“It’s shocking to the conscience”

Posted by Marc Hodak on June 17, 2008 under Politics | 2 Comments to Read

Those were the words of Rep. Elijah E. Cummings (D-Md.) yesterday regarding the XM-Sirius plan to lease 4 percent of their radio spectrums, or 12 channels, for programming run by minorities and women. Congressman Cummings and the rest of the Black Caucus believes that number should be 20 percent. And where did they get that 20 percent figure from? The WaPo reporter helpfully explains:

[Rep. G.K.] Butterfield [(D-N.C.), chairman of the Congressional Black Caucus’s working group on satellite radio] said he got the idea for the 20 percent set-aside for minority-owned companies from Georgetown Partners, a minority-run private-equity firm based in Bethesda, and its managing director, Chester Davenport.

The firm, which has invested in wireless and media companies, objected last year to the merger, arguing that a monopoly could limit opportunities for minority programming.

But Davenport said that if regulators give the marriage a green light, the combined company should be required to turn over some channels to a minority-controlled entity. He said he hoped Georgetown Partners would fill that role, making it a competitor to the merged company.

But of course.

Lest anyone is naive enough to believe that Georgetown Partners is patiently waiting to jump on a major investment opportunity, grow up. Georgetown has already invested $420,000 where it counts– in lobbying. Shortly after the XM-Sirius merger was announced, Georgetown began to ramp up its spending. They were the largest campaign donor to Cummings’s Maryland colleague on the Black Caucus, Albert Wynn. Chester Davenport has personally spread $5,600 among Black Caucus members, including Chairman Butterfield, as well as over $28,500 to the Democratic Senatorial Campaign Committee, all in the last year.

Butterfield said that black caucus members planned to meet today with Karmazin and Nate Davis, chief executive of XM. “We’re going to close the door and have a very honest and open dialogue about the merger,” Butterfield said.

If it’s truly honest and open, it will sound something like this:

Butterfield: Look, these brothers have paid us well, and they expect something in return. What they want is 20 percent.

Karmazin: Twenty percent makes this merger difficult to justify.

Butterfield: Well, less than 20 percent makes this merger impossible. We have the power to shut it down. That’s your choice.

Karmazin: You realize that if you block this merger, we’re likely to end up in bankruptcy.

Butterfield: Oh, oh. Let me get a tissue, here. Boo hoo. Listen, we aren’t on the payroll of your shareholders. In fact, if your company goes under, we happen to know some private equity dudes who’ll be happy to scoop up what’s left.

Davis: That’s extortion.

Butterfield: No. Extortion is where I remind you of how much y’all have contributed to any of our campaigns in order to suggest a possible out. How much was that? Oh, that’s right–you paid sh*t.

Karmazin: Well, as long as we’re being open, here, is there anything we can do at this point?

Cummings: At this point? What the hell you thinking? We’re gonna take a half million of a brother’s cash, and sell him down the river? F*&k you.

Karmazin: Think of the workers–black, Hispanic, all of them on the street. Just so you can enrich a couple of investors who happen to be black?

Butterfield: If you don’t like it, write your congressman. Oh, yea, I forgot. You’ve already paid those Washington lilies Engel and Dreier, representin’ your nice, suburban districts. Well, you can look around at our smiling faces. Engel and Dreier would stick out if they were among us. Notice anything? Yea, that’s what I thought.