Forbes fumbles Obama record on merger politicization
FORTUNE — Did you know that Obama’s Justice Department selectively blocks mergers by Republican CEOs? No? Well then, you must not be reading Forbes.
Look, I’m all for driving page-views. It’s how folks in my profession get paid (either directly or indirectly). But is it too much to ask for a tiny bit of fact-checking before a national business publication posts ideological drivel posing as quantitative analysis?
How do I know the piece is garbage? For starters, it uses that plural term “mergers” in its headline. Unfortunately, the actual story discusses only one blocked merger: AT&T’s proposed 2011 acquisition of T-Mobile USA.
Yes, it is true that the CEO of AT&T has donated primarily to Republicans (as did the CEO of T-Mobile USA, for that matter). But basing a conclusion on that would be like deciding the Red Sox beat the Yankees last night because the Sox led 1-0 after two innings (for the record, the Yankees won 3-2).
For example, let’s look at the other mega-merger that Obama’s DoJ sued to stop: The $11 billion merger of U.S. Airways with American Airlines buying U.S. Airways.
Forbes readers may be surprised to learn that U.S. Airways CEO Doug Parker donated $40,000 to President Obama’s reelection campaign. So did the DoJ simply forget about Parker, or was it instead focused on the fact that American Airlines CEO Tom Horton was a GOP donor? Would seem kind of strange to focus on Horton, though, given that Parker was to become CEO of the combined company (and did so after the companies fought the DoJ in court, and reached a settlement that included major concessions — something that AT&T didn’t really attempt).
But let’s go even further? How about the mega-mergers that DoJ did approve? Like the second-largest M&A deal of all time for a U.S. target (and easily the largest of Obama’s tenure), which was Verizon Communications paying $130 billion to purchase Vodafone’s stake in Verizon Wireless. That one sailed through, even though Verizon CEO Lowell McAdam donated $50,000 to support Mitt Romney.
Of course, Forbes isn’t really concerned about what’s happened in the past. Its post exists to imply that DoJ approval of the proposed Comcast-Time Warner Cable merger would be the result of political favoritism, because Comcast CEO Brian Roberts is an Obama friend and donor (never mentioning that Democratic Senator Al Franken was hardest on Comcast during last week’s congressional hearings on the merger).
So create a phony history, and then use it to ascribe negative motive to an event that has not even yet occurred.
In the spirit of… well, journalism, I decided to do some actual quantitative research. I asked the Department of Justice for a list of all proposed mergers against which it has filed suit since the beginning of 2012, and then looked up the federal political giving history of each participating company’s CEO. To do so, I only included CEOs who have contributed at least $1,000 to federal candidates in their lifetimes and classified each CEO based on the partisan preponderance of their giving. Fourteen CEOs fit the bill. Seven of them were Republican backers, seven of them were Democratic backers. The rest either had no political giving history or simply only had donated a few hundred dollars.
I have no idea where “Obama’s Justice Department” will come down on Comcast-Time Warner Cable, but I do know this: Whatever its decision, it will be better reasoned that the latest edition of Forbes Fiction.
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