J$P Instant Transcript! Could Air America be violating federal law? The Factor investigates.

From The O'Reilly Factor, February 22 2006:

BILL O'REILLY [FOX NEWS]: In the Factor investigation segment tonight, we've been looking at the far-left Air America radio network, along with blogger Brian Maloney at Radio Equalizer. The Factor's compiled information that Air America is losing so much money it can only survive by accepting donation. A source tells us that a man named Rob Glaser, the founder and CEO of RealNetworks, has been paying many of Air America's bills. And those bills are huge. This year alone Al Franken will make almost two-and-a-half million dollars. He and his staff account for more than 50% of Air America's entire payroll. But apparently even Glaser can't afford to keep up with the bills. And now an outfit called Democracy Alliance, financed in part by left-wing billionaires George Soros and Peter Lewis, is reportedly going to funnel eight million bucks to Air America. That bailout will keep the network on the air through election day, and that's what could be the problem. Franken is set to run for the Senate in Minnesota, and if he uses money from his big salary in the race, some believe that might be a campaign violation. We're not sure because this is very complicated. But joining us now from Washington, Cleta Mitchell, an attorney who specializes in campaign finance law. All right, let's deal with this Democracy Alliance first, Ms Mitchell. This is a bunch of guys--Soros, Lewis, Rob Reiner, Rob Stein, Andrew Rappaport, all rich far-left guys. Now they have, and we have the data, told Air America they're going to give them eight million dollars to keep them afloat until November, so they can hammer home liberal candidates. Is that a violation?

CLETA MITCHELL: Well it could be. Now what they're claiming, I'm sure, is that they're a media entity and therefore entitled to the media exemption. But don't you love the fact that these laws, like these campaign finance laws, liberals love to pass, then the liberals and their wealthy donors spend all their time figuring out how to circumvent them? But the original campaign finance laws passed in the early '70s are really an anachronism, because at the time they were passed there were three networks and no internet. But the law says--

O'REILLY: OK, but basically, I don't want to get too complicated, but basically what you have here is a radio network that's failing financially, Air America. They can't support itself in the marketplace. It's supposed to be for-profit, they're losing millions of dollars. A far-left outfit comes in, Democracy Alliance. I don't even know what that is. They don't even have a phone number or an address, all right? They are paying the bills of Air America, or say they will, according to internal documents, OK?

MITCHELL: That's right.

O'REILLY: That's got to be a violation of something, is it not? They're not stockholders.

MITCHELL: No they're not. And what this really means is that Air America, they're turning Air America into what ought to be a regulated political committee, that's subject to the--

O'REILLY: Right, right. It's basically they bought 40 stations or whatever they're on, radio stations, to get across a propaganda point of view, under the guise of competing in the marketplace.

MITCHELL: Right.

O'REILLY: All right. Now Franken, Stuart Smalley. The guy moves up to Minneapolis and he's going to run for the Senate, so they say. He's making way more money than the market would dictate, all right? Nobody would pay a guy two-and-a-half million dollars when you're losing money all over the place, all right?

MITCHELL: Right.

O'REILLY: Now he, according to insiders, is going to borrow against his salary to launch his Senate run. I mean--

MITCHELL: Well first of all, he can only borrow from a bank. And he can only borrow if it is commercially reasonable. He cannot borrow from his wealthy friends.

O'REILLY: No no, but he's going to get paid this money. And he puts it in the bank. Obviously he put it in a bank. And then he runs, and he's going to borrow, his campaign--they all do that not just him. They borrow against themselves and their campaign will pay it back when they raise the money. But it's almost like George Soros and Lewis coming in with a lot of dough and handing it to him, is it not?

MITCHELL: It's money laundering. It's money laundering. It's--

O'REILLY: Well I'm not going to make that accusation. I mean, it looks that way; we're not for sure. We don't know yet.

MITCHELL: If he takes money that, from these wealthy donors, and converts that to his own, supposedly his own money, so he can put it into his campaign--

O'REILLY: But it is his own money, because he's getting paid a salary. They're paying Air America, and Air America's paying him.

MITCHELL: There are FEC advisory opinions going back for many years which address this issue, which preclude payments to a candidate in the guise of salary, when it really isn't--

O'REILLY: But he isn't an announced candidate yet; that's the problem. What we're going to do--

MITCHELL: Well, it goes back for two years.

O'REILLY: What we're--it goes back two years; that's interesting. All right, we're going to ask the FCC to look into Air America; that's what we're going to do.

MITCHELL: I think that's a good idea.

O'REILLY: And we appreciate your coming on, counselor. Thanks very much.

MITCHELL: All right, thank you.