T-Mobile is trying to merge with competitor Sprint in a hotly contested, $26 billion mega-deal that could be blocked by the Federal Communications Commission or the Department of Justice’s anti-trust division. T-Mobile has also spent $195,000 at a DC hotel operated by President Donald Trump, who has refused to divest himself from his business interests while simultaneously holding the power of the executive branch.
These two things have nothing to do with each other, insists T-Mobile.
According to a Tuesday report by the Washington Post, in response to reports that those two things might in fact having something to do with each other—as well as a formal request for more information from Democratic Senator Elizabeth Warren and Representative Pramila Jayapal—T-Mobile VP of federal legislative affairs Anthony Russo wrote the company spent nearly $200,000 at the Trump International Hotel in Washington, DC between April 2018 and Feb. 21, 2019.
A prior Post report found that T-Mobile executives had lodged at least 38 nights’ worth of stays at the hotel 2018, starting in April, when the deal was announced. CEO John Legere explained to the paper the frequent visits were because he had taken a sudden fondness to the facility’s high-quality service, security, and convenience. (Nevermind that Legere publicly shit-talked Trump’s hotels in since-deleted tweets from 2015.) Former DOJ antitrust division chief counsel Gene Kimmelman told the Post that “I can’t believe this is a coincidence,” adding, “In mergers, companies look for any potential advantage they can find.”
In a letter to Warren and Jayapal dated on Feb. 21, Russo acknowledged that the hefty hotel bill may be viewed “positively by some and negatively by others,” but T-Mobile did not expect it to sway the decisions of federal agencies vetting the merger:
I want to reiterate, as we indicated in our initial response, that T-Mobile respects the regulatory review process underway concerning our pending merger with Sprint. The Department of Justice and Federal Communications Commission are giving this transaction a thorough and objective analysis. While we understand that staying at Trump properties might be viewed positively by some and negatively by others, we are confident that the relevant agencies address the questions before them on the merits.
Later in the letter, Russo detailed the expenses and said that it had spent more at non-Trump hotels:
As best as we have been able to determine, the total amount spent by all TMobile employees, including Mr. Legere and his leadership team, for all expenses for stays or meetings at the Trump International Hotel in Washington between April 2018 and the present is approximately $195,000. These hotel expenses cover a variety of types of business-related activities and include many categories of costs, including the cost of meeting space, catering, business center services, audio/visual equipment rental, lodging, meals, taxes and other incidental expenses.
...For context, T-Mobile incurred nearly $750,000 in actual or estimated costs at Hilton Hotel properties in Washington, D.C. in the same period, or approximately 50 percent of its total hotel spend in Washington, D.C.
Russo did, however, acknowledge that T-Mobile was aware of only two instances prior to April 2018 in which executives got rooms at the hotel—both in August 2017.
As the Post noted in its Tuesday report, T-Mobile executives sure seem to have wanted someone to notice exactly where they were staying:
The T-Mobile executives were very visible during their stays at the Trump hotel, wearing clothes featuring the bright magenta T-Mobile logo. At one point, Legere walked around the Trump hotel lobby posing for photos.
Someone well known to appreciate obsequious displays of fealty, perhaps.
The DOJ’s antitrust division, which has seemed disinclined to block the T-Mobile-Sprint merger, is supposed to be insulated from political pressure by the executive branch. However, recent reports have indicated Trump leaned on former National Economic Council director Gary Cohn to pressure that division into rejecting an AT&T-Time Warner merger, presumably to crush Time Warner subsidiary CNN. Cohn said he refused, but the DOJ antitrust division then tried and failed to block the merger.
It’s unclear whether their attempts to do so were swayed by the man upstairs, though the New Yorker noted the DOJ “expressed no serious antitrust concerns” about conservative billionaire Rubert Murdoch’s deal to sell 21st Century Fox to the Walt Disney Company.
Meanwhile, congressional Democrats have been pushing the DOJ and FCC to reject the deal.
Chris Shelton, the president of Communications Workers of America, recently told a House panel that the merger would cost nearly 30,000 U.S. jobs and reduce telecom salaries by $30,000, according to the Verge.
He added that a successful merger was unlikely to improve service, either, telling the panel that the “‘digital divide’ between urban and rural America is likely to get worse, not better.”