```

[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

 
            THE WHITE HOUSE, THE NETWORKS AND TV CENSORSHIP

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON TELECOMMUNICATIONS,
                     TRADE, AND CONSUMER PROTECTION

                                 of the

                         COMMITTEE ON COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 9, 2000

                               __________

                           Serial No. 106-91

                               __________

            Printed for the use of the Committee on Commerce

                    ------------------------------  

                      U.S. GOVERNMENT PRINTING OFFICE
62-969 CC                     WASHINGTON : 2000

                         COMMITTEE ON COMMERCE

                     TOM BLILEY, Virginia, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    RALPH M. HALL, Texas
FRED UPTON, Michigan                 RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
CHRISTOPHER COX, California          PETER DEUTSCH, Florida
NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California         BART STUPAK, Michigan
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
GREG GANSKE, Iowa                    TOM SAWYER, Ohio
CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma              GENE GREEN, Texas
RICK LAZIO, New York                 KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico           BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona             LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING, 
Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland

                   James E. Derderian, Chief of Staff

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

   Subcommittee on Telecommunications, Trade, and Consumer Protection

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

MICHAEL G. OXLEY, Ohio,              EDWARD J. MARKEY, Massachusetts
  Vice Chairman                      RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               BART GORDON, Tennessee
PAUL E. GILLMOR, Ohio                BOBBY L. RUSH, Illinois
CHRISTOPHER COX, California          ANNA G. ESHOO, California
NATHAN DEAL, Georgia                 ELIOT L. ENGEL, New York
STEVE LARGENT, Oklahoma              ALBERT R. WYNN, Maryland
BARBARA CUBIN, Wyoming               BILL LUTHER, Minnesota
JAMES E. ROGAN, California           RON KLINK, Pennsylvania
JOHN SHIMKUS, Illinois               TOM SAWYER, Ohio
HEATHER WILSON, New Mexico           GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
Mississippi                          JOHN D. DINGELL, Michigan,
VITO FOSSELLA, New York                (Ex Officio)
ROY BLUNT, Missouri
ROBERT L. EHRLICH, Jr., Maryland
TOM BLILEY, Virginia,
  (Ex Officio)

                                  (ii)

                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Corn-Revere, Robert, Partner, Hogan & Hartson................    59
    Franks, Martin D., Senior Vice President, CBS................    63
    Loeb, Jef, Creative Director, Katsin/Loeb Advertising........    55
    Vereen, Donald R., Jr., Deputy Director, Office of National 
      Drug Control Policy........................................    18
    Wallau, Alex, President, Network Administration and 
      Operations, ABC Television.................................    53
Material submitted for the record by:
    Heekin-Canedy, Scott H., Senior Vice President, Circulation, 
      The New York Times, letter dated February 8, 2000, to Hon. 
      W.J. Tauzin................................................    83

                                 (iii)

            THE WHITE HOUSE, THE NETWORKS AND TV CENSORSHIP

                              ----------                              

                      WEDNESDAY, FEBRUARY 9, 2000

              House of Representatives,    
                         Committee on Commerce,    
                    Subcommittee on Telecommunications,    
                             Trade, and Consumer Protection
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:10 p.m., in 
room 2322, Rayburn House Office Building, Hon. W.J. ``Billy'' 
Tauzin (chairman) presiding.
    Members present: Representatives Tauzin, Oxley, Cox, 
Wilson, Bliley (ex officio), Markey, Eshoo, Wynn, Luther, 
Sawyer, Green, and Dingell (ex officio).
    Staff present: Mike O'Rielly, professional staff; Cliff 
Riccio, legislative clerk; Andy Levin, minority counsel.
    Mr. Tauzin. The committee will please come to order. Let me 
first announce that we have finally a high-tech timing system 
here. I am sure I would appreciate the committee that finally 
supplied us with one. Instead of the little egg meter clock, we 
have some real high-tech timing devices which we will use 
today. I welcome high technology----
    Chairman Bliley. You are not planning on using those on the 
members, are you?
    Mr. Tauzin. Not on the members, only on the chairman.
    The committee will come to order. In 1997, Congress enacted 
legislation providing the Office of the National Drug Control 
Policy with funding to pay for a National media campaign aimed 
at reducing and preventing youth drug use in the United States. 
In 1998, Congress again appropriated funding for its media 
campaign with one all-important understanding, that the ONDCP 
would use the funding to purchase air time from broadcast 
networks and receive in return from the networks a 100 percent 
pro bono match of air time designated for additional anti-drug 
ads and public service announcements or PSAs.
    Well, ladies and gentlemen, some have recently reported 
that this basic statutory authorized arrangement has been 
substantially altered by a surreptitious quid pro quo deal 
struck between the ONDCP and the broadcast networks. It has 
been alleged by some in the media that the ONDCP has relieved 
the networks, rather, of some of their matching quotas in 
exchange for direct consultative role in constructing the 
actual content of anti-drug messages in programs prior to them 
being aired. According to one Salon.com article which ran on 
January 13, this has enabled the White House to create a ``new, 
more potent strain of anti-drug social engineering that it 
wants.''
    Controversially, some broadcasters have apparently not 
objected to the government's added control over broadcasting 
content because it is in their economic interests not to do so. 
Essentially the ONDCP forbearance for requiring 100 percent 
matching has apparently allowed some in the industry to sell 
otherwise encumbered advertising time slots under the matching 
arrangements to the private sector for a profit; in short, in 
profit by the arrangement by which the government certifies 
that politically correct speech is contained in the 
programming. If, in fact, such a deal exists between the ONDCP 
and industry, I personally believe it is unconstitutional; that 
it is in violation of Federal communications law; and last but 
not least, contrary with what Congress intended when it 
appropriated funds for this project in the first place. I 
believe that it puts the government on a horrible slippery 
slope of interference with first amendment rights, the likes of 
which I have never witnessed in my tenure in the U.S. Congress. 
I am deeply troubled by the stories that portrayed ONDCP 
officials as ``Washington script doctors who have cut dealing 
with networks in order to control the actual content of their 
programming.'' In my opinion, this, indeed, amounts to a 
serious affront on the first amendment to the Constitution.
    I also find it interesting that some in the industry who 
generally defend the first amendment at every turn would choose 
to say nothing about this when doing so would jeopardize the 
bottom line.
    Let me also say that I am deeply pleased that at least one 
American television network said no. Not only said no, but said 
hell, no. They would have no part of this arrangement and 
walked away from it. They frankly have my admiration for doing 
so.
    Finally, I wonder if the affected parties' failure to 
announce their financial arrangements with the ONDCP during 
their programming broadcast might have violated the reporting 
requirements of section 317 of the Communications Act of 1934, 
the so-called Payola laws. With all of this having been said, I 
have called today's oversight hearing to get to the bottom of 
the allegations. I understand that the ONDCP contends that the 
various Salon.com articles are full of inaccuracies and 
misinformation. I received a call from General McCaffrey 
alleging the very same thing. I am, of course, interested in 
hearing about them, but at the end of the day, I want to leave 
here with an understanding of the relationship between the 
ONDCP and industry. I want to determine just how close the 
ONDCP has come to determining program content. And I want our 
panelists to provide some clarification of the Section 317 
issue. Furthermore, I think ONDCP should explain to the 
subcommittee why it is necessary to establish new guidelines to 
clarify the pro bono match component of the media campaign and 
how these new policies will prospectively preclude any 
suggestions that the office is exercising control over the 
creative broadcast in broadcasting.
    I would finally say that, as I told the General, he and the 
Office of ONDCP have my continued support and admiration for 
the work it does. Goals that it has embraced in reducing drug 
abuse in our country are not only admirable, but extremely 
necessary. The pro bono match program that we designed and 
funded in Congress was designed to facilitate that effort. But 
if that program is now being used to allow government for any 
good reason to determine the political correctness of speech on 
our networks, and then to award those who politically correctly 
speak as opposed to those who don't with an indirect cash 
benefit, I think we have stepped incredibly far and hard upon 
the first amendment. I have compared it to a situation where 
the Governor or a president might read the newspapers each day, 
and if he liked the columns, they spoke well of him, then he 
authorized some kind of cash benefit, some tax credit. And if 
they spoke ill of him, he didn't like the content of that 
newspaper, would have denied a cash benefit or some tax credit.
    Can you imagine the revolution in this country if that were 
to be allowed to stand? If the allegations we have read about 
are true, and a government agency in our country is reviewing 
scripts and rewarding the politically correct ones at the 
expense of those that are not, then I think we have a similar 
situation when it comes to broadcasting, and we ought to 
correct it immediately.
    I look forward to learning the facts so we might understand 
whether that has occurred and what is being done about it. I 
thank you and look forward to hearing all of the testimony. I 
yield now to the ranking minority member, my friend, from 
Massachusetts, Mr. Markey.
    Mr. Markey. Thank you, Mr. Chairman, very much. I want to 
thank you for calling this hearing today on anti-drug public 
service announcements, PSAs, and anti-drug messages in 
television network programs. I think this hearing will be very 
helpful in eliciting exactly what policies and practices are in 
place, both at the Office of National Drug Control Policy and 
the television networks while handling PSAs and incorporating 
important anti-drug messages in popular TV shows.
    Obviously, I believe General McCaffrey is one of our great 
Americans. If we are going have a general leading this battle 
which is just as important as any war we would every fight 
overseas, I want General McCaffrey at the front of that line. 
So I am very proud to know that somebody of his caliber is 
willing to take on this most important of all battles being 
waged on the minds of the children in our country. In 1997, 
Congress tasked the Office of National Drug Control Policy to 
design a media campaign to help reduce and prevent the use of 
drugs by America's children. Under the guidelines issued by 
Congress and the drug office, it was authorized to purchase 
media time for the campaign and for ``entertainment industry 
collaborations advancing anti-drug messages in motion pictures, 
television programming, and popular music.''
    So we in Congress told this office that that is the goal, 
try to go out there, try to accomplish this goal. We ordered 
them to do it, an order from Congress. In addition, Congress 
placed a limitation on the level of funding for this anti-drug 
effort, and required that such funding be matched by an equal 
amount of nonFederal funds or in kind contributions.
    Recently this National youth anti-drug media campaign came 
under scrutiny, and the media for its practice for including 
anti-drug messages targeted to children within the popular 
programming aired on broadcast television. Concerns were raised 
and allegations were made about government censorship of 
television programs. Concerns were also raised that taxpayers 
might not be getting the public service announcements that the 
program was designed to get because the TV networks were 
getting financial credit for anti-drug messages that the 
networks were incorporated into plots anyway. There is no 
question that as a society, we need to explore every way to get 
the attention of children. And the younger we reach them, the 
better with effective and compelling anti-drug messages. There 
is no question that when I was boy, I was powerfully influenced 
by what the Lone Ranger gave me as his message, good versus 
evil, much more important than the Kelloggs Corn Flakes ad in 
terms how that might give me a value that was positive or 
negative. It was the Lone Ranger, Superman, those were the 
people who were put in the television in the substance, in the 
content of the television programming.
    There is no question that as a society, we have reached a 
point where the life expectancy of Americans, which was 48 
years of age in 1900, has now been extended 30 years. We went 
to the Garden of Eden in 1900 and we have only extended it to 
48. Today it is 78 or so on average for male and female. The 
interesting thing is that we have, in fact, eradicated or 
dramatically reduced the impact which the diseases that our 
grandparents died from. We have largely eliminated them. What 
we now die from are things that we do to ourselves. It is 
drugs. It is alcohol. It is tobacco. It is food. It is unsafe 
sexual practices. The images that are created for the young 
people in our society are inside the body of these programs.
    Let's not kid ourselves. That is the new culture. As 
children watch it they can either be given good messages or bad 
messages. They can either embrace unhealthy behavioral 
practices or they can ignore them. And so that is why I think 
it is a noble thing that the networks have done in beginning to 
examine their own programming, beginning to question their own 
values how they would want their own children to--whether or 
not they would want them to be exposed to this kind of program.
    I think that is a very healthy conversation, in fact, 
probably the most healthy conversation in America. We have got 
to get a behavior. We know statistically that if a child 
doesn't begin smoking by the age of 19, there is a 95 percent 
chance he will never start smoking. Same for drugs, alcohol, 
and everything. We have got to get them early. These programs 
without question deal with it. That is why we have children's 
television rules. That is why we passed the V chip and that is 
why we have rules governing what sort of language and 
restrictive times for adult themes permissible over the air 
waves because it understands how important the child audience 
is, how influenced they are by what they see on television. So 
I would like to welcome again our panel. I think this hearing 
will help to dispel much of the disinformation about the youth 
anti-drug campaign and hopefully generate additional ideas 
about how we might make this campaign more effective. I thank 
you, Mr. Chairman, and I certainly thank our witnesses.
    Mr. Tauzin. I thank the gentleman. The Chair recognizes the 
chairman of the full committee, the gentleman from Virginia, 
Chairman Bliley.
    Chairman Bliley. Thank you, Mr. Chairman. At today's 
hearing, we look at whether the anti-drug media campaign and 
the Office of the National Drug Control Policy, better known as 
the Drug Czar's Office, crossed any lines in getting into its 
desired objective.
    First, let me state that I want illegal drugs out of our 
society. Illegal drug use is one of the biggest problems facing 
our country. It effects everybody and destroys all of the lives 
in its path.
    Undoubtedly, we all agree that America's youth need to 
learn about the risks and dangers of using drugs. The goal of 
teaching our Nation's youth that drug use is not acceptable, 
not cool, not helpful to a productive future is a worthy one 
indeed. To teach this lesson, Congress armed the drug czar with 
significant funding to run a high stakes media campaign. But 
recent reports raised questions about just how the drug czar 
carried out in this campaign and that is the reason for this 
hearing today. We know that Congress wants a successful anti-
drug campaign. We know that the Drug Czar's Office wants to 
decrease youth drug use. We know that with some type of 
financial consideration given for including anti-drug messages 
in network programming.
    What I hope this will answer is how exactly did the Drug 
Czar's Office implement the anti-drug media campaign. I think 
we should know exactly what transpired between the White House 
office and the media outlets that participated with the anti-
drug messages. Many decisions were made about how the funding 
and credits for the campaign were allocated. I would like to 
hear from our witnesses today about these decisions. I must 
admit that I am troubled by what I have seen and read on this 
matter.
    Now, and again, we are forced to consider the age-old 
dilemma of whether the ends justifies the means. I think the 
Drug Czar and the networks' action get mighty close to some 
questionable means. I am concerned that the networks may have 
been happy to tilt their artistic control when advertising time 
became a hot commodity. While I agree we are working toward 
similar ends, these events represent a dangerous means to those 
ends. I will keep an open line and hope this hearing address my 
concern. Thank you, Mr. Chairman .
    [The prepared statement of Hon. Tom Bliley follows:]
 Prepared Statement of Hon. Tom Bliley, Chairman, Committee on Commerce
    I thank Chairman Tauzin for yielding the time.
    In today's hearing we look at whether the anti-drug media campaign 
of the Office of National Drug Control Policy--better known as the Drug 
Czar's office--crossed any lines in getting to its desired objective.
    First, let me state that I want illegal drugs out of our society. 
Illegal drug use is one of the biggest problems facing our country. It 
effects everyone. And it destroys all of the lives in its path. 
Undoubtedly, we all agree that America's youth needs to learn about the 
risks and dangers of using drugs. The goal of teaching our nation's 
youth that drug use is not acceptable, not cool and not helpful to a 
productive future is a worthy one indeed.
    To teach this lesson, Congress armed the Drug Czar with significant 
funding to run a high stakes media campaign.
    But recent reports raise questions about.just how the Drug Czar 
carried out this campaign, that is the reason for today's hearing.
    We know that Congress wants a successful anti-drug campaign. We 
know that the Drug Czar's office wants to decrease youth drug use. We 
know there was some type of financial consideration given for including 
anti-drug messages in network programming.
    What I hope this hearing will answer is how exactly did the Drug 
Czar's office implement the anti-drug media campaign. I think we should 
know exactly what transpired between the White House office and the 
media outlets that participated with the anti-drug messages. Many 
decisions were made about how the funding and credits for the campaign 
were allocated. I would like to hear from our witnesses today about 
these decisions.
    I must admit that I am troubled by what I have seen and read on 
this matter.
    Now and again we are forced to consider the age old dilemma of 
whether the end justifies the means.
    I think the Drug Czar's and the network's actions get mighty close 
to some questionable ``means.'' I am concerned that the networks may 
have been happy to tilt their artistic control when advertising time 
became a hot commodity. While I agree we are working toward similar 
ends, these events represent a dangerous means to those ends.
    I will keep an open mind and hope this hearing addresses my 
concern.
    I yield back my time.

    Mr. Tauzin. I thank the chairman. The chairman is now 
pleased to welcome and recognize the ranking minority member of 
the full committee, the gentleman from Michigan, Mr. Dingell.
    Mr. Dingell. Thank you, Mr. Chairman, and thank you for 
holding this hearing. During the past month we have heard pious 
denunciations of a program to encourage anti-drug messages in 
television programs. Some of these denunciations have come from 
editorial writers whose newspapers have only been too happy to 
accept advertising dollars from the same anti-drug program they 
now decry. Others have come from Members of Congress who have 
had ample opportunity in the past years to raise questions 
about this program, yet have failed to do so.
    I am compelled to ask what causes their belated outrage. I 
am reminded of the saying that my dear little mother used to 
say about how when people overslept, they tend to wake up in a 
very bad state of mind and in a bad humor. I think it is worth 
reviewing the history of this program. The proposal for this 
anti-drug campaign was unveiled with great fanfare amidst huge 
tub thumping and tremendous thunderous expressions of outrage 
by our good friend, then-Speaker Mr. Newt Gingrich in Atlanta 
in July 1998.
    On August 20, the Los Angeles Times further detailed the 
substance of this program. The paper noted that the agreement 
had been reached for a $50 million package with Disney and ABC 
provided credits for such things as broadcast time, Internet 
sites, and further noted, I quote, that ``the Fox Family 
Network may count as donations episodes in its entertainment 
programs that carry out an anti-drug message.''
    The legislation authorizing this anti-drug campaign was 
passed by the House just before the election on September 16, 
1998. It had nine votes against it. I was one of those who 
voted against it. If any of the others of you here present 
voted against this proposal, I would like to see a show of 
hands saying that you had joined me in that opposition. In 
there I had the very interesting statement which I made. I 
said, ``Since this legislation has been drafted behind closed 
doors by a task force composed almost entirely of Republican 
members with little opportunity for input from the other side 
of the aisle. What that means, Mr. Speaker, is that the ideas 
of all but very few Democratic members were not a part of the 
discussion when this bill was created. It also means we are 
considering a bill that was introduced only last Thursday and 
then referred to six committees, none of which has taken any 
action on the bill.'' The bill was on the floor the Monday 
following.
    The USA Today noted that under the campaign, media outlets 
can receive credit for anti-drug messages in the following way. 
This is in November 1998. So this is not news to this committee 
or indeed to anybody else. I now quote: ``For networks, 
donating commercial time counts. Talk show time can count. So 
do White House-approved scripts that promote the anti-drug 
theme. So does time on a prime time show when a kid is shown 
turning down a marijuana cigarette.''
    None of this is news, although I am delighted that we are 
finally awakened and inquiring into these matters. So when news 
of this program and its practices became a controversy earlier 
this year, I admit that I was somewhat baffled. I may have some 
personal doubts about the wisdom of this approach, but it 
cannot be said that the Congress could not have acted to 
prevent it back in 1998. In fact, had Congress fulfilled its 
responsibilities in 1998 or followed the orderly and ordinary 
and intelligent procedures of this body, perhaps we might not 
be holding this hearing today and we might not be hearing newly 
founded expressions of outrage from my Republican colleagues.
    The legislation authorizing the anti-drug campaign was 
rushed to the floor with not a single hearing and without a 
single committee markup, despite the fact that the provisions 
fell within the jurisdiction of no less than six House 
committees. The legislation was a product of a task force led 
by government reform subcommittee chairman, the distinguished 
gentlemen from Illinois, our current Speaker, Mr. Hastert, who 
is now as I note, the Speaker of this body.
    Now, this gives us a distinguished parentage, but I would 
note that one of the aides to the Speaker has had the temerity 
to say that, ``It is very upsetting that the White House has 
control over the Nation's television programs.'' Terrible 
outrage over something which he did and they did. Funds have 
been appropriated for this anti-drug campaign in each year 
since its authorization. Indeed some were appropriated prior to 
the authorization of the program. Now, it seems that if the 
White House really did control these television programs, it 
would first move to cancel Jay Leno's monologues. Having said 
that, General McCaffrey has repeatedly testified before the 
Appropriations Committee on this matter. I think every member 
of this House has been out at one time or another making stump 
speeches telling how he had pushed through this legislation, 
which was going to make a massive contribution to publicizing 
the evils of use of drugs.
    Now, I am not sure what awakened my colleagues from their 
deep and tranquil slumber, but I welcome today a belated 
opportunity to discuss the merits of the approach under 
discussion as we go into this matter. As we do, let us keep a 
few facts in mind. First, this program was enacted in broad 
daylight. Second of all, it is not mandatory. It creates 
financial incentives. I will address those in just a minute. 
But are we so terribly shocked to learn that broadcasters will 
respond to financial inducements? I opposed the legislation 
creating the program in part because it was procedurally 
flawed, because the House had not properly considered it, 
because it was fraught with extremist provisions separate from 
the anti-drug campaign, all of which were of doubtful merit. 
Nevertheless, the campaign had strong bipartisan support and 
passed with only nine negative votes. And again, I would ask 
anyone who was opposed to it, please hold up your hand so that 
we can see that you were there to warn us of the evils that 
ended here.
    Nonetheless, to the extent these practices are problematic, 
the responsibility is shared between the political parties and 
the executive and the legislative branches.
    Now, I want to read to you some of the language that is in 
this bill, just so you will know what you are talking about 
today, Mr. Chairman. Let's go to section 1802, use of funds, A, 
authorized uses. Then let's go down to H which says 
``entertainment industry collaborations to fashion anti-drug 
messages in motion pictures, television programming, popular 
music, interactive (Internet and new) media projects and 
activities, public information, news media outreach, corporate 
sponsors and corporate sponsorship, and participation.''
    They go on. This is authorized expenditures of public 
moneys. Having said that, there is also a fine requirement 
later that says, C, a little bit further down in 1802, matching 
requirement. ``amounts made available under section 1804 of 
this title should be matched by an amount equal to nonFederal 
funds for national media campaign or be matched with in-kind 
contributions to carry through the campaign of the same 
value.''
    Quite frankly, Mr. Chairman, I think you are quite frankly 
pumping a dry hole here today and I would say I wait with some 
interest to find out ``where is the beef?'' Thank you.
    [The prepared statement of Hon. John D. Dingell follows:]
    Prepared Statement of Hon. John D. Dingell, a Representative in 
                  Congress from the State of Michigan
     Mr. Chairman, thank you for calling this hearing.
    In the last month we've heard pious denunciations of a program to 
encourage anti-drug messages in television programs. Some of these 
denunciations have come from editorial writers whose newspapers have 
been only too happy to accept advertising dollars from the very same 
anti-drug program they now decry. Others have come from Members of 
Congress who have had ample opportunity in past years to raise 
questions about this program, yet failed to do so. I'm compelled to ask 
what causes their belated outrage.
    It's worth reviewing the history of this program.
    The proposal for this anti-drug campaign was unveiled with great 
fanfare, and the participation of then-Speaker Newt Gingrich, in 
Atlanta in July of 1998.
    On August 20, 1998, the Los Angeles Times further detailed the 
substance of this campaign. The paper noted that agreement had been 
reached on a $50 million package with Disney-ABC providing credits for 
such things as broadcast time and Internet sites, and further noted, 
and I quote, that ``the Fox Family Network may count as donations 
episodes of its entertainment programs that carry an anti-drug theme.''
    The legislation authorizing this anti-drug campaign was passed by 
the House just before the election, on September 16, 1998.
    In November of 1998, USA Today noted that under the campaign, media 
outlets could receive credit for anti-drug messages in the following 
ways, and I quote:
          ``For the networks, donated commercial time counts. Talk show 
        time can count. So do White-House approved scripts that promote 
        the anti-drug theme. So does time on a prime-time show when a 
        kid is shown turning down a marijuana cigarette.''
    So when news of this program and its practices became a controversy 
earlier this year, I must admit I was somewhat baffled. I may have some 
personal doubts about the wisdom of this approach, but it cannot be 
said that the Congress could not have acted to prevent it back in 1998.
    In fact, had Congress fulfilled its responsibilities in 1998, much 
of this controversy could have been avoided. The legislation 
authorizing the anti-drug campaign was rushed to the floor without a 
single hearing or committee markup, despite the fact that its 
provisions fell within the jurisdiction of six House Committees. The 
legislation was the product of a task force led by a Government Reform 
Subcommittee Chairman, the gentleman from Illinois, Mr. Hastert, who 
has now gone on to become the Speaker. Despite his parentage of this 
program, one of his aides has had the temerity to say, and I quote, 
it's ``very upsetting that the White House has control over the content 
of the nation's television programs.''
    It seems to me that if the White House really did control 
television programs, it would first move to cancel Jay Leno's 
monologues.
    Funds have been appropriated for this anti-drug campaign in each 
year since its authorization. General McCaffrey has repeatedly 
testified before the appropriations committees, yet we heard not a peep 
questioning these practices until January of this year.
    I'm not sure what awakened certain members of Congress from their 
peaceful slumber, but I welcome the belated opportunity to discuss the 
merits of the approach under discussion here today.
    As we do so, let us keep certain facts in mind.
    One, this program was enacted in broad daylight.
    Two, it is not mandatory. Yes, it creates certain financial 
incentives. But are we so terribly shocked, shocked to learn that 
broadcasters will respond to financial inducements?
    I opposed the legislation creating the program under discussion 
today, in large part because it was procedurally flawed and because it 
included extraneous provisions, separate from the anti-drug campaign, 
that were of dubious merit. Nonetheless, this campaign had strong 
bipartisan support in the Congress. To the extent that these practices 
are problematic, the responsibility is shared between the political 
parties and the executive and legislative branches.

    Mr. Tauzin. I thank the gentleman. I would be interested in 
knowing why the department had to clarify its programs once the 
news reports were issued. The gentleman from Ohio, the vice 
chairman of the committee, is recognized for an opening 
statement.
    Mr. Oxley. Thank you, Mr. Chairman. This is indeed a 
serious subject. First of all I have an article that was in the 
Washington Post on Friday, January 21, an op-ed piece written 
by Charles Krauthammer I would like to make part of the record.
    Mr. Tauzin. Without objection, so ordered.
    [The article follows:]

              [Friday, January 21, 2000--Washington Post]

                           A Network Sellout
                         by Charles Krauthammer
    No one invokes the sanctity of the First Amendment more often and 
more passionately than the media. When music companies are criticized 
for purveying the most repulsive misogynistic rap lyrics, they hoist 
the First Amendment flag. When newspaper reporters who've given 
confidentiality pledges refuse to testify about their sources, the flag 
is run up again.
    As it should be. For all its abuses, the First Amendment is perhaps 
the greatest of all bulwarks against the power of government. It turns 
out, however, that the TV networks are not quite the First Amendment 
purists they pretend to be. Dangle some cash in front of them and they 
will let the White House drug czar vet their scripts.
    Salon magazine reported Jan. 13 that in return for being released 
from the obligation to show free anti-drug ads (and thus enabled to 
sell that ad time), the TV networks have allowed the White House to 
review primetime programs to make sure they send the right anti-drug 
message.
    These networks are parts of some of the same media giants that make 
passionate protestations of their sovereign right to purvey syncopated 
CD incitement to rape and murder. They are quite willing, however, to 
accept government meddling in their prime-time shows if that makes them 
money.
    How much money? There's the howler. The six networks combined sold 
their First Amendment soul for a grand total of $25 million, about what 
Arnold Schwarzenegger gets for one movie. This for companies with 
combined revenues of about $5  billion.
     It reminds me of that immortal line in ``A Man for All Seasons'' 
in which Sir Thomas More, condemned to death on the false testimony of 
his protege Richard Rich, sees him newly wearing the insignia of 
attorney general of Wales. ``For Wales?'' says More. ``Why, Richard, it 
profits a man nothing to give his soul for the whole world. But for 
Wales!''
    In reality, this ad-money-for-script-vetting swap is a novel form 
of product placement. Product placement is the practice of taking a 
bundle of cash from Coke in return for having the hero swig some 
prominently onscreen.
    Disturbing as it is, gratuitously inserting a soda can or cereal 
box or muscle car into a scene for money is a trivial form of artistic 
corruption. However, inserting government-sponsored messages is not.
    Unlike Coke and Kellogg, government has the power to tax, audit, 
subpoena, imprison. We allow companies and individuals and groups to 
put all kinds of pressure on media--through advertising, boycotts, 
lobbying. But we balk when government, with such unique and abusable 
power, steps in. In a system where liberty is preserved by the 
separation and diffusion of power, we rightly refuse to grant 
government even more power through control of the content of free 
media.
    One reason is to prevent slightly Orwellian press releases of the 
kind issued by the White House drug office on Jan. 14. It is headlined: 
``New Study Finds Little Depiction of Illicit Drugs on Network Prime 
Time Television: White House Drug Czar Pleased with Accurate 
Portrayals.'' He should be. He paid for them.
    No big deal, you say. This whole affair involves nothing more than 
promoting anti-drug messages on prime-time shows. What's so wrong with 
that?
    The big deal is not these particular ads but the principle: 
government's hand in mass media script writing. If that is no big deal, 
what is to prevent government from doing it for other causes of its 
choosing?
    President Clinton and his spokesmen were asked whether the vetting 
of scripts might not be extended to equally worthy messages about ``gun 
control'' and ``youth violence'' (and why not to recycling, ethnic 
tolerance, charitable giving and the correct use of the fork?). The 
response was not encouraging.
    Press Secretary Joe Lockhart was defiant. We were ``looking for 
other ways to get the [anti-drug] message out that allows networks in a 
robot advertising environment to sell to other people where they can 
make more money,'' he said.
    Got a problem with that? Well yes. Some find the practice 
corrupting. And when they asked Lockhart if it does not raise questions 
about deceptive government influence, he responded in perfect 
Clintonian fashion: ``As far as sort of theological questions for the 
entertainment industry,'' said Lockhart ``I suggest you put the 
questions to the entertainment industry.''
    But of course. This is surely an airy abstraction for the likes of 
Thomas Aquinas, on retainer at DreamWorks.

    Mr. Oxley. Thank you, Mr. Chairman. By the way, I served 
for a number of years on the Committee on Narcotics Use and 
Control and have been involved in the anti-drug issues for a 
number of years. I have great respect for ONDCP and its 
leadership over the years including, of course, General 
McCaffrey. But I have to say that I have some real concerns 
when it appears that there is some involvement by government in 
drafting, or at least approving certain scripts, given the 
power of government and the power that the government has 
versus the private sector in this particular area as it relates 
to the first amendment. Let me quote Mr. Krauthammer. He says, 
``Unlike Coca Cola and Kellogg, government has the power to 
tax, audit, subpoena, and imprison. We allow companies and 
individuals and groups to put all kinds of pressure on the 
media through advertising, boycotts, and lobbying. We balk when 
government, with such unique and abusable power, steps in. In a 
system where liberty is preserved by the separation and 
diffusion of power, we rightly refuse to grant government even 
more power through control of the content of free media, indeed 
the very heart and soul of the first amendment.''
    Krauthammer goes on, ``One reason is to prevent slightly 
erroneous press releases of the kind issued by the White House 
drug office on January 14. It is headlined, ``New study finds 
little depiction of illicit drugs on network prime time 
television. White House Drug Czar pleased with accurate 
portrayals.''
    Krauthammer says, ``He should be, he paid for them.''
    Well, indeed the real question lies as to where do you draw 
the line? If the anti-drug message is indeed a good one, and I 
think all of us would agree in general that that is the case, 
do we then follow with issues like gun control, youth violence, 
bad breath, or the heart break of psoriasis? Where does it end 
in terms of the involvement of the government in these issues, 
and where does it say that the first amendment ends at a 
particular level of government involvement?
    Now, I would hope that the networks would have some kind of 
coverage of this hearing, Mr. Chairman, although I am not going 
to count on it. I do think that this is a story worthy of 
following, if nothing else but for those who profess to be 
saviors and protectors of the first amendment. And when it 
appears that the first amendment has been breached with prior 
approval by government agencies, whether it be in religious 
broadcasting or in commercial broadcasting, I think this 
committee has the legitimate right to inquire as to the 
propriety and the constitutionality of such acts. For that, I 
think all of us are pleased that we have an opportunity to air 
these issues and I yield back.
    Mr. Tauzin. The Chair thanks the gentleman.
    Mr. Luther.
    Mr. Luther. I will yield.
    Mr. Tauzin. Ms. Eshoo is recognized for an opening 
statement.
    Ms. Eshoo. Well, let me get myself organized here, Mr. 
Chairman. First of all, I am delighted to be here. I want to 
thank you for holding this important hearing. I think it is the 
first one of the year 2000 for this subcommittee and we are--
embedded in this hearing is our Constitution, the First 
Fmendment, and so it continues to live on. We continue to 
question what is appropriate, what the use of it is, the 
application or the misapplication of it. I am delighted to be 
here. I welcome everyone that is on the panel, but I have a 25-
year friend, Jeff Loeb who is here on the panel. He has 
distinguished himself in what he has done, and I really value 
our friendship over all of these years and also to watch him 
grow in everything that he has done.
    I am concerned about the reports that the administration 
influenced content on prime time television shows. I believe 
that this, indeed, raises serious first amendment questions 
that I hope will be answered quite directly at today's hearing. 
Although the intent of the ONDCP's program is a good one, and 
the messages that were encouraged throughout the anti-drug 
story lines of these shows are themes that I think all of us 
would approve, I do think the administration went too far. 
ONDCP's program created a situation where there is a clear, 
competitive, and financial advantage for shows that offered 
anti-drug themes. The administration, in my view, has no 
business doing that. I am pleased that General McCaffrey has 
clarified the policies that they are going to follow, 
particularly that ONDCP will not review program episodes until 
after the programs have aired.
    I think the updated policy leaves little doubt that the 
administration will not have any role in creating content. I 
agree with this policy, and I think there has to be a clear 
line drawn so that no one would make the mistake of thinking 
that the government is in any way controlling the content of 
our entertainment. The ONDCP program can and should be an 
effective way to broadcast the message of the terrible harms 
that abusing drugs can cause. The program should not be 
implemented, however, at the expense of a content-rich 
environment.
    I look forward to the testimony of our witnesses today, Mr. 
Chairman, and I also think that the ranking member's testimony 
was really quite instructive. I don't know how many members 
actually read everything that was buried in what we voted on. 
He did. He objected obviously to the process. So while it is 
healthy to review some of the curiosities of who was involved 
and who didn't raise their voices about certain things and who 
does now, I still think it is important to have this hearing 
and to hear from our witnesses and to review something that has 
everything to do with how this Nation really has grown and 
functioned so well, and that is our Constitution and the first 
amendment. I yield back.
    Mr. Tauzin. Thank you. The gentlelady from New Mexico, Mrs. 
Wilson, is recognized for an opening statement.
    Mrs. Wilson. Thank you, Mr. Chairman. I also appreciate you 
holding this hearing today. I have known General McCaffrey for 
quite a long time and served with him as a young lieutenant and 
captain when I was in the Air Force. I know of his commitment 
to this issue and his integrity, and I have a tremendous 
respect for him and for what he has done with national drug 
control policy. I am looking forward to some clarification 
today on facts and also on policy with respect to what the 
intent of the Office of the National Drug Control Policy was 
and what is and is not correct in the public accounts of what 
we have heard and read online and in the newspapers.
    It seems to me the issue here and the problem is not the 
drug campaign or public awareness campaign to influence young 
people. All of us agree that that is a message that we want to 
get to young people. The issue is the means. In my mind there 
is nothing wrong with the government promoting a message. We do 
that all of the time, whether it is anti-smoking or anti-drugs. 
The issue is whether the people have a right to know when they 
are being propagandized by their government. That to me is the 
important part. With respect to the first amendment and 
government control or influence of speech, we are talking 
generally about things like smoking or anti-drug messages for 
kids. But what about messages where good and bad are less 
clear? What if the message was about abstinence or the 
importance of reference for children and prayer in schools, or 
even more controversial issues about the environment?
    From the point of view of the broadcast media, are there 
only some messages that you are willing to carry or rewrite 
your scripts for or is it just a matter of price? I think that 
that is an important question to know. I would kind of like to 
know the answer to that and I will be asking those questions 
today. Finally, Mr. Chairman, with respect to the question of 
what the law really says, and I have not been at this anywhere 
near as long as the distinguished minority leader of this 
committee. But I read the plain language of this authorization 
act. I don't understand it the same way he does as authorizing 
this kind of tradeoff without any public knowledge of what is 
going on with public dollars. I read that clause very 
straightforwardly.
    I have no problem with authorizing entertainment industry 
collaboration to fashion anti-drug messages in motion pictures, 
television programming, popular music, and so forth. But that 
seems to me to be authorizing something quite different than 
government control or approval of scripts. That is what we are 
talking about here. As I said, I have no problem with the 
intent of sending a message to kids that drugs can ruin your 
life, and I think that that message has been clear from every 
public leader and every broadcast outlet and every medium that 
we can with kids.
    The question is one of first amendment control and what the 
industry is willing to sell. And finally, whether the people 
have a right to know when the message is coming from their 
government as opposed to the creative license of a private 
individual. Thank you.
    Mr. Tauzin. I thank the gentlelady. The gentleman from 
Ohio, Mr. Sawyer, is recognized.
    Mr. Sawyer. Thank you, Mr. Chairman. I have a longer 
statement today that I don't intend to read. I would like to 
make a couple of observations, however, the first of which is I 
think it is obvious that the government should not have prior 
approval of specific programming. But it is also true that if 
the government is going to be in the business of promoting a 
particular kind of message that we ought to make sure that that 
message is, in fact, that what is being paid for. The 
government is an advertiser in that regard. A message that says 
``just say no'' is one thing. One that says ``just say maybe'' 
says something else. One that says ``you can smoke but don't 
inhale'' is something entirely different. It becomes a question 
of nuance. In that sense it may be--however valuable a 
message--open to question whether the government ought to be in 
that business at all in a way that is not a clearly separated 
from the content of programming, however effective that might 
be as a medium for sharing a message. I think back to the time 
that the gentleman from Massachusetts referred to the Lone 
Ranger and Superman, and then you think back to Robin Hood in a 
valuable but somewhat different message.
    Mr. Markey. Democratic.
    Mr. Sawyer. I wasn't going to get into that, Mr. Chairman.
    Mr. Tauzin. What was it, robbing?
    Mr. Sawyer. I also recall in those same 1950's where 
advertising was a seamless part of the entertainment part of 
the program. And the host of the show, whether it was Milton 
Berle talking about the man with the Texaco star or people 
lighting up cigarettes, and as a part of the plot, referring to 
the brands and the pleasure they derive from it, or pouring a 
beer and making that an obvious part of the message.
    That clearly goes on today in motion pictures. And the 
question becomes one of whether or not the government, per se, 
ought to be in that business of seamless message-sending at 
all. If they are going to be in that, they need to be able to 
be assured of the quality of the message. But it remains open 
whether that ought to be the case. With that, I think I will 
yield back the balance of my time except that before a panel 
like this, I would really be interested to note who is the 
first person on this side who asks ``is that your final 
answer'' and ``do you want to call a friend.'' Thank you, Mr. 
Chairman.
    [The prepared statement of Hon. Tom Sawyer follows:]
   Prepared Statement of Hon. Thomas C. Sawyer, a Representative in 
                    Congress from the State of Ohio
    Thank you Mr. Chairman for holding this oversight hearing this 
afternoon regarding the Office of National Drug Control Policy's Youth 
Anti-Drug media campaign. I appreciate our witnesses coming to testify 
before us on this matter.
    I want to commend the ONDCP for conducting such an aggressive youth 
anti-drug, antiviolence media campaign. When television was first 
introduced after World War II, I doubt many people expected it to have 
the effect on society as it has had. Today, television is a major 
influence in all of our lives. In fact, last November the Kaiser Family 
Foundation released its Kids and Media at the New Millennium study 
where it was reported that youth in America between ages 2 and 18 years 
old spend on average close to 3 hours per day watching television. I 
can only suspect that the amount of time spent watching television will 
increase dramatically with the manufacturing of better televisions in 
the future. Therefore, it seems only appropriate to me that the ONDCP 
provide some incentive that encourages television broadcasters to 
deliver anti-drug messages.
    Less than a month ago, Salon.com reported that the Office of 
National Drug Control Policy received program scripts from several 
networks prior to their shows being aired to determine how much 
advertising credit the company would receive in exchange for promoting 
an anti-drug message. There has also been an assertion that the ONDCP 
asked to have the content of the scripts changed. It is also my 
understanding that there is little, if any, truth to those allegations, 
and I hope that through this process we learn more about the policies 
and practices of the ONDCP.
    I believe we all can agree that no federal agency or office should 
be in the business of dictating the content of network shows. That is 
clearly a violation of the First Amendment, and I would hope that the 
networks would not allow that to happen. Although we may not approve of 
some of the programming that airs on television, the networks should 
remain independent of government.
    Having said that, I believe that as an advertiser, and in this 
instance I believe the federal government is an advertiser because 
public service announcement credits are being given to the networks to 
free up advertising time for private sponsors, you want to know what it 
is you are paying for before you agree to buy the advertising slot. In 
this regard, I believe it's entirely reasonable for the ONDCP and the 
networks to be able to share the scripts, review them to evaluate the 
messages, and assign a credit prior to the program being aired. But 
there's a stipulation, and I made mention to it earlier, as long as the 
ONDCP does not modify the content of the program. In some instances, 
this may help reduce the costs of companies who need to buy advertising 
time because the network knows how much advertising time is available 
and they can sell those slots earlier rather than later. But I 
understand the Drug Czar recently issued a new policy clarifying that 
the credits will not be determined until after programs air.
    Mr. Chairman, thank you again for calling this hearing. I am a 
little surprised by all of the negative reporting of what has happened. 
Nonetheless, I hope this becomes an opportunity for the ONDCP, and the 
networks to set the record straight and educate us and the public about 
this media campaign.

    Mr. Tauzin. I thank the gentleman. The gentleman from 
California, Mr. Cox is recognized.
    Mr. Cox. Thank you. I apologize for joining you late, and 
therefore, I missed all of the opening statements of my 
colleagues. But I am not going to miss the testimony. I look 
forward both to the testimony and my opportunity to put 
questions to the panel. Thank you.
    Mr. Tauzin. The gentleman from Texas, Mr. Green.
    Mr. Green. Thank you, Mr. Chairman. I appreciate the chance 
to hold this hearing because I watched this issue unfold over 
the last month. And much like Diet Coke and Budweiser ads, the 
Office of General Counsel paid money to the networks to display 
their product which was an anti-drug message. Think about the 
number of companies that pay for their product or message to be 
advertised within the content of a movie or TV series. In 
movies, companies allow their products to be shown for 
advertising value. Web advertisers pay the most popular web 
sites to carry a link to their products. Paying a media outlet 
to advertise a product or message in their content is not new.
    We have heard that we want government to be run like a 
business and now we have it. I guess that is why we are having 
this hearing today to see if we really want the government 
running like a business. There has been government influence 
over military movies for years. If you want to make a pro Army, 
Marines, Navy, or Air Force movie, you can use their 
facilities. If the movie was anti-war or anti-military, I bet 
you were denied those facilities. In 1997, Congress 
appropriated funds for the development of a media plan to 
reduce and prevent drug use by America's youth. Drugs are a 
problem that we have faced as a Nation for some time. Frankly, 
I applaud the creativeness of this administration and their 
vision of a targeted youth anti-drug campaign. I don't believe 
there was any secret agenda or malicious intent. I assume they 
were just trying to use every vehicle in their command, in 
today's free market system, to get their message out.
    Both the networks and ONDCP were trying to prevent and 
fight drug abuse among our children, and they are using the 
most visible communications medium, television. They are doing 
what other companies have been doing for years in movies and on 
television. As in Casablanca, Mr. Chairman, I am shocked. There 
is a commercial message that is built into the content. I just 
can't believe that. At least now it is not encouraging me to 
buy Diet Coke or Budweiser, but it is encouraging people to 
refrain from what is an unlawful and illegal activity and the 
message is ``do not use illegal drugs.'' I yield back the 
balance of my time.
    Mr. Tauzin. The gentleman from Maryland, Mr. Wynn, is 
recognized.
    Mr. Wynn. Thank you, Mr. Chairman. Let me begin by 
expressing my appreciation to you for calling this very 
important hearing. I wanted to make a brief comment from a 
somewhat different perspective. The congressional black caucus 
wrote to General McCaffrey in March of last year expressing our 
concern about the disparities in the allocation of funds, media 
funds, between majority- and minority-owned media outlets. We 
noted at that time that approximately $185 million was being 
spent by media outlets, and yet only about $3.2 million was 
being spent by African-American owned media outlets.
    The response from the Office of the National Drug Control 
Policy, to say the least, was unsatisfactory. Again, there is a 
substantial allocation of funds in this year's budget for the 
office. We think it is important that there be a representative 
and fair allocation, particularly since many of these funds are 
on a no-bid basis between majority- and minority-owned media 
outlets.
    So I would very much like to get in the course of this 
hearing a response to those issues that were raised. And in the 
event in this hearing doesn't allow opportunity for full 
response, I would be happy and would request the chairman's 
permission to submit questions to the panelists so they could 
provide extensive response to the CBC. Thank you, Mr. Chairman.
    Mr. Tauzin. I thank the gentleman. It is a policy of the 
committee to keep the record open for at least 30 days. We will 
keep it open 30 days. If the gentleman or any other member 
wishes to submit written questions to the panel at the 
conclusion of this hearing, at any point we will certainly 
accommodate them in that request.
    Mr. Wynn. Thank you, Mr. Chairman.
    Mr. Tauzin. Mr. Luther is recognized.
    Mr. Luther. Thank you, Mr. Chairman. I appreciate the 
opportunity to be heard on this particular issue. A number of 
my colleagues have made reference to this, but I think it would 
be helpful if the witnesses could draw any similarities or 
contrasts between what we are talking about here and what is 
commonly known as product placement advertising. That has 
already been referred to by Mr. Sawyer, Mr. Green. This is just 
my sixth year here in Congress. Perhaps there have been 
hearings or outrage expressed in the past over product 
placement advertising. But that is where an industry like the 
tobacco industry actually pays the entertainment industry to 
include tobacco products or even name brand tobacco products, 
thereby altering the content of the program.
    So for my way of thinking, something like that probably is 
a more serious concern than some of the issues that we are 
talking about here. But I think it would be very instructive to 
us if the witnesses could talk about that. In other words, how 
does this differ from that? What is the greater public harm 
coming about? And so that is the simple point that I wanted to 
make. If we are talking about really dealing with a very 
serious matter here, I think our focus ought to be on the 
serious part of the problem and not make too big of an issue 
about people who are legitimately trying to get a positive 
message out to the public. So that is simply the point. I think 
if the witnesses could address that it would be very helpful.
    Mr. Tauzin. I thank the gentleman.
    [Additional statement submitted for the record follows:]
Prepared Statement of Hon. Barbara Cubin, a Representative in Congress 
                       from the State of Wyoming
    Thank you, Mr. Chairman, for holding this important hearing on the 
recent interactions between the major television networks and the 
Office of National Drug Control Policy.
    It should concern all of us when we hear of the possibility that 
our government may be eroding the sanctity of our First Amendment 
rights.
    We've seen it recently in the Federal Communications Commission's 
order regarding what constitutes religious programming over the public 
airwaves. Thankfully we've seen the subsequent reversal of the order. A 
few FCC commissioners, though, still maintain they have the authority 
to limit religious programming. It's an issue we must continue to 
monitor closely.
    There is no doubt that the Office of National Drug Control Policy 
has its work cut out for it when it comes to preventing drug use by 
America's youth.
    Regardless of the challenge the Administration has before it, it 
cannot and should not trample our First Amendment Rights for the sake 
of the National Youth Anti-Drug Media Campaign.
    Obviously it is of utmost importance that the Campaign be 
successful in helping to prevent America's youth from using illegal 
drugs, alcohol and tobacco.
    In 1997, when Congress appropriated funding for the Office of 
National Drug Control Policy, it expressed its support for an 
aggressive and strategic media plan to combat drug use.
    This Administration, however, has gone way beyond the intent that 
Congress laid out in 1997. It was widely reported in a recent article 
in Salon.com that the ONDCP felt it necessary to review network 
television scripts for ``anti-drug'' content.
    Fortunately, Director McCaffrey has seen the error of the ONDCP 
ways and recently issued a new policy that does not allow his office to 
review program scripts until the programs have been aired.
    I believe the policy should be codified into law to ensure other 
agencies or offices within the Administration don't take these types of 
liberties in the future.
    Mr. Chairman, there is certainly a lot of controversy surrounding 
today's hearing. It's unfortunate that a campaign meant to do good has 
become so tainted.
    It is my sincere hope that we can address the issue before us today 
for the sake of our nation's youth who may be struggling with pressure 
from their peers to try illegal drugs.
    Again, thank you Mr. Chairman for holding this important hearing. I 
look forward to hearing from the witnesses and yield back the balance 
of my time.

    Mr. Tauzin. Any further questions? The Chair is pleased to 
welcome the panel. Let me introduce them to you, first of all. 
Let me extend to this committee and the entire hearing the 
apologies of General McCaffrey. I think he is in Mexico at this 
time in anti-drug conferences. I had a conversation with him 
just this weekend and received his personal apologies for not 
being able to attend. I assured him that we would be very happy 
to receive your testimony, Dr. Vereen, and also that we wished 
him well. He is in Mexico and then Colombia after that. So we 
have with us the Deputy Director of the Office of National Drug 
Control Policy, Dr. Donald R. Vereen, Jr., who will be 
testifying for the gentleman in the program.
    We have with us Mr. Alex Wallau, the president of Network 
Administrations Operations of ABC TV Network. We have Jeff 
Loeb, the creative director of Katsin/Loeb Advertising in San 
Francisco; Mr. Robert Corn-Revere, a partner in Hogan & Hartson 
here in Washington, DC; and Mr. Martin Franks, the senior vice 
president of CBS here in Washington, DC.
    Gentlemen, again you heard the questions raised by the 
members of our committee in their opening statements. I know 
that you have all prepared written statements. If you can, 
please don't read those to us. We have them. If you can, 
summarize and hit the highlights and if you can in your 
presentations address some of the issues that the members have 
raised, so that we can get to Q and A as quickly as possible.
    Dr. Vereen, this is not the first time that the Congress 
has passed a law that was implemented by an agency that we had 
questions about, but it has happened here and we do need an 
explanation and some answers. We would appreciate your 
testimony and welcome you to the committee. You are not 
recognized for that purpose.

  STATEMENTS OF DONALD R. VEREEN, JR., DEPUTY DIRECTOR, OFFICE 
   OF NATIONAL DRUG CONTROL POLICY; ALEX WALLAU, PRESIDENT, 
  NETWORK ADMINISTRATION AND OPERATIONS, ABC TELEVISION; JEF 
 LOEB, CREATIVE DIRECTOR, KATSIN/LOEB ADVERTISING; ROBERT CORN-
REVERE, PARTNER, HOGAN & HARTSON; AND MARTIN D. FRANKS, SENIOR 
                      VICE PRESIDENT, CBS

    Mr. Vereen. Thank you. On behalf of ONDCP and Director 
McCaffrey, thank you for this opportunity to testify and to 
clarify what the National Youth Anti-Drug Media Campaign is all 
about. Chairman Tauzin, Representative Markey and other members 
of the subcommittee, we want to tell you, up front, that we 
appreciate the congressional support for the media campaign. 
Thank you for those comments.
    Mr. Chairman, I do have opening remarks. They are quite 
extensive and detailed and deal with the questions that have 
been posed and I respectfully request that they be included in 
the record.
    Mr. Tauzin. Without objection all written statements are 
made part of our record. So ordered.
    Mr. Vereen. The other thing that we are prepared to do is 
to present directly to you a sample of the ads as well as 
examples of what shows up in television programming, so that 
you can see for yourself directly the evidence that we are 
talking about. That is going to take the allotted time that I 
have. I have approximately 5 to 7 minutes.
    Mr. Tauzin. Without objection, the Chair would request that 
the Panel authorize Dr. Vereen to not count against his 
allotted testimony time, the time that would be used up in 
video presentation. Without objection, so ordered.
    Mr. Vereen. It is 4 or 5 minutes. I just wanted to clarify. 
I also want to make some acknowledgments because the media 
campaign is not just ONDCP. I must recognize Jim Burke and Mr. 
Dick Barnett from the Partnership for a Drug Free America. Dr. 
Alan Leshner, who is the director of the National Institute of 
Drug Abuse. Remember that, because this is not propoganda we 
are dealing with but scientific facts; Major General Art Dean 
and the 5,000 community anti-drug coalitions of America; Peggy 
Conlon of the Ad Council, an invaluable partner; Wally Snyder 
of the American Advertising Federation, and I would like to 
recognize law enforcement, public health, and community 
organizations. All have been a partner in this. I also have to 
point out our two media partners in advertising and 
communications, Shona Seifert, the executive group director and 
our project director for this campaign are here from Ogilvy & 
Mather. They have just been voted the best ad agency on the 
East Coast by Ad Week.
    Beverly Schwartz, who is the project director for the media 
campaign and the senior vice president of Fleishman-Hillard. 
They have been named the agency of the decade by Inside P.R.'s 
report card. We are working with two of the best in the 
country. Brief introduction. It is a little unusual to have a 
physician working at the Office of National Drug Control 
Policy, but we have one. That person is me. I am a physician 
trained in psychiatry. I have been working at NIH for most of 
my career in the Federal Government. I know something about 
public health health promotion.
    What I bring to the agency is the sense of science, that 
is, what we have based all of this on. It is important, Mr. 
Chairman, to understand that this campaign began a while back, 
4 years ago. At the time this was the situation: There was 30 
percent decrease in the number of public service announcements 
noted on public television in the early part of the 1990's. 
There was a general sense, we don't have the hard data, but a 
general sense that the drug use, in addition to violence and 
sex, were glamorized in television and films, and that at the 
very least, drug use and violence were shown without any 
negative consequences.
    We refer to that as accurate depiction or inaccurate 
depiction of the problem. Third and perhaps more importantly, 
studies show that past month drug use in young people, ages 12 
to 17, was increasing in the early 1990's. In other words, 
there was a crisis and we were able to articulate three very 
clear areas where we could respond to the crisis. Congress 
recognized the situation and passed legislation authorizing the 
National Youth Anti-Drug Media Campaign. It was a huge 
bipartisan commitment that established an historic public 
health communications program. This was not a willy nilly fly 
by-night operation. The campaign was approved by Congress in 
the Omnibus Bill. You heard about all of that. I don't need to 
go into the details.
    Over the next 8 months, we, the Federal Government, 
collected the best and the brightest minds in behavioral 
science, substance abuse prevention and research. We gathered 
best practices from the public and private sectors, lessons 
learned from past campaigns. We obtained advice from over 200 
experts and expert panels. We developed a comprehensive 
communications strategy. This communications strategy is a 
public document. It lists in here exactly what it was that we 
were about.
    So what is the campaign? It is a program that is designed 
to carry out the first goal of the National Drug Control 
Strategy, to educate and enable America's children to reject 
illegal drugs, including alcohol and tobacco. It is science-
based. This is not propoganda that we are talking about. Each 
and every message that shows up in a commercial has a 
scientific fact at its core, or a group of scientific pieces of 
information that ground the commercial. The purpose of this 
campaign is to increase awareness, change attitudes, and change 
behavior. We charged ourselves with doing that. Our target 
audience, young people, 11 to 13. The media campaign, as you 
can see from this, involves all media. It is not just 
television. It is the Internet; it is the radio; it is the 
print media; it is film. It is everywhere that children are. 
Based on past ad campaigns, they didn't go that far in reaching 
out to kids making sure that they were there where kids were. 
Everything we do, every dollar we spend for advertising or 
other communications efforts is linked to one of these message 
areas. Again, not propoganda. Science-based information in 
these categories. I can go over those in detail at some other 
point if you wish.
    So the strategy was developed based on what experts told 
us. They said communicate with kids wherever they were, to 
penetrate at the community level, and to develop partners. We 
do that through our Ogilvy & Mather and Fleishman-Hillard 
partners. The campaign has six major components. The green box 
in the middle are the main components. The most visible 
component are the ads. Most of you, if not all of you, have 
seen the ads on television. Most, the vast majority of the 
money appropriated for this program, something like 85 percent 
of the money, goes to buying ad time, not to make the ads; the 
ads are made pro bono. Sometimes we pay for a bit of the 
production cost. But we are buying ad time. We are buying air 
time. That air time, if a network chooses to accept the Federal 
dollars, has to be matched with what we call a public service 
obligation. Congress's wisdom was that if you are going to get 
taxpayer dollars, you had to give us something back in return 
for that money. What you get is what we refer to as the match, 
this public service obligation. The pro bono match or the 
obligation has a set of criteria. We have to have a set of 
benchmarks that are--next chart, please--that are open and not 
secret.
    How is it that you would get something that in a sense 
counts for the pro bono match, that counts toward serving back 
this public service obligation? Let me underscore here: There 
is no money involved in the match. There is no money involved 
in the public service obligation part of this program. A pro 
bono match that fits these criteria developed by experts for 
us, and we use experts to determine what satisfies this, gets 
approved after you have proven, or shown to us, that you have 
met your obligation.
    Now, at this point, let me show you the fruits of what has 
come about in our interaction with our partners, the networks.
    Mr. Markey. Can you take down the sign here for a second?
    Mr. Vereen. What you are going to see first is a tape that 
features two public service ads.
    [Videotape shown.]
    Mr. Vereen. Next are examples of television programming 
that qualified for the match.
    [Videotape shown.]
    Mr. Vereen. I think that is the end of the tape. Let me 
clarify a couple of things that you may not have noticed--
before I say that, ABC is also going to present some other 
information for you to judge for yourself. But if you notice, 
the two ads did not have ONDCP at the bottom. It was not 
labelled as a part of the media campaign. That is because those 
ads were already developed as a regularly occurring public 
service announcement, something that is completely legitimate, 
on fatherhood and volunteerism. Those are the issues that 
relate directly to the kinds of things that protect kids from 
using drugs. Those two ads qualify for our match because they 
attach themselves to those very issues that we want to be able 
to support. I can go into further detail about how this 
campaign has been supportive and helpful of other public 
service groups. That is very important.
    In that same vein, the networks, in particular ABC, has 
been very good at putting responsible images on television. We 
just released the first study by Mediascope several weeks ago 
indicating that the perception, the second point that I made 
about why we initially started this campaign, the perception 
that television was not doing a very good job in depicting 
accurately the drug problem. You can see that the creative work 
that comes out of their shops is phenomenal. Through this work, 
we have developed a number of very important partners. We 
consider the networks a very important partner. That is 
evidence of their work. One of the things that I wanted to 
offer for the official record in addition, are partnership 
letters clearly outlining how we work with them.
    Mr. Tauzin. Without objection, they are made a part of the 
record. Dr. Vereen, your time is just about up.
    Mr. Vereen. There have been some recent press stories and I 
want to take this time to set the record straight about 
misinformation. We didn't get many calls to clarify what was 
written in many of these stories because you would get what you 
are going to get now with a lot more time and a lot--as much 
detail as you would need to satisfy yourselves. Let me say that 
this has been the most public and open campaign of its kind. 
America should be proud of it. It is a model in terms of public 
health promotion. It is a matter of public law. We took our 
guidance from Congress on how to proceed with this. We report 
regularly.
    These are examples of the regular reports to Congress and 
to the American public about what this campaign is and how it 
works. We have had a GAO audit. We have had three congressional 
hearings related to this and numerous other pieces of paper and 
information. We have never intruded in the creative process. I 
can let my colleagues here attest to that. The process by which 
we provide information, scientifically based information in 
terms of technical assistance to the networks and to the 
creative community, is a separate process from the media 
campaign and the match. With that I think I will end my remarks 
and cover other points through questions. Thank you.
    [The prepared statement of Donald R. Vereen follows:]
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    Mr. Tauzin. I thank the gentleman. There will be time for 
questions. The Chair is now pleased to welcome Mr. Alex Wallau, 
President of Network Administration Operations, ABC TV Network.
    Mr. Wallau.

                    STATEMENT OF ALEX WALLAU

    Mr. Wallau. Thank you, Mr. Chairman. In deference to your 
request, Mr. Chairman, I will dispense with the part of my 
written testimony that addressed the issue of ABC's history of 
public service. Let me just suffice to say that we have had a 
history in public service generally for many years, 
specifically in drugs for 13 years with the Partnership for a 
Drug Free America, and we have donated through ABC 
Incorporated, the owned television stations and radio stations, 
radio networks, publishing, hundreds--literally in 13 years, 
hundreds of million dollars of valued public service.
    Mr. Tauzin. Let me interrupt. The gentleman would also have 
the same courtesy we extended to Dr. Vereen. If you have a 
television video presentation it will not be subtracted from 
your time. Without objection, so ordered.
    Mr. Wallau. Thank you, Mr. Chairman. Specifically with the 
ONDCP relationship, in 1998 the ONDCP, through its program 
purchased advertising time in return for an equal match and 
value from its media partner. The ABC network stepped up with a 
major commitment to this program. In the first buying cycle 
from covering a 15-month period from July 1998 to September 
1999, the ONDCP bought $39 million worth of ads on ABC. In 
return, we agreed to match that figure with a combination of 
PSAs approved through the ONDCP and programming with anti-drug 
story lines. We gave over $34 million in PSA time, more than 
double our previous PSA level, and 88 percent of a commitment 
that we owed for the $39 million purchase. The remainder of our 
commitment of media value was met, and we believe actually far 
exceeded by programming with anti-drug themes, many in our 
signature prime time shows. We have a tape to give the 
subcommittee an idea of how they dealt with the issues. If we 
could roll the tape, please.
    [Videotape shown.]
    Mr. Wallau. Just the points that were raised earlier, Mr. 
Chairman, about how these programs came to be. None of the 
programs that are on that tape or any that we submitted for the 
match for the first year of the ONDCP were done in response to 
requests of the networks. These were stories that the creators, 
like David Kelly and Steven Bochco wanted to tell on their 
shows, they were relevant to society, they wanted to make their 
viewers aware by telling strong powerful stories that you saw 
there. There was nothing from the network to them saying we 
need you to do these stories in order to get money. That wasn't 
the process.
    We did submit these shows after the fact with not scripts, 
but synopses of what the story line was, how much time of the 
show the drug-related story contained and submitted them after 
the fact with those kind of synopses and cassettes to the 
ONDCP. I should mention that we never submitted any of the 
outstanding coverage of the subject of drug abuse that was done 
by ABC News because of the specific nature of that division.
    In May of last year, our sales people met with the ONDCP 
and its ad agencies to negotiate renewal of the deal, the 
second year of our relationship. The senior sales executive at 
that meeting called me to say that the guidelines had changed. 
The ONDCP had stated at the meeting that in order for a program 
to qualify for the match, a script had to be submitted in 
advance. We told our executive we would not do that. The sales 
division then negotiated a new deal based solely on a PSA 
match.
    There was no programming match component to our deal this 
year. A month later, the ONDCP brought $18,500,000 in time for 
this 1999-2000 season. We are a third of the way into that 
season. About a third of that money, over $6 million of ONDCP 
ads, have aired on the network and we are pacing well ahead of 
our commitment goal to match just with PSAs and almost $10 
million in PSA match value has already been broadcast on the 
ABC television network.
    One other important fact, Mr. Chairman, that has been 
raised here and in some of the articles written about this and 
I think misunderstood, the relationship with the ONDCP did not, 
in any way, create a windfall for us. The fact is it cost our 
network tens of million dollars in revenue. If we had not 
entered into the relationship with ONDCP, we would have made at 
least $50 million more to our bottom line. We could have sold 
this extra PSA time we added to make the PSA match, especially 
as was referenced of the members in the booming advertisement 
marketplace we have today. Instead, that time went to messages 
dealing with solutions to problems facing millions of children 
and their parents every day. We know our medium is a powerful 
one and the impact of these messages hopefully changed lives 
and perhaps helped save some lives. I welcome any questions 
that you, Mr. Chairman, and the subcommittee have.
    [The prepared statement of Alex Wallau follows:]
   Prepared Statement of Alex Wallau, President, Administration and 
                   Operations, ABC Television Network
    Mr. Chairman: Thank you for giving me the opportunity to testify 
before you today. I'd like to give a brief overview of ABC's public 
service efforts and then address our relationship with the ONDCP.
    ABC's overall commitment to public service has been serious and 
significant for a long time, and our involvement in the war against 
drugs specifically goes back more than a decade, when we began airing 
the messages of the Partnership For A Drug Free America. Since April of 
1987, the Television Network, our Owned Television Stations, our Radio 
Networks, our Owned Radio Stations, and our Publishing division have 
devoted media time and space worth hundreds of millions of dollars to 
this effort.
    The relationship with the PDFA created an unprecedented model for 
cooperation between a media company and a public service organization. 
In 1995, the Executive Vice President of the PDFA said, ``ABC is by far 
the biggest supporter of the Partnership. Without them, the Partnership 
would never have survived.''
    We built on our commitment in March of 1997 by launching our own 
initiative. We called it ``March Against Drugs,'' an entire month 
dedicated primarily to encouraging parents to talk to their children 
about drugs. We ran anti-drug PSA's every hour for the entire month, 
representing about $8 million in media value, and virtually every day 
we aired programming that addressed the issue, with tie-ins to our 
website.
    A year later, the ONDCP began its program of purchasing advertising 
time in return for an equal match in value from its media partner.
    The ABC Network stepped up with a major commitment to this program. 
In the first buying cycle, covering the 15-month period from July 1998 
through September 1999, the ONDCP bought $39,400,000 of ads on ABC. In 
return, we gave $34,600,000 in PSA time for ONDCP-approved messages, 
more than doubling our PSA time from its previous level.
    The remainder of media value was exceeded by programming with anti-
drug messages, many in our signature prime time shows.
    To qualify these shows for the match, we submitted plot summaries 
and cassettes after the airing of the show. We never submitted any of 
the outstanding coverage of the subject done by ABC News because of the 
special nature of that division.
    In May of last year, our Sales people met with the ONDCP and their 
ad agency for the negotiation of the deal renewal. The next day, the 
senior Sales executive at that meeting called me to say that the 
guidelines had changed. The ONDCP had stated at the meeting that, in 
order for programming to qualify for the match, a script had to be 
submitted in advance. We told him we would not do that.
    The Sales division then negotiated a new deal based solely on a PSA 
match, without any programming. A month later, the ONDCP brought 
$18,500,00 in time for the upcoming season. So far this season, the 
ONDCP has bought $6,086,850 in ad time, and we have aired $9,841,560 in 
PSA match value.
    One important fact has been sometimes misunderstood in the recent 
events that have resulted in today's hearing. The relationship with the 
ONDCP did not result in a windfall for us. It cost our Network tens of 
millions of dollars in revenue. If we had not entered into the 
relationship with the ONDCP, we would have made at least $50 million 
more by selling the extra PSA time we added to make the PSA match, 
especially in today's booming advertising marketplace. Instead, the 
time went to messages dealing with solutions to problems facing 
millions of children and their parents every day. Our medium is a 
powerful one, and the impact of these messages hopefully changed lives 
and perhaps helped save some.
    I would be happy to answer any question that you, Mr. Chairman, or 
the Subcommittee may have.

    Mr. Tauzin. Thank you, Mr. Wallau.
    Mr. Jeff Loeb, creative director, Katsin/Loeb Advertising, 
San Francisco.
    Mr. Loeb.

                      STATEMENT OF JEF LOEB

    Mr. Loeb. Thank you, Mr. Chairman. Before I start, I would 
be remiss not to express my thanks to Congresswoman Eshoo. I 
think it is we who are proud of her and how much she was done 
for all of us.
    Mr. Tauzin. And so are we.
    Mr. Loeb. I woke up this morning with kind of a couple of 
things running through my mind. The first one was, I am glad 
the members have been talking about their favorite TV shows. 
One of the lines that came into my mind was Blazing Saddles, 
where he said Mongo is just a pawn in the game of life. I am 
here because through an odd set of coincidences, I wound up on 
the Nightly News with Jim Lehrer in the unfortunate position of 
having to criticize what ONDCP policies were to Dr. Vereen. I 
felt kind of bad about it, because ultimately, what they are 
doing is all of the right things.
    But unfortunately, the way in which this has transpired is 
somewhat controversial. And I think what my strongest counsel 
to you is, since I have zero axe to grind, I am not an agency 
representing ONDCP or any other government agency, is that you 
do not throw the baby out here with the bathwater. The baby in 
this case is that ultimately the business of advertising, more 
and more, is about building brands. By that, we mean what the 
emotional and intellectual attributes that we hope to thread to 
our products. You are familiar with that concept. The reality 
is ONDCP's job is to build an anti-brand. We don't want to 
build bridges to drugs, we want to divide them up, we want to 
distance ourselves from that. In that context you would say to 
yourself that logic suggests that if product placement works 
for a brand, wouldn't anti-product placement work for anti-
brand particularly geared to young people whom we all know when 
they see a commercial that specifically targets them tend to 
reject it. That is the hardest in dealing with generations X 
and Y.
    The question becomes in that situation, do the rules of the 
engagement change when it is government doing the advertising. 
In thinking of this way, I am sort of mindful of one of my 
favorite books before I met Anna actually was Drew Pearson's--a 
lot of his stories about Washington. I have always loved this 
place. He said in government oftentimes the right things get 
done for the wrong reason. I have to say this is a case where 
the wrong thing got done for the right reason.
    I think what is important to do is to draw lessons from 
that and move forward. Frankly, if I were with my distinguished 
panelists from CBS and ABC, I would say, boy, this is an 
interesting possibility. I know NBC isn't here, but if Coke 
could convince NBC to get Jennifer Aniston on Friends to say, 
no, thanks, I will have a Coke instead of a Pepsi because it is 
healthier for me, I think they have a uncovered huge new stream 
of revenue.
    Certainly they would be held as marketing geniuses. 
Unfortunately, this is not the case here. ONDCP is not a 
company. It is not a private advertiser. It isn't anything like 
one of those kinds of things, the kind of people that I 
typically represent. What they are is an element of government 
with a legitimate public policy interest. If the threshold 
question is should government become involved with the business 
of marketing, the next follow-up question is how do we make 
government the most effective in the way it markets? I don't 
know if you are familiar with the statistics on how many ads we 
as citizens or consumers are confronted with every day. I have 
seen numbers right now approaching 20,000. How do you make an 
impact in the face of that? How do you get awareness? How do 
you get people, particularly young people, to pay attention?
    Product placement works in that situation and I would 
suggest to you that anti-product placement could be equally 
efficacious. The problem here is that product placement unlike 
the anti-product placement is fully disclosed to the audience. 
I see a movie, it is James Bond, there is a BMW, an ungodly 
amount of money spent on it. I know they are paying for that. I 
accept that. It doesn't interfere with my enjoyment of the show 
or the willing suspension of disbelief. I see a message about 
my behavior and what I should or should not think and then it 
get as little dicier, because I don't know for a fact that the 
government played any role in that.
    More importantly, I think one of the members alluded to 
this, there is the question of precedent and where do you stop. 
At what point does it become impermissible for product anti-
placement or the promotion of behaviors in our public policy 
context to occur. I am mindful of the fact that in this 
situation--the Marines are huge advertisers--I wonder if we 
want the Marines reviewing shows and commenting on content of 
programming. On the other hand, and I say this from a 
standpoint of a relatively modest-sized agency in San 
Francisco, the amount of money that you are talking about in 
this case, the technical term of the networks would be peanuts. 
We are not talking about enough money to really influence 
things.
    Let me wrap this up. If the real problem here is disclosure 
and audience understanding, it is a very simple problem to 
conclude. You merely, in the titles and credits of programs, 
indicate that there was some consultation in government or an 
ONDCP problem.
    The second thing is if Congress is going to authorize these 
kinds of programs in the future, Congress needs to be informed 
about what they are. Network negotiations are hugely 
complicated and there really is totally negotiation. There is 
no cost for a commercial when these guys are doing the work 
because it is really about how much we promise to get and how 
much they deliver when we negotiate. This is a clever 
negotiation. Last, I would urge you not to handicap your 
advertising agencies, including the ones here who are 
excellent, in being creative. The stakes here in drug control 
are too great. I think the trick here is merely to put the 
thing on the right course.
    I apologize for taking all of my time. I really meant to do 
half of it.
    [The prepared statement of Jef Loeb follows:]
Prepared Statement of Jef Loeb, Chairman/Creative Director, Katsin/Loeb 
                           Advertising, Inc.
    It is a great honor to have been asked to appear before you and to 
have the opportunity to discuss a subject of deep interest to anyone 
involved in affecting public attitudes and behaviors--particularly 
given the governmental context.
    For the record, I would like to state that I do not represent any 
advertising industry group and that my viewpoints are not endorsed 
either by my agency or any of our clients. They are, however, supported 
by more than 20 years in advertising, creating and writing advertising 
campaigns on behalf of commercial, industrial, manufacturing, health 
care, e-commerce, media, governmental and public service organizations. 
My own work, and the work of my agency, has been recognized at the 
international, national and regional level in a variety of advertising 
competitions. Additionally, by way of further credentials, I have 
taught marketing, advertising and copywriting at several schools and 
have been published in various advertising industry trade magazines.
    The events that provoked today's hearing reflect the inevitable 
collision between three dynamic forces--the national interest in 
defeating a pernicious threat to public health and welfare; the 
evolution of 21st century marketing practice in a world where getting 
attention, much less making an impact, is increasingly daunting; and, 
most important, the role of government when it assumes the mantle of an 
advertiser.
    In considering the results of this intersection, I would like to 
underscore my belief that what happened in no way, shape or form 
reflects any evil or malignant intent by the White House, ONDCP or any 
of its advertising advisors. Rather, it's the product of people of good 
will going the proverbial bridge too far in pursuit of a very 
legitimate objective.
    In that spirit, let's begin by talking about the advertising 
underpinnings of this program and why, from that limited perspective, 
ONDCP's actions actually made a great deal of sense.
    In our pop-culture world, most of us are familiar with the concept 
of ``product placement.'' Whether it's a can of soda placed in a movie 
scene or a manufacturer paying millions of dollars to make their car 
the star of the show, product placement is an inevitable feature of 
today's entertainment industry. Advertisers use this tool for reasons 
ranging from building product awareness to creating favorable 
associations for their brands. After all, if James Bond drives the car, 
it must be cool.
    This is particularly true for youth markets who, repeated studies 
have shown, often reject messages specifically targeted at them in the 
form of 30-second TV spots or magazine ads. The twin keys in reaching 
these groups seem to be creating the kind of aggressive ubiquity that 
allows Generations X and Y to ``discover'' and adopt the brand or the 
product on their own.
    Of course, ONDCP's mission isn't to create a brand at all, but 
rather its diametrical opposite--call it an ``anti-brand.'' So, logic 
suggests, if we know that product placement works in brand-building, 
why not try the inverse--having negative references about our ``anti-
brand'' organically inserted into entertainment?
    When Salon broke the story about this program, I was caught by the 
thought that product placement is now commonplace--but this is the 
first example of anti-product placement in recent history.
    In fact, it is an exceedingly clever notion. Let me assure you: if 
Coca Cola were somehow able to magically persuade a network like NBC to 
have Jennifer Anniston on Friends reject a Pepsi in favor of a Coke--it 
would be hailed as an astonishing marketing coup.
    But ONDCP isn't Coke; it isn't a company with products to sell; it 
isn't even an advertiser in the ordinary sense. ONDCP is an arm of the 
Federal Government--and that is where the wheels begin to fall off on 
what, otherwise, would be regarded as an ingenious advertising 
innovation.
    The question is: do the advertising rules change when government is 
the sponsor? I submit to you that they do and for two common sense 
reasons.
    The first is rooted in the nature of non-traditional marketing 
tools like product placement. Creatively these are effective because 
they lend verity to the production, are sometimes unexpected and, from 
the audience standpoint fundamentally non-directional. Unlike 
conventional advertising, a product placement doesn't say ``think this, 
feel this, buy this.'' It only introduces us to the product in a 
context where it gains cachet. Audiences buy into the placement because 
they are more than well aware of the intent and willing to accept its 
intrusion.
    In this instance, however, ``anti-product placement'' has one 
other, more opportune but less fortunate attribute: the fact of 
persuasion is not only non-disclosed, but invisible to any member of 
the audience who hasn't happened to read the Congressional Record.
    This lack of disclosure leads to a second, and far more 
transcendent, concern: if it's okay for the government to engage in 
undisclosed marketing tactics when it comes to drugs, how about 
tobacco? If it's okay for tobacco, how about teen pregnancy? If it's 
okay for teen pregnancy, how about any of a hundred other issues that 
could legitimately lay claim to the national interest? And if it's okay 
for the Federal Government, how about the states? After all, in most 
states lotteries are established to support public education.
    Most important, and of greatest concern, if this precedent is set 
now, what about the future? Will an administration with vastly 
different predilections--and the ability to rally sufficient 
Congressional support--be able to utilize these tools on subjects like 
abortion or religion or lifestyles?
    Boiled down, it all comes down to this: there is a bright but 
exceedingly fine line between promotion and propaganda when government 
attempts to influence public behaviors or attitudes. In light of the 
stakes involved in many of these issues, a democratic society can and 
should embrace the former. And utterly reject the latter.
    At the outset of this presentation, I characterized this situation 
as a collision between national interests that often justify government 
stepping out from behind the bully pulpit to use tools like advertising 
to promote the welfare of its citizens; the demands of marketing 
efficacy in the 21st century; and, the role of government as an 
advertiser.
    None of these forces ever needs to come into conflict again, if the 
Congress sets and lives by three policies.
    The first must be strict avoidance of any action that would promote 
the reality or the appearance of exerting pressure on the creative 
content of programming. Even the perception of such activities is 
crippling--a vital point when you realize that advertising is as much 
about perception as it is reality. And that government's mission in 
these exercises is to create perceptions that motivate and lead to 
positive actions.
    Second, whenever the government is involved, a rule of strict 
disclosure must be enforced. It's already normal in TV spots and print 
ads. It should become standard in titles and credits that follow movies 
and television shows, where appropriate.
    Third, I would suggest that those who have an oversight role in 
these matters also need to be informed about the involved dynamics. 
According to the news stories I have read, this all occurred as part of 
the typical bargaining that attends most network buys. If you are going 
to pass judgement on the efficacy of those purchases, you may be well 
advised to have your own experts on call to evaluate the proposal.
    These are not earthshaking recommendations. Nor do they imply that 
the government needs to shut off the creative wellsprings of its 
advertising agencies and advisors. In fact, ONDCP's revised policy 
itself may well represent a pragmatic solution to this complex problem.
    But in the fluid, ever changing and always negotiable world of 
marketing, extreme care must be taken to ensure that government never 
steps over the bright line from promotion to propaganda. Which, in the 
end, is what this particular issue is all about.
    Mr. Chairman and Members, thank you for your time. If there are any 
questions I can answer, I would be delighted to give them my best 
response.

    Mr. Tauzin. Thank you.
    The Chair recognizes Mr. Robert Corn-Revere, a partner of 
Hogan & Hartson here in Washington, DC.
    Mr. Corn-Revere.

                 STATEMENT OF ROBERT CORN-REVERE

    Mr. Corn-Revere. Thank you, Mr. Chairman, and members of 
the committee. Thank you for inviting me to testify on this 
important subject. I have been asked to address the potential 
first amendment issues that arise from the question of the 
possible practice of providing financial credit for anti-drug 
messages in prime time entertainment programming. Before 
addressing that issue, I would like to touch on a couple of the 
issues or practices that I think clearly do not raise first 
amendment concerns. First, obviously, the practice of having a 
public information campaign and purchasing public service 
announcements by itself raises absolutely no constitutional 
concerns. Freedom of the press doesn't mean that the government 
is disabled from entering the marketplace of ideas, it can add 
its voice to others. Personally, I was very taken with the 
Emperor Penguin ad. It made me feel a little bit bad since I 
left my kids on vacation to come to this hearing.
    Second, the practice of the entertainment industry outreach 
by ONDCP that has been presented in testimony elsewhere by 
members of the office also doesn't raise any constitutional 
concerns. In the material that I have read, ONDCP personnel 
meet regularly with producers and entertainment executives in 
Hollywood to provide factual and medical information on drug 
use. And that again raises no concern. It is laudable. While 
these practices are not controversial, the allegation that a 
number of prime time programs have had specifically 
governmentally approved messages inserted in them for exchange 
for public service announcement time does raise some 
controversial issues.
    I realize there is a factual dispute over how this 
transpired and the extent it took place. I am not here to weigh 
in on that. I really don't know. I think that hopefully with 
hearings like this, those factual issues will be sorted out. 
While I can't evaluate the respective versions of events, I 
really would like to offer some perspective on some of the 
constitutional issues that are raised. Obviously, as we have 
heard about today, perspectives on this can vary widely. One 
columnist in the Washington Post asked, is it really so 
alarming that Uncle Sam is undermining the creative integrity 
of Sabrina, the Teenage Witch?
    Other columnists have raised a totally different 
perspective as the column from Charles Krauthammer that has 
already been introduced into the record here. My own view is 
that for a Nation dedicated to freedom of expression, the 
United States should resist the use of propoganda as acceptable 
policy regardless of how meritorious a particular message might 
be. I know that Dr. Vereen has described this as not being 
propaganda, that it is medical or scientific fact. I don't 
dispute his characterization of what the messages are. I don't 
think that keeps it from being propoganda when the government 
is inserting it into programs or using incentives to make sure 
those messages are inserted into programs, the viewers of which 
I am sure are not aware that they are receiving a government-
sponsored message.
    Like the wall of separation between church and State 
envisioned in the Constitution, I believe that the first 
amendment calls for a separation of press and state. Just as 
Robert Jackson wrote over half a century ago, the first 
amendment was intended to foreclose public authority for 
assuming a guardianship of the public mind and for protecting 
the public against false doctrine.
    It is true that this program did not involve compulsion in 
the sense that it wasn't based on a government directive or a 
government rule. However, the adoption of such a rule is not 
necessarily prerequisite to raising serious first amendment 
concerns. For example, 25 years ago the broadcast networks were 
persuaded to develop a family viewing policy in which 
programming was inappropriate for viewing by a general family 
audience would not be presented before 9 p.m. These networks' 
decisions were voluntary in the sense that no official edict 
issued from the FCC required them to adopt this policy.
    Nevertheless, the Federal district court that reviewed the 
agreement that limited the family viewing policy described it 
as a per se violation of the first amendment. The same kinds of 
first amendment concerns can arise from funding decisions, 
whether or not it is subsidized postal rates or tax exemption 
based on a person's willingness to say a certain thing or got a 
royalty of. Certainly we have seen this kind of concern raised 
with respect to grants for the National Endowment of the Arts, 
one that the Supreme Court approved limited the kinds of 
conditions it was imposing in that case, it cautioned that if 
specific kinds of messages were required in order to receive 
those Federal grants, that would raise grave first amendment 
problems.
    I think the same kinds of concerns are raised by the kinds 
of policies that have been described. Once again, I don't 
presume to know what all of the facts are. I see that my time 
has expired. I would be happy to answer any questions later on.
    [The prepared statement of Robert Corn-Revere follows:]
                Prepared Statement of Robert Corn-Revere
    Mr. Chairman, and Members of the Subcommittee. Thank you for 
inviting me to testify on this important subject.
    A little less than a month ago, the story broke in Salon magazine 
that the White House Office of National Drug Control Policy (``ONDCP'') 
had used its authority and spending power under the National Youth 
Anti-Drug Media Campaign, 23 U.S.C. Sec. 1802, et seq. to insert anti-
drug messages into prime time entertainment programming presented by 
the national broadcast networks. According to the story, the networks 
received approximately $25 million worth of credit for time that under 
the law would have been devoted to anti-drug public service 
announcements. The credits were given under the auspices of a five-
year, $1 billion media campaign that ONDCP described in a 1998 press 
release as ``the largest and most complex social-marketing campaign 
ever undertaken.''
    It was reported that under this program government officials and 
their contractors began approving, and in some cases altering, the 
scripts of shows before they aired in order to conform to the 
government's preferred message. ONDCP reportedly used a numerical 
formula to assign a financial value to the anti-drug messages that 
appeared in each program: Half hour programs that presented an approved 
theme received three ``credits,'' or the value of three 30-second ads, 
while hour-long programs received five credits. The value of the 
credits depended on the ratings of the program that presented the 
approved message, creating an incentive to alter the story lines of the 
most popular programs. Accordingly, the Salon article named ``Beverly 
Hills 90210,'' ``ER,'' ``Chicago Hope,'' ``Sports Night,'' ``7th 
Heaven,'' ``The Wayans Bros,'' ``Cosby,'' ``The Smart Guy'' and ``Home 
Improvement'' as among the shows that received credit for approved 
themes. The story noted that almost none of the producers and writers 
who crafted the anti-drug episodes were aware of the deal.
    Reactions to the revelations have varied widely. One response is 
that the story is no big deal. Writing in the Washington Post, Marjorie 
Williams asked if it is ``really so alarming that Uncle Sam is 
undermining the creative integrity of `Sabrina the Teenage Witch?' '' 
Marjorie Williams, ``. . . But Really, What Was Sold?'' Washington 
Post, January 21, 2000 at A29. She concluded that ``the propaganda in 
question here was distinctly benign'' because drug use ``is one of the 
few uncontested zones in our perennial culture wars.'' Writing the same 
day, Charles Krauthammer pointed out that the big deal is that the 
government ``has the power to tax, audit, subpoena [and] imprison'' and 
that in a system ``where liberty is preserved by the separation and 
diffusion of power, we rightly refuse to grant government even more 
power through control of the content of free media.'' Charles 
Krauthammer, ``A Network Sellout . . .'' Washington Post, January 21, 
2000 at A29. He also asked whether such tactics might not be applied to 
``equally worthy messages'' about gun control, youth violence, 
recycling, ethnic tolerance or charitable giving. These two examples 
are fairly representative of the range of opinion on this issue.
    My own reaction is that, as a nation dedicated to freedom of 
expression, the United States should resist embracing the use of 
propaganda as an acceptable policy, regardless of the merits of any 
particular message. By propaganda, I am not referring to the campaign 
to purchase advertising time in order to deliver an anti-drug message. 
Such efforts to persuade the audience are readily recognizable as such 
to the viewers, who can form their own impressions of the message. 
Instead, I am concerned about the use of federal funds and advertising 
credits to induce the networks to transmit an officially approved 
message. Like the ``wall of separation'' between church and state 
envisioned in the Constitution, the first amendment requires a 
separation of press and state. ``At the heart of the first amendment 
lies the principle that each person should decide for him or herself 
the ideas and beliefs deserving of expression, consideration, and 
adherence. Our political system and cultural life rest upon this 
ideal.'' Turner Broadcasting System v. FCC, 512 U.S. 622, 641 (1994). 
``Government action that stifles speech on account of its message, or 
that requires the utterance of a particular message favored by the 
Government, contravenes this essential right.'' Id.
    As Justice Robert Jackson wrote over half a century ago, the First 
Amendment was intended to ``foreclose public authority from assuming a 
guardianship of the public mind,'' and from ``protect[ing] the public 
against false doctrine.'' Thomas v. Collins, 323 U.S. 516, 545 (1945) 
(Jackson, J., concurring). The ONDCP initiative to influence prime time 
programming appears not only to have crossed the line marking the First 
Amendment's underlying philosophy, but to have scrambled it.
    Of course, the act of purchasing public service advertisements, by 
itself, raises no constitutional concerns. There is no question but 
that ONDCP's actions in conducting a media campaign was well within its 
legitimate authority. Freedom of speech ``does not mean that government 
must be ideologically `neutral,' '' or ``silence government's 
affirmation of national values,'' or prevent government from ``add[ing] 
its own voice to the many that it must tolerate.'' Laurence Tribe, 
American Constitutional Law 588, 590 (1978). But that is not all that 
appears to have taken place here. As Justice Scalia has noted, ``[i]t 
may well be that threat and thus suppression would be the consequence 
of a scheme for systematic review of books and films by an official 
evaluator, in order that the government may label their content 
approved or condemned.'' Block v. Meese, 793 F.2d at 1314.
    Without a doubt it would violate the First Amendment if the 
government adopted a rule requiring broadcasters to include anti-drug 
messages in prime-time programming. Turner Broadcasting System, 512 
U.S. at 650 (``the FCC's oversight responsibilities do not grant it the 
power to ordain any particular type of programming that must be 
offered''). The question here is whether less coercive means of 
exerting influence raise similar concerns. I believe that government 
actions that fall short of a law or regulation can violate the First 
Amendment.
    Twenty-five years ago, the broadcast networks were persuaded to 
adopt the ``family viewing policy,'' in which programming 
``inappropriate for viewing by a general family audience'' would not be 
presented by 9 p.m. The network programming decisions were 
``voluntary,'' in the sense that no official order emanated from the 
FCC requiring the policy. But the District Court that reviewed a 
challenge found the policy to be a per se violation of the First 
Amendment because it resulted from a concerted plan by the Commission 
to influence licensees' programming decisions. Writer's Guild of 
America, West v. FCC, 423 F. Supp. 1064 (C.D. Cal. 1976). The decision 
was reversed on appeal on jurisdictional grounds, because the reviewing 
court held that the complaint should have been presented to the FCC in 
the first instance and not to a federal district court. Writer's Guild 
of America, West v. FCC, 609 F.2d 355 (9th Circuit 1979). But at the 
same time the Court of Appeals noted that such informal actions to 
control programming present ``serious issues involving the 
Constitution, the Communications Act and the APA.'' Id. at 365.
    Similar concerns may be raised by the use of federal funds to 
influence or dictate programming content. It has long been held, for 
example, that when government subsidizes private speech it may not 
favor some viewpoints or ideas at the expense of others. Hannegan v. 
Esquire, Inc., 327 U.S. 146, 149 (1946) (the Postmaster General may not 
deny subsidies to certain periodicals on the ground that they are 
``morally improper and not for the public welfare and the public 
good''). Nor may the government condition tax exemptions on a person's 
agreement to utter approved speech, Speiser v. Randall, 357 U.S. 513, 
519 (1958), or otherwise engage in discriminatory taxation of the 
press. Leathers v. Medlock, 499 U.S. 439, 447 (1991).
    These same considerations apply to discretionary distributions of 
federal funds for expressive purposes. In National Endowment for the 
Arts v. Finley, 524 U.S. 569 (1998), the Supreme Court upheld a 
condition on NEA grants to artists that required the endowment to 
consider ``general standards of decency and respect for the diverse 
beliefs and values of the American public.'' In doing so, however, the 
Court found that the condition was not a ``categorical requirement'' 
that would ``preclude or punish the expression of particular views.'' 
And the majority added that if the NEA ``were to leverage its power to 
award subsidies on the basis of subjective criteria into a penalty on 
disfavored viewpoints, then we would confront a different case.'' Id. 
at 587. Here, the use of federal money by ONDCP to provide a 
substantial bonus to broadcasters who agree to transmit a government-
vetted message may well be that different case.
    Apart from any possible constitutional issues, various federal 
policies are designed to limit the use of propaganda, whether or not 
the message is ``benign.'' For example, the Foreign Agents Registration 
Act, 22 U.S.C. Sec. Sec. 611-621, requires any foreign agent who 
engages in political activities to register with the Justice Department 
and to notify DOJ within 48 hours after it transmits into the United 
States ``any political propaganda for or in the interests of [its] 
foreign principal.'' 22 U.S.C. Sec. 614(a). The required notification 
must contain a statement ``setting forth full information as to the 
places, times and extent of such transmittal.'' 22 U.S.C. Sec. 614(a).
    The law is not directed only at messages that have some subversive 
or nefarious purpose. It defines ``political propaganda to include any 
form of communication ``reasonably adapted to . . . prevail upon, 
indoctrinate, convert, induce, or in any other way influence a 
recipient or any section of the public . . . with reference to the 
political or public interests, policies, or relations'' of the foreign 
entity. 22 U.S.C. Sec. 611(j). As a result, the law has required 
``political propaganda'' notices for Canadian films about acid rain and 
about the dangers of nuclear war, Israeli films about the plight of 
Soviet Jewry and German films about the Berlin Wall. Block v. Meese, 
793 F.2d 1303, 1306, 1312 (D.C. Cir. 1986). In short, if the messages 
approved by ONDCP had been produced by a foreign entity, federal law 
would have required full disclosure on the theory that the American 
public has a right to know the source of the persuasion.
    Similarly, Section 508 of the Communications Act requires producers 
of programs who receive money or other valuable consideration for the 
inclusion of matter in a program to report its receipt to the licensee 
over whose facilities the program is broadcast. 47 U.S.C. Sec. 508. And 
Section 317 of the Communications Act requires broadcast licensees to 
announce when matter contained in a program is paid for, and by whom. 
47 U.S.C. Sec. 317. These laws were adopted in the wake of the 
``payola'' scandals of 1950s because Congress believed that the public 
should know if record companies were paying broadcasters to play 
certain songs. It is difficult for me to believe that it is a matter of 
lesser concern if the government pays broadcasters to insert approved 
messages into their programs.
    Some have suggested that ONDCP's efforts are not a matter of 
concern because the message is commendable. But as the Washington Post 
editorialized shortly after the story surfaced:
        [W]e happen to agree with the spin, and the idea of sitcoms and 
        television dramas carrying anti-drug themes seems healthy. But 
        where does it end? Could the government pay the networks to 
        slip idle comments into ``ER'' about the virtues of a 
        particular health care policy?
``Drugs, TV and Propaganda,'' Washington Post, January 15, 2000 at A24. 
I agree with this concern, but it is not merely a question of a 
slippery slope. What about other matters within ONDCP's mission? When 
California was considering Proposition 215 regarding the medicinal use 
of marijuana in 1996, General McCaffrey spoke out strongly against the 
measure, stating the ``[a]s medicine, this proposition is unworthy of 
the Middle Ages. As politics, it is dishonest.'' ONDCP Press Release, 
White House Drug Policy Director McCaffrey Issues Statement Against 
Legalization of Marijuana, Sept. 12, 1996. As it turned out, California 
voters disagreed. But would it have been legitimate for ONDCP to have 
attempted to change their minds through placement of officially 
sanctioned messages in prime time?
    At this point, it is premature to reach firm conclusions about the 
legality of ONDCP's actions. Hopefully, hearings such as this one will 
bring out all the facts so that the American public can fully assess 
the legitimacy of the government's program of inserting its messages 
into popular entertainment.

    Mr. Tauzin. Thank you.
    Finally, Mr. Martin Franks, senior vice president, CBS, 
Washington, DC. Mr. Franks.

                  STATEMENT OF MARTIN D. FRANKS

    Mr. Franks. Thank you, Mr. Chairman, and members of the 
subcommittee. I confess to being surprised at the news reports 
that circulated last month that made it seem as if the networks 
and ONDCP have been engaged in secretive and unseemly 
practices. In fact, from the program's inception, CBS has done 
nothing more than cooperate with ONDCP in a way that is fully 
consistent with CBS's editorial independence and the expressed 
intent of Congress when it authorized the campaign.
    During the 1998-1999 television season, CBS received $3 
million for the broadcast of ONDCP's anti-drug announcements. 
Our agreement with ONDCP is simply that CBS matches, at least 
dollar for dollar, the money spent by ONDCP on the network. 
This was done by the airing of ONDCP-paid PSAs and our own drug 
anti-PSAs, and by credit received from ONDCP for certain 
network entertainment programs with an anti-drug story line. 
CBS more than fulfilled its $3 million commitment in 1998-1999 
season with a total of $4.5 million in PSAs and story-line 
credits. Of that $4.5 million, approximately $2.8 million was 
received for a combination of ONDCP-produced PSAs and CBS PSAs, 
respectively. The remaining $1.7 million was credit received 
for airing of entertainment programming with a drug-related 
story line.
    A total of four original program episodes qualified for the 
credit: Touched By An Angel, the Cosby episode that you saw, 
Promised Land, and L. A. Doctors. Each program was submitted, 
with the sole intent of obtaining a yes or no answer, as to 
whether the program qualified for matching credits, not for the 
purpose of inviting ONDCP edits. It is important to keep this 
in mind, drug abuse has long been and continues to be one of 
CBS's largest and most important PSA categories. In 1998, the 
television network donated $16.6 million in regular PSAs 
impacting drug abuse and mentoring unrelated to the ONDCP 
match. For 1999 that amount increased to $17.9 million.
    Before I conclude, I would like to address for a moment the 
concerns that many have expressed regarding first amendment 
righting being trampled. On numerous occasions, I have 
forcefully argued with many of you in defense of CBS's first 
amendment rights. At various times, some of you have agreed 
with the position I have articulated while others agreed to 
disagree. I am not shy when it comes to protecting and arguing 
for broadcasters' rights in general, and CBS's in particular.
    I welcome further discussion concerning how to further 
broadcasting's first amendment protection. But when we have 
that discussion, please also consider the following among 
others: Our first amendment rights is endangered when 
broadcasters are required to air a government-mandated amount 
of children's television programming. Aren't first amendment 
rights jeopardized when government officials proposed tying 
license renewal to their own notion of what is an acceptable 
level of sexual and violence programming? Are we close to the 
first amendment line when we are asked to rate our programs 
voluntarily by an administration in Congress whose goodwill is 
essential to the deregulation we need to compete and prosper?
    Mr. Chairman and members of the subcommittee, while I can 
understand the theoretical concern many may have about the 
ONDCP program, I am here to assure you that ONDCP does not make 
the cut on my own personal list of threats to CBS's first 
amendment rights and editorial independence. Our intention of 
participating in the ONDCP program was and is to act 
responsibly and serve the public interest as was the Congress's 
intent in launching this initiative. At no time have we felt 
that our creative integrity was being compromised. If we had, 
we would have stopped doing business with ONDCP. In fact, 
hardly a week goes by without CBS telling an advertiser, 
frequently an advertiser with a much larger budget than ONDCP, 
that we will not run the ad they are proposing because it 
contravenes CBS's well-defined and long-standing broadcast 
standards and practices. We do not have difficulty saying no, 
whether to a Fortune 500 advertiser or to ONDCP if our 
standards are being undermined. Had ONDCP sought to do so, 
which they did not, CBS would have refused.
    Thank you for the opportunity to appear today. I will be 
happy to answer your questions.
    [The prepared statement of Martin D. Franks follows:]
  Prepared Statement of Martin D. Franks, Senior Vice President, CBS 
                              Corporation
    Mr. Chairman, Members of the Subcommittee, I am pleased to be here 
today and have the opportunity to discuss with you CBS's participation 
in the ONDCP national media campaign. I am here because the CBS 
Television Network's Broadcast Standards and Practices department, 
which oversees our ONDCP relationship, reports to me.
    I confess to being surprised at the news reports that circulated 
last month that made it seem as if the networks and ONDCP have been 
engaged in secretive and unseemly practices. In fact, from the 
program's inception, CBS has done nothing more than cooperate with 
ONDCP in a way that is fully consistent with CBS's editorial 
independence and the express intent of Congress when it authorized the 
campaign.
    As you will recall, this program was announced in 1998 by President 
Clinton, Speaker Gingrich and General McCaffrey. At the time it 
received widespread bipartisan support. Upon its announcement it was 
the subject of numerous news reports, and the very facet of the program 
now under question was widely reported and examined in the media.
    The Drug Demand Reduction Act of 1998, the legislation authorizing 
this program, as well as relevant sections of the conference report, 
support the assertion that Congress anticipated that the program would 
include both public service announcements and other cooperative 
activities by broadcast and other media; including credit to broadcast 
networks and the creative community for drug related storylines. CBS's 
activities in response to this Congressional program involved nothing 
that can reasonably be considered improper or a threat to our editorial 
independence.
    Before describing for you CBS's participation in the program, I 
think it is important to remember that the legislation which authorized 
the ONDCP program was passed with overwhelming support from both sides 
of the aisle, with only nine votes in opposition. Then Chairman of the 
National Security, International Affairs and Criminal Justice 
Subcommittee, Congressman Dennis Hastert, spent an entire year leading 
a bipartisan task force that produced this bold drug reduction 
initiative.
    For our part, during the 1998-99 season CBS received $3 million 
dollars from the ONDCP for the broadcast of ONDCP's anti-drug 
announcements. The arrangement between our network and the ONDCP is 
simply that CBS matches dollar for dollar the money spent by the ONDCP 
on the network. This was done through the airing of the ONDCP PSA's, 
our PSA's, and by credit received from ONDCP for certain network 
entertainment programs with an ``anti-drug'' story line.
    CBS fulfilled its $3 million commitment in the 1998-99 season and 
then some, with a total of $4.5 million in PSA's and storyline credits. 
Of that $4.5 million, approximately $2.8 million was received for a 
combination of ONDCP produced PSA's and CBS PSA's respectively. The 
remaining $1.7 million was credit received for airing of entertainment 
programming with a drug related storyline. A total of 4 original 
programs and three repeats were aired and qualified for the credits. 
They were: one original and one repeat of Touched by an Angel, one 
original and one repeat of Cosby, one original and one repeat of 
Promised Land, and one original of LA Docs. Of these four original 
programs, two scripts were submitted prior to airing and two 
productions were submitted after broadcast. Each script or program was 
submitted with the sole intent of obtaining a yes or no answer as to 
whether the program qualified for matching credits, not for the purpose 
of inviting ONDCP edits. And, in no case have programs been produced 
for the purpose of receiving ONDCP credit. Let me add here--and I think 
it is important to keep this in mind--drug abuse has long been and 
continues to be one of CBS's largest and most important PSA categories. 
In 1998, the TV network donated $16.6 million in regular PSA's 
impacting drug abuse and mentoring--unrelated to the ONDCP match. For 
1999 that amount increased to $17.9 million.
    Before I conclude, I would like to address for a moment the 
concerns that many have expressed regarding First Amendment rights 
being trampled. On numerous occasions, I have forcefully argued with 
many of you in defense of CBS's First Amendment rights. At various 
times, some of you have agreed with the position I articulated while 
others agreed to disagree. I am not shy when it comes to protecting and 
arguing for broadcasters' rights in general, and CBS's in particular.
    I welcome any further discussion concerning how to further 
broadcasting's First Amendment protections. But when we have that 
discussion, please also consider the following, among others:
    Are First Amendment rights endangered when broadcasters are 
required to air a government-mandated amount of children's television 
programming? Aren't First Amendment rights jeopardized when government 
officials propose tying license renewal to their own notion of what is 
an acceptable level of sexual and violent content in programming? Are 
we close to the First Amendment line when we are ``asked'' to rate our 
programs ``voluntarily'' by an administration and Congress whose good 
will is essential to the deregulation we need to compete and prosper?
    Mr. Chairman and Members of the Subcommittee, while I can 
understand the theoretical concern many may have about the ONDCP 
program, I am here to assure you that ONDCP does not make the cut on my 
own personal list of threats to CBS's First Amendment rights and 
editorial independence.
    Our intention in participating in the ONDCP program was and is to 
act responsibly and serve the public interest, as was the Congress' 
intent in launching this initiative. At no time have we felt that 
creative integrity was being compromised. If we had, we would have 
stopped doing business with ONDCP. In fact, hardly a week goes by 
without CBS telling an advertiser, frequently an advertiser with a much 
larger budget than ONDCP, that we will not run the ad they are 
proposing because it contravenes CBS's well defined and longstanding 
Broadcast Standards and Practices. We do not have difficulty saying NO, 
whether to a Fortune 500 advertiser, or to ONDCP, if our standards are 
being undermined.
    Had ONDCP sought to do so, which they did not, CBS would have 
refused. Thank you for the opportunity to appear today. I will be happy 
to answer any questions the Committee may have for me.

    Mr. Tauzin. The Chair will now recognize himself for a 
round of questions. Let me get the facts on the table first of 
all. The facts are, Dr. Vereen, that, at some point, your 
agency was prescreening scripts, that scripts were being 
presented to you in advance of being aired; is that correct?
    Mr. Vereen. No, that's not the case. The fact is that in 
our interactive outreach to the networks, we provide technical 
information to them----
    Mr. Tauzin. I know about that. I will get into that in a 
second. But CBS testifies that on the record that of the four 
programs just mentioned, two were submitted prior to airing by 
your agency. Is that not correct?
    Mr. Vereen. That is what I am trying to explain to you. 
They may be presented to us for technical assistance and we 
refer those out to places like the National Institutes of 
Health, NIDA----
    Mr. Tauzin. You have changed your rules on that point? You 
no longer reviewed television program episodes for possible 
government credit only after the episodes have been aired?
    Mr. Vereen. What you are doing is you are blurring the 
lines between the technical assistance that we give and what 
happens in credit for the match.
    Mr. Tauzin. Let me ask you, Mr. Franks, why did you submit 
those scripts to the agency? Was it for technical assistance?
    Mr. Franks. No. As I testified, for a yes or no answer.
    Mr. Tauzin. Whether or not you get the credit?
    Mr. Franks. Right.
    Mr. Tauzin. So scripts were being submitted for the purpose 
of the agency deciding whether or not you got credit. Why are 
we getting two different sets of testimony on that point?
    Mr. Vereen. They submitted them for evaluation. It is a 
separate process. We passed that----
    Mr. Tauzin. Dr. Vereen, you announced in your latest 
statement that this advice would now be offered separate from 
the review process indicating that it was offered together with 
the review process previously. Mr. Franks is testifying that 
they submitted their scripts to you for a yes or no answer on 
whether or not credit would be given. Are you denying that?
    Mr. Vereen. That is determined by our contractor by Ogilvy 
& Mather.
    Mr. Tauzin. Whoever determines it, Dr. Vereen, are you 
denying Mr. Franks' statement that scripts were submitted for a 
yes or no answer on the basis of whether they get a credit?
    Mr. Vereen. Yes. That has happened and the reason we needed 
to clarify that was because of the confusion between providing 
technical assistance and things qualifying for the match. We 
don't determine that.
    Mr. Tauzin. Mr. Wallau, your network, upon hearing at this 
conference, that you had to submit your scripts before they 
were aired, said no. I am not doing that. Your network was 
denied any credits for program content; is that correct? Take 
the mike please, sir.
    Mr. Wallau. Mr. Chairman, I don't know if we could have 
negotiated beyond that point where we said no, or whether we 
could have done that after the fact and gotten some credit. We 
didn't get to that point in the negotiation. We just said we 
didn't want to submit scripts in advance and then negotiated a 
relationship with the season which had a full PSA match. But 
the deal presented to us at the time was we had to submit in 
advance.
    Mr. Tauzin. Submit in advance, you said no. You are the 
only network now that gets credit on basis of PSAs you provide?
    Mr. Franks. We have changed our policy also, Mr. Chairman.
    Mr. Tauzin. What is your policy?
    Mr. Franks. We only submit programs after they have aired.
    Mr. Tauzin. Apparently, there has been a lot of changes. I 
am trying to understand what was done before and what is being 
done now. Mr. Wallau, as far as the facts are before these 
changes occurred in the government policy and the policy of CBS 
and others, your network apparently was the only one who said 
we are not submitting scripts in advance, and the result was 
you negotiated a contract where you lost all content credits; 
is that correct?
    Mr. Wallau. Yes.
    Mr. Tauzin. Now, I want to ask you, Dr. Vereen, why do you 
treat newspapers different than television? Newspapers, 
according to the stories, never had content reviews and 
newspapers don't get any content credits. Television does. Why 
do you think it is appropriate to give dollar credits or 
credits to television stations on the basis of your content 
reviews and while you are not doing that with newspapers?
    Mr. Vereen. We don't pay for news. That is the product that 
newspapers present. We don't give credit for things that would 
be reported anyway. When a television network creates a show, 
once they get information from NIDA or NIAAA or something, it 
is their creative product. What they do with that information--
--
    Mr. Tauzin. Is an editorial a creative product? Why do you 
not give credits to newspapers whose editorials contain good 
anti-drug messages? Why do you, on the other hand, give credits 
to a television station that has a script that you approve of?
    Mr. Vereen. There are other ways that newspapers can 
provide information----
    Mr. Tauzin. Other ways that television can't.
    Mr. Vereen. That is right, and they do. ABC, for example, 
created----
    Mr. Tauzin. I just want to note, and please be specific on 
this, granted, that they can each do it very different ways, 
why did your agency treat one media in one way and another 
media another way when both have creative material which could 
contain content that would either meet or not meet your 
criteria?
    Mr. Vereen. We made a decision not to pay for news.
    Mr. Tauzin. Mr. Loeb, you wanted to respond.
    Mr. Loeb. I just want to observe that I don't think product 
placement or anti-placement would work in a newspaper. It is a 
whole different ball of wax. It is not organic to the 
entertainment environment in which you can see the newspapers. 
I think in fairness to ONDCP----
    Mr. Tauzin. I am going to wrap because I have got to. Let 
me differ with you. It seems to me a good editorial in a 
newspaper scientifically decrying the use of drugs and urging 
young people not to use them, et cetera, and giving out good 
information about why it is harmful to their careers could be 
significantly as effective as any hidden message in a 
television program. It just puzzles me that the agency would be 
given credits for content in one media and not the other.
    Finally, let me say, Mr. Vereen, because I want to put this 
on the record. I tend to agree with my colleague from New 
Mexico. I am proud of that vote that we cast. I like the fact 
that we are doing this. I think the way we are doing it, 
perhaps the way you did it in looking at scripts in advance 
most particularly, is very troublesome. It is the 
implementation of it.
    Second, I am pleased that you are changing. I am pleased 
that CBS and others are changing their attitude about 
presubmitting scripts to you. That troubles me more than any 
part of this. But I am equally concerned about the fact that 
some media is going to be given dollar credits for messages 
that we approve of in their programs when others are not, and 
in any case, that does, in fact, threaten the first amendment 
position. I continue to be concerned about that. We want to 
have more discussions about that with it.
    I yield to my friend, Mr. Markey, for his questions.
    Mr. Markey. Thank you, Mr. Chairman, very much. Obviously, 
there is no more important subject that we are going to take up 
than the influences that the culture has on the behavioral 
patterns of children in terms of their engaging in risk-taking 
behavior that ultimately will come back to haunt them later on 
in their life. Again, 50 percent of all disease in the United 
States is behaviorally based. We have to deal with that 
reality. Let's hope that we cure cancer and other diseases. We 
are not sure. We can, through all of the money in the world 
that we want at NIH, and hope that breakthroughs can be made in 
those diseases.
    There are diseases, however, that we know we can do 
something about if we can convince people early enough in their 
life not to engage in that kind of behavior. That is a much 
bigger near-term payoff in terms of the health of our society 
and the cost to the Federal and State taxpayers in terms of 
taking care of these people when the disease sets in that is 
directly resulted from engaging in unhealthy behavior. I think 
this is as important a program as can exist, because television 
is the most powerful influence, with the exception their 
parents.
    The tension that exists here, it seems to me in this 
program, is one that is difficult to resolve. Either the 
government got involved and altered or influenced scripts so 
that the taxpayers, that is the public health dollars, got 
matched, so that we were targeting this audience, or the TV 
networks were not influenced at all and all they did was submit 
programs they were doing anyway, and they got away from having 
to put on the matching PSAs; and we got nothing for our money 
but they got something for free. That is not good either. That 
is a waste of our money.
    So what we are seeing here are a few scattered shows that 
are calling for thousand of hours of programming, and they are 
showing us these few proud moments, and we get nothing. If, on 
the other hand, we can see a dramatic increase as result of the 
kind of the influence of a program like this, it is a difficult 
chicken and egg problem we have here. We clearly believe that a 
lot of people might be tempted in the movies.
    Increasingly, when I go to the movies, I am seeing, as Mr. 
Loeb says, all of this product placement. You can see James 
Bond smoking this cigarette, drinking this drink, driving this 
car, and looking at this particular watch, and wearing his 
Briani this and that. Then you have this anti-product question 
that you have to raise. Can you influence people the other way, 
negatively.
    So I think that from my perspective, I know that I drank a 
lot of Bosco because big brother Bud Emory Army told me to 
drink it. It was definitely built into the body of the show, 
the substance of the show. That is why we had to pass laws 
saying the hosts of the shows can't say, um, um, good kids, 
drink that quart of milk and some Bosco every day. Make sure 
mom gets some extra special for you. We know that 68-year-old 
guy wasn't slugging down that stuff every day, but he was able 
to influence the 8-year-olds, if they were reading the 
editorials.
    I am not saying that the kids were smarter than I was. I 
think they are getting their information largely from the same 
sources that I did when I was a kid. So I think we have in a 
way that there is almost some semantical--there is a 
terminological inexactitude here that the program was 
implemented. I think that it can be resolved in ways that 
ultimately benefit the public. I would hope that the networks 
would continue to work the drug office. I wish we had a tobacco 
office and a gun office. I wish we had a sexual practices 
office as well so that the networks could be engaged in an 
ongoing basis with the education, technical help that comes 
from professionals like Dr. Vereen who have dedicated their 
lives as public health service doctors to help reduce the 
incidence of later disease that are exposed to these practices 
that our children----
    So I guess my general view is that it would be a tragedy if 
the networks decided they are just going to walk away from 
their responsibility to ensure that the lead character in a 
show where the average 9- to 13-year-old girl is looking at 
some lead girl in the show week after week as their model, and 
you have the missed the opportunity of having that girl, as 
cool as she is, saying I am never going to do drugs or smoke.
    If we don't see a show like that where you build in the 
main character in one of those shows, then you are missing your 
own social responsibility. We shouldn't even have a program 
like this to be honest with you. You should be coming to us 
right now showing us an entire program where you have a lead 
character who is viewed as the coolest girl in town, and you 
advertise around that program, and she is taking one or two 
major negative behavioral patterns that she is saying she is 
not going to do it, and everyone else in the school still 
thinks she is still the coolest kid going.
    You don't have a program like that, and that really 
troubles me that you can't show us that here, that we have to 
have a government program do it. I hope that this discussion 
actually puts a bigger spotlight on the networks, on the movies 
so that on an ongoing basis now, you can answer the question as 
to what you did voluntarily, those of you who want to walk away 
from it. But don't expect the Congress to go away. Don't expect 
parents across the country to go away because unless you 
cooperate, they are going to be fighting a losing battle in 
terms of changing these behavioral patterns.
    Thank you, Mr. Chairman.
    Mr. Tauzin. The gentleman's time has expired. The 
gentlelady from New Mexico is recognized.
    Mrs. Wilson. Thank you, Mr. Chairman. I must have missed 
the Bosco thing. I admit when I come to these discussions, I 
enjoyed seeing the excerpts and the public service 
announcements, but I also seem somewhat out of touch because of 
those nine programs or so that you showed clips from, I have 
never seen eight of them. Somehow I feel like I may not have 
missed much, which is I guess a good thing in some way.
    I have some questions, Mr. Franks, for you. Of those shows 
that you submitted for prior approval before you changed your 
policy, did you get any ``no'' answers? You said you were 
looking for a yes or no.
    Mr. Franks. Yes, we did get some no's.
    Mrs. Wilson. What was your next step?
    Mr. Franks. Move on.
    Mrs. Wilson. Did the producers or the writers or the people 
involved creatively with those shows know what the network was 
doing with respect to getting credits?
    Mr. Franks. No, not in every instance early on. One of the 
things I said when we changed our policy, when we looked at the 
second year and we were trying to decide how to do this 
rationally going forward, one of the things that we decided was 
in order to avoid the kind of controversy that has arisen--we 
obviously weren't very successful--was that we would only admit 
shows after they aired so there couldn't be any question about 
their editorial independence.
    In some instances we, the creators, were involved because 
in some instances, they were shows that we also own. There was 
the well-written, well-documented exercise where an episode of 
Chicago Hope qualified. Interestingly enough, it was qualified 
by Fox, who produces it. We did not submit it and we did not 
know that it had qualified for the credit. There is some 
interesting recordkeeping exercises. But I think we could 
certainly do a better job as we go forward in making sure 
producers are aware.
    Mrs. Wilson. As long as there is not a prior approval 
process?
    Mr. Franks. Correct. For us there never has been a prior 
approval process in the sense that, again, the question----
    Mrs. Wilson. Referring specifically, you said for a brief 
period of time you did submit some programs for prior approval 
and then changed----
    Mr. Franks. Prior approval for yes or no answer, does it 
qualify or not.
    Mrs. Wilson. The question that then arises on my mind, and 
it may, at this point, be theoretical, because you have changed 
your policy, but I think it is important when we think about 
these things and similar questions that may come up is if you 
have a no answer and the producers and the writers knew that 
you got a no answer, does that then again influence the way 
they write?
    Mr. Franks. Congresswoman, I wish--the other part of my 
standards and practices, if you will, is in dealing with 
writers and producers when there are elements in their shows 
that we don't like. Steven Bochco thinks that I am probably the 
biggest prude on the North American continent because of the 
things that I don't want to let him do in programs that he airs 
on CBS. We have an ongoing dialog with producers about the 
content, pro and con, positive and negative. It is a pretty 
vigorous back and forth. It is not an arms-length process when 
we are talking to them about the content of the programs on a 
weekly basis.
    Mrs. Wilson. Thank you.
    Dr. Vereen, with respect to other media, the chairman 
mentioned newspapers. I have to say that I don't know many kids 
that do the editorial page either. But the question that I had 
was about other entertainment media, particularly music, 
videos, movies, even Sports Illustrated-kinds of things, or I 
guess in my wildest dreams, Rolling Stone. Has the Office of 
Drug Control Policy ever sought to give credit, or in some way 
compensate for content in any other media?
    Mr. Vereen. Sure. In the case of the New York Times--by the 
way----
    Mrs. Wilson. I am not talking about paid clear advertising, 
but content.
    Mr. Vereen. I got you. I made the point that we didn't want 
to get in the business of paying for news. First of all, the 
kids are not reading the newspapers. In order to hit the kids, 
we only want to support those things in the media match that 
would get messages out to kids. But the New York Times 
developed----
    Mrs. Wilson. Dr. Vereen, I am not talking about guides or 
those kinds of things. I am talking about the analog of 
programming decisions, whether it is in movies, music, video 
games, other entertainment that may be disguised as a message. 
Has the Office of Drug Control Policy ever compensated anybody 
else or given them credits or anything else in any of those 
other entertainment media?
    Mr. Vereen. For example, in MTV, everything that gets 
satisfied in the match oral ads, okay, sometimes there are 
featured stories that are offered on occasion. I think you saw 
something on ABC that was a story that was presented, but they 
tend to not happen very often when it does happen.
    Mrs. Wilson. I think I would like to know, and this may be 
something you need to take back, as to whether and when it has 
happened. I am not talking about networks or the advertisements 
on MTV, but if we are talking about--if the Office of Drug 
Control Policy provided some kind of compensation to a rap 
artist for doing an antidrug song, I would kind of like to know 
that. If you could take that for the record.
    Mr. Vereen. Let me offer a clarification and go over some 
things I presented before very quickly. The time here doesn't 
allow for the full explanation of a very complicated 
relationship. The relationship that we have with the networks 
or any other group is voluntary. We buy time and space in order 
to place the ads that have been developed pro bono that are 
antidrug. Once we buy the time and space, that determines the 
pro bono match. That determines the public service obligation 
that we expect. It is a voluntary thing. What counts, in terms 
of serving back that obligation, has a set of criteria which I 
ran through too quickly.
    Mrs. Wilson. Doctor, I understand all that, but I hope that 
you understand the distinction that is being made here between 
a match from a public service campaign or a program that is 
produced and written by somebody for CBS submitted after the 
fact, and submitting scripts in advance for some kind of 
compensation with a hidden governmental message. That, to me, 
is the fundamental issue. My time has expired.
    Mr. Vereen. I'm not sure I get that. I apologize.
    Mr. Tauzin. The gentlelady's time has expired. The credits 
you give to newspapers is often for programs directed to 
parents and guardians.
    Mr. Vereen. Yes, that is true.
    Mr. Tauzin. My point stands. I just want you to think about 
that. I yield to my friend from California, Ms. Eshoo.
    Ms. Eshoo. Thank you to all of the witnesses that have 
offered their reflections to the questions that our colleagues 
have asked. Let me start with Dr. Vereen. Have you looked into 
working with any of the websites?
    Mr. Vereen. Oh, sure. We have a huge interactive----
    Ms. Eshoo. Could you tell us about that program briefly but 
give us the meat of that. I can't help but think with what, 
some 80 million Americans on-line today and in a handful of 
years is projected to be 117 million, maybe it is just me. Most 
of these programs that you showed, I have to confess, I haven't 
even heard of. I don't watch TV. I don't know how many kids are 
watching all of this. Obviously, in marketing you want to get 
your message out to as broad an audience as possible. Any one 
of us that wants great assistance relative to the Web or the 
Internet hire young people to do that, not people that are 
older than ourselves. So can you tell us what the office has 
done so far and how much of that market you think you have 
penetrated?
    Mr. Vereen. Your question actually gets right to the heart 
of the challenge that we have. The experts told us that you 
have to go after the kids. And they are not always watching 
television. Sometimes they are listening to radio. A recent 
report told us that more----
    Ms. Eshoo. I have another question to ask, so maybe you 
could tell me directly to my question.
    Mr. Vereen. We have a number of Internet sites where kids 
can go and get information. When we first started out this 
campaign, when you punched in a key word, you got the wrong 
message about drugs.
    Ms. Eshoo. Do you advertise on the net?
    Mr. Vereen. Certainly. And the net is also there for the 
parents as well. We got word from parents that they didn't know 
what to tell their kids. They didn't have the facts about 
drugs.
    Ms. Eshoo. Do you have any way of measuring?
    Mr. Vereen. Yes, we do. We have tons of information about 
how these sites have become quite popular over time, over just 
a short time that we have had this media campaign.
    Ms. Eshoo. When did you begin it?
    Mr. Vereen. The Internet part of the campaign was launched 
actually here in this building last fall.
    Ms. Eshoo. Was that the beginning of your agency's entire 
effort?
    Mr. Vereen. With the Internet, the official launching of 
the Internet. Prior to that, ABC had developed an Internet site 
on their own. It was an idea that they came up with for which 
they got credit.
    Ms. Eshoo. I don't know what your hits are, but----
    Mr. Wallau. We had 6 million on the ABC site----
    Ms. Eshoo. If I were a kid using drugs, I don't think I 
would go to your site to find out how to stop using them. I 
think that there has to be kind of a subliminal way----
    Mr. Wallau. It was not an ABC site. It was a site set up 
specifically for an antidrug message, the name of it I wish I 
could----
    Mr. Vereen. Freevibe.
    Mr. Wallau. Free buy.
    Ms. Eshoo. I don't want to diminish what you are doing. We 
need all the help we can get. What it sounds like, it may need 
to be more finer tuned and pitched, so that it really reaches 
far more. I still buy Tide. There must be some kind of reason 
for that. I haven't tried anything else. But I guess all of 
those hits were successful. Thank you for what you just told 
me.
    I want to go to Jeff Loeb. Jeff, do you think, in your 
opinion, that the new regulations that the ONDCP has taken on 
that you mentioned in your testimony, that they will really 
promote the antidrug material, that they are effective?
    Mr. Loeb. As far as I understand those regulations and I 
admit to being as baffled as everybody else the way this story 
has unfolded, yes, I think they are a smart move. I think what 
the chairman has raised, and the member from New Mexico really 
were talking about here is there is a real question here. The 
question is, does government have the ability and the 
willingness to be an effective marketer or not? That is a 
balancing act that is way above my head in terms of what the 
competing institutional interests are. Where does the limit go 
and do you want to be paying rap artists to do stories like 
that?
    The trick here is, and the reason why I argue so strongly 
in my remarks for disclosure is----
    Ms. Eshoo. I think that is the key.
    Mr. Loeb. [continuing] that basically at the end of the 
day--this is all about perception. This is what I do for a 
living, basically. I hate to admit it. Advertising is much 
perception as reality. The fact of this hearing and the news 
stories that transpired after all this broke, which is really 
an Internet-generated news story is astonishing to me. 
Basically, what you're trying to do is find a way to control 
perceptions in a way that you can reach in an effective way, 
which I think the ONDCP is trying to do without getting 
themselves into hot water over the fact of the implementation 
of the policy.
    Ms. Eshoo. Thank you. I think my time is up, Mr. Chairman. 
Thank you for your excellent testimony.
    Mr. Tauzin. I thank the gentlelady. The gentleman from 
California, Mr. Cox is recognized for 5 minutes.
    Mr. Cox. Thank you. I can't tell from reading your 
statement, Mr. Wallau, whether or not you believe that ONDCP's 
reduction in the amount of advertising that they bought from 
you was connected to the fact that you told them that you 
weren't going to go along with their new program of looking at 
the scripts in advance. I do note the figures that for the 
period July 1998 through September 1999 ONDCP bought nearly $40 
million worth of advertising. Following the discussions that 
you had about preapproval of scripts, they bought $18 million 
for the upcoming season. So far they have bought $6 million and 
you have aired $9.8 million in match value.
    Mr. Wallau. Right. Just so we are clear, Congressman, the 
$6 million is part of that $18 million. We are about a third of 
the way into this season.
    Mr. Cox. I understand. Since the first was a 15-month 
period, on an annual basis that is about $31 million. An 
apples-to-apples comparison is $31 million to $18 million. Why 
the diminution in the purchases from ONDCP?
    Mr. Wallau. There were a number of components to it, some 
of which had to do with other changes in the qualification 
criteria for other areas such as the website, for instance. We 
had done a website in cooperation--I think we both agree was 
quite successful when the criteria came out for the second 
season. The match--I am sorry, we wanted the website continue 
to be a match for a buy made on our website, ABC.com. The 
agency that the ONDCP worked with didn't want that to happen. 
They wanted it to be as part of the match for the telephone--
television buy and that was just in negotiation with the 
agencies.
    Mr. Cox. Did you get anything like $31 million out of the 
government this year?
    Mr. Wallau. We haven't begun that negotiation. Those start 
in May. We are willing to go up that high and match with PSAs. 
We went up to $18.5 million this year. We are willing to 
continue to go higher. We didn't get that amount of money from 
the agency when they awarded the bid. I can't tell you what the 
agency's thought process was, Congressman.
    Mr. Cox. It appears, in any case, that the government is in 
a position as purchaser to influence you to the extent that you 
are willing to sell to them and they are, at the same time, in 
a position to buy less if they are not extending their 
influence.
    Mr. Wallau. That is accurate, but there is one more 
component, that is, are we willing to give up the match of the 
PSAs in the $18.5 million that we went forward with this year, 
we also were willing to format that into our schedule, $18.5 
million of additional PSA time. We were willing to do that. 
Other networks made other choices. So the limiting factor is 
not just whether the agency wants to give us the money in 
return for the $18.5 million. There is another component of 
whether we are willing to give up that time, especially in a 
marketplace like we have right now where we can make 
significantly more money with that time than we are making in 
selling it in the upfront to the ONDCP.
    Mr. Cox. I wonder if I could ask Mr. Corn-Revere, if I 
understand you correctly, you are concerned about the use of 
Federal funds to induce networks to broadcast and officially 
approve messages; is that right?
    Mr. Corn-Revere. That is right.
    Mr. Cox. Much has been made, not only in your presentation, 
but also in other coverage on this of the fact that opposition 
to recreational drug use is pretty much agreed all around. It 
is a socially responsible message. If government is influencing 
content, but it is doing it on such a benign point that nobody 
really cares, are we losing a lot of ground? And to give you an 
analogous way, perhaps to address the question, when the Nazis 
marched in Skokie, we were told that it is protecting unpopular 
speech that is the test of whether we have a first amendment. 
So might it also be the case adversely that rejecting a popular 
message from the government is likewise the test of whether we 
can reject government influence on the content of broadcast 
television?
    Mr. Corn-Revere. It is a very interesting question, because 
I think the popularity in the socio-utility of the message does 
make this a much more difficult issue to confront.
    Mr. Cox. Let me move down the margin just a bit while you 
are answering the question, because the Federal Government and 
Congress and the President have agreed to put Federal tax 
dollars behind abstinence education. What if the Federal 
Government were pushing abstinence education PSAs, would it 
make it harder?
    Mr. Corn-Revere. Yes, I think as you add more issues to the 
mix of those that would be promoted, both by PSAs and by some 
kind of match, it might be inserted into entertainment 
programs. You multiply the number of possible points of 
disagreement, the numbers of ways in which the issue can become 
politicized and as a result, it goes against the grain of the 
very kinds of things that I believe the first amendment was 
designed to prevent.
    Mr. Cox. What should we do?
    Mr. Corn-Revere. I wouldn't presume to advise you on that 
point. I would say that I think any program that tends to 
encourage the use of mixing government messages with 
entertainment without--and certainly without disclosing to the 
public what is going on raises danger flags.
    Mr. Cox. Thank you, Madam Chairman. I would just observe 
that it is incumbent upon the parties to these transactions to 
maintain as rigid a wall of separation between what is 
government and what is not as possible, so that if these are 
market transactions and the government is purchasing a message 
that you object to and it is labeled as such, that everybody is 
protected all around. But if it is done in this more cozy way 
in which you can't tell which side of the wall we are on, that 
we have infected, in fact, the content, and we have very 
explicitly agreed that the government is influencing the 
message and that we are okay with that.
    Mrs. Wilson [presiding]. Thank you.
    The gentleman from Ohio.
    Mr. Sawyer. Thank you, Madam Chairman. I just wanted to 
take a moment to make clear that Mr. Markey and I will not be 
offering our version of Robin Hood on the Internet in digital 
form. I also, at the risk of embarking down a pathway of mutual 
assured destruction, I want to point out that Mr. Franks and I 
went to the same high school, and that Steven Bochco couldn't 
be more wrong. He is not the biggest prude in North America, 
but he is very discrete.
    Mr. Franks. Thank you, Congressman. I will tell him you 
said so.
    Mr. Sawyer. I keep hearing undertones in all of this of 
fear and triumph of the will and all that sort of thing. Let me 
emphasize, I don't think anybody up here views anybody at that 
table being embarked on something like that. What we are really 
concerned about more than anything else is something that I 
know that you share as much as we do, and that is preserving 
the integrity of the message. It is critical to its success, 
and it is put at risk by many of the things that we are asking 
questions about today. I am particularly interested, as we had 
submissions to the commission, I gather you were not seeking 
guidance. Did you receive offers of guidance, Mr. Franks?
    Mr. Franks. I don't believe so. I am almost certain that we 
didn't. Again, partly because we also weren't soliciting it. 
Long before ONDCP came along, we had a fair amount of 
experience at the question of prosocial themes. I mean, the 
classic case being Jay Winston's Harvard program on designated 
drivers. We have a number of people that we regularly turn to 
for advice when we need it and I don't--with respect, I don't 
think we felt that we needed ONDCP's help in figuring out 
antidrug messages.
    Mr. Sawyer. And it is not your recollection it was offered 
gratuitously?
    Mr. Franks. No.
    Mr. Sawyer. Mr. Wallau, is that essentially your 
experience?
    Mr. Wallau. We didn't submit any.
    Mr. Vereen. Perhaps it wasn't very clear. We, ONDCP, 
doesn't approve any scripts. I think where some of the 
confusion has come in is that scripts came into us for 
valuation or determination of whether they counted in the 
match.
    Mr. Sawyer. I am just talking about eligibility and that's 
all you are talking about as well, is it not? Eligibility for 
the match?
    Mr. Vereen. Yes. The appearance that we had undue influence 
and the reason why we had to clarify the rules about when 
submissions would occur, is why we stated clearly we will 
only--our partner, Ogilvy & Mather, will only--evaluate 
something for the match after it has been aired. So there is no 
question about us interfering with the creative process.
    Mr. Sawyer. I am only asking, however, whether you ever 
offered unsolicited guidance with regard to----
    Mr. Vereen. Yes. That is a part of the media campaign. We 
have an outreach program. We are authorized to use dollars to 
go to the creative community. We do a presentation. General 
McCaffrey presents what I just presented to you, what the media 
campaign is about. We have either Dr. Leshner or myself 
presenting the science, stuff that people don't know about, 
haven't heard of, and they take that information and they run 
with it like they have never run with it before. You have seen 
what they have come up with.
    Now, if you want to call that influence, call it influence. 
All we have done is pay attention to a public health issue. 
This is not----
    Mr. Sawyer. I am going to run out of time. I apologize. But 
I do understand the distinction that you are making. Mr. Loeb, 
you were about at one point to, I think, to make a distinction 
between the environment of fictional entertainment and news 
depiction. Would you like to finish that thought?
    Mr. Loeb. Yes. I am baffled as to how--if you buy an 
editorial, you are buying an opinion, and I don't think 
entertainment is the same thing. I think Mr. Corn-Revere, I 
don't want to speak for you, but I guess it would be a whole 
different thing. This comes down to the efficacy of marketing 
tactics, where do you reach kids, particularly, where do you 
reach their parents and how do you do that kind of thing. Does 
that help answer your question? Does that help answer----
    Mr. Sawyer. It does. Thank you, Madam Chair.
    Mrs. Wilson. Do you have further questions, Mr. Cox?
    Mr. Cox. Yes, just to pick up with Dr. Vereen on this point 
of who is influencing whom to do what. If we have a government 
message, which we do here, I guess my hope would be that we 
would label it as such, that there wouldn't be any question 
that it is a government message.
    Mr. Franks says at CBS they don't need the government's 
help in figuring out socially responsible programs, certainly 
not in any drug message they can do that on their own. So if it 
is a matter of sticking it in the program, we then follow our 
original premise that we would want government content to be 
labeled as such. Do you not trust the networks to do antidrug 
programming messages on their own?
    Mr. Vereen. They have been doing a fabulous job, but as I 
pointed out earlier, there was a 30 percent decrease in the 
PSAs that were being run. So we wanted to change that.
    Mr. Cox. But you could buy those.
    Mr. Vereen. And that is what we are doing. We are buying 
the time to be able to air those.
    Mr. Cox. Then you go one step further and leverage what you 
are buying with influence on the programming itself.
    Mr. Vereen. Because the science tells us that in order for 
the message to get into these kids, it is not just the ads. It 
has to be the television. It has to be the Internet. It has to 
be programs in the community.
    Mr. Cox. Can't we go beyond that and say that is true about 
more than drug use?
    Mr. Vereen. Yes, there are other health issues.
    Mr. Cox. Not just other health issues, but all sorts of 
issues in the popular culture that are very much under 
discussion these days. We have had hearings in this very 
subcommittee on the topic. And of course we have a rating 
system in place that addresses itself to some of these very 
questions. Would we want the government to take its concerns in 
this area directly into the programming?
    Mr. Vereen. I can't really speak for any other area. We 
have focused only on the drug issue and the things that relate 
to it. That is all we have done.
    Mr. Cox. Are you prepared, as a result of the discussion 
that's occurred thus far in the public, to pursue the purchase 
of PSAs and withdraw from the influence of the programming 
itself as a government agency?
    Mr. Vereen. I can say this, that it would really make the 
effort that we have put forth to deal with the prevention of 
drug abuse in this country by kids, it would really harm the 
effort.
    Mr. Cox. That would be true only if the networks stopped 
doing it. The question is whether Mr. Franks is telling us the 
straight story when he says that CBS doesn't need the 
government to tell them how to do this.
    Mr. Vereen. Well, actually, we don't tell them how to do 
it. We provide them information and they----
    Mr. Cox. Let me ask Mr. Franks. Is it the case that not 
only you can figure it out on your own, but also you would do 
it on your own?
    Mr. Franks. In fact, we didn't commission any of these 
scripts to meet the ONDCP match. We saw that they were coming 
in the pipeline and then seized on them. Frankly, one of the 
reasons that we thought long and hard about participating in 
this program in the first place was that we would end up sort 
of exactly where we are today, with a controversy about whether 
or not we were giving full value, or whether it was a fair 
bargain with the government, and we were afraid that there 
would be no way for us to--it would seem somehow that we were 
overcharging or double-billing, and frankly, that is part of 
where we are today, and it is part of our frustration.
    It partly stems from the Congress having said to the 
agency, you know, go out and do a buy-one-get-one-free program. 
It is not a marketplace rate. And so, it then sets us all off 
in a scramble as to how best to do that, and sets up an 
inevitable controversy about why are you paying for something 
that the networks were going to do anyway. Or are you getting 
fair value for the taxpayer's dollar. It is not a position that 
we are very happy being in the middle of.
    Mr. Cox. I asked Mr. Corn-Revere a moment ago what we 
should do on the specific question----
    Mr. Franks. We sell the government advertising time, you 
know, recruiting, all kinds--we would be happy to sell the 
government advertising time.
    Mr. Cox. Do you view the current program as essentially a 
mandate to sell the government advertising----
    Mr. Franks. We feel much more mandated by the notion of 
what might happen, how we might be viewed by the public if we 
weren't cooperating in an area in which there is an 
overwhelming national consensus. We too will have to make a 
decision in May about how we want to proceed going forward. We 
are not very happy about having been drawn into this particular 
controversy.
    Mr. Cox. I appreciate it. Thank you, Madam Chair.
    Mrs. Wilson. Mr. Markey.
    Mr. Markey. Thank you. Thank you very much. Again, I am 
going to do a full disclosure here since I do have a 
governmental interest. My wife has been a public health service 
doctor for 18 years. So I definitely have a bias in terms of 
insuring that information, which is what public health service 
doctors do. They are not surgeons. They are not internists. 
They get information into people's hands. They make sure that 
everyone knows what it is that they have to do. And so on the 
one hand, I guess, you have got kind of mandatory programs 
where we want to make sure every child gets all those 
inoculations. All these things we have up on our arm come from 
Federal programs to make sure children get protected against 
bad things that can happen to them physically. Here, though, we 
have a program that isn't mandated. It is all voluntary, all 
voluntary. But we know, of course, the mind can be just as 
diseased as the body, and we know that if you get a child early 
enough, that you can hopefully build in the same kind of 
preventative attitudes mentally as we try to build in through 
drugs physically.
    So I am really actually a little bit troubled by this whole 
hearing because I am not sure that we haven't been running in 
least in part a program whereby networks have been able to get 
something for nothing because we can't have it both ways here. 
Either they were influenced and as a result we have this 
dramatic increase or they weren't influenced. And we don't have 
a problem.
    Mr. Franks. No good deed goes unpunished.
    Mr. Markey. It is kind of, you know, a waste fraud and 
abuse part of this. It is like a welfare. There is a food stamp 
issue here. We are handing out food stamps to people who may or 
may not merit it.
    Mr. Franks. It is one of the reasons why we overdelivered--
why we sought to overdeliver in the first season because we 
were trying--precisely trying to avoid the suggestion that we 
were somehow bilking the government. The fact that we 
overdelivered did not show up in the Salon.com articles.
    Mr. Wallau. Let me just say to the question of what the 
government and the taxpayers got for their money, and ABC--I 
can't speak for everybody else because I don't know the 
figures--for the $39 million that was spent in the first 15 
months on ABC, you have got the $39 million which you bought so 
you didn't get anything for that except value. But you have $34 
million of free time, more than double our previous PSA 
commitment that made a significant, I believe, impact, forget 
the programming. We were going to do that programming anyway. 
We can talk about that however we want. We didn't do that 
programming in order to qualify it for this match. We submitted 
it afterwards, because the rules said you could take strong 
programming like that, which is powerful and has influence on 
people.
    Mr. Markey. That show on ``The Practice,'' by the way, I 
saw it in its entirety when it ran. It was really one of the 
greatest programs I have seen.
    Mr. Wallau. The point I am trying to make is that the 
proposition that you have before you and we have before us and 
trying to figure out how to participate in this program going 
forward, we went after it in big numbers. You saw--$39 million 
is a lot of--it may not be big in the $4 billion revenue stream 
that we get, but maybe in that big picture, peanuts as 
previously described, but we went after that because we felt 
strongly that we wanted to have a PSA, would take up our PSA 
commitment.
    Here is a way to take up our PSA commitment by tens of 
millions of dollars, $34 million. We actually didn't think we 
would go that high. We overshot it. We thought we would be 
closer with the balance of a programming match, but we wound 
up, to Marty's point, overdelivered.
    So we went higher on PSAs, we went higher on programming. 
We overdelivered on both. The taxpayers got $34 million of 
public service advertisements that had impact, and that is the 
proposition. Is the $4 million in change or programming match 
that we had in that, that we would have done anyway, that we 
got for--essentially we got for nothing. That is part of the 
overall proposition. I can't speak for ourselves. I am sorry, I 
can't speak for others. I can say for ourselves we were willing 
to do in the second year a one-for-one, no-programming, PSA 
for--PSA match, and we have for $18.5 million. Still a lot of 
money. But that may not be true for everybody else. What you 
have to look at is the overall proposition for the network. Is 
the revenue received in combination with the PSA time that has 
to be taken out of sale, no longer produce revenue, in 
combination with what you get as a programming match? Is that 
an appealing enough proposition to combine your economic 
interest with your pro bono, your public service interest, does 
that make sense, and every network has to make that decision 
for themselves.
    Mr. Markey. Do you agree with Dr. Vereen that it is a much 
more powerful message to have an antidrug message coming from 
the mouth of a character respected by teenagers, adolescents? 
Do you agree with that?
    Mr. Wallau. I defer to Dr. Vereen's history in the 
business. I think people identify with programming more than 
they do with commercials, yes.
    Mr. Markey. Do you agree that it is more powerful when it 
does come out of the mouths of a character?
    Mr. Franks. With all due respect to my friends at ABC, 
there are an awful lot of people that watch the Super Bowl for 
the commercials. I think----
    Mr. Markey. Not in St. Louis.
    Mr. Franks. You are not going to catch me saying that 
commercials, particularly--some of the historic ad council 
spot, this is your brain, this is your brain on drugs, I am not 
sure that that isn't pretty darn effective stuff.
    Mr. Markey. I am talking about a child. In terms of 
influencing a child that having a character who is----
    Mr. Franks. It is certainly effective. Whether it is more 
effective, I am not qualified.
    Mr. Markey. Would you accept the expert opinion of Dr. 
Vereen and public health service?
    Mr. Franks. Happily.
    Mr. Markey. So do you consider this a good program?
    Mr. Wallau. It was a good program from our point of view. 
It coincided at a time when we thought we wanted to take up our 
public service commitment. It allowed us to do that and get 
some revenue at the same time as we got up to a certain point 
that we felt comfortable with in terms of public service. So 
from our point of view, it was a good program. We wanted to 
participate. We aggressively participated.
    Mr. Markey. Do you think it is a good program?
    Mr. Franks. Yes. I think anything that makes progress on 
drug abuse is a good program. Clearly in its--somehow or other, 
we are here today not because everybody thinks that it has been 
a wonderful success and, you know, with all due respect, I 
would rather be somewhere else this afternoon.
    Mr. Markey. Mr. Loeb, do you think it is a good program?
    Mr. Loeb. Yes, sir.
    Mr. Markey. You do?
    Mr. Loeb. Could I add one thing that maybe will help. The 
real issue is implementation. As I understand it--I don't know 
the full fact pattern here, but what I understand was that 
there was a mandate to basically do a two-for-one match in the 
upfront. So given that, the agency, which I know is mercury at 
the time, or whatever goes back to the networks and say they 
want one-for-one in the face of the hottest advertising market 
in the history.
    Mr. Wallau. That is just not so. That is one of the real 
inaccuracies that is out there, at least--I can't speak for 
anybody else, but the process was, in no way, what was 
described in that Salon.com article, which we could go through 
all the inaccuracies in that which are staggering. But the one 
thing that is the most offensive is that what happened was 
there was a process between the networks and ONDCP, in which 
the networks said we don't like that one-for-one match. Let's 
work out another way where we can use some money, but we can 
get some credit for programming. Just didn't happen. 
Absolutely, absolutely, categorically did not happen.
    Mr. Markey. You agree with that?
    Mr. Franks. Yes. If we are going to go through the 
Salon.com article, I hope you can all be here till the end of 
the week.
    Mr. Wallau. That never happened. What happened was there 
was a proposition, a set of guidelines put out by the ONDCP and 
their agency the first year which was Zenith Media, and we 
looked at the guidelines and we decided whether we wanted to 
participate, and we got into a negotiation with the agency, not 
with ONDCP, but the agency representing them. There was never 
any change in that. That stayed the same way from day one. 
There was no conspiracy with the five station networks, to get 
the--that was in place from day one, didn't change, changed the 
second year in ways that we described. But there was nothing 
where the networks came and said, you know what, guys, you are 
not going to get one-for-one. You have got to put some 
programming match into it to make it palatable for us. Didn't 
happen.
    Mr. Markey. Let me ask you this. On a scale of 10, with 10 
being some great challenge to the constitutional rights of the 
networks to be able to retain their first amendment rights of 
free speech, where would you put this as a controversy?
    Mr. Wallau. I can only speak for ABC. This is a zero 
because we did not--none of the programming that we have in the 
match that is part of the public record, none of it was done, 
none of the content that we aired was changed because of a 
financial incentive from the ONDCP, none.
    Mr. Markey. Where would you put it, Mr. Loeb?
    Mr. Loeb. I would put it as zero as well.
    Mr. Markey. Mr. Corn-Revere, in the totality of all the 
challenges of the first amendment, where would you put this?
    Mr. Corn-Revere. I don't know that I could put this on a 
numerical scale, but I think----
    Mr. Markey. Let me move on. Mr. Franks?
    Mr. Franks. As I said----
    Mr. Markey. You have got to cooperate.
    Mr. Franks. He makes the rules. As I said in my testimony, 
it doesn't make my list. The list of threats, it is not on 
there.
    Mr. Markey. Thank you. Mr. Corn-Revere, I am sorry.
    Mr. Corn-Revere. I think I just addressed this in the same 
terms that you raised when you mentioned that the FCC prohibits 
host selling on programs for a good reason. The judgment by the 
FCC is that the American public deserves to know who is the 
puppeteer behind the host. I think it is equally true when the 
government is the puppeteer as when it is someone placing a 
product.
    Mr. Markey. If you understand, Mr. Corn-Revere, the reason 
we had hearings on that in the 1950's was that we didn't think 
the host should be promoting that every child should have a 
huge glass of Bosco every day, or should be buying dangerous 
toys that the host is--we never had hearings saying that the 
rest of the program with Big Brother Bob Emory each day at 
noontime, when I came home as every other child in 
Massachusetts, for a bowl of tomato bisque and a peanut butter 
sandwich with our mom who was home in the 1950's when they were 
telling us to engage in good behavior. Big Brother, there were 
never any hearings, and no mom, no dad ever complained about it 
because it was reinforcing what they were hearing at home.
    I think Mr. Cox was raising a good point, differentiating, 
you know, the benign nature of what really we are talking about 
in terms of how parents, how our society would be viewing what 
the government is trying to achieve, which is a public health 
service message most effectively delivered to the most 
vulnerable audience in a way that didn't compromise the first 
amendment rights of the broadcasters who we all want to 
protect, but working out some message by which there could be a 
cooperative relationship that advances that goal, so that we do 
deal now with a science that was in its nascent form when I was 
a kid but now is more profoundly understood in terms of the 
impact it can have on children in our society. I thank you.
    Mrs. Wilson. I just have a couple of final questions, one 
for Mr. Wallau. You had a slightly different experience than 
Mr. Franks with respect to his request for previewing of 
scripts, and then my colleague, Mr. Cox pointed out the 
difference in the budget. And maybe this is peanuts, but if I 
were the guys that had that account, I would kind of be upset 
that it got cut in half if I am the sales guy for this network. 
Straight question, straight answer. If you don't want to 
answer, that is fine too. Do you feel that you got punished for 
taking the position you did about previewing scripts?
    Mr. Wallau. No. Because I think the intent of the ONDCP is 
to get as many of its PSA messages out as possible. So it is 
counterproductive for them to take down a network who is 
willing to put out more PSAs, especially when we are willing to 
do it on a--a one-for-one, PSA-only match. It seems 
counterproductive to me that the people who run, and I think 
sincerely are trying to do the right thing at the ONDCP, would 
punish us.
    This thing that is--that I am trying to get across is that 
we, in a sense, by doing this financially, are punishing 
ourselves. This is done in a financial detriment to us, so that 
the more money they take--I am sorry, the more money they buy 
in our network, the more it costs our network. I am not sure 
that is an equation I have articulated as well as I can. So the 
negotiation that came out at $18.5 million net for this season 
was one negotiated for a number of reasons, and it had only to 
do with the television buy. It didn't have to do with a number 
of other components that were in the $39 million buy. There was 
not an Internet component to it. Their budget was cut. There 
are a number of other factors, and I really don't believe we 
suffered in the amount of money that was bought by the agency 
on our air.
    Mrs. Wilson. Thank you. I want to thank all of you for 
coming today. This has been--while this may not rate above a 1 
on the scale of first amendment issues that you have to deal 
with, and this committee has to deal with, it has, nonetheless, 
raised and in many ways, answered some interesting questions. 
Others still remain as questions for me. Probably the central 
one being, okay, was this something for nothing, because you do 
it anyway on the content of the programming, or was it 
influencing in some broader context the contents of the 
programming that would be offered, so that it would qualify for 
the credit, because you can't have--only my mother could have 
it both ways.
    And I think that is a legitimate and still-open question. 
The other question that still lingers in my mind is, Mr. 
Franks, you use a phrase that is also one of my husband's 
favorites, which is ``no good deed goes unpunished.'' That then 
raises the question, if you are paid for a good deed, is it 
either a waste of money or does the deed, in some way, become 
tainted because it is no longer a voluntary good deed. And I 
could come up with answers to that question. I really only pose 
it in a rhetorical way because it does raise that question for 
those in public life or in corporate public life who are trying 
to do the right thing. And I think that that is a question 
still on the table.
    I was not around in the 1950's, but I think Mr. Markey made 
a good point, which is ultimately the question here, who is the 
puppeteer, and if the puppeteer is the U.S. Government, I 
think, as a parent and as an occasional watcher of television, 
I would like to know that. And I am glad that the networks have 
made the decisions they have made ultimately and that the 
Office of Drug Control Policy has made its decision with 
respect to the previewing of scripts, so that that bright line 
can remain a much brighter line. And I thank all of you for 
your time for giving up your vacation from your family and for 
spending the time with us today. The hearing is concluded and 
the subcommittee stands adjourned.
    [Whereupon, at 4:45 p.m., the subcommittee was adjourned.]

                                 The New York Times
                                               New York, NY
                                                   February 8, 2000
Congressman W.J. Billy Tauzin
 Chairman
Committee On Commerce
House Subcommittee on Telecommunications, Trade and Consumer Protection
2183 Rayburn House Office Building
Washington, D.C. 20515-6155
    Dear Mr. Chairman: The purpose of this letter is to clarify the 
relationship of The New York Times education efforts with the National 
Youth Anti-Drug Media Campaign of the Office of National Drug Control 
Policy,
    The guiding principle in all we do, including the preparation of 
our Anti-Drug Educator's Guide, is to safeguard The Times's editorial 
integrity. This means that New York Times Journalists and Editorial 
Board members we're not involved in writing, reviewing or editing the 
Guide.
    The Educator's Guide, a product of our Circulation Department, 
encourages the use of The Times in schools and helps serve the needs of 
educators. This is very separate from the ONDCP ads and pro bono match 
with our Advertising Department.
    Therefore, to set the public record straight, there are some 
additional specific points we would like the Subcommittee to know about 
the Guide:
NYT Editorial Integrity
 The Educator's Guide contains an introduction, lessons and a 
        list of resources written by an outside education expert, and 
        reviewed by other outside education experts.
 The Guide also includes reprints of previously published NYT 
        articles. Obviously these articles, because they are reprints, 
        could not have been influenced or reviewed by any outside 
        agency, government or otherwise.
NYT Business-Side Program
 The Guide is purely a program from the business-side of the 
        newspaper.
 The Guide is the Circulation Department's equivalent of the 
        Advertising Department's advertorial, paid promotional content 
        written by outside writers separate from our news-side. All 
        advertorials include a highly-visible disclaimer that the NYT 
        news-side was not involved in its content. The purpose of the 
        disclaimer is to make sure all our readers know they are 
        reading advertising copy.
 In the future, and as a result of the public misunderstandings 
        about this Guide, all NYT business-side educational material 
        will include a similar highly-visible disclaimer.
NYT Leadership Role as Good Corporate Citizen
 We view the Educator's Guide an one example of the NYT 
        business-side's long history of supporting public service and 
        educational messages.
    We hope this clarifies the point that The Times's news content is 
totally independent of the Office of National Drug Control Policy's 
programs and its media campaign.
    Thank you, Mr. Chairman, for your time and attention.
            Sincerely,
                                     Scott H. Heekin-Canedy
                                 Senior Vice President, Circulation
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