Fair Play: AT&T, Justice Dept. Just Can’t Shake Donald Trump

Donald Trump

At the first pre-trial hearing of the Justice Department’s suit to stop AT&T Inc. from buying Time Warner Inc., U.S. District Court for the District of Columbia Judge Richard Leon was very clear. Keep politics out of his courtroom.

His comment, though aimed at both sides, shut down AT&T’s public questioning outside the courtroom about whether President Donald Trump interfered in the DOJ’s consideration of the merger because of his stated dislike for CNN, part of Time Warner.

Leon told the attorneys they needed to provide relevant documents without delay and that arguments unrelated to the merger wouldn’t be tolerated.

Taking the hint, the telecom giant backed off the “Trump intervened” theory after that first court hearing and raised it again only once thereafter when it unsuccessfully sought access to a massive swath of internal DOJ communications to look for signs of White House interference. Leon refused to allow AT&T to pursue that question in discovery, and the argument didn’t come up at trial.

For six weeks, Leon’s courtroom operated largely the way he wanted it to. Attorneys focused on questions of competition within various markets and posed competing legal interpretations about dominance.

Now, as Leon retreats to his chambers to weigh the trial testimony and data, news breaks that AT&T paid a firm founded by Trump’s personal lawyer Michael Cohen for advice on how the new administration would tackle issues like antitrust. The first monthly payment to Cohen’s firm, in January 2017, came just after AT&T’s October announcement of its blockbuster deal with Time Warner.

Unlike juries, judges aren’t sequestered. Leon is sure to notice that the argument AT&T made about White House interference just turned on its head.

It’s fairly common for companies in heavily regulated industries to seek out such consulting relationships as part of their government relations operation. It makes sense that AT&T, with hundreds of paid lobbyists, would try to get all the information it could about the new, unorthodox president as part of its due diligence in understanding the administration.

But the optics are bad, as CEO Randall Stephenson acknowledged when he said AT&T’s reputation was damaged by the revelation that his company paid Cohen’s firm $50,000 per month for a year.

The AT&T payments made the front pages of major newspapers, but analysts say it probably won’t tip Leon’s decision about the merger one way or the other. The litigants in the trial did their best to avoid Trump politics when arguing their case. Instead, AT&T lawyer Daniel Petrocelli went after the DOJ itself and the government’s star economic witness, calling the case against the merger a “house of cards.”

Antitrust officials at the Justice Department have repeatedly stated that their actions are entirely based on the law and not on the opinions of the man in the White House. They have to say it often because questions keep surfacing about White House influence over deal review. Observers see the president’s public congratulations to 21st Century Fox Inc.’s Rupert Murdoch on his bid to buy Walt Disney Co. or Trump’s pre-inauguration meeting with AT&T’s Stephenson and the heads of Bayer AG and Monsanto Co., who also are trying to merge. Like AT&T’s consulting contract with Cohen, it looks bad.

Leon knows this too. But now it’s his turn to try to tune out the cacophony.

What’s Happening

On Thursday, Deputy Assistant Attorney General Barry Nigro will address the American Bar Association’s health care and antitrust conference in Arlington, Va. Also appearing will be the Federal Trade Commission’s Daniel Butrymowica, a staff attorney in the health care division, and Kevin Hahm, deputy assistant director at the FTC’s bureau of competition.

Quote of the Week

“You are responsible for defending the rule of law. If you fail, do not expect me or anyone else to do it for you.”

--Deputy Attorney General Rod Rosenstein, in his commencement address at Campbell University Law School.

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