California Senate Launches Paramount-Trump Settlement Talks Investigation, Invites Bill Owens and Wendy McMahon to Testify
In a Friday letter, the state's lawmakers invited former '60 Minutes' executive producer Bill Owens and former CBS News president Wendy McMahon to testify as part of an investigation into Paramount's settlement discussions with President Donald Trump over his $20 billion lawsuit against the program's Oct. 7 interview with former vice president Kamala Harris.
'Your recent resignations from CBS's leadership, amid public reports of internal concern about the editorial and ethical implications of the proposed settlement, suggest that you may possess important, first-hand knowledge relevant to our legislative oversight responsibilities,' the joint letter from its Energy, Utilities & Communications committee chair Josh Becker and Judiciary committee chair Thomas Umberg states. 'If Paramount is entertaining a settlement primarily to secure favorable regulatory treatment, this raises deeply troubling implications not just for journalism, but for the rule of law and the integrity of corporate governance.'
The committees are seeking information from the pair on whether newsroom staff raised internal objections to the settlement or its motivations, whether any editorial decisions were impacted or overridden, whether internal counsel or leadership acknowledged the weakness of the lawsuit's claims and whether anyone within the company indicated that the settlement may be 'advantageous or necessary' in order to influence the regulatory review of the pending $8 billion Skydance merger.
The lawmakers argue that a settlement to clear regulatory approval of the Skydance deal could constitute a violation of federal anti-bribery laws, an infraction of California's unfair competition law, a breach of fiduciary duties owed by Paramount board members to shareholders and the misuse of corporate funds vulnerable to shareholder derivative litigation.
'These issues go beyond internal policy,' the letter states. 'They have real legal exposure for Paramount and its board of directors, including Ms. Shari Redstone, Ms. Barbara Byrne, Ms. Judith McHale, Ms. Linda Griego, and Ms. Susan Schuman.'
They also said it could have a 'potential chilling effect' on investigative and political journalism, signaling 'politically motivated lawsuits can succeed when paired with regulatory threats.'
'It would damage public trust in CBS News and other California-based outlets, diminishing the state's stature as a national leader in ethical journalism. Paramount's capitulation would also undermine two essential pillars of a liberal democracy: a free press and an impartial, rule-of-law regulatory system,' the letter continues.
The California State Senate noted that while the invite is a voluntary request, they retain full subpoena authority under California law should additional testimony or documentation become necessary during its investigation.
'We respectfully encourage you to participate in this important hearing,' the letter concluded. 'Your cooperation will help safeguard the values you have each worked to uphold in your distinguished careers.'
Representatives for Paramount declined to comment on the letter.
Owens resigned from '60 Minutes' in April, telling staff in a memo that he lost the ability to make independent decisions as the network. Meanwhile, McMahon resigned earlier this month, saying in a memo to staff that 'it's become clear the company and I do not agree on the path forward.' She described the tension between herself and Paramount as 'challenging.'
Though neither referenced the Trump lawsuit directly, both executives had previously expressed opposition to a settlement.
The lawsuit takes aim at the news program's Oct. 7 interview with former Vice President Kamala Harris, which Trump has said was deceptively edited to make her look good.
CBS News has maintained that Trump's accusations of deceitful editing were false, explaining that the promo shown on 'Face the Nation' used a longer section of Harris' answer. It also turned over the transcript and camera footage from the interview to the FCC as part of the agency's investigation into allegations of 'news distortion.' In a March filing to dismiss the Trump suit, CBS called it 'an affront to the First Amendment' and 'without basis in law or fact.'
In a Wednesday legal filing asking the court to deny Paramount's motion to dismiss, Trump's attorneys claimed that the interview caused him 'mental anguish and confusion.' They also said that 'viewers withheld attention from President Trump and Truth Social,' his social media platform, due to the 'false advertising and tampering' tied to the Harris interview, resulting in a decrease in value for Trump Media and Technology Group and his other media holdings.
The Wall Street Journal reported that Trump recently shot down Paramount's offer to settle the lawsuit for $15 million, with the president aiming to get at least $25 million and an apology.
The Paramount-Skydance merger, which is subject to regulatory approval from the FCC due to a required transfer of broadcast licenses of Paramount's 28 owned-and-operated local TV stations, recently triggered its first automatic 90-day extension after failing to close by April 7.
FCC chairman Brendan Carr has argued that the settlement talks with Trump are unrelated to the agency's review of the Skydance deal. But he has warned that 'all options remain on the table' in the agency's ongoing investigation into alleged 'news distortion,' including potentially revoking CBS' broadcast license if the network is found to have violated the agency's public interest standard.
He has also previously threatened to block M&A for companies who embrace diversity, equity and inclusion (DEI) policies and is reportedly seeking concessions in the Paramount-Skydance deal.
Paramount's settlement talks come as Disney previously paid $15 million to settle a defamation lawsuit Donald Trump brought against ABC News and star anchor George Stephanopoulos. Meta also paid $25 million to settle Trump's lawsuit about being kicked off Facebook and Instagram after the attack on the Capitol on Jan. 6, 2021.
The post California Senate Launches Paramount-Trump Settlement Talks Investigation, Invites Bill Owens and Wendy McMahon to Testify appeared first on TheWrap.
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