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WASHINGTON — During a visit to Hollywood last month, President Obama hailed the global reach of the entertainment industry.
“Believe it or not,” he told a star-studded crowd gathered at DreamWorks Animation, the mega-studio helmed by one of his most devoted supporters, “entertainment is part of our American diplomacy.”
There is no question about Hollywood’s role in exporting American culture abroad. The president’s statement, though, was a tacit acknowledgment of the industry’s influence in Washington and beyond.
Indeed, Hollywood’s insistence on tough anti-piracy provisions is partly blamed for preventing the massive Trans-Pacific Partnership Agreement, a trade pact between the United States and 11 other Pacific Rim nations, from being finalized as planned by the end of the year.
The Obama administration’s attempt to deliver for Hollywood should be of little surprise: During the 2012 election cycle, the entertainment industry spent more than $69.7 million on political campaigns, nearly three-fourths of the largess on Democrats.
While many Americans might dismiss Tinseltown as a shallow bastion of fame, glamour and liberal causes, the entertainment industry is an economic and political powerhouse that wields considerable clout in policy discussions in Washington — from the Internet and technology to tax codes and international trade policy.
Over the past three years, the film, television and music industries have spent $328 million to influence legislation and policy in Washington, according to data compiled by the Center for Responsive Politics, a Washington nonprofit that tracks money and influence. During the past year, more than 600 lobbyists have swarmed the nation’s capital on the industry’s behalf.
After all, Hollywood is a multibillion industry that, like any other sector of the economy, aggressively protects its bottom-line interests and spends millions of dollars to help elect its political allies and millions more on lobbyists to press its agenda. Like Wall Street, the entertainment industry spends money to make money.
“Like any big company, they have a whole lot of issues in Washington,” said Bill Allison, the editorial director of the Sunlight Foundation, a Washington nonprofit that tracks the flow of money and influence in government. “They have issues relating to health care and how they take care for their employees.”
“Will there be extensions of the employer mandate? They have workplace safety issues. Of course, trade is another big issue for them. So there’s a whole host of things,” he added.
Tax breaks, piracy and … drones
During the “fiscal cliff” crisis, as Democrats and Republicans wrangled over spending and budget cuts, the industry successfully lobbied Congress for extending tax deductions worth $430 million over two years for studios that keep film and television productions on U.S. soil.
Other Hollywood’s concerns might seem more surprising — such as the industry’s interests in aviation and drones. It comes into focus when seen in the context of celebrities trying to keep paparazzi from using remote-controlled drones to launch cameras that could peer into the backyards and homes of the rich and famous.
But, without question, intellectual property is the industry’s marquee concern.
The Motion Picture Association of America said movie studios lose $6.1 billion every year because of unauthorized distribution of films, although critics say Hollywood is dramatically overstating its losses from piracy.
For all the money it spends on electioneering and lobbying, however, Hollywood doesn’t always get what it wants.
Congressional support fizzled for industry-sponsored anti-piracy measures, including the “Stop Online Piracy Act,” amid a rebellion led by consumer groups and Internet companies worried about censorship, excessively harsh penalties and giving the entertainment industry too much control over the Internet.
The defeat prompted the movie industry’s chief lobbyist, former Sen. Chris Dodd, to issue a stern warning last January as Democrats sought to retain control of the White House and the U.S. Senate.
“Those who count on, quote, Hollywood for support need to understand that this industry is watching very carefully,” said Dodd, the chief executive of the MPAA who was once among the most powerful Democrats in Congress.
“Don’t ask me to write a check for you when you think your job is at risk and then don’t pay any attention to me when my job is at stake,” he said, his wrath clearly directed at fellow Democrats.
But for all the bluster, Hollywood kept writing huge checks to finance President Obama’s reelection and the campaigns of congressional Democrats.
And the money keeps pouring in as Democrats yet again reach into the deep pockets of Hollywood in preparation for next year’s potentially epic battle for Congress.
During his pre-Thanksgiving visit to Southern California, President Obama also visited the home of former NBA star Magic Johnson, where wealthy benefactors paid between $2,500 and $15,000 to meet the president. Afterward, television mogul Haim Saban hosted Obama and the top two Democrats in Congress — Rep. Nancy Pelosi of California and Sen. Harry Reid of Nevada — for a $16,200-a-plate dinner benefitting the House Senate Victory Fund.
The next day, the president was at the home of television producer Marta Kaufman, best known for the sitcom “Friends,” for a $32,400-per-ticket fundraiser for the Democratic National Committee.
While celebrities are frequent guests at Hollywood fundraisers, many attendees are less known outside the industry but are crucial rainmakers in Hollywood and Washington.
“Certainly, there are very real world consequences for people who we wouldn’t consider celebrities — the executives, the CEOs who wouldn’t be commonly recognized — to have an interest in legislation being written by Congress,” said Sarah Bryner, research director for the Center for Responsive Politics.
“But it’s hard to track payback,” she said. “This particular industry doesn’t get a ton of what’s considered government payout — as opposed to, say, the defense industry and health care sector,” which are awarded lucrative government contracts.
But the influence can't be denied.
In his speech last month at DreamWorks, Obama hailed the studio’s chief executive, Jeffrey Katzenberg, as “a friend and supporter … whose counsel and advice I value.”
The president personally takes Katzenberg’s calls, according to a report published by Mother Jones earlier this year. Katzenberg also makes frequent visits to the White House. When disputes arose over profit sharing between China and U.S. film studios, Vice President Joe Biden intervened to secure a deal more favorable to Hollywood after consulting with Katzenberg.
And when China’s president, Xi Jinping, visited the United States two years ago, Katzenberg was given a seat next to him during a State Department luncheon. A week later, Katzenberg announced a $350 million deal to open Oriental DreamWorks.
Derek Khanna, a former staffer of the House Republican Study Committee, suggests that the delay in finalizing the Trans-Pacific Partnership Agreement is “evidence of a quid pro quo.”
In essence, he said, the film and music industries “are able to write their own international treaties.”
Khanna was fired last year after writing a memo advocating an overhaul of current copyright laws that would weaken the entertainment industry’s control.
Some speculated Rep. Marsha Blackburn, R-Tenn., whose district is near Nashville, exerted pressure on the committee to dismiss Khanna. Blackburn’s chief of staff is a former recording industry lobbyist.
Hollywood’s failure to enact tougher anti-piracy laws in the United States explains why it is aggressive pushing for tough anti-piracy language in the Trans-Pacific Partnership Agreement, which would include Japan and Australia and represent 40 percent of the world’s GDP.
Much of the negotiations are conducted in secret, but documents obtained by WikiLeaks show deep reservations over the U.S. position on intellectual property rights, particularly on pharmaceutical patents and copyright protections for music and movies. The United States is seeking harsh penalties for violations that some countries find excessive.
“What we’ve been hearing,” University of Sydney associate professor of law Kimberlee Weatherall told The Australian, the Australia’s largest national newspaper, “is the U.S. is really piling on the pressure.”