorado) and Claire McCaskill (D-Missouri).

Out of a total of six "Honorary Senate Chairs" of Third Way, only Sen. Blanch Lincoln (D-Arkansas) voted with the majority of Democrats on the Judiciary bill.

The Future of FISA

Wednesday, Congress passed a 15-day extension to the Protect America Act, a hastily-passed bill that greatly expanded executive branch spy powers, which was scheduled to expire on Friday.

Bush has threatened to veto the extension and any other FISA legislation that does not include retroactive immunity for the telecoms. Sen. Chris Dodd (D-Connecticut) has said he will attempt to filibuster any spy legislation that does include immunity.

The battle over the issue will play out over the coming weeks.

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Matt Renner is an assistant editor and Washington reporter for Truthout.

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