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MINORITY OWNED BROADCAST STATIONS

A law passed by the U.S. Congress gives 100 million dollar tax breaks to minority owned TV and radio stations but there is a loophole. Non-minority capitalists may artificially set up a minority person as president and CEO of particular broadcast stations, yet then the law allows the non-minority capitalists to buy out the minority figurehead after just one year! Making the matter worse, the new owners, typically non-minorities, get to continue receiving the huge tax breaks from the U.S. government!

Furthermore, to sweeten the deal the minority partner may only have to come up with a few hundred dollars to buy a multi-million dollar broadcasting facility. When a Federal Communications Commission (FCC) official once tried to stop this abuse, he was branded a racist by the news media! Essentially he was run out of town, so to speak, and most everyone in Congress abandoned him.

Later, a Democratic controlled Congress went even further and passed another law banning any FCC official from ever again intervening in these type transactions! Congress' good intentions can create perverse incentives to take advantage of tax loopholes.

Taxpayers are picking up the tab for these tax breaks and, as of 1995, so far over 200 one hundred million dollar tax breaks have been doled out to so-called minority owned broadcast stations.

SUPPLEMENTAL SOURCE: ABC-TV NEWS 3/23/95

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