Senator Cruz Exposes FCC Nominee’s Secret $700K Settlement — Two Cents on the Dollar — Signed the Day Before Her Nomination

On 2/10/2022, Senator Ted Cruz grilled Biden’s FCC nominee Gigi Sohn over a secret settlement agreement she signed the day before her nomination was announced. While the public settlement claimed $32 million in damages against the nonprofit on whose board Sohn sat, a confidential agreement reduced the payment to just $700,000 — two cents on the dollar. Cruz called it a “sweetheart deal” from networks that would be regulated by the FCC and said the ethics issue was “truly stunning and disturbing.”

The Timeline That “Stinks”

Cruz laid out the suspicious chronology. Biden announced his intent to nominate Sohn on October 26, 2021. The confidential settlement agreement was signed on October 27 — the very next day. Sohn’s formal nomination was made October 28, and on that date, the public settlement claiming $32 million in damages was filed.

“The timing of the settlement stinks,” Cruz said.

Sohn pushed back on the timeline, saying an “enforceable term sheet” had been signed on October 12 — two weeks earlier. “So you knew about the sweetheart deal two weeks earlier. Fine. That doesn’t change the timing,” Cruz responded.

Two Cents on the Dollar

Cruz emphasized the gap between the public and secret figures. The public settlement announced $32 million in statutory damages under the Copyright Act against Sportsfans Coalition New York, the streaming service on whose board Sohn served. But the secret agreement reduced the actual payment to $700,000.

“I’ve litigated a lot of cases. I’ve settled a lot of cases. I don’t recall ever settling a case that my clients had won, that we had a victorious court judgment, for two cents on the dollar,” Cruz said. “But you know what? I’ve never had a case against someone who was about to be the regulator of my industry.”

“On the face of that, that’s a sweetheart deal,” Cruz concluded.

”Did You Disclose It? Yes or No?”

Cruz pressed Sohn repeatedly on whether she had disclosed the secret agreement to the Senate Judiciary Committee. The exchange grew heated.

“Did you disclose the secret settlement agreement that settled it for $700,000, not the $32 million that was public? Did you disclose it to this committee? Yes or no?” Cruz demanded.

“I did. I said the matter was settled,” Sohn replied.

“The matter was settled doesn’t answer,” Cruz said. “Did you disclose the $700,000 secret settlement agreement?”

“No, because I was not allowed. I was not permitted,” Sohn said.

Cruz read the confidentiality provision directly. “Provision 6.0 says, ‘No party will communicate with the media or press.’ Last time I checked, the United States Senate is not the press,” Cruz said. “There’s nothing in this agreement that prohibits you from disclosing it to the Senate.”

Not Disclosed to the White House Either

Cruz then asked whether Sohn had disclosed the secret agreement to the White House during her vetting process.

“Did you disclose the $700,000 secret settlement to the White House?” Cruz asked.

“No, I did not,” Sohn admitted.

“So you did not disclose it to the White House? The entire vetting they did, nobody asked about this?” Cruz pressed.

“I was vetted long before,” Sohn said.

Fox News: The One Network That Didn’t Sign

Cruz noted a striking detail. “The one network that didn’t sign the agreement was Fox News. Fox News also happens to be the network that you’ve shown incredible animus towards,” Cruz said. He raised concerns about Sohn’s “hostility to conservative speech in particular, to Fox News in particular” and warned that “the FCC is a very dangerous place for a regulator to have the authority to silence political views."

"Truly Stunning and Disturbing”

Cruz delivered his verdict. “I’ve been in the Senate 10 years now. I’ve never seen a nominee for any regulatory board who at the exact moment of her nomination saw the companies that would be regulated by her effectively give a $31,300,000 gift to a company on whose board she sits,” Cruz said. “That is truly stunning and it’s disturbing.”

The committee chair attempted to move on, saying Sohn had “answered this question about five times already.” Cruz protested: “You keep putting misinformation out there.” The chair replied: “She’ll answer it and I’ll answer it.”

Key Takeaways

A public settlement announced $32 million in damages; a secret agreement signed one day before Sohn’s nomination reduced the actual payment to $700,000 — two cents on the dollar.
Sohn admitted she did not disclose the secret agreement to the White House during vetting and claimed she was “not permitted” to disclose it to the Senate.
Cruz read the confidentiality clause and showed it only prohibited media disclosure, not Senate disclosure.
Fox News was the only network that did not sign the settlement — and also the network toward which Sohn had shown “incredible animus.”
Cruz called it the most stunning ethics issue he had seen in 10 years in the Senate.

Transcript Highlights

The following is transcribed from the video audio (unverified — AI-generated from audio).

Did you disclose the secret settlement agreement that settled it for $700,000? Yes or no? I said the matter was settled. The matter was settled doesn’t answer.
I’ve never settled a case that my clients had won for two cents on the dollar. But I’ve never had a case against someone who was about to be the regulator of my industry.
Did you disclose the $700,000 secret settlement to the White House? No, I did not.
The one network that didn’t sign the agreement was Fox News — the network you’ve shown incredible animus towards.
I’ve never seen a nominee who at the exact moment of her nomination saw the companies that would be regulated by her give a $31 million gift. That is truly stunning.
Last time I checked, the United States Senate is not the press.

Full transcript: 1963 words transcribed via Whisper AI.