Armed with a blistering report that said Apple had avoided paying billions of dollars in taxes, senators this week had choice words for the company’s chief executive, Timothy D. Cook, when he appeared before the Senate’s Permanent Committee on Investigations on Tuesday.
They called him a “pretty smart guy” and praised the “incredible legacy” his company had left. They gushed over his products, calling Apple “a great company” that had managed to “change the world.”
True, Senator John McCain, Republican of Arizona, and Senator Carl Levin, Democrat of Michigan, vigorously attacked Mr. Cook over tax gimmicks. But the overall mood of the panel was summed up by Senator Claire McCaskill, a Democrat from Missouri, who declared, “I love Apple!”
It was considerably different for the officials of the Internal Revenue Service, whose presence was also “requested” by lawmakers to face accusations that the agency had improperly targeted conservative Tea Party groups for special scrutiny.
On Wednesday, Lois Lerner, who leads the I.R.S.’s division on tax-exempt organizations, prompted angry denunciations from lawmakers by proclaiming her innocence and then quickly invoking her Fifth Amendment right to refuse to answer questions. Representative Tim Walberg, Republican of Michigan, marveled at the “amount of ineptitude” at the I.R.S. and proposed that Ms. Lerner’s refusal to answer questions from the committee suggested “there’s some concern about criminality” regarding what happened at the tax agency.
Representative John Mica, Republican of Florida, accused Ms. Lerner’s former boss, Douglas Shulman, of having “closed down or gagged” I.R.S. employees from telling the truth.
In short, Wednesday’s I.R.S. hearing felt like an inquisition — unforgiving, angry, prosecutorial.
Mr. Cook, by contrast, took his hot seat in front of senators who seemed halfhearted in their desire to beat up on the rich guy who makes their iPhones, and whose products are far more popular than they are.
“With him, they were just not going to go up against an American success story,” said Neil Eggleston, a veteran Washington lawyer who has prepared many government officials to face a grilling at the hands of lawmakers.
But Mr. Eggleston said Ms. Lerner and the other I.R.S. officials never had a chance at changing the narrative of their hearing. Before such sessions, Mr. Eggleston said, he is honest with his clients: “You are going to get beat up. You are going to get yelled at. There’s no way to turn the tide in your favor.”
The hearings of Mr. Cook were in striking contrast to those 15 years ago of Bill Gates, the chairman of Microsoft, who was skewered by lawmakers and his rivals over using monopoly power to run over his business rivals.
Mr. Gates was disdainful of Washington and politicians when he arrived from Seattle for his first Capitol Hill appearance in 1998. That did not serve him well. Microsoft’s Windows — highly crash-prone at the time — along with irritants like “Clippy,” the obsequious talking paper clip who popped up on computer screens offering to help write letters, hardly endeared Mr. Gates to consumers.
Not so Mr. Cook and Apple. Even the often-cantankerous Mr. McCain, who as recently as 2008 still used an old-fashioned flip phone, concluded his questioning with a jocular tech support query. “What I really wanted to ask you is why the hell I have to keep updating the apps on my iPhone all the time,” Mr. McCain said, prompting guffaws from the dais and the audience.
Public relations experts who help witnesses survive Capitol Hill hearings say the tenor of the sessions is often set well before the witnesses take their seats. How much the witnesses subsequently are pummeled often depends on whether they are able to tap into any reservoirs of good will on their issues among the public.
As an example, when lawmakers created a spectacle in 2005 by demanding the testimony of the nation’s top baseball stars during an investigation into steroid use, the questioning got rough. But the players were still heroes to millions — certainly more so than most of the lawmakers. (After the hearings, congressional staff members crowded around the sluggers, asking for autographed baseballs.)
In contrast, lawmakers pilloried the top executives of the auto companies in 2008 after they admitted to flying on corporate jets to Washington to beg the government for as much as $25 billion in help. Their appeals, though, came in the middle of an economic crisis and were roundly denounced by an outraged public.
This week, Mr. Cook tapped into the public’s good will to defuse the congressional anger. The I.R.S. officials had no such luck.
“This just shows the trust deficit that the I.R.S. has with the American public,” said Kevin Madden, a veteran Republican strategist who advises corporate clients on communications strategies. “The only thing that the American public hates more than the Congress right now is the I.R.S.”
There is always the possibility that a witness can change his or her fortunes by saying just the right thing at a congressional hearing.
Mr. Cook was well prepared, observers of his testimony said. During the hearing, he appeared to know as much about tax policy as the lawmakers asking him questions. (Mr. Cook might also have been helped by the “reality distortion field” that journalists often joked surrounded his predecessor, Steve Jobs, during rollouts of the latest “magical” iPhone or iPad.)
But Mr. Madden and others said the I.R.S. officials could hardly have said anything to defuse the anger, especially among Republicans eager to keep the issue alive.
Perhaps that was part of Ms. Lerner’s calculation when she decided to make an opening statement — and then shut up.
“I know that some people will assume that I’ve done something wrong,” she said. “I have not. One of the basic functions of the Fifth Amendment is to protect innocent individuals, and that is the protection I’m invoking today.”
Kitty Bennett contributed reporting.
Article source: http://www.nytimes.com/2013/05/23/business/torches-and-pitchforks-for-irs-but-cheers-for-apple.html?partner=rss&emc=rss
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