Democratic lawmakers tore into a visibly uncomfortable T-Mobile Chief Executive John Legere over his decision to stay at President Trump’s hotel in Washington while his company seeks government approval for a $26-billion merger with Sprint.
T-Mobile spent nearly $200,000 at the Trump hotel in the months following the announcement of the deal, Legere acknowledged Tuesday at a hearing before a House Judiciary subcommittee. But he defended the practice by pointing out that T-Mobile had spent roughly $1.7 million on hotel stays across the nation’s capital during that entire period.
The issue of the hotel stays flared up almost immediately as Rep. Hank Johnson (D-Ga.) opened the questioning by challenging Legere on the decision to stay at Trump’s hotel.
“Do you understand the optics of that, what it looks like? It looks like what’s happening is T-Mobile is trying to curry favor with the White House,” Johnson said.
“Congressman, I was and I am 100% sure this deal will be judged by the FCC and DOJ on the merits,” Legere responded, referring to the two agencies reviewing the proposed merger, the Federal Communications Commission and the Department of Justice.
The two men talked over each other briefly before Johnson interjected: “It doesn’t pass the smell test with the American public. It looks like you’re trying to purchase influence.”
The flare-up comes weeks after the Washington Post uncovered detailed guest logs from the Trump hotel showing that top T-Mobile executives booked dozens of stays. Following the Post’s report, lawmakers such as Rep. Pramila Jayapal (D-Wash.) sent letters to T-Mobile inquiring about the stays.
On Tuesday, Jayapal said the issue of the hotel stays was significant because of allegations that Trump may have interfered in the antitrust review of another deal, AT&T Inc.’s purchase of Time Warner.
“There is reason to look at these questions of what happened at the Trump hotel, because it has been clear from quite a bit of reporting that President Trump appears to have involved himself in the AT&T-Time Warner merger, and we want to make sure that is not happening today,” she said.
Legere insisted that the choice to stay at the hotel was his alone and that it reflects his consistent practices in prior years.
“Except in 2015, you said you were never going to stay there,” said Jayapal, referring to an old Twitter feud with Trump in which Legere had criticized his experience at a different Trump hotel. It is unclear whether Legere committed never to stay at another Trump hotel — though he did not appear to dispute Jayapal’s characterization Tuesday — but in 2015 he did vow to leave one over a noise complaint.
“I am so happy to wake up in a hotel where every single item isn’t labeled ‘Trump,’” Legere tweeted after leaving the hotel, according to news reports at the time.
Rep. Val Demings (D-Fla.) said that she felt where Legere chose to stay in Washington is not relevant, but that the “appearance of compromise or undue influence is.”
Republican members needled Legere’s Democratic critics, accusing them of pursuing a non-substantive line of questioning.
“I have said I would never stay in a La Quinta again, and I have stayed at a La Quinta subsequently,” joked Rep. Matt Gaetz (R-Fla.).
Not every moment of the hearing was devoted to Legere’s hotel stays. Gaetz peppered Legere on a key issue facing the telecom industry: Huawei. U.S. officials have been trying to dissuade allies from using the Chinese technology giant’s equipment in their networks over possible spying concerns, and T-Mobile said Tuesday that it did not use the company’s gear.
T-Mobile’s smartphone testing technology is at the center of federal charges of fraud and theft of trade secrets stemming from the alleged theft by Huawei employees of a robotic arm that T-Mobile used to test cellphones. Huawei then engineered a cover-up of the theft, prosecutors allege. The two units of Huawei named in the case have pleaded not guilty.
Lawmakers on both sides of the aisle raised concerns about what a merger between T-Mobile and Sprint would mean for consumer prices, employees’ wages and innovation. The two companies have promised that cellphone plan prices will not increase after the merger, and T-Mobile has vowed not to raise prices for at least three years after the deal closes. It also has argued more generally that consumers would receive a better value for its service, which would benefit from enhanced capacity as a result of combining Sprint and T-Mobile’s networks.
T-Mobile and Sprint have framed their merger as a vital step toward building a competitive, next-generation 5G network. A global race is on to launch the first mass-market 5G network that, proponents promise, will lead to the mainstreaming of new applications such as self-driving cars. T-Mobile and Sprint have said they expect to invest $40 billion in 5G technology if the merger is approved.
Some opponents insist that the deal will result in higher prices. Gigi Sohn, a consumer advocate and former FCC official, said T-Mobile’s arguments about capacity were largely a distraction.
“Carnegie owned all the railroads,” she told the lawmakers. “He owned all the capacity, but he was still a monopolist. Capacity is meaningless when it comes to setting prices.”