In National Assn of Broadcasters v. FCC, No. 21-1171 (July 12, 2022), a D.C. Circuit panel invalidated an FCC rule designed to ensure that material aired by broadcasters was properly identified when coming from a foreign government.  The regulation’s fatal flaw was its requirement that broadcasters check two government databased to ascertain whether the entity providing the broadcast matter had connections to a foreign government.

In the first post in this series, I showed that the D.C. Circuit panel’s textualist interpretation, which abstracted out the context of the relevant statutory provision altogether, was wrong even on its own abstract terms.  I promised (to be honest, teased) a second part, which would add a context that would encompass a cast of characters as diverse as Dick Clark and Vladimir Putin.  You’ve waited patiently. This post provides that context.  But this is not just an interesting story, the story provides a context that exposes deep flaws in the NAB v. FCC Court’s opinion.

The Background Story

Section 317: The 1930’s and 1940’s

In the Communications Act of 1934, Congress provided that for “[a]ll matter” provided by another person and for which broadcaster accepted any money, service or other valuable consideration” to broadcast, the broadcaster must announce the identity of the source of the material.[1] However, the provision may have “occupied a humble position in the regulatory design and [gone] virtually unnoticed” in the early years of telecommunications regulation.[2] 

Ten years later, in 1944, the FCC adopted a rule providing that “an [identification] announcement be made in the case of any political program or any program involving the discussion of any controversial issue.”  The rule applied “even where the program matter is furnished without charge or at a nominal charge as an inducement to the broadcast of the program.” Federal Communications Commission, Dkt No. 6672, Announcement of Sponsored Programs, 9 Fed. Reg. 14,734 (1944)(codified at 47 C.F.R. § 3.409(c)(Supp. 1944)); see, H.R. Rpt. 86-1800, 24-25 (June 13, 1960).[3] Apparently the impetus for the change was the increase in unattributed political messaging during the 1944 presidential election campaign.[4]  

The rule emphasized the accuracy of the disclosure.  The broadcaster’s obligation was to “fully and fairly disclose the true identity” of the principal providing the broadcast content or the payment or other compensation for broadcast of the content.[5] In particular, “[w]here an agent or other person contracts or otherwise makes arrangements with a station on behalf of another, and such fact is known to the station, the announcement shall disclose the identity of the person or persons in whose behalf such agent is acting instead of the name of such agent.”[6]

The 1930’s and 1940’s were also a period in which foreign propaganda was directed at the American public (some of it, eventually, wartime propaganda of the U.S. Government).[7] Investigations and legislative work beginning in 1934, culminated in congressional enactment of the Foreign Agents Registration Act of 1938, Pub. L. 75-583, 52 Stat. 631-633. The Act was aimed at “requiring public disclosure by persons engaging in propaganda activities and other activities for or on behalf of foreign governments, foreign political parties, and other foreign principals” so that the American people “may appraise their statements and actions in the light of their associations and activities.” 56 Stat. 248-249; see Viereck v. United States, 318 U.S. 236, 244 (1943).  Under the statute, as amended in 1942, when the agent of a foreign principal disseminates any “political propaganda,” the agent must: (1) provide the Attorney General with a copy of the material and describe the extent of planned dissemination, (2) provide the recipient of the material with a disclosure statement, and (3) label the material with markings that identify the agent and the agent’s principal.[8]

The 1950’s: Oh, We’ve Got Trouble! Terrible, Terrible Trouble!

One might have thought that the Cold War and the associated problem of potential nuclear annihilation would have fully occupied the American public’s attention in the 1950s.  But not so. The 1950’s brought about a number of broadcast scandals, perhaps the most well-known is the scandal of rigged game shows, which led the government to swing into action. 

An associated scandal involved what came to be known as “payola.”  It turned out that “selection of much of the music heard on the air may have been influenced by payments of money and gifts, inter alia, to programming personnel.”  H.R. Rpt. 86-1800, supra, at 19.[9] Congress held 19 days of hearings, extending over four-month period on “payola” and related unfair and deceptive practices.  Id. Fifty-seven witnesses testified, including disc jockeys and other programming personnel, network and broadcast licensee executives, record manufacturers and distributors, trade paper representatives, songwriters and publishers, inter alia. Id. at 19-20. 

This is the Dick Clark part of the story.  Dick Clark, one of the most popular disc jockeys at the time, was suspected to taking payola given the widespread nature of the practice. After all, 335 disc jockeys from around the country admitted to having received over $263,000.  Dick Clark avoided having to admit to accepting payola (and no “guilt” was ever established), thus escaping the scandal largely unscathed, and the rest is history.[10]

In any event, the first response was from the Attorney General of the United States, who prepared for the President of the United States, a 71-page report on the broadcast scandals and what the FCC and the Federal Trade Commission could do to address them.  Report to the President by the Attorney General on Deceptive Practices In Broadcasting Media (Dec. 30, 1959).[11] In the Attorney General’s view:

the disclosures recently made with respect to certain advertising and other practices indicate that “naked commercial selfishness,” rather than factors of public service, has too often been the principal motivation for much of the matter that has been broadcast.

Id., at iv.

The FCC acted next. On March 16, 1960, it issued a notice of proposed rulemaking entitled “Sponsorship Identification of Broadcast Material.”[12] The FCC sought to revise its regulations to make clear that section 317 obligations were triggered not only by payments or gifts to broadcast license holders themselves, but also by payment or gifts to employees of the licensee responsible for programming selection, such as disc jockeys.  See H.R. Rpt. 86-1800, supra, at 19.  The radio and television industries “strongly opposed” the FCC’s interpretation of section 317. Id.

So Congress took up the gauntlet; after all, something HAD to be done![13] Congress amended section 317 as a part of larger set of amendments to the Communications Act.  The House Report explained that section 317 had to be extended beyond licensees themselves to the employees to whom they had delegated much of their actual programming responsibilities and who, in fact, were responsible for the selection and inclusion of broadcast matter.  Id.  One of the amendment’s two major purposes was to “prevent[] recurrences of the extreme types of ‘payola’ situations uncovered by the Special Subcommittee on Legislative Oversight,” during its 19 days of hearings on the subject.  Id.  The purpose was accomplished by a proviso nested within a proviso:

Provided, That “service or other valuable consideration” shall not include any service or property furnished without charge or at a nominal charge for use on, or in connection with, a broadcast unless it is so furnished in consideration for an identification in a broadcast of any person, product, service, trademark, or brand name beyond an identification which is reasonably related to the use of such service or property on the broadcast.

What followed were four pages, consisting of twenty-seven examples, some with subparts, defining the line between service or property furnished at a nominal charge and consideration beyond an identification which is reasonably related to the use of such service or property on the broadcast.  Id. at 20-24.

Importantly, a new provision, subsection (a)(2), was added to section 317 to codify the FCC’s 1944 rule requiring identification of the provider or sponsor of “any political program or any program involving the discussion of any controversial issue,” even if the program is furnished without charge.  H.R. Rpt. 86-1800, supra, at 24 (referencing 9 Fed. Reg. 14,734 (1944) (codified at 47 C.F.R. § 3.409(c) (Supp. 1944))).[14] 

Information with regard to consideration was to be announced on broadcasts based on two sources of information.  First, a new section 508 imposed obligations on employees, or anyone else supplying broadcast material, an obligation to disclose receipt of payment made to induce them to include such material for broadcast.  H.R. Rpt. 86-1800, supra, at 25.[15] Second, another new provision of section 317, subsection (c), provided that every broadcast licensee shall exercise reasonable diligence to obtain from its employees, and from other persons with whom it deals, information to enable the required announcements to be made.  H.R. Rpt. 86-1800, supra, at 25.  The Senate Report is largely consistent with the House Report, though addressing the sponsorship and payola issues much more briefly.  See Sen. Rpt. 86- 1857 at 5-6 (Aug. 19, 1960). 

The bill was then enacted.[16]  

Shortly after the payola scandal was resolved, and still at the height of the Cold War, the FCC issued a warning about foreign broadcast content appearing without attribution.  FCC Warns About Broadcast of Controversial Foreign Matter Without Indicating Foreign Sponsorship, Public Notice 40 F.C.C. 136 (1962).  It would prove a harbinger for things to come 50 to 60 years later.

The Present Day: Actual Terrible Trouble and the FCC’s Response

In recent years, foreign governments have sought to spread disinformation and influence public opinion within the United States; indeed, some of those efforts are directed at impacting elections.  U.S. Department of Justice, Protecting the United States from Covert Foreign Intelligence (undated leaflet); The National Intelligence Counsel, Foreign Threats to the 2020 US Federal Elections i, 2-4, 6 (March 10, 2021). Such efforts have perhaps most notably taken place via social media.  See, e.g., Meg Kelly and Elyse Samuels, How Russia Weaponized Social Media, Got Caught and Escaped Consequences, WASH. POST (Nov. 18, 2019); I Special Counsel Robert S. Mueller, III, Report on the Investigation into Russian Interference in the 2016 Presidential Election 14-36, 41-49 (March 2019). This, of course, is the Vladimir Putin part of the story (with Putin as a representative for the Russian Federation’s propaganda apparatus).

So it is not surprising that the FCC became aware of programs provided and sponsored by foreign governments sponsored and aired by American broadcast stations without proper attribution.  In Re Sponsorship Identification Requirements for Foreign Government-Provided Programming, Notice of Proposed Rulemaking, FCC 20-146 at ¶¶ 11 n. 40, 13, 58 & nn. 155, 159 (Oct. 26, 2020)(“Notice of Proposed Rulemaking”); In Re Sponsorship Identification Requirements for Foreign Government-Provided Programming, Report and Order, FCC 21-42  at ¶1 & n.1 ¶3, ¶4 & nn. 9-10, ¶6, ¶25, 26 (April 22, 2021)(“Final Report and Order”).

The FCC quite reasonably sought to ensure that the statutorily-required identification of sponsors not be misleading, on the theory that the public had a right to know the source of the programming and to judge the programming based in part on the source, particularly when the source was a foreign government.[17]  Not only was the broadcaster to ask the sponsor or provider for such information, it would be required to verify that information against two government databases identifying the agents of foreign governments —the Foreign Agent Registration Act database maintained by the Department of Justice and the Commission’s own database. Final Report and Order ¶¶ 40-41.[18] And that is what proposed and adopted via rulemaking.[19]

First, the Commission promulgated a notice of proposed rulemaking. In Re Sponsorship Identification Requirements for Foreign Government-Provided Programming, Notice of Proposed Rulemaking, FCC 20-146 (Oct. 26, 2020)(“Notice of Proposed Rulemaking”). Remarkably few comments were offered in response to the Notice of Proposed Rulemaking.[20] Then the Commission settled upon a final rule.  In Re Sponsorship Identification Requirements for Foreign Government-Provided Programming, Report and Order, FCC 21-42 (April 22, 2021)(“Final Report and Order”).  In doing so, the FCC noted that it was acting consistently with its own and Congress’ special concerns regarding foreign influence in domestic broadcasting. Notice of Proposed Rulemaking, supra, at ¶17, n.52.[21]

The NAB argued that the verification requirement conflicted with the limited obligations imposed by section 317(c).  Final Report and Order, supra, at ¶41, n.121.  The FCC rejected such an “overly narrow reading” of the statute.  Id.   In the Commission’s view, such inquiries “are similar to the reasonable due diligence, such as credit checks or other background checks,” that any “responsible business owner [would be expected] to conduct before entering into a contractual relationship with someone.” Id.[22] Moreover, it noted, the “reasonable due diligence” requirements under the Commission’s existing sponsorship identification rules “envision[s] situations where the licensee may have to take account of the principals of those entities/individuals with whom it is dealing directly.” Id.

And the Commission rejected the more general argument that requiring broadcaster to check the FARA list imposed an undue burdensome obligation.  Indeed, it explained, “the objective tests laid out above should facilitate compliance.” Id. at ¶45.  “[B]y specifying what licensees have to do to comply with the ‘reasonable diligence’ requirement[,] in terms of straightforward and limited search requirements[,] the Commission had minimized the broadcasters’ burdens consistent with ensuring that “the public is adequately informed about the true identity of a programmer’s ties to a foreign government.” Id.

In addressing the complaint about the verification requirement, the Commission addressed seminal D.C. Circuit precedent, Loveday v. FCC, 707 F.2d 1443, 1450 (D.C. Cir. 1983)(Bork, J.).  There, the D.C. Circuit found the licensees did not have to look beyond the entity that had provided the programming to ascertain the sponsor.  After an exhaustive review of legislative and post-enactment history, the Loveday Court had found practical and constitutional reasons to construe the Commission’s authority to impose “reasonable diligence obligations” narrowly. 

The Commission distinguished Loveday. Final Report and Order, supra, at ¶45, n.132. First, it explained, its foreign sponsorship identification rules fit within the context of recent congressional action to address undisclosed foreign government programming. Congress had recently amended FARA to impose requirements resembling the ones the FCC was about to impose upon broadcasters.  Id.  Second, the Commission’s precision in specifying broadcasters’ “due diligence” obligations, “obviat[ed] the Loveday Court’s fear about licensees having ‘to guess in every situation what the Commission would later find to be ‘reasonable diligence.’” Id. (quoting Loveday, supra, 707 F.2d at 1457).  It noted that in Loveday, the broadcaster was asked to “adjudicate” undocumented claims of the complainant and similarly undocumented denials by the sponsor.  Id.

The D.C. Circuit’s Decision

The National Association of Broadcasters challenged the rule as exceeding the FCC’s authority. A three-judge D.C. Circuit panel agreed.  It concluded that Congress has specified the obligations the FCC could impose upon broadcasters in terms of verifying sponsors of programming, namely ascertaining such information “from its employees, and from other persons with whom it deals directly.”  The FCC could not supplement those obligations, even by requiring broadcasters to check two government databases to discover an entity’s apparent ties with a foreign government.  The Commission’s statutory authorization for it to “prescribe appropriate rules and regulations to carry out the provisions” of §317, 47 U.S.C. §317(e), was irrelevant.  Such “[a] generic grant of rulemaking authority” merely allowed the FCC “to fill gaps,” not alter the “the specific choices Congress made” with regard to the actions licensees must take to ascertain the identity of sponsors.

Observations

The D.C. Circuit panel’s approach suffers from two basic flaws.  The first was explored in my earlier post in this series.  The Court erroneously assumed that whenever Congress specifies one means of reaching a statutory goal, it intends to preclude agencies from adopting additional means to attain the same goal.  In effect, the Court assumed that any means to achieve a statute’s goal that is not expressly mandated is thereby expressly prohibited.

But the Court’s second error is perhaps its more egregious.  The Court, apparently oblivious to the history outlined above, failed to recognize that subsection (c) was not even crafted with the foreign-government-influence scenario in mind.  Indeed, subsection (c) did not even target public affairs programming. Rather it was addressed to the specific problems presented by payola-influenced in selection of musical entertainment.[23]

Distinguishing Three Scenarios

There are three distinct situations in which identification of sponsors becomes important.  First, sometimes broadcaster’s honest exercise of discretion in the public interest is the problem, as when broadcasters allow the programming judgment to be corrupted by payments or gifts from sponsors.  Second, sometimes broadcast licensees’ failure to properly advise their audiences of the source of public affairs programming is the problem, as when licensees fail to accurately identify the true source of public affairs broadcast content. A content provider’s successful effort to hide its true identity prevents the audience from judging the information provided based on its source.  A third type of situation, which is a particular pernicious subset of this second category, involves foreign government attempts to covertly influence American public opinion for that government’s own purposes, as when a foreign government entity seeks to surreptitiously provide programming through an innocuous front organization.

Subsection (c) was explicitly crafted to address only the first situation. In that context if may make sense to rely upon the information provided by employees who receive payments and gifts and the sponsors who provide them.  Or so the enacting Congress might have thought.  Indeed, Congress seemed intent upon supporting the FCC’s more robust efforts to ensure proper identification of entities sponsoring public affairs programs, even if such programs were offered for free or a at nominal fee.  Thus, as the House Report noted, subsection (a), which involves payment of consideration to broadcast matter, really had little to do with subsection (b), which had to do with public affairs programing.  And nothing indicated that Congress believed either subsection (a), or the new subsection (c) designed specifically to implement it, were geared to foreign government use of broadcast stations to purvey propaganda without accurate identification of the source.

Indeed, what might otherwise seem a statutory anomaly makes perfect sense once one understands the three different types of sponsorship scenarios. It is clearly sensible to limit broadcasters to ascertaining from employees or the persons with whom it directly deals information regarding whether, and by whom, any consideration has been paid to the employee or the station to broadcast a program.  Employees will know whether they have received payment and with whom they have dealt.  But what sense does it make to limit such inquiries to employees and the person with whom the broadcaster deals when the question is whether a foreign government has submitted “public affairs” programming?  The employee will know no more than the broadcaster, and the person with whom the broadcast station is dealing will attempt to deceive — that’s the whole point of operating as a front for a foreign government.

The distinction between payment of consideration to influence programming choices and providing public affairs programing using an intermediary to hide one’s identity even explains the precise language in subsection (c).  The subsection specifies that the provisions regarding verification efforts are limited to “announcement[s] required by this section” (emphasis added), and thus do not expressly cover announcement required by FCC regulations that are merely authorized by the section 317.  Subsection (a)(1) specifies circumstances in which an announcement is required by statute; subsection (a)(2) merely permits the FCC to retain its extant rules, or promulgate new ones, regarding public affairs programming.

In short, subsection (c) is arguably irrelevant to political broadcast content, and certainly irrelevant to broadcast content sponsored by foreign governments.  Thus, only the general provision that the Commission shall create appropriate rules to enforce the provisions of section 317 has any relevance to any “reasonable due diligence” requirement related to foreign-government-sponsored public affairs programming.  Granted, a political statement might also run afoul of subsection (a) because the sponsor pays for the program to be aired. But that surely does not mean that Congress limited, to the means prescribed in subsection (c), the FCC’s authority to ensure that programming having political content was properly attributed to a sponsor.  That conclusion remains sound, even assuming arguendo the erroneous interpretation of subsection (c) as prohibiting any complementary or supplemental approach embraced by the FCC to enforce the provisions of section 317 (the NAB v. FCC’s other critical error).

The Norm of Limiting Government Influence (Foreign and Domestic) in the American Political System

Section 317, like any other statute should be interpreted in light of background legal principles, namely the corpus of the law.  The FCC identified a relevant background principle — that foreign countries should be precluded from influencing American elections and American public opinion, and should certainly not be able to do so without acknowledging their efforts.[24] The Commission could have, but did not, note the prohibition on foreign nationals making political contribution or engaging in electioneering communications. 52 U.S.C. §30121.[25] Indeed, the concern about government efforts to use broadcast or broadcast materials to influence domestic public opinion even extends to some U.S. Government funded efforts.[26] Three examples are illustrative.

First, when Congress authorized the U.S. Government to produce and disseminate public affairs films and broadcast matter, by enacting the Information and Educational Exchange Act of 1948, commonly known as the Smith–Mundt Act, there was an implicit de facto ban on making such material available to domestic audiences.[27] As one commentator has noted, “the domestic dissemination of government-produced programming would have been politically toxic[;] Congress did not want to draw parallels with the government of the Soviet Union.”[28]  Indeed, 17 years later Congress felt it necessary to adopt legislation to permit the domestic broadcast of a U.S. Information Agency film on the life and assassination of President John F. Kennedy, entitled Years of Lightning, Day of Drums.[29]  And in doing so Congress provided explicitly that no documentary produced by the U.S. Government concerning the life of a government official could be shown domestically “unless authorized by law in each specific case.” The de facto ban was made explicit in 1972,[30] and remained in effect until 2013. Even then removal of the ban was controversial.[31]

Second, Congress has long prohibited government agencies from using “appropriated funds for publicity or propaganda purposes not heretofore authorized by the Congress,” or sometimes “for publicity or propaganda purposes within the United States not heretofore authorized by the Congress.” A criminal statute, later codified at 18 U.S.C. §1913, prohibited use of appropriated funds “directly or indirectly to pay for any [communication], intended or designed to influence in any manner a Member of Congress, a jurisdiction, or an official of any government, to favor, adopt, or oppose, by vote or otherwise, any legislation, law, ratification, policy or appropriation.”  In 2002, Congress converted the criminal penalties into civil penalties. 21st Century Department of Justice Appropriations Authorization Act, Pub. L. 107-273, 116 Stat. 1758, §205(b).  Interestingly, as interpreted by the Office of Legal Counsel and the Comptroller General, one of the actions the appropriations riders and statutes prohibit is engaging in covert propaganda, that is, disseminating information in ways that “are misleading as to their [government] origin.”[32]

Third, the Public Broadcasting Act of 1967[33] established the Corporation for Public Broadcasting (CPB), but forbid any noncommercial educational station that receives a grant from the CPB to “engage in editorializing.”[34] Congress was concerned that noncommercial educational broadcasting stations could be coerced, as a result of federal financing, into becoming vehicles for Government propagandizing or, alternatively, become the objects of governmental influence.[35]

In each of these cases, Congress sought to bar U.S. Government agencies and officials from disseminating propaganda directly (in the case of the Mundt-Smith Act and the appropriations riders) or indirectly (through pressure on noncommercial broadcasts) to the American public.

Conclusion

The FCC identity verification rule is based on two simple and seemingly incontrovertible principles.  First, the audience of broadcasters using the public airwaves should be able to judge the content of broadcast material by its source.[36] Second, broadcasters should not provide misleading information that hides the identity of the source of public affairs broadcast programming, but provide accurate information regarding that identity. 

The authority to have broadcasters check government databases to ensure the truthfulness of their identification of entities providing the broadcast matter they air is surely implicit in the requirement to identify the sponsor or content provider.  Section 317 specifies that the broadcaster ask the person who pays consideration or supplies programming to the broadcaster for such information, i.e., the nominal sponsor, but nothing prohibits the FCC from requiring a bit more, namely verifying the true identity of the real sponsor who stands in the shadows of the nominal sponsor, in particular identifying the real sponsor as a foreign government.

In NAB v. FCC, the D.C. Circuit erroneously assumed that by providing one means for determining the identity of a sponsor, Congress meant to preclude others.  But worse, the D.C. Circuit misread the statutory text to apply special provisions meant to identify those who provide payola to disc jockeys (the “Dick Clark problem”),[37] to limit the FCC authority to ensure that material originating from foreign governments was accurately identified (the “Vladimir Putin problem”).  In short, the D.C. Circuit’s opinion in NAB v. FCC is wrong, dangerously wrong.

---

[1] Communications Act of 1934, ch. 652, title III, § 317, 48 Stat. 1064, 1089.  The provision had been a part of the Radio Act of 1927, Pub. L. 632, §19 69th Congress, (February 23, 1927).  Apparently, Congress modelled the sponsorship identification requirement on an established feature of postal law.  Richard Kielbowicz, and Linda Lawson, Unmasking Hidden Commercials in Broadcasting: Origins of the Sponsorship Identification Regulations, 1927-1963, 56 FED. COMMUN. L. J. 329, 334-35 (2004).

[2] Loveday v. FCC, 707 F.2d 1443, 1450 (D.C. Cir. 1983)(Bork, J.); see, generally HARVEY L. ZUCKERMAN, ET AL., MODERN COMMUNICATIONS LAW §14.5 at 1243 (1999).  In Loveday, the D.C. Circuit offered a history of the origin of the sponsorship provision.  707 F.2d at 1450-52.

 [3] Legislative History of the Communications Act Amendments of 1960: P.L. 86-752: 74 Stat. 889: September 13, 1960 (Washington: Covington & Burling, 1960)(“Legislative History of the 1960 Amendments”)(accessible on HeinOnLine).

[4] In Re Sponsorship Identification Requirements for Foreign Government-Provided Programming, Notice of Proposed Rulemaking, FCC 20-146, ¶5 (Oct. 26, 2020)(“Notice of Proposed Rulemaking”).  For a detailed history, see, Unmasking Hidden Commercials, supra, 56 FED. COMMUN. L. J. at 341-42.  

[5] 3 C.F.R. §3.409(c).  The text read:

“The announcement required by this section shall fully and fairly disclose the true identity of the person or persons by whom or in whose behalf such payment is made or promised, or from whom or in whose behalf such services or other valuable consideration Is received, or by whom the material or services referred to in paragraph (b) hereof are furnished.” 

Id. (emphasis added).

[6] Id. Granted the clause, “and such fact is known to the station,” limits in some way the station owner’s obligation to inquire.

[7] See, U.S. Holocaust Memorial Museum, Americans and the Holocaust (Part 7 of 8): Propaganda and the American Public (providing a history of foreign propaganda and U.S. wartime propaganda efforts, and noting that “[t]hroughout the 1930s, Americans grew fearful of Nazi, Soviet, Italian, and Japanese propaganda in the United States”); H.R. 75-1381, Foreign Propaganda  (July 28, 1937) (reporting that many persons in the U.S. represent foreign government[s] and agencies and are supplied with funds and other material to influence the internal and external policies of the U.S., “thereby violating . . . the democratic basis of our own American institutions and government”); H.R. Rep. 73-153, Investigation of Nazi and Other Propaganda, (Feb. 15, 1935) (24-page report providing findings on investigations authorized by House Resolution 198, 73d Cong. (March 20, 1934)).

[8] Foreign Agent Registration Act Amendments, Pub. L. 77-532 §4, 56 Stat. 248, 255; Meese v. Keane, 481 U.S. 465, 469 (1987).

[9] For an entertaining take on the scandal, see What’s the story on the radio payola scandal of the 1950s?, THE STRAIGHT DOPE (August 31, 2004).

[10] Lydia Hutchinson, Alan Freed and the Radio Payola Scandal, PERFORMINGSONGWRITER.COM (August 20, 2015); Dick Clark survives the Payola scandal, History.Com: This Day in History May 2, 1960 (“If Alan Freed, the disk jockey who gave rock and roll its name, was Payola’s biggest casualty, then Dick Clark was its most famous survivor.”); Sharon Oliver, Alan Freed & Dick Clark: Two Stories, One Scandal (DECEMBER 15, 2019); Matthew Lasar, Dick Clark: race, class, and the payola scandal of 1959 (April 22, 2012).

[11] Legislative History of the 1960 Amendments, supra. The Attorney General discussed a number of regulatory response[s] . . . available to the FCC under its existing authority. 1959 Attorney General Report, supra, at vi-vii.  More specifically, the Attorney General noted: “The Commission would appear to have ample authority, under its general rule making powers, to adopt regulations which would require licensees to take affirmative steps to prevent the broadcast of matter as the result of payola received by their employees.”  Id. at 47.  The House Committee in particular cited that discussion with approval. H.R. Rpt. 86-1800, supra, at 20 n. 1.  See also,1959 Attorney General Report, supra, at 47-49.

[12] The Notice of Proposed rulemaking is Appendix C to the House Report.  It noted that:

Many station licensees have failed to comply with the requirements of section 317 of the Communications Act and with the Commission’s rules promulgated thereunder. In many instances, such broadcasts resulted from practices of station employees and independent contractors, acting in their individual capacities. In these situations, questions are raised as to whether the licensee took reasonable steps to inform itself as to the type and nature of the material being broadcast by its station, and to assure itself that its operation met the sponsorship identification mandate of the act and the rules.

[13] One might ask — but what was this controversy REALLY about?  Much as in the musical The Music Man, to which the title of this section alludes, the controversy was really about perceived corrupting influences upon the nation’s youth, namely the emergence of Rock and Roll and its popularity with the nation’s youth.  “Payola” provided a convenient excuse for concluding that the music industry was “bribing” disc jockeys to play music that manipulatively channeled youth to Rock and Roll (which would surely corrupt their morals), rather than, say, the harmony of the Andrews sisters or the strains of Rachmaninoff.

[14] “In order to provide specific statutory authority for the requirement of an announcement here, the substance of the Commission rule has been included as subsection (a)(2) of the amended section 317.”  H.R. Rpt. 86-1800, supra, at 25.

[15] The section 508 provision was renumbered in 1980, but otherwise the statute remained unchanged.  An Act to repeal section 506 of the Communications Act of 1934, Pub. L. 96-507, 94 STAT. 2747 (1980).  The FCC lists enforcement actions taken for violation of the “sponsorship identification” provisions here. 

[16] The statute is available here. Of course it neither eliminated, nor even diminished, the popularity of Rock and Roll with the nation’s youth.

[17] Notice of Proposed Rulemaking, supra, ¶11,12, see ¶14; Final Report & Order, supra, at ¶8 (“to ensure that the American public can better assess the programming that is delivered over the airwaves, the Commission found that there is a need to identify instances where foreign governmental entities are involved in the provision of broadcast programming”).  See also, Brennan Center for Justice, Limiting Foreign Meddling In U.S. Campaigns: Key Policy Recommendations (Aug. 2019). See note 36 infra.

[18] The Commission went on to observe:

“In this regard, we note that the FARA database is simple to use and allows for a search by terms.  Consequently, we anticipate that in most cases a licensee will need to do no more than merely run a search of the lessee’s name on the FARA database.  If the search does not generate any results, the licensee can safely assume that the lessee is not a FARA agent and no further search is needed on the FARA database.”

Final Report & Order, supra, at ¶41.

[19] The impact on the domestic population of foreign interference in U.S. elections is not as straightforward as one might assume.  The results of one study, using hypothetical scenarios presented to the study’s subjects, is reported in Michael Tomz & Jessica L. P. Weeks, Public Opinion and Foreign Electoral Intervention, 114 AMER. POL. SCI. R. 856 (2020).  Tomz & Weeks split their survey population into four groups, giving each a different scenario of election-related foreign interference. The level of intervention ranged from non-interference, to simple endorsement, to threatening to downgrade diplomatic relations, to engaging in “operations” to influence public opinion.  The researchers sought to assess the level of participant disapproval of such efforts, and the effect such foreign influence had in terms of attitudes toward the fairness of the particular election and faith in the election system in general.

Approximately 77% of respondents expressed disapproval when told a foreign country had initiated operations, such as using money, information, or hacking, to favor its preferred candidate.  Only 37% expressed disapproval of a foreign country’s endorsement of a candidate, and 55% expressed disapproval when a foreign country not only endorsed a candidate, but, in addition, threatened to downgrade diplomatic relations with the United States if their preferred candidate lost.  The researchers concluded that respondents did not draw a sharp distinction between spreading truth and spreading lies, with 79% disapproved the latter while 72% disapproved of the former.  (This may be one of the most relevant results to the question of sponsor identification — listeners are put off by information offered by foreign governments regardless of its veracity.)  

But the researchers found a consistent partisan double standard: with respondents expressing greater disapproval of foreign interference to help candidates of the opposite party rather than the candidate of their own party.  For example, among Republicans, disapproval reached 87% when foreign operations aimed to help the Democrat candidate, compared with 67% when foreign operations aimed to help the Republican candidate.

Tomz & Weeks also found that foreign intervention greatly increased distrust in the results of the election; 71% distrusted the results when informed that a foreign country had carried out operations.  Foreign intervention also eroded overall faith in U.S. democracy. But here again the researchers found a partisan double standard, in which voters lost more faith in the fairness of a particular election and the electoral system in general when the foreign intervention favored an opposing candidate, rather than the candidate of the respondent’s own political party. Finally, foreign intervention modestly depressed respondents’ future intentions to vote. 

[20] The FCC reported that “[a] total of seven commenters filed comments and reply comments in response to the Notice of Proposed Rulemaking.”  Final Report & Order, supra, at ¶11.  The commenters were American Public Television Stations and PBS, Minnesota Public Radio, National Association of Broadcasters (“NAB”), National Cable and Telecommunications Association – The Internet and Television Association, National Public Radio (NPR), REC Networks, and RM Broadcasting.

[21] The Commission cited 47 U.S.C. §301 (prohibiting foreign government or their representatives from owning a broadcast license and imposing heightened restrictions and reviews on foreign individuals or corporations holding broadcast licenses), 47 U.S.C. §537a (relieving multi-channel video programming distributors of the obligation to accept programing sponsored by the Russian Federation), 47 U.S.C. §624 (requiring U.S. based foreign media outlets to submit periodic reports to the FCC).

[22] An irreverent wag might observe that the NAB is seeking to spend less time verifying the identity of a supplier of broadcast content designed to influence many thousands of listeners or viewers than it must spend verifying the immigration status of a janitor the broadcast station is considering for employment.  See, U.S. Citizenship & Immigration Services, Handbook for Employers M-274, Guidance for Completing Form I-9 (Employment Eligibility Verification Form) §1.2 (April 2020).

[23] Indeed, Richard Kielbowicz, and Linda Lawson, highlight this distinction in their history of the origins of sponsorship identification regulations. Disputes over the sources of public affairs programming led Congress to consider “expanding the sponsorship disclosure requirement to remove any doubts about its applicability to public affairs programs.” Unmasking Hidden Commercials, supra, 56 FED. COMMUN. L. J. at 339-41; see generally, id. at 341-44.  The FCC’s 1944 rule accomplished this purpose.

[24] As a Congressional Research Service Report explained: “Concerns over foreign interference in domestic affairs date to America’s founding, when delegates to the constitutional convention feared that the new nation would make a tempting target for European powers willing to pay for influence and compliance.”  Jacob D. Shelly, “Things of Value” and the Foreign Contribution Ban 1-2 (Oct. 28, 2019).

[25] Federal Elections Campaign Act Amendments of 1976, Pub. L. 94–283, title I, §112(2), 90 Stat. 493 (1976) (renumbered §319, Pub. L. 96–187, title I, §105(5), 93 Stat. 1354 (1980), and amended Pub. L. 107–155, title III, §§303, 317, 116 Stat. 96, 109 (2002)).

[26] MICHAEL G. YUDOF, WHEN GOVERNMENT SPEAKS: POLITICS, LAW & GOVERNMENT EXPRESSION IN AMERICA 186 (1983)(citing the Smith-Mundt Act, the Hatch Act, and Civil Service Commission regulations implementing the Hatch Act.)  In his view “Congress appears to have . . ., however inconsistently . . . [sought] to isolate communications activities that have a great potential for falsifying consent and are closely related to elective and legislative office.”  Id. at 187.  However, he explained, “ingrained attitudes and mores” have played a role in limiting government use of expression to indoctrinate the public.  Id. at 111. Indeed, “[l]eaders in the United States have far more opportunities to organize for propaganda purposes than they have historically been willing to take advantage of.”  Id.

[27] Pub. L. No. 80-402, § 2, 62 Stat. 6 (1948)(codified at 22 U.S.C. § 1431). The Smith–Mundt Act was named after its cosponsors Representative Karl Mundt and Senator H. Alexander Smith.

[28] Weston R. Sager, Apple Pie Propaganda? The Smith–Mundt Act Before and After the Repeal of the Domestic Dissemination Ban, 109 NW. U. L. REV. 511, 520 (2015).

[29] Joint Resolution: To Allow the Showing in the United States of the United States Information Agency Film “John F. Kennedy—Years of Lightning, Day of Drums,” Pub. L. No. 89-274, 79 Stat. 1009 (1965).  It emphasized the point by adding:

Any documentary film which has been, is now being, or is hereafter produced by any Government department or agency . . . concerning the life, character, and public service of any [Government official] . . . shall not be distributed or shown in public in this country during the lifetime of the said official or after the death of such official unless authorized by law in each specific case.

Id. (emphasis added).

[30] Pub. L. No. 92-352, § 204, 86 Stat. 489, 494 (1972).

[31] Apple Pie Propaganda?, supra, 109 NW. U. L. REV. at 513-15.

[32] See generally, Comp. Gen., Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Op. B-302504, 2004 WL 523435 *5 (Mar. 10, 2004) (discussing history of “publicity or propaganda” riders). Such riders typically provide that “[n]o part of any appropriation contained in this or any other Act shall be used for publicity or propaganda purposes within the United States not heretofore authorized by the Congress.” They ordinarily apply to all governmental entities receiving appropriated funds. See generally, Bernard W. Bell, Proposed Section 553(c)(6) of the Regulatory Accountability Act and Soliciting Grassroots Support, YALE NOTICE & COMMENT (May 31, 2017).

[33] Pub. L. 90-129, 81 Stat. 365 (1967).

[34] Id., §399, 81 Stat. 368.  FCC v. League of Women Voters, 468 U.S. 364 (1984); Accuracy in Media v. FCC, 521 F.2d 288, 291-92 (D.C. Cir. 1975)(Bazelon, J.).  Yudof provides some detail and color regarding the early history of public broadcasting. WHEN GOVERNMENT SPEAKS, supra, at 127-133.

[35] Yudof comprehensively discusses the need for and dangers of government expression.  He notes that “there are a variety of ways government may attempt to influence behavior in accordance with its legitimate authority,” but that “substantial dangers lurk, even in democratic countries, in government’s sweeping power to communicate and in the accompanying perceptoral attributes, creating the danger of falsifying consent, fashioning a majority will through uncontrolled indoctrination activities.” WHEN GOVERNMENT SPEAKS, supra, at 14-15.

[36] Kielbowicz and Lawson note that the law reflected the principle “that the public is entitled to know when and by whom it is being persuaded,” before Congress adopted comprehensive telecommunications legislation, Unmasking Hidden Commercials, supra, 56 FED. COMMUN. L. J. at 334-35, and undergirds laws affecting other forms of communication. Id. at 332. Indeed, the Foreign Agent Registration Act is based on the same principle. See text accompanying notes 7-8 supra.

[37] Dick Clark was never found to have accepted payola, but he is nevertheless associated with the payola controversy.