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House Democrat: FCC inspector general probing agency's treatment of Sinclair

Following a series of requests from Democratic lawmakers, the Federal Communications Commission inspector general has agreed to investigate whether the commission has shown preferential treatment toward Sinclair Broadcast Group Inc., according to a congressman.

Rep. Frank Pallone Jr., a Democrat from New Jersey, confirmed Feb. 15 that the FCC inspector general has accepted a request to investigate whether Republican FCC Chairman Ajit Pai and his aides improperly pushed for rule changes to benefit Sinclair's proposed $6.6 billion combination with Tribune Media Co. The investigation, according to Pallone, will also look at whether Pai and his staff improperly coordinated with Sinclair on those rule changes.

"For months I have been trying to get to the bottom of the allegations about Chairman Pai's relationship with Sinclair Broadcasting," Pallone said, while noting he had particular concerns about any improper interactions the chairman may have had with the company. Pallone also thanked the FCC inspector general for having "decided to take up this important investigation."

A spokesman for the FCC, meanwhile, denied any allegations of wrongdoing, calling them "absurd."

The Office of Inspector General did not immediately respond to a request for comment, but it generally does not confirm or deny what investigations it is working on. The office is tasked with conducting objective and independent investigations, audits and reviews of FCC programs and operations. Based on those investigations, the inspector general creates semiannual reports that are delivered to both the Congress and the FCC chairman. According to the FCC website, "The Inspector General reports to, and is under the general supervision of, the FCC Chair."

The current inspector general for the FCC is David Hunt, appointed in 2011 by then-FCC Chairman Julius Genachowski. Genachowski was an appointee of Democratic President Barack Obama.

In refuting Pallone's allegations of improper coordination with Sinclair, an FCC spokesman pointed to the $13.4 million fine the commission proposed against Sinclair in December 2017 for violating the commission's sponsorship identification rules. The penalty is the largest fine the commission has ever sought for a violation of its sponsorship identification rules, and it came in response to allegations Sinclair aired sponsored programming from the Huntsman Cancer Institute without disclosing that the Huntsman Cancer Foundation paid for the content. Under FCC rules and federal law, broadcast stations must identify any sponsored programming so as to distinguish between paid broadcast material and independent news coverage or editorial content.

Given the historic size of the proposed fine against Sinclair, the FCC spokesman said, "The accusation that he has shown favoritism toward the company is absurd."

SNL Image
FCC Commissioners Brendan Carr, Mignon Clyburn, Chairman Ajit Pai,
Michael O'Rielly and Jessica Rosenworcel

Source: FCC

While the fine was indeed the largest ever imposed, Commissioners Jessica Rosenworcel and Mignon Clyburn, both democrats, argued at the time that based on the number of violations and the overall size of Sinclair, the fine should be larger.

Specifically, Clyburn called the penalty "a mere slap on the wrist" and Rosenworcel argued a fine representing only 0.5% of Sinclair's 2016 revenues represented an instance of the FCC showing Sinclair "unreasonable and suspicious favor." She had argued for a penalty of more than $82 million, or 3% of Sinclair's 2016 revenues.

Rosenworcel has been among those to accuse Pai of showing preferential treatment toward Sinclair, especially after Pai led a party-line vote in November 2017 to loosen the commission's media ownership rules, which have historically limited how many TV or radio stations or newspapers a single owner can operate in a given local market. Notably, the FCC voted to eliminate a previous prohibition on any single entity owning more than one top-four rated station in a single market. Instead, the FCC will do a case-by-case review, providing more flexibility within the rule.

Without any divestitures, Sinclair/Tribune would own two top-four rated affiliates in 10 of the 14 markets where Sinclair and Tribune both operate.

After the November vote, Rosenworcel told reporters the FCC has "engaged in a series of media policy changes ... that are striking in the one thing they have in common: they are all custom-built for a company called Sinclair Broadcasting."

The FCC spokesman, however, noted that Pai called for updates to the FCC's media ownership rules long before he became chairman and long before Sinclair announced its deal with Tribune.

"Chairman Pai has for many years called on the FCC to update its media ownership regulations to match the realities of the modern marketplace. The chairman's actions on these issues have been consistent with his long-held views," the spokesman said.

Sinclair and Tribune recently extended their merger closing date and promised to provide a 10-day advance notice to the U.S. Department of Justice when they intend to finalize the deal. The Justice Department is widely expected to require divestitures as a condition on closing the transaction, though it remains unclear exactly how many stations Tribune and Sinclair will be forced to sell.