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A Project of The Annenberg Public Policy Center

DSCC Not Fighting Fair

In Connecticut’s Senate race, the Democratic Senatorial Campaign Committee is sponsoring a misleading ad that attacks Republican candidate Linda McMahon.

It says McMahon, the former CEO of World Wrestling Entertainment, "laid off workers, yet took millions in bonuses," and "spent thousands on lobbyists to get millions in tax breaks for herself." McMahon did earn "millions in bonuses." She got a total of $2.4 million spread over several years. But in only one of those years were any workers laid off. Furthermore, the ad goes too far in saying the one-time CEO sought tax breaks "for herself." They were film and TV production tax credits for WWE.

The ad, called "Bad," first aired on Oct. 2:

To support its claim that “McMahon laid off workers" but "took millions in bonuses,” the DSCC points to Associated Press reports of WWE layoffs amounting to 3 percent of its staff in 2001; 9 percent in 2002; and 10 percent in 2009. Viewers of the ad may get the impression that McMahon took her big bonuses the same years the layoffs occurred. But the DSCC’s own source sheet shows that 2001 was the only year in which there were layoffs and in which McMahon actually received a bonus. McMahon collected a bonus of $675,000 that year, according to a proxy statement the company filed with the Securities and Exchange Commission. That amount, however, is short of the "millions" mentioned in the ad. The DSCC only gets to "millions" by adding in bonuses of $995,262 and $750,000 that McMahon received in 2000 and 2004, respectively. But the committee provided nothing showing that WWE made staff cutbacks in those years. 

The ad goes on to claim that “McMahon spent thousands on lobbyists to get millions in tax breaks for herself.” But that’s misleading. WWE, not McMahon personally, paid the legislative lobbying firm Sullivan & LeShane more than $50,000 in 2008 to lobby the state administration on its behalf, according to filings with the Office of State Ethics. At the time, the company was working to secure film and television production tax credits that the state had begun awarding to companies filming in Connecticut in 2007. The Hartford Courant reported that as of August 2010, WWE had secured nearly $10 million in tax credits. (McMahon resigned as CEO in September 2009 to run for Senate.)

It’s true that McMahon and her husband, Vincent, are the major shareholders by far in WWE. The company’s 10-K report covering 2008 says that the two "control approximately 88% of the voting power of the issued and outstanding shares of our common stock. Through their beneficial ownership of a substantial majority of our Class B common stock, Mr. and Mrs. McMahon can effectively exercise control over our affairs."

But the credits, or "tax breaks," were for the company, not for McMahon, as the ad says. When the company does well, the McMahons do well, but so do others who have a financial stake in WWE, however many or few there are.

The DSCC also stretches in claiming that McMahon "opposes Wall Street reform." It’s true that the National Journal reported in June that McMahon didn’t favor the Wall Street Reform and Consumer Protection Act that President Barack Obama signed into law almost a month later. McMahon told National Journal that it was an "over-reaching, overarching bill." But the magazine also quoted McMahon as saying, "I think we do need to have some form of financial reform."

The ad closes with the narrator saying that McMahon was a "bad CEO" and that she’d be a "worse senator." That’s the DSCC’s opinion and it’s entitled to it. Our job is not to speculate on what kind of senator McMahon would make, or to judge her stewardship of WWE — though the company did make Forbes’ 200 Best Small Companies list in 2008 and 2009 during her tenure. We’re more concerned with the evidence that the DSCC uses to support its claims, and we find that to be misleading.

— Lauren Hitt