IAB Gave Thousands to Influence Key Lawmakers

The Interactive Advertising Bureau is putting its money where its mouth is. The little known political action committee, run by the online ad industry’s best known trade group, gave thousands of dollars to key U.S. lawmakers last year and is sitting on thousands more it could use to influence them in the future. Since its establishment in 2008, the IAB PAC has generated contributions from a bevy of industry veterans, from founders of some of its biggest member firms to top online ad sales executives — all of whom have made online advertising their bread and butter.

It’s all in the hopes of influencing legislators who sit on congressional committees that could decide the future of things like behavioral advertising, Federal Trade Commission authority, or the creation of a new agency with new power over financial advertisers.

“A PAC remains the most effective and efficient way for our industry to channel contributions and achieve impact in the Congress,” wrote IAB President Randall Rothenberg in his annual report to members in 2007. “With well-placed contributions to the right candidates in the right districts, even a small PAC can make a difference.”

In October, the IAB PAC hosted a fundraising event for Congressman Chris Murphy, a Connecticut Democrat who sits on the House Subcommittee on Communications, Technology, and the Internet. The PAC also gave his reelection campaign committee $1,000. The subcommittee — home to all other House members who received money from the IAB PAC in 2009 — met multiple times last year to discuss concerns regarding privacy implications of behavioral ad targeting and online data collection, and the potential for new comprehensive privacy legislation that would deal with such issues.

Indeed, Subcommittee Chairman Rick Boucher hoped to propose that privacy bill late last year, and indicated again earlier this month in Beltway pub The Hill that he would do so “in the near future.” The IAB PAC also gave $1,000 to the Virginia Democrat’s reelection campaign last year. But, along with helping fund his reelection bid, the IAB is taking a tough love approach to the powerful congressman.

“Why does Rep. Boucher want to imprison the Internet economy?” asked Rothenberg in his own January 11 op-ed in The Hill. He suggested the would-be bill “promises to erode the burgeoning field of e-commerce, harm ad-supported news and entertainment media, and destroy the tens of thousands of small businesses in all 50 states that have come to depend on interactive technologies for marketing, retailing, and customer connectivity.”

Also on the IAB PAC’s House Internet Subcommittee donation list: Michigan Republican Mike Rogers ($750) and Illinois Republican John Shimkus ($1,000).

Meanwhile, U.S. Senate recipients of IAB cash represent a whole other can of worms the organization hopes to avoid. Democratic Senators Charles Schumer of New York and Robert Menendez of New Jersey — both of whom got $1,000 from IAB PAC last year — have supported the creation of new agencies intended to protect consumers against financial services fraud or predatory lending; and could affect financial services advertisers. Both Schumer and Menendez sit on the Senate Finance and Banking Committees, which could play important roles in creation of a new consumer financial protection body.

Perhaps more threatening to online advertisers, the bill associated with the most noted of these proposed agencies — the Consumer Financial Protection Agency — has included language that could award the Federal Trade Commission more power. This is the IAB’s most recent bÊte noire, as indicated in a letter sent this week to the Senate Commerce Committee and signed by the IAB, along with several other business trade groups. The groups warned that if the FTC is given additional enforcement and penalty-making authority, “the FTC could essentially act as an unelected legislature governing industries and sectors across the economy.”

On June 17, Senator Jay Rockefeller, Democrat from West Virginia and Senate Commerce Committee chairman, put out a press release stating his support for increased FTC power. On June 25, according to a Federal Election Commission report filed by the IAB PAC, the action committee contributed $1,000 to the Friends of Jay Rockefeller PAC.

“We hope as many of you as possible will take the leap with us and help IAB become a larger presence in our nation’s capital,” wrote Rothenberg in his 2007 President’s Report. In it, he included a photo of the personal check for $5,000 (the most allowed by law) he’d written to help seed the PAC. Along with him were online ad industry heavyweights like Dave Morgan, CEO of Simulmedia and founder of AOL-owned behavioral ad outfit Tacoda, who has given $10,000 in the last two years.

IAB Founding Chairman Rich LeFurgy, now General Partner at Archer Advisors, also made two payments of $5,000 each in 2008 and 2009 to IAB PAC. Also among the PAC’s early donors were AOL CEO and former Google ad exec Tim Armstrong ($5,000 in 2008), 24/7 Real Media Chairman and Founder David Moore ($5,000 in 2008), and NBC Universal SVP Digital Media Sales Peter Naylor ($2,500).

As of its most recent FEC filing, the PAC has just under $50,000 on hand.

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