FCC Chief Didn't Mislead Congress Over Sinclair, Watchdog Says

(Bloomberg) -- U.S. Federal Communications Chairman Ajit Pai was cleared by an agency watchdog of misleading members of Congress by failing to disclose a conversation with a Trump administration lawyer about Sinclair Broadcast Group Inc.'s now-failed bid to buy Tribune Media Co.

Congressman Frank Pallone, a New Jersey Democrat, had claimed that Pai failed to disclose a discussion he had with former White House Counsel Donald McGahn about the proposed deal. The investigation focused on Pai's testimony during a July 2018 hearing before the House Energy and Commerce Committee. FCC Inspector General David Hunt said Pai answered the question that was asked.

It's the second time the Inspector General has cleared Pai of improper acts regarding Sinclair, a conservative-leaning owner of television stations that's seen as friendly to President Donald Trump. In August, the watchdog rejected allegations of favoritism toward Sinclair by Pai.

“We are pleased that the Office of Inspector General has confirmed for a second time that there were no improper actions taken during the Sinclair-Tribune review process and that the investigation has concluded,” FCC spokesman Brian Hart said in a statement.

Sinclair proposed its failed $3.9 billion bid for Tribune after the FCC restored an obsolete rule that lets companies count just half the audience for some stations, when calculating compliance with a limit on national reach. The deal collapsed after Pai criticized Sinclair's actions. Tribune withdrew, saying Sinclair had mishandled negotiations with federal officials.

During the July 2018 hearing, Pallone asked Pai to commit to disclosing on the public docket whether he had discussions with anyone in the White House. Pai said he would, within the agency's rules and noted “we are limited in what information we can receive and what we can put on the record.”

Pai's response was “tailored to the question that was asked,” Hunt said. While Pai could have disclosed that he had discussed the deal with McGahn, it was not a “material omission,” Hunt said. The phone call with McGahn was disclosed during an August hearing with a Senate committee, according to the inspector general report.

In that Senate testimony, Pai said that McGahn wanted to know what the FCC's decision on the merger would be, but didn't express an opinion on what should be done.

Hunt said he was not able to find any other conversations between the White House and the commission related to the Sinclair deal and recommended no further investigation into the issue.

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman

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