Foes See Lawyer's Civil Rights Agenda in
Attack on MCI
By Paul Farhi and Mike Mills
Washington Post Staff Writers
Wednesday, February 11, 1998; Page A01
By his own reckoning, David Honig is simply fighting the good fight, an
outsider tilting against America's biggest media and telecommunications
companies to make them more accountable to minorities.
But critics of the 48-year-old communications lawyer and civil rights
advocate have their own view: that Honig is a clever opportunist who has
repeatedly exploited corporate mergermania to extract multimillion-dollar
settlements for clients that include the NAACP and Jesse L. Jackson's
Rainbow/PUSH Coalition.
There's no question that Honig is effective. Over the years, he has filed
papers at the Federal Communications Commission challenging dozens of
TV and radio station deals involving Fox Broadcasting Co., CBS Inc.,
Evergreen Broadcasting Corp., Viacom Inc., Infinity Broadcasting Corp.
and others.
Rather than fight lengthy legal battles, the targets of Honig's broadsides
often have agreed to settle. The settlements include financial commitments
to underwrite minority training programs, provide media internships and
scholarships for black and Hispanic students, stage job fairs and offer
advertising discounts -- as well as to pay Honig's own fees of $235 an
hour plus expenses.
"The system is set up in a way that rewards people for making these
filings," said a Honig foe, who asked not to be identified. "The only people
who would spend the time and effort to proceed are those who see a
payoff at the end of the line."
Now Honig is taking aim at his biggest target ever: WorldCom Inc.'s
proposed $37 billion acquisition of MCI Communications Corp. At a
news briefing last week in New York, Honig was standing in the wings as
Jackson argued that the biggest corporate merger in history should not be
allowed to proceed.
Turning up the pressure, Honig also has orchestrated a new advertising
campaign underwritten by Rainbow/PUSH and MCI rivals Bell Atlantic
Corp. and GTE Corp. One draft print ad compares MCI and WorldCom
to the outlaws Bonnie and Clyde: "America needs public hearings and
more time to examine the real impact of this merger," it says.
The deal, according to Honig's legal argument, would fail the FCC's test of
being in the "public interest" because the newly merged company would
serve mainly big-ticket business customers and ignore the needs of
lower-income consumers. He and Jackson point to WorldCom's all-white,
all-male board of directors and say the merger would frustrate the FCC's
goals of fostering minority involvement in the telecommunications industry.
Those claims are vintage Honig, according to the small circle of
Washington communications lawyers who have watched him for years.
Since becoming a communications law specialist 15 year ago, Honig has
raised similar issues in many media deals to come before the FCC.
An FCC hearing on the MCI-WorldCom merger could tie the companies
up for years in legal proceedings, experts on lobbying the agency say. "If
they set this for an evidentiary hearing, it becomes a death knell" for the
deal, said one lawyer for a local telephone company allied with Honig. "A
commercial transaction doesn't survive that long."
Whether or not his arguments have merit, Honig's method is akin to placing
an obstacle in the path of a speeding truck and forcing the driver to
negotiate its removal.
The prospect of protracted hearings, for example, led Fox last year to
settle a long-running challenge by Honig and the NAACP to Rupert
Murdoch's purchase of the original six Fox TV stations. They alleged the
acquisition had violated a federal law against foreign ownership of stations.
The FCC ultimately ruled that Murdoch's Australian company, News
Corp., had technically violated the rules, but they imposed only minor
penalties on Fox.
In return for Honig's pledge not to appeal that decision, Fox last February
agreed to contribute more than $2 million to Honig-designated recipients.
The agreement included $1.4 million in scholarships to the Foundation for
Minority Interests in Media Inc., a New York-based organization that
provides training programs. It also included $640,000 for "Benjamin L.
Hooks Fellowships" at New York University. Hooks is a former NAACP
president.
Honig's share of the settlement was $300,000 in legal fees from Fox.
A Honig-led filing against Infinity Broadcasting's purchase of Washington
radio station WPGC-FM in 1995 prompted Infinity (now owned by CBS)
to contribute another $2 million to minority causes. Honig argued that
Infinity, the employer of "shock jock" Howard Stern, was unfit to hold
WPGC's license because Stern had repeatedly made racist remarks on
other stations.
The settlement money went to create a radio broadcasting school in the
District called the African American Media Incubator. "We are a living
testimony to David's efforts," said Pearl Murphy, the school's executive
director. She said many of the school's 30 minority trainees have gone on
to careers in radio.
Similarly, Honig wrested $2 million last year on behalf of Jackson's
Rainbow/PUSH Coalition from Viacom, Evergreen and Chancellor
Broadcasting Inc. to fund public education programs and broadcast
training for minorities in the Washington area. These commitments were in
exchange for settling Honig's case against Viacom, which he accused of
reneging on a promise to explore selling its four Washington radio stations
to minorities. Honig received $52,600 in legal fees in that case.
The settlement prompted a source close to Evergreen to comment bitterly,
"We took care of the Jesse thing. All you have to do is pay them off."
A driven man whose somewhat rumpled appearance makes him stand out
among the dapper members of the communications bar, Honig makes no
apologies for his tactics. He cites government statistics showing that
minorities own less than 3 percent of all commercial radio and TV licenses,
and only 0.5 percent of all telecommunications companies. Honig defines
his mission as being the conscience of an industry that uses public airwaves
in exchange for a promise to serve the public interest.
"It's only because of organizations such as the Rainbow/PUSH Coalition
that the public interest is advanced," he says. "That is how [federal law]
intended it. The [law] provides that representatives of the public . . . bring
these issues to the commission."
Honig became committed to civil rights causes at the age of 15, after
hearing the Rev. Martin Luther King Jr. speak at his church. A former
communications teacher at Howard University, Honig, who is white,
usually works solo, answering his own phone in his small office in an
apartment building on upper 16th Street NW. He still works 18-hour days,
despite surviving a heart attack at the age of 42. His only apparent
indulgences are the three vintage Checker cabs he owns.
Those who have opposed Honig rarely question his motivations, but they
do question his methods. In the absence of any federal programs that
explicitly improve the presence of minorities in the media, they argue,
Honig is essentially shifting that burden onto the major media
conglomerates.
"He's almost like Robin Hood," says lawyer Steve Lerman, who
represented Infinity in the WPGC case. Martin Franks, a CBS executive,
agrees that Honig can be an irritant but quickly adds: "Irritants inside
oysters often create beautiful pearls."
Nobody accuses Honig of engaging in "greenmail" -- a practice outlawed
in 1989 in which lawyers would simply file complaints against pending
media deals at the FCC, only to extract cash payments from the
companies so they would go away. But critics say he sometimes comes
close, by erecting obstacles that convince companies to provide funding for
new nonprofit programs to help minorities find their way in a booming
market.
Honig's track record isn't perfect, of course. The FCC's files are full of
rulings rejecting Honig's claims on behalf of the NAACP, Rainbow/PUSH,
the League of United Latin American Citizens and other organizations,
although he often appeals those decisions. Honig points out that he has
invested as many as eight years in some cases without earning a cent for
himself.
But Honig has higher hopes for the WorldCom-MCI deal, which extends
his crusade beyond the broadcast realm and into the world of telephones
and the Internet.
Phone companies, he points out, use the public airwaves just as
broadcasters and cable companies do, and increasingly transmit video
signals over the Internet. Therefore, he said, the FCC should make phone
companies comply with the same equal employment opportunity rules that
broadcasters must obey, and should be forced to serve customers in all
areas equally.
"I think their arguments are misplaced," Andrew Lipman, who represents
WorldCom, said of the arguments made by Jackson and Honig. "I think it's
telling that these concerns are hypothetical and speculative. Nobody has
pointed to a single example of where WorldCom or MCI have sought to
exclude certain customer bases, nor would it make any economic sense for
them to do so."
c Copyright 1998 The Washington Post Company
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