Sprint CEO's Democratic Ties Haunt T-Mobile Deal in Trump Era
(Bloomberg) -- As Donald Trump was headed for his surprise presidential election victory in 2016, Sprint Corp. Chief Executive Officer Marcelo Claure was going the other way: he endorsed Hillary Clinton.
Now Claure needs to sell a deal in Trump’s Washington, and some wonder how his support of Trump’s Democratic opponent will play as he seeks federal permission for a $26.5 billion merger with T-Mobile US Inc.
“With this administration I’d be more worried than with other administrations, because they seem to make a big deal out of loyalty,” said Larry Noble, general counsel at the Campaign Legal Center, a Washington-based policy group dedicated to strengthening democratic processes.
It’s not just the ill-fated endorsement. Over the years, the Sprint leader has showered almost $170,000 in personal contributions to Democratic politicians and organizations, and handed a pittance to Republicans. Along with his wife, Jordan, he was a “Hillblazer” -- a supporter who raised at least $100,000 for the Clinton campaign.
“It should not make a difference, but those contributions are made in the hope they will make a difference when a candidate gets into office,” Noble said in an interview.
Politics will never be far in the background as Claure and T-Mobile Chief Executive Officer John Legere beseech regulators to approve their deal, which critics say would reduce competition and bring higher prices. While both CEOs were making the rounds in Washington this week, the T-Mobile chief stayed at the Trump International Hotel, run by one of the president’s companies.
“It’s indicative of businesses’ approach to Washington, which is very pragmatic: I’ve got this deal I want to cut, and if I have to stay in the Trump hotel, I’ll do it,” said Meredith McGehee, executive director at Issue One, a policy group that promotes transparency and disclosure.
Claure found lodging elsewhere.
T-Mobile and Sprint must persuade Trump appointees at the Justice Department and Federal Communications Commission to endorse the merger -- an outcome assigned only 50-50 odds by some analysts. The deal would combine the third and fourth-largest U.S. mobile providers. The companies say they’ll be stronger united and better able to build a new fifth-generation, or 5G, network and challenge industry leaders AT&T Inc. and Verizon Communications Inc.
On Wednesday, Japan’s SoftBank Group Corp., which has a controlling interest in Sprint, named Claure as its chief operating officer. As part of that shift, he will become executive chairman of Sprint and cede the CEO post to Michel Combes.
Claure, since he became Sprint’s chief executive and in previous roles stretching to 2007, donated $169,758 to Democratic candidates and groups, according to figures compiled by the Center for Responsive Politics, a Washington-based group. Clinton received $2,700 in 2016, and $2,300 during her earlier presidential run in 2007. Republicans took in $11,000 from Claure, and Trump received nothing from him.
“We had two very productive days in D.C. this week and based on discussions we’ve had we believe the decision on whether it gets approved will be based on the merits,’’ David Tovar, a Sprint spokesman, said in an interview.
In an earnings call on Wednesday, Claure said that he and Legere and people from both companies have "had a chance to go visit the FCC and go visit the DOJ and basically go present the merits of a merger."
Sprint’s political action committee, which coordinates donations from employees, has given $864,673 since 2014, when Claure became CEO. Republican candidates received 57 percent of the contributions.
Over the same period, T-Mobile’s political action committee gave $1.6 million, sending 54 percent of its candidate contributions to Republicans. Legere hasn’t been a big donor; since 2012, he has given only the $26,000 that he contributed to the company’s PAC.
The deal goes before an administration that has moved to block AT&T’s proposed purchase of Time Warner Inc. on novel antitrust grounds, after Trump as a candidate vowed to block the $85 billion deal. After a six-week trial the antitrust case is before a federal judge, with a ruling expected in June.
“Your guess is as good as mine on whether companies would be punished for their perceived political leanings,” said McGehee. “I would hope not.”
©2018 Bloomberg L.P.