Ashcroft’s Role in Sirius/XM vs Broadcasters Battle: Working for the Side Who Will Pay the Most?

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I once worked with a person — who will remain unnamed — who said that in the work my institution was focused on and that was primarily supported by two sides of an industry group at war with each other that we should pick the side that gives us the most financial support (i.e., dough).
In retrospect, this individual has said that his comment was meant in jest — and so I withdrew my criticism of the statement and him — but the point of working for the highest bidder despite the merits of a case still matters in the structurally corrupt reality of Washington, D.C.
Allegedly, former Attorney General John Ashcroft offered his firm’s services to XM Satellite Radio Holdings in the days after the Sirius/XM merger was announced. When rebuffed, he went and sold his weight in these matters to opponents of the deal, the National Association of Broadcasters.
This clip just ran in the Wall Street Journal:

Former Attorney General John Ashcroft, who sent a letter this week to his successor Alberto Gonzales blasting the proposed merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., approached XM in the days after the merger was announced offering the firm his consulting services, a spokesman for XM said Saturday.
The spokesman said XM declined Mr. Ashcroft’s offer to work as a lobbyist for the company.
Mr. Ashcroft was subsequently hired by the National Association of Broadcasters, which is fiercely opposed to the merger. On its behalf he conducted a review of the effects on competition if the two satellite radio companies were allowed to merge.

The fact is that there may be appropriate reasons for opposing a merger of two huge media firms — not that any other large merging media conglomerate marriages have been stopped. But still, there may be a reason not to allow a virtual monopoly in satellite radio services to be born.
But if Ashcroft did “pay for play” in this case — then this is a very serious matter that ought to be debated in the press, among players in the legal and antitrust profession, and among politicians and policymakers.
Ashcroft may have done nothing illegal in this case — but to have served as the former Attorney General of the United States and to weigh in so heavily on a specific case in which he has a financial interest — needs to be known by all parties because it should erode the trust that others should have in his counsel and advocacy.
I think that Ashcroft’s representatives have some explaining to do in this case — or alternatively, the revelation that Ashcroft wrote to Attorney General Gonzales and shopped his services to both sides in the case may generate a lot of “Blowback” and may make it harder for the federal government to block the XM/Sirius merger — even if it is the appropriate thing to do.
Gonzales needs to understand that he has a problem now and needs to demonstrably show that he and his antitrust division have not been inappropriately influenced by Ashcroft.
Gonzales should now appoint an independent ombudsman to report on the process — and potentially even assign an investigator to look into the review that the Ashcroft Group conducted for the National Association of Broadcasters if it is submitted as evidence in the case.
— Steve Clemons
P.S. Hat tip to Bonddad for forwarding the WSJ piece.

Comments

11 comments on “Ashcroft’s Role in Sirius/XM vs Broadcasters Battle: Working for the Side Who Will Pay the Most?

  1. Dirk says:

    Ethel is right in suggesting that there is no business reason to prevent the merger. Despite being similar to the Echostar and DirectTV merger, both satellite radio companies are losing money and a union could only aid their survival.
    That said, Steve is arguing that Ashcroft, in trying to horn in on the deal, first proffered his services to one party and when rebuffed, found an adversary to the deal in the NAB. It has nothing to do with whatever sense the merger makes; just an opportunity to get a cut in on the deal.

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  2. Jerome Gaskins says:

    Perhaps your question should be: was he lobbying when he sent the letter? The only thing mentioned about him lobbying was in reference to XM, whom he had not worked for (to my knowledge).
    Now, I didn’t read the whole article. From the clip it does not appear to me that JA is lobbying the Attorney General’s office. All I see is a lawyer that’s representing a client.

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  3. David N says:

    Yes, Ashcroft is a lawyer, and will use whatever arguements will get his side the best outcome.
    Thus, when Republicans wanted to court the votes of Southern bigots, they waved the flag of “States Rights” at every opportunity.
    When they wanted to restrict the federal government from increasing freedom of expression, “local control” was the buzzword for letting local prudes close down sexually explicit businesses.
    But when local governments and states want to allow the use of medical marijuana, or to allow single-sex couples to call themselves married and obtain the same rights and priviledges as other life-long committed couples, then local control and states rights go right out the window.
    The problem here was that at the time he was exercising this hypocracy, Ashcroft wasn’t a lawyer for hire, but the chief legal officer of the United States, sworn to uphold the Constitution.
    And you still haven’t answer my question. Is it or is it not against the law for a senior official to lobby before his or her former agency, even beyond the time limitation for general lobbying?

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  4. Jerome Gaskins says:

    Another thing favoring JA: if NAB is perceived as the deep pocket, why didn’t JA go to them first?
    Personally, I think he just wants to be involved in shaping the country’s laws as part of his legacy, and he doesn’t care which side he’s on, as long as he’s in it.

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  5. Jerome Gaskins says:

    Hey Ethel, that was uncalled for. Disagree if you must, but leave the acid reflux at home, please. We all know that Steve isn’t perfect, but your tone suggests that you think he is a stupid moron, which even GWB is not.
    In reading this article and the comments, I get the distinct feeling that something is misunderstood.
    Issues of law do not require fealty to either side of a case. Argument of a case is the act of proving one side or another. Of course, people make careers out of representing one side or another habitually, but there is nothing in the law that requires them to do so except the fact that an advocate for one side cannot switch sides in the middle of a trial.
    As much as I don’t like Mr. Ashcroft’s politics or reputation, I can see nothing legally wrong with his solicitation of both sides. In fact, he only asked one side. I’m sure people will have trouble with this concept, so let me give you a similar example:
    In pickup basketball, two captains choose the playes of their teams. If someone wants to play for team 1, but doesn’t get picked for that team, they’re not precluded from playing on team 2.
    How is Mr. Ashcroft’s position different? I’m assuming that he (considers himself to be) is an expert, able to argue either side of this issue.
    After all, it’s not as if he started working for Sirius/XM, then took discovery materials/work product from them and sold/gave it to the NAB.
    I know we all think of John A. as a dastardly character, but we still need to be objective and not confuse his character flaws with what the law allows.
    After all, haven’t we all seen cases where the verdict is the complete opposite of what common sense dictates?

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  6. Carroll says:

    “Bizness” as usual in DC.
    All I can say is that this is just another example of all that is wrong with our political and goverment system.
    I have the feeling that it will all collapse before it is ever fixed.

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  7. Ethel-to-Tilly says:

    The fact is that there may be appropriate reasons for opposing a merger of two huge media firms — not that any other large merging media conglomerate marriages have been stopped.
    For the life of me I just can’t understand why, in any discussion of this merger, everybody pretends that the *extremely similar* Echostar merger with Direct TV (both providers of satellite television) wasn’t successfully challenged less than 5 years ago.
    As for classifying this as a “large merging media conglomerate marriage” – XM and Sirius are both stand-alone independent companies with no affiliations or subsidiaries – hardly conglomerates. And their combined revenue last year was just about $800 million. Time Warner’s revenue was $44 BILLION. Don’t get me wrong as I’m opposed to this merger – but they hardly would be characterized as “large” media.
    Do you have any idea at all what you’re talking about or do you just throw things out there and pretend that the rest of us don’t know any better?

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  8. David N says:

    There are rules for normal people against lobbying an agency for which one has worked.
    I guess those rules don’t apply to some people.

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  9. eCAHNomics says:

    Gonzales should now appoint an independent ombudsman to report on the process — and potentially even assign an investigator to look into the review that the Ashcroft Group conducted for the National Association of Broadcasters if it is submitted as evidence in the case.
    — Steve Clemons
    lol

    Reply

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