ProPublica: As Hollywood Lobbied State Department, It Built Free Home Theaters for U.S. Embassies

by Robert Faturechi ProPublica, July 2, 2015, 5:15 a.m.

This story was co-published with The Daily Beast.

Hollywood’s efforts to win political clout have always stretched across the country, from glitzy campaign fundraisers in Beverly Hills to cocktail parties with power brokers in Washington.

Last year, the film industry staked out another zone of influence: U.S. embassies. Its lobbying arm paid to renovate screening rooms in at least four overseas outposts, hoping the new theaters would help ambassadors and their foreign guests “keep U.S. cultural interests top of mind,” according to an internal email.

That was the same year that the Motion Picture Association of America, which represents the six biggest studios, reported it was lobbying the State Department on issues including piracy and online content distribution. Hollywood’s interests 2013 including its push for tougher copyright rules in the Trans-Pacific Partnership trade pact 2013 often put the industry at odds with Silicon Valley.

The only public indication of the embassy-theater initiative was a February 2015 press release from American officials in Madrid, titled “U.S. Embassy Launches State-of-the-Art Screening Room.” It credited “a generous donation” from the MPAA.

Asked about its gifts to the State Department, the lobby group declined to say how many embassies got donations or how much they were worth.

“Because film is a great ambassador for U.S. culture around the world, MPAA assisted with the upgrade of some embassy theater facilities,” said spokeswoman Kate Bedingfield. “All gifts complied with the law as well as with State Department ethics guidelines.”

Nicole Thompson, a State Department spokeswoman, said at least three embassies besides Madrid received between $20,000 and $50,000 in entertainment upgrades last year 2013 London, Paris and Rome. The revamped screening rooms, she said, aren’t intended to entertain U.S. officials, but rather to help them host screenings to promote an American industry and sow goodwill.

Thompson said the donations were proper and that all gifts to the department are reviewed to avoid even the appearance of a conflict of interest. “The department has explicit authorities to accept gifts made for its benefit or for carrying out any of its functions,” she said.

The State Department routinely accepts gifts from outside groups, Thompson said. She couldn’t provide any other examples of major gifts from groups that simultaneously lobby the agency. Thompson declined to list the items given by the MPAA or their total value, and wouldn’t say whether the group had made similar gifts in the past.

There was at least one precedent. A spokesman for Warner Bros. Entertainment said the studio helped pay for the refurbishment of the screening room at the U.S. ambassador’s home in Paris in 2011. “This donation was coordinated with the State Department and complied with all appropriate rules and regulations,” the spokesman said.

State Department policies posted online specifically permit gifts from individuals, groups or corporations for “embassy refurbishment, ” provided that the donors are vetted to ensure there’s no conflict or possible “embarrassment or harm” to the agency. The posted policies include no caps on the value of donations, nor any requirements for public disclosure of foreign or American donors. The rules also say that the donations can’t come with a promise or expectation of “any advantage or preference from the U.S. Government.”

Obtaining an advantage, albeit a nonspecific one, sounded like the goal when a Sony Pictures Entertainment official wrote to the studio’s chief executive officer, Michael Lynton, to relay a request to fund the screening rooms from Chris Dodd, the former U.S. senator who heads the MPAA. The executive writing the note 2013 Keith Weaver 2013 sought to assure the CEO that such a donation wouldn’t be improper.

“The rationale being that key Ambassadors will keep U.S. cultural interests top of mind, as they screen American movies for high level officials where they are stationed,” reads the message, included in a cache of emails hacked from Sony and which were posted online by the website WikiLeaks.

“The cost implication is estimated to be $165k (aggregate of $$$/in-kind) per embassy/per studio. Apparently, donations of this kind are permissible.”

Besides Sony, the MPAA represents Disney, Paramount, Twentieth Century Fox, Universal Studios and Warner Bros. Entertainment. The e-mails suggest that Sony executives decided against contributing to the project for budget reasons.

The MPAA has long been a powerful presence in the nation’s capital, spending $1.34 million on federal lobbying last year, according to data compiled by the Center for Responsive Politics. One of its flashier tools has been to host exclusive gatherings at its Washington screening room, two blocks from the White House, where lawmakers get to watch blockbuster films, rub elbows with celebrities, and up until several years ago, enjoy dinner 2013 a perk scuttled because of stricter rules on congressional lobbying.

Hollywood studios depend on foreign markets for much of their profit but the MPAA’s interests don’t always align with those of other major American constituencies. For example, Hollywood studios have moved some film production to Canada to cut costs. American film workers have tried to get the federal government to stop the outsourcing of jobs, but have been met with resistance from the MPAA.

The trade group has also pushed federal officials to pressure foreign governments into adopting stricter copyright laws. An MPAA-funded study found that in 2005 worldwide piracy cost American studios $6.1 billion in revenue. That number has been disputed by digital rights advocates.

For the TPP trade deal, the MPAA has discouraged the American government from exporting “fair use” protections to other countries. In a hacked message from Dodd to the U.S. Trade Representative, the MPAA chief warned that including such provisions, which in American law allow limited use of copyrighted materials without permission, would be “extremely controversial and divisive.” Digital rights activists have characterized the efforts as overzealous.

“They’re basically encouraging other countries to adopt the most draconian parts of U.S. copyright law and even to reinterpret U.S. copyright law to make it more stringent,” said Mitch Stoltz, an attorney for the Electronic Frontier Foundation. “Broadly speaking broadening copyright law harms free speech in many cases by creating a mechanism for censorship.”

The state-of-the-art screening rooms are a relatively minimal investment by Hollywood as it works to strengthen connections abroad.

This spring, the U.S. ambassador to Spain, James Costos, brought a group of foreign officials to Los Angeles for a meeting hosted by the MPAA. Among them were representatives from the Canary Islands, who came prepared to discuss filming opportunities and tax incentives for American studios in the Spanish territory. The State Department touted the trip as an opportunity to “expand bilateral trade and investment, including through ties between the entertainment industries.”

It’s not known whether the path to that particular meeting was eased by the new screening room in Madrid. At the theater’s debut in February, the ambassador’s guests were treated to a dark tale of corruption, lobbying and double-dealing in Washington 2013 the Netflix series “House of Cards.”

Related stories: For more coverage of politics and influence, read ProPublica’s previous reporting on secret political dealings by Sony, a reversal by the higher ed lobby and an imploding super PAC.

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Officially In: James Costos — From HBO to Spain

— By Domani Spero

 

On June 14, President Obama announced his intent to nominate James Costos as the next Ambassador to Spain. The WH released the following brief bio:

James Costos is Vice President of Global Licensing and Retail for Home Box Office (HBO).  Before joining HBO in 2006, he was President and CEO of Eight Cylinders, Inc., an entertainment marketing and licensing agency.  Previously, from 2002 to 2004, he was head of Promotions and Consumer Products at Revolution Studios in California.  He began his career in New York as a fashion and retail executive.  From 2001 to 2002, he was Vice President of Retail for Hermes in New York, and from 1991 to 2001, he was Vice President of Retail Operations for Tod’s in New York.  Mr. Costos currently serves on the Board of Directors of The Humane Society of the United States.

He received a B.A. from the University of Massachusetts.


According to OpenSecrets.org Mr. Costos and his partner, designer Michael Smith, raised at least $500,000 for Obama’s reelection campaign in the 2012 cycle.  In 2009, Smith was selected by the first lady to redecorate the residential quarters of the White House, and he later designed a makeover of the Oval Office.

If confirmed, Mr. Costos would replace political appointee Alan Solomont who was appointed chief of mission to the US Embassy Madrid in December 2009.  Non-career ambassadors make up 73.7% of all ambassadorial appointments to Spain since 1960.

(‘_’)


Related item:

June 14, 2013 | President Obama Announces More Key Administration Posts