News

FCC Ends Leak Probe, One Fired

2/27/2001 5:55 PM Eastern

The Federal Communications Commission has ended its investigation into
whether one or more employees improperly disclosed agency merger documents to
unauthorized individuals, including reporters at the Washington Post and
TheWall Street Journal.

But the investigation did cost one FCC employee his job in connection with
various documents he leaked to a nonmedia source.

In a Dec. 19 report by the agency's inspector general, the FCC said it was
unable to determine whether anyone within the agency gave documents to reporters
in connection with three mergers, including the union between America Online
Inc. and Time Warner Inc., which was approved by the agency in January.

On Sept. 21, the Washington Post reported that FCC staff supported
approval of the AOL-Time Warner merger provided that the companies agreed to
allow competing Internet-service providers to gain access to their cable
systems.

The Post article said its source for the story was an FCC staff
'draft' it had obtained, yet the story provided no other details on the source
of the disclosure.

That Post story -- combined with previous leaks that became the basis
for other stories in the Post and the Journal between April 24 and
Sept. 25 -- infuriated then-FCC chairman William Kennard and Republican
commissioner Michael Powell, who insisted that leakers caught in the act should
be fired.

Outrage over the leaks prompted Kennard to ask Inspector General H. Walker
Feaster to launch an investigation.

Feaster said he interviewed 30 people, including FCC personnel with access to
key AOL-Time Warner merger documents. He also interviewed journalists and others
outside of he agency, but the source of the FCC leaks could not be conclusively
identified.

'The investigation is closed. We don't believe we found the source of those
leaks to reporters,' Feaster said in an interview Tuesday. He added that his
probe also covered leaks with regard to AT&T Corp.'s merger with MediaOne
Group Inc. and Bell Atlantic Corp.'s merger with GTE Corp.

A copy of Feaster's two-page report was obtained by Multichannel News
under the Freedom of Information Act.

Last October, the FCC adopted rules designed to crack down on leaks. The
commission said it would require lawyers and lobbyists who conduct business at
the FCC to return nonpublic documents to Feaster's office. The rules did not
apply to the media.

While failing to catch media leakers, Feaster's probe uncovered that an
attorney within the Cable Services Bureau gave AOL-Time Warner merger documents
to an outside individual not named in Feaster's report.

Feaster found that the FCC attorney disclosed several nonpublic documents,
including an internal memorandum, a draft of the FCC's open-access notice of
inquiry and a draft order pertaining to the AOL-Time Warner merger.

Feaster's report concluded that the FCC attorney leaked the material in
violation of agency rules 'for the purpose of acquiring input for the aspects of
the open-access question and the merger matter upon which he was working.'

Feaster said he would not name the FCC employee, but he confirmed that he had
been fired. The FCC attorney, Feaster added, hand-delivered some documents and
electronic-mailed others. He said the employee did not accept compensation in
exchange for the documents.

Feaster said he was led to the employee when the recipient of the documents
returned the materials to the commission in October, around the time when
Kennard and Powell spoke out about leaks.

Feaster said the person who returned the documents had to know his actions
would allow the FCC to finger who inside the agency provided the
information.

'The guy who sent us back the documents knew that he was putting the person
who gave him the documents at risk,' he added.

Four sources familiar with Feaster's probe confirmed the name of the FCC
attorney who was fired for leaking. But top FCC spokesman David Fiske said he
had to consult with officials to determine whether he could confirm the FCC
employee's name.

Feaster said he believed the fired FCC employee had not been the source of
the media leaks or additional leaks beyond the person who returned the
documents.

He said the person who returned leaked documents would have been covered by
the FCC's new anti-leak rules had they been in effect, which was not to occur
for another 60 days following their early October adoption.

'The person operated very openly with us. He was very uncomfortable dealing
with the issue,' Feaster said. 'He had documents in his possession that he knew
he shouldn't have had. If the rules had been in place at that point in time,
[he] would have been [covered].'

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