President Donald Trump and his political appointees at the Justice Department insist that the federal government’s lawsuit Monday to block AT&T from acquiring Time Warner is not retribution for CNN’s coverage of the White House. But there are good reasons to be dubious of their denials.
AT&T chief executive Randall Stephenson was adamant Monday that he won’t agree to sell CNN to placate Trump, an issue that he described as “the elephant in the room.” He said he cannot say for sure why the government sued. “But nobody should be surprised that the question keeps coming up,” he said, “because we’ve witnessed such an abrupt change in the application of antitrust law here.”
Telling the Justice Department to go to court to block a business transaction because of his personal animus toward a news organization, if proven, would constitute a clear-cut abuse of presidential power.
Stephenson said he is willing to go to court and will try to compel DOJ to turn over internal correspondence, which might expose political interference. The company’s case would be much stronger if it could establish that the opposition of the government is the result of a desire to silence a dissenting voice.
Even if a smoking gun never emerges, though, here are seven reasons to be suspicious of the administration’s motives:
1. In every other area, the Trump administration is bending over backward to boost big business.
This lawsuit is ideologically inconsistent and discordant with the rest of their agenda. The biggest critics of the merger have been hard-left liberals who oppose the concentration of corporate power, so it’s odd to see Trump’s DOJ throw in their chips with people like Al Franken, Bernie Sanders and Elizabeth Warren.
At the same moment DOJ is filing suit, for example, FCC chairman Ajit Pai is moving swiftly to get rid of net neutrality rules that were put in place during the Obama administration. This would allow Verizon to deliver content from Yahoo, which it owns, faster than it delivers content from Google or to slow down Google’s services to push customers toward its own products, for example.
Getting rid of net neutrality demonstrates the administration’s lack of broad-based concern about consumer protection.
2. The head of the antitrust division has changed his view on the issue to match the president’s.
In October 2016, two days after Trump decried the AT&T-Time Warner merger at a rally, Makan Delrahim expressed the opposite view during a television interview. “I don’t see this as a major antitrust problem,” he said. “I think these folks would have an easier route toward approval” compared with other deals.
3. The administration’s denials are full of lawyerly language that leaves wiggle room.
Asked 10 days ago about reports that DOJ told AT&T it would need to spin off CNN for the merger to go through, Trump told reporters: “I didn’t make that decision. It was made by a man who’s a very respected person, a very, very respected person. . . . I did make a comment as to what I think. . . . I do feel you should have as many news outlets as you can – especially since so many are fake.”
The head of the antitrust division who Trump was referring to, Delrahim, says he was never given instructions by the White House on how to conduct his analysis of whether the merger would be anticompetitive. “I have never been instructed by the White House on this or any other transaction under review by the antitrust division,” Delrahim said in a statement.
But one would not need to receive an explicit order from the president to cater to his preferences, and Trump admits making a comment about what he thinks.
White House spokesman Raj Shah said in a separate statement on Nov. 8 that Trump has not spoken with Attorney General Jeff Sessions about the proposed acquisition, “and no White House official was authorized to speak with the Department of Justice on this matter.”
Before being named assistant attorney general in charge of antitrust, Delrahim spent six months as a top lawyer inside the White House and managed Neil Gorsuch’s Supreme Court nomination. Did he have conversations with Trump regarding Time Warner before he got confirmed?
4. Trump has repeatedly demonstrated that he does not respect the independence of the Justice Department. Why would he prize the autonomy of the antitrust division any more than he did the FBI?
Think of all Trump’s criticisms of Sessions, his decision to fire James Comey as FBI director and his calls for Hillary Clinton to be investigated.
5. There are no precedents for this kind of lawsuit succeeding.
Until very recently, the $85 billion acquisition looked like a done deal because previous administrations, including Barack Obama’s, allowed vertical mergers that didn’t involve direct competitors. Comcast’s deal to buy NBC in 2011 was similar to this transaction, for example.
“The move by the Justice Department’s antitrust division is unusual because it challenges a deal that would combine two different kinds of companies – a telecom with a media and entertainment company. Antitrust officials are relatively untested in the courts on opposing such deals and have rarely tried to squash them,” explains The Post’s Brian Fung, who covers tech. “Even beyond the politics surrounding the case, the Justice Department may not have an airtight economic argument against the AT&T-Time Warner deal, some analysts said.”
6.The president has made no secret of his deep personal disdain for CNN.
Trump said during a fundraiser for his 2020 campaign at the Trump hotel in June that the people who work at CNN are “horrible human beings.”
He tweeted this just last week “While in the Philippines I was forced to watch @CNN, which I have not done in months, and again realized how bad, and FAKE, it is. Loser!”
Most notoriously, Trump shared a video depicting himself as a professional wrestler attacking a CNN stand-in.
“Deals like this destroy democracy,” he said at a rally last October when he was especially mad about CNN’s reporting.
The Wall Street Journal reported that two weeks ago that Trump’s son-in-law and senior aide, Jared Kushner, met with a top executive at CNN parent company Time Warner earlier this year and told him that 20 percent of the cable network’s staff should be fired because of their coverage of the 2016 election. The White House claimed Kushner was making a point and didn’t intend for the 20 percent number to be taken seriously, but the Journal said that it was within Time Warner.
7. White House officials have previously hinted that Trump might wade into the antitrust process.
“It’s all about CNN,” one source told the Financial Times earlier this month, explaining why the deal is facing scrutiny.
The New York Times reported this summer that White House advisers had discussed using the merger as a potential point of leverage to try manipulating the tenor of CNN’s coverage.
Politico reported in July, before Steve Bannon went back to Breitbart News, that the then-White House chief strategist was internally pushing the idea of blocking the merger.
The conservative Daily Caller cited “a source familiar with President Trump’s thinking” this summer to report that “the White House does not support the pending merger between CNN’s parent company Time Warner and AT&T if Jeff Zucker remains president of CNN.”
The New York Post’s Page Six, which Trump reads, ran a thinly sourced item around this time that said AT&T would look to “neutralize” Zucker, the president of CNN, if the merger went through.
— The editorial boards of several newspapers are expressing alarm about the motives behind the suit:
USA Today says it “smacks of politics”: “Ever since the Nixon administration secretly meddled in antitrust policy, both parties have tried to keep raw partisan politics out of it. Presidents appoint certain types of lawyers to head the Justice Department and Federal Trade Commission antitrust units, then leave them alone to conduct independent reviews that follow the facts and the law. At least that was the practice until Trump became president. . . . None of this makes any sense outside of political vendettas. Turner Broadcasting is fairly small potatoes in terms of market power. . . . If the AT&T-Time Warner case goes to court, the administration is highly likely to lose, but not before wasting a lot of taxpayer and shareholder money on legal fees in the process.”
The Chicago Sun-Times frets that “Trump is behaving again like a tin-pot dictator, trying to punish a media company that has dared to cover him honestly, aggressively and accurately”: “The president has called on the Justice Department to open an investigation into bogus scandals involving . . . his opponent in last year’s election. As a candidate, Trump threatened Jeff Bezos, the owner of The Washington Post, with ‘such problems’ once he got elected. Just last month, Trump threatened to look into pulling NBC’s broadcasting license after the network reported that the president was contemplating a dramatic increase in the nation’s nuclear arsenal. . . . When Trump threatens to use the powers of government against his critics and foes, as if a federal agency were just a weapon for his personal use, he makes it tough for anybody to believe that any major policy decision by his administration is being judged on its merits.”
The Washington Post Editorial Board is calling for congressional hearings: “The acquisition may pose legitimate antitrust concerns – but Mr. Trump’s behavior raises the specter of political retaliation, which in turn increases the need for transparency . . . The Senate subcommittee on antitrust, competition policy and consumer rights should exercise its oversight responsibility and convene a hearing on the matter. If the White House exerted improper influence over the Justice Department in the interest of punishing a political enemy, the public has a right to know. If suspicions are unfounded, then a hearing will work to dispel them. The White House has put itself in a position where the nation may reasonably presume bad faith. If it wants trust, it must now earn it.”
— The former chief White House ethics lawyer under George W. Bush weighed in on Twitter Tuesday morning:
Richard W. Painter tweeted “The entire point of the DOJ suit against the ATT -Time Warner deal is to retaliate against CNN, force sale to Rupert Murdoch. Congress must investigate now!”
