Jul 15, 2026
The Fall Is Coming
The moves from real assets to paper to electronic to cyber is unsettling and disruptive at best - and potentially catastrophic.
Unlimited infinite growth is not sustainable. Left alone, an economy will overspeed and explode. Like a cancer, rapid unregulated growth kills the host 100% of the time.
Here we go again.
Companies’ race to issue shares reminds some analysts of later stages of prior rallies
The rush for cash by some of the world’s largest companies is putting the long bull market at risk.
SpaceX’s record $75 billion public offering. Alphabet’s $85 billion equity raise. A $26 billion-plus sale of American depository receipts from the South Korean chip-making company SK Hynix.
Investors have been cheering the raging bull market for years—three years and nine months, to be precise—with the S&P 500 having more than doubled during that period. Now companies are racing to take advantage, raising concern that the party could be coming to an end.
Markets don’t collapse because of old age. Even high prices aren’t usually enough alone to cripple a bull. But one way stocks can slow is when new issuance overwhelms investors, as supply outstrips demand. Companies raced to sell shares in late 1999 and the first half of 2000, for example, which some believe contributed to the dot-com collapse.
That is why some investors are wary of the recent rush of stock and bond issuance, as well as a slowdown in stock buybacks. Already this year, $344.7 billion of new shares have been sold to investors—more than the full-year totals in 2025, 2024, 2023 and 2022, according to Dealogic, which includes public offerings, follow-ons and convertible bonds in its totals.
“Stock issuance tends to surge in the late stages of a bull market,” says Rob Arnott, chair of Research Affiliates.
The pace of issuance is picking up. Last month, SpaceX went public in the biggest-ever IPO. On Friday, SK Hynix’s offering marked the largest-ever share sale by a non-U.S. company. More issuance is on the way, with the AI developer Anthropic and others planning to go public.
And fewer companies are buying back shares, another way the overall supply of shares is swelling.
Overall, U.S. companies will issue a net $500 billion of equities and debt over the next year, compared with a net reduction of $1 trillion of stocks and bonds in recent years, mostly from stock buybacks, according to Elm Wealth, an advisory firm.
A surge of share sales doesn’t guarantee a stock slump, of course. Comparable issuance took place in 2021, as investors hoovered up shares of special-purchase acquisition companies, also known as SPACs. Many of those deals ran into problems, costing investors big money, though the S&P 500 shook the concerns off, soaring 27% in 2021.
But a surge of stock sales is a phenomenon sometimes witnessed near the end of bull markets, as companies take advantage of investor exuberance.
One of the bigger shifts lately is that AI “hyperscalers,” or companies operating huge data centers and other AI services, are selling shares and debt to raise capital for a historic capital-expenditure spree.
These companies are expected to have total capex of more than $800 billion this year, up from $450 billion last year, and the figure will top $1 trillion next year, according to Janus Henderson Investors.
“Many of the hyperscalers are beginning to undo years of carefully manicured capital allocation, with share buybacks now making way for share issues,” says John Lloyd, Janus Henderson’s global head of multisector credit.
Amazon.com alone raised $85 billion in equity sales in the first half of this year, Lloyd notes, while Oracle now has negative cash flow.
“Pre-AI, these companies were extraordinary cash businesses with little debt that really focused on buybacks,” he says. “That’s all changed.”
Some veterans say a surge in stock issuance along with fewer stock buybacks shouldn’t worry investors too much, partly because they have a marginal impact on the overall market’s supply and demand. After all, the value of the U.S. stock market is close to $80 trillion, dwarfing the changes in issuance.
It is difficult to predict when rising stock sales and slowing buybacks might weigh on stocks, says Howard Marks, co-chairman of the investment firm Oaktree Capital Management. Just as important, he says, they are unlikely to be enough by themselves to end a bull market.
“It is a reflection of an environment of optimism in the business sector and that investors don’t want to miss out,” says James Paulsen, the former chief investment strategist at Leuthold Group, who writes a Substack. “In the extreme, that’s a sign that things are overdone.”
It isn’t clear whether a surging supply of shares can derail a market that has a lot going for it. Earnings have been strong, and the economy shows few signs of slowing. Stock prices are at expensive levels—the dividend yield of the S&P 500 is 1.05%, for example, its lowest level on record, according to Research Affiliates—but markets rarely fall because of high valuations.
If spending on artificial intelligence can continue apace, this bull market might have longer legs than past such markets.
“I’m in the Cassandra camp, but continued good news on the AI front can sustain this rally,” says Antti Ilmanen, global co-head of the Portfolio Solutions Group at AQR Capital Management.
Even those who consider the market overpriced are wary of betting against it. Arnott, for example, recommends that investors buy shares of smaller companies and emerging-market value stocks, rather than pulling out of the market.
Historically, rising interest rates, new regulations and underappreciated risks have brought bulls down. In 1987, it was portfolio insurance, while subprime lending sank the market in 2008. But the Federal Reserve isn’t likely to raise rates enough to cripple the economy or the market, according to investors.
Marks says he doesn’t detect similar potential risk factors comparable to portfolio insurance or subprime lending.
“I don’t see prominent excesses, and our economy feels pretty good,” he says. “It would be folly to predict a recession any time soon.”
Buying Influence
As long as practically all Republicans (and too many Democrats) are willing to sit on their asses and either take the money, or just watch the parade go by, this kind of obvious corruption will continue.
Expensive Gifts:
Despite regulating broadcast media, FCC commissioners have accepted pricey tickets to the Kennedy Center honors gala from CBS or its parent company, now Paramount.
Conflict of Interest:
Mixing Business and Pleasure:
These highlights were written by the reporters and editors who worked on this story.
The rich and famous who filed into the Kennedy Center’s opera house in December were there to enjoy one of the nation’s most exclusive celebrations of the performing arts: the center’s annual honors gala.
The black-tie event, hosted by President Donald Trump, prioritized tickets to people who donated more than $75,000 to the center. This year, it feted Hollywood icon Sylvester Stallone, the legendary glam rock band Kiss and the Grammy Award-winning disco pioneer Gloria Gaynor.
Among the attendees that evening were two lower-profile government officials whose regulatory decisions had been crucial to the future of the gala’s broadcast sponsor, CBS, and its parent company, Paramount.
Five months earlier, Federal Communications Commissioner Olivia Trusty cast a decisive vote approving Paramount’s historic $8 billion merger with Skydance Media. Now, the commissioner and a guest enjoyed the star-studded celebration thanks to tickets gifted to her by Paramount worth more than $12,000, according to ethics disclosure records obtained by ProPublica.
The other commissioner who approved the merger watched from a prized perch. FCC Chair Brendan Carr and his wife sat in a private skybox with Paramount CEO David Ellison and other executives from Paramount and CBS. Such seats sold for $125,000 a ticket, according to Kennedy Center guidelines.
It’s unclear if Paramount gifted Carr the premium seats because the FCC has yet to make public his financial disclosure for last year.
However, past disclosures show Carr and Trusty are among seven FCC commissioners who have accepted Kennedy gala tickets from CBS or its parent company over the last decade. Ethics experts told ProPublica this poses a blatant conflict of interest since the commission regulates the network. Carr’s previous financial statements show he has accepted tickets at least seven times since his 2017 appointment, totaling over $63,000 in gifts.
Last December’s ceremony attended by Trusty and Carr took place as Paramount was launching a hostile takeover bid for Warner Bros. Discovery, a move that would later result in a merger agreement that requires FCC approval.
Federal ethics rules ban employees from taking gifts from any entity that does business with, is regulated by or seeks official action from their agency.
Four ethics experts told ProPublica that by accepting the premium tickets Trusty and Carr compromised the FCC’s impartiality and should not take part in any upcoming decision on the merger.
“There’s no way that any top federal regulator should ever, ever accept a gift from a regulated company with interests their work will foreseeably affect,” said Walter Shaub, who led the federal Office of Government Ethics from 2013 to 2017. “The appearance of taking gifts like that is terrible. What’s at stake is nothing less than the public’s trust in government.”
Virginia Canter, who served as an ethics lawyer at the White House, Treasury Department, and Securities and Exchange Commission during the presidencies of George H.W. Bush, Bill Clinton, George W. Bush and Barack Obama, said the commissioners who accepted tickets cannot participate in this matter without damaging the integrity of the government’s decision-making process.
“This is shocking. Pretty disturbing, that’s what I would say. I just don’t understand what they were thinking,” said Canter, who now works as chief counsel for ethics and corruption at the nonpartisan government watchdog group Democracy Defenders Fund.
The FCC’s review of the merger is one of the final hurdles facing a historic $110 billion consolidation of two of the five largest film studios in Hollywood. The deal would unite Paramount Skydance with Warner Bros., bringing under the control of one company Paramount+ and HBO Max streaming services; CBS and CNN; and scores of other major broadcast channels, cable networks, and digital platforms.
The new megacorporation, which could reshape how millions will access news, movies, sports and video games, faces fierce opposition from inside and outside Hollywood. More than 5,000 actors, producers and entertainment workers — including stars such as Robert De Niro, Javier Bardem, Joaquin Phoenix and Glenn Close — signed an open letter decrying how the consolidation would eliminate jobs and compromise “the integrity, independence, and diversity of our industry.”
On Monday, California, New York and 10 other Democratic states filed a lawsuit seeking to block the merger under federal and state anti-monopoly laws.
American and international regulators are evaluating the deal for its potential national security implications and impacts to consumers worldwide. Last week, the British government signaled it planned to investigate whether the new entertainment titan that would emerge from the union would unfairly stifle competition. The FCC’s ongoing review includes examining the Middle Eastern sovereign wealth funds backing the deal, including from Saudi Arabia, Qatar and Abu Dhabi.
The FCC usually has five commissioners — all appointed by the president and confirmed by the Senate to serve five-year terms — but the agency currently has only three. Any vote by the full commission would likely be decided by Republicans Carr and Trusty over Democrat Anna Gomez. Gomez was not at the December 2025 show but has accepted tickets from Paramount in the past. Because the FCC requires a three-commissioner quorum for a vote, any recusal could leave the panel unable to decide on the merger. Carr could decide to ask staff to approve the deal rather than bring it to a commission vote, but the ethics experts said he should recuse himself from any decisions affecting the Paramount merger.
The experts warned the commissioners’ gifts might become central in legal challenges and said the Justice Department should investigate potential violations of federal rules or laws.
Neither Carr nor Trusty responded to ProPublica’s requests for comment. Gomez said in a statement that she followed agency advice when she attended the event in 2023 and 2024. Her statement did not elaborate or otherwise address why taking gifts from Paramount did not pose a conflict of interest.
An FCC spokesperson said agency ethics officers have for years cleared commissioner appearances, finding it consistent with ethics law.
“FCC Chairs and officials have attended the same event, in the same ways, consistently from the Trump Administration to the Biden Administration to the Obama Administration,” the FCC said in a statement. “There has been no change in recent years.”
Shaub called the justification outrageous.
“It’s no excuse to say that you took the gift because everyone else was doing it or that your agency has had a bad habit of indulging in gift taking for a long time,” Shaub said. “That kind of explanation doesn’t work for school children, and it sure as hell doesn’t work for government officials who are supposed to have better judgment than a fifth grader.”
Despite their oversight role, FCC members have long enjoyed a night out at the Kennedy Center courtesy of CBS or its parent company. Seven of the 10 commissioners who served since 2016 accepted tickets worth more than $260,000, according to a ProPublica analysis of ethics disclosures.
Carr’s predecessor, Jessica Rosenworcel, who was appointed FCC chair by President Joe Biden and stepped down in January 2025, attended regularly.
Rosenworcel and several other former commissioners who accepted the tickets did not respond to requests for comment. The one commissioner who didn’t accept a single gift, Nathan Simington, said he received the Kennedy Center invites from CBS and Paramount but turned them down because it “wasn’t my cup of tea.”
A review of 10 years of disclosures shows commissioners accepted paid trips from various sponsors to appear at banquets and speak at conferences. Some of those gifts came from other media companies regulated by the FCC. NBCUniversal, ABC-Disney and Fox News, for instance, paid for commissioners to attend White House Correspondents’ Association dinners, records show. The total value of the combined gifts topped $308,000. But the vast majority came from CBS and its parent company.
Melissa Zukerman, Paramount’s chief communications officer, said it was a decades-long “CBS practice to invite government officials from both parties” to the Kennedy Center show. She didn’t address why the practice continued after new ownership took over last year, the purpose of the gifts or whether the tickets posed a conflict of interest.
Carr, who joined the FCC as a staffer in 2012 and rose to become the agency’s general counsel, was appointed to serve as a commissioner by Trump during his first term. Since then, Carr has accepted tickets annually, except when the 2020 event was postponed due to the COVID-19 pandemic, according to his public disclosures.
Carr did not respond to an email request from ProPublica for his latest ethics report, which would indicate whether Paramount also paid for him to attend last December’s gala. The FCC referred us to the Office of Government Ethics, which told us that the FCC had not yet provided the disclosure. The FCC did not respond to our subsequent requests for the record.
A 2009 Office of Government Ethics memo gave federal employees the right to attend Kennedy Center events but explicitly said officials cannot accept free attendance “offered by persons other than the Kennedy Center and its trustees, officers and employees.” In 2016, the ethics office tightened its gift requirements, warning officials to avoid any appearance “of loss of impartiality.”
There is an exemption to the gift rules that allows free entry to gatherings that are widely attended and paid for by third parties, but only if certain conditions are met.
The event must “further agency programs or operations,” and the agency’s interest in an official attending must outweigh “concern that the employee may be, or may appear to be, improperly influenced in the performance of official duties,” according to the federal rules.
As an example, the Office of Government Ethics said an industry-wide seminar attended by more than 100 people could be allowed if the employee’s participation would be in the agency’s interest. But those attending should “represent a range of persons interested in a given matter” and the event must provide a “structured opportunity” to exchange ideas and views among invitees.
The office clarified in a 2007 memo that performing arts presentations would not count even if they, like the honors gala, have a reception before or afterward at which officials can mingle with other attendees.
Canter, the former White House ethics lawyer, said it would be a “stretch” for the FCC to argue the exemptions apply to the Kennedy Center’s annual show, where famous musicians perform and celebrities laud those who are being honored. “It’s not what we would consider a widely attended gathering,” she said.
Kedric Payne, general counsel and senior director of ethics at the Campaign Legal Center, a nonpartisan watchdog group, noted that federal rules also require agencies to weigh the market value of the attendance, its relevance to the agency, any sensitive pending matters involving the donor and whether accepting free tickets creates an appearance of preferential treatment.
“The ethics rules are designed to prevent this exact situation,” he said, adding that it is an “obvious conflict of interest” for an official to “accept expensive gifts from anyone with decisions pending before the agency. This matters because it makes the public question whether official decisions are free from the improper influence of wealthy special interests.”
An FCC official familiar with the legal guidance given to the commissioners said they were told the event met the criteria for the “widely attended gathering” exception. (The source was not authorized to talk publicly about agency legal discussions.)
Shaub, the former Office of Government Ethics head, disagreed, saying it would be “hard to understand what compelling interest the FCC could think it had in letting its commissioners” attend the gala.
“What possible reason could have outweighed the obvious ethics concerns?” he asked.
Federal rules require written authorization for an official to accept free entry to a widely attended gathering. The FCC did not respond to our requests to provide the authorizations for the Paramount tickets or say who authorized them. Two senior ethics officials at the agency, Kathleen Fulp and Lauren Northrop, did not respond to requests for comment.
While December’s event came at a particularly sensitive time for Paramount and the FCC, it wasn’t the first.
More than a year earlier, in September 2024, Paramount had filed paperwork seeking the commission’s approval for its merger with Skydance Media. A month later, the FCC launched an investigation of CBS after a conservative group complained about a “60 Minutes” interview with Democratic presidential candidate Kamala Harris. Trump later filed a lawsuit alleging the network deceptively edited the interview — an accusation CBS denied.
Then in November, less than two weeks after his election victory, Trump declared he would appoint Carr as FCC chair. Almost immediately, Carr accused CBS of biased election coverage and said it would be an obstacle to approving the Paramount-Skydance merger.
That December, Carr and three other commissioners — Rosenworcel, Gomez and Geoffrey Starks — accepted Kennedy Center gala tickets from Paramount worth a combined $48,156.
On Jan. 16, 2025, just days before Rosenworcel stepped down from the commission, she announced the agency was dismissing the election complaint against CBS. She and Gomez called the outcome a victory for the First Amendment.
But days later, Carr, the incoming FCC chair, reopened the investigation.
To resolve Trump’s lawsuit, CBS agreed to pay the president $16 million, a decision criticized by legal experts who decried Trump’s claims as baseless.
Two days after Trump posted on social media that he had received the settlement money, the FCC took up the Paramount-Skydance merger. To meet Carr’s demands, Paramount agreed to appoint an independent ombudsperson who would evaluate claims of bias. The company also pledged to eliminate its diversity, equity and inclusion initiatives.
By then, Starks and Simington had unexpectedly stepped down from the commission. Trusty, a Trump appointee, had been confirmed by the Senate the previous month.
Trusty and Carr voted in favor of the merger. Gomez voted against, blasting the approval for requiring “never-before-seen forms of government control over newsroom decisions and editorial judgment.”
Experts said that while Trusty had no conflict yet, Carr and Gomez did. The fact that Gomez voted against Paramount did not mean she didn’t face a conflict under the rules, Shaub said.
Federal rules only require those who accept improper gifts to make a prompt reimbursement, but Shaub and the other experts said Carr and Gomez should have abstained from the vote.
“If you repay the face value of the ticket, the gift rules don’t require you to recuse — though common sense and any kind of conscience might lead you to recuse voluntarily for the good of the country,” Shaub said. “But if you refuse to repay the donor, I don’t see how anything short of recusal could remotely remediate the problem.”
With the Paramount-Skydance merger greenlit by the FCC, Ellison, the new company’s CEO, then set his sights on acquiring Warner Bros. Discovery.
Warner at first rebuffed Paramount’s overtures and on Dec. 5 — two days before the Kennedy Center gala — accepted a bid from Netflix to buy its studio and streaming assets. Ellison responded by making numerous calls to administration officials and had a long talk with Trump, according to The Wall Street Journal.
On the night of the gala, Trump told reporters the Netflix deal “could be a problem” and that he planned to get directly involved with the regulatory approval. Inside the Kennedy Center, Carr and his wife sat with Ellison in an exclusive skybox, Bloomberg reported. (Gomez said in her statement to ProPublica that she declined Paramount’s “invitation because of serious concerns about press independence connected to conditions Paramount agreed to as part of its merger transaction before the FCC.”)
Hours after the gala ended, Paramount announced it was launching its hostile takeover bid of Warner Bros. Discovery.
About three months later, Carr publicly endorsed Paramount over Netflix on CNBC, promising swift approval.
If one or more commissioners choose to abstain from a merger vote because of ethical concerns, what would happen next is unclear. Under federal conflict of interest rules, an agency designee could theoretically permit commissioners to vote after considering several factors, including “the difficulty of reassigning the matter,” the nature of the relationship between the commissioners and Paramount, and the “effect that resolution of the matter would have upon the financial interests” of the firm.
Carr could bypass a full commission vote entirely, as he did with the recent acquisition of Tegna by Nexstar Media Group. In that case, Carr delegated authority to FCC staff to approve the takeover.
But any decision on the Paramount deal — whether by the full commission or by staff at the direction of the chair — is likely to be challenged.
Richard Painter, a former White House ethics attorney in the administration of George W. Bush, said while courts often defer to the government’s judgment, they also can become skeptical if a regulatory agency is shown to have violated ethics rules.
“A judge may very well say that the merger decision of the FCC isn’t worth jack because the process was corrupted,” he said.
Conflict of Interest:
Ethics experts say that by accepting the gifts, FCC commissioners are compromising the agency’s impartiality and should avoid acting on Paramount’s pending merger.
Mixing Business and Pleasure:
After voting for a Paramount merger, Commissioner Olivia Trusty took tickets worth over $12,000. FCC Chair Brendan Carr has accepted tickets worth at least $63,000.
These highlights were written by the reporters and editors who worked on this story.
The rich and famous who filed into the Kennedy Center’s opera house in December were there to enjoy one of the nation’s most exclusive celebrations of the performing arts: the center’s annual honors gala.
The black-tie event, hosted by President Donald Trump, prioritized tickets to people who donated more than $75,000 to the center. This year, it feted Hollywood icon Sylvester Stallone, the legendary glam rock band Kiss and the Grammy Award-winning disco pioneer Gloria Gaynor.
Among the attendees that evening were two lower-profile government officials whose regulatory decisions had been crucial to the future of the gala’s broadcast sponsor, CBS, and its parent company, Paramount.
Five months earlier, Federal Communications Commissioner Olivia Trusty cast a decisive vote approving Paramount’s historic $8 billion merger with Skydance Media. Now, the commissioner and a guest enjoyed the star-studded celebration thanks to tickets gifted to her by Paramount worth more than $12,000, according to ethics disclosure records obtained by ProPublica.
The other commissioner who approved the merger watched from a prized perch. FCC Chair Brendan Carr and his wife sat in a private skybox with Paramount CEO David Ellison and other executives from Paramount and CBS. Such seats sold for $125,000 a ticket, according to Kennedy Center guidelines.
It’s unclear if Paramount gifted Carr the premium seats because the FCC has yet to make public his financial disclosure for last year.
However, past disclosures show Carr and Trusty are among seven FCC commissioners who have accepted Kennedy gala tickets from CBS or its parent company over the last decade. Ethics experts told ProPublica this poses a blatant conflict of interest since the commission regulates the network. Carr’s previous financial statements show he has accepted tickets at least seven times since his 2017 appointment, totaling over $63,000 in gifts.
Last December’s ceremony attended by Trusty and Carr took place as Paramount was launching a hostile takeover bid for Warner Bros. Discovery, a move that would later result in a merger agreement that requires FCC approval.
Federal ethics rules ban employees from taking gifts from any entity that does business with, is regulated by or seeks official action from their agency.
Four ethics experts told ProPublica that by accepting the premium tickets Trusty and Carr compromised the FCC’s impartiality and should not take part in any upcoming decision on the merger.
“There’s no way that any top federal regulator should ever, ever accept a gift from a regulated company with interests their work will foreseeably affect,” said Walter Shaub, who led the federal Office of Government Ethics from 2013 to 2017. “The appearance of taking gifts like that is terrible. What’s at stake is nothing less than the public’s trust in government.”
Virginia Canter, who served as an ethics lawyer at the White House, Treasury Department, and Securities and Exchange Commission during the presidencies of George H.W. Bush, Bill Clinton, George W. Bush and Barack Obama, said the commissioners who accepted tickets cannot participate in this matter without damaging the integrity of the government’s decision-making process.
“This is shocking. Pretty disturbing, that’s what I would say. I just don’t understand what they were thinking,” said Canter, who now works as chief counsel for ethics and corruption at the nonpartisan government watchdog group Democracy Defenders Fund.
The FCC’s review of the merger is one of the final hurdles facing a historic $110 billion consolidation of two of the five largest film studios in Hollywood. The deal would unite Paramount Skydance with Warner Bros., bringing under the control of one company Paramount+ and HBO Max streaming services; CBS and CNN; and scores of other major broadcast channels, cable networks, and digital platforms.
The new megacorporation, which could reshape how millions will access news, movies, sports and video games, faces fierce opposition from inside and outside Hollywood. More than 5,000 actors, producers and entertainment workers — including stars such as Robert De Niro, Javier Bardem, Joaquin Phoenix and Glenn Close — signed an open letter decrying how the consolidation would eliminate jobs and compromise “the integrity, independence, and diversity of our industry.”
On Monday, California, New York and 10 other Democratic states filed a lawsuit seeking to block the merger under federal and state anti-monopoly laws.
American and international regulators are evaluating the deal for its potential national security implications and impacts to consumers worldwide. Last week, the British government signaled it planned to investigate whether the new entertainment titan that would emerge from the union would unfairly stifle competition. The FCC’s ongoing review includes examining the Middle Eastern sovereign wealth funds backing the deal, including from Saudi Arabia, Qatar and Abu Dhabi.
The FCC usually has five commissioners — all appointed by the president and confirmed by the Senate to serve five-year terms — but the agency currently has only three. Any vote by the full commission would likely be decided by Republicans Carr and Trusty over Democrat Anna Gomez. Gomez was not at the December 2025 show but has accepted tickets from Paramount in the past. Because the FCC requires a three-commissioner quorum for a vote, any recusal could leave the panel unable to decide on the merger. Carr could decide to ask staff to approve the deal rather than bring it to a commission vote, but the ethics experts said he should recuse himself from any decisions affecting the Paramount merger.
The experts warned the commissioners’ gifts might become central in legal challenges and said the Justice Department should investigate potential violations of federal rules or laws.
Neither Carr nor Trusty responded to ProPublica’s requests for comment. Gomez said in a statement that she followed agency advice when she attended the event in 2023 and 2024. Her statement did not elaborate or otherwise address why taking gifts from Paramount did not pose a conflict of interest.
An FCC spokesperson said agency ethics officers have for years cleared commissioner appearances, finding it consistent with ethics law.
“FCC Chairs and officials have attended the same event, in the same ways, consistently from the Trump Administration to the Biden Administration to the Obama Administration,” the FCC said in a statement. “There has been no change in recent years.”
Shaub called the justification outrageous.
“It’s no excuse to say that you took the gift because everyone else was doing it or that your agency has had a bad habit of indulging in gift taking for a long time,” Shaub said. “That kind of explanation doesn’t work for school children, and it sure as hell doesn’t work for government officials who are supposed to have better judgment than a fifth grader.”
Despite their oversight role, FCC members have long enjoyed a night out at the Kennedy Center courtesy of CBS or its parent company. Seven of the 10 commissioners who served since 2016 accepted tickets worth more than $260,000, according to a ProPublica analysis of ethics disclosures.
Carr’s predecessor, Jessica Rosenworcel, who was appointed FCC chair by President Joe Biden and stepped down in January 2025, attended regularly.
Rosenworcel and several other former commissioners who accepted the tickets did not respond to requests for comment. The one commissioner who didn’t accept a single gift, Nathan Simington, said he received the Kennedy Center invites from CBS and Paramount but turned them down because it “wasn’t my cup of tea.”
A review of 10 years of disclosures shows commissioners accepted paid trips from various sponsors to appear at banquets and speak at conferences. Some of those gifts came from other media companies regulated by the FCC. NBCUniversal, ABC-Disney and Fox News, for instance, paid for commissioners to attend White House Correspondents’ Association dinners, records show. The total value of the combined gifts topped $308,000. But the vast majority came from CBS and its parent company.
Melissa Zukerman, Paramount’s chief communications officer, said it was a decades-long “CBS practice to invite government officials from both parties” to the Kennedy Center show. She didn’t address why the practice continued after new ownership took over last year, the purpose of the gifts or whether the tickets posed a conflict of interest.
Carr, who joined the FCC as a staffer in 2012 and rose to become the agency’s general counsel, was appointed to serve as a commissioner by Trump during his first term. Since then, Carr has accepted tickets annually, except when the 2020 event was postponed due to the COVID-19 pandemic, according to his public disclosures.
Carr did not respond to an email request from ProPublica for his latest ethics report, which would indicate whether Paramount also paid for him to attend last December’s gala. The FCC referred us to the Office of Government Ethics, which told us that the FCC had not yet provided the disclosure. The FCC did not respond to our subsequent requests for the record.
A 2009 Office of Government Ethics memo gave federal employees the right to attend Kennedy Center events but explicitly said officials cannot accept free attendance “offered by persons other than the Kennedy Center and its trustees, officers and employees.” In 2016, the ethics office tightened its gift requirements, warning officials to avoid any appearance “of loss of impartiality.”
There is an exemption to the gift rules that allows free entry to gatherings that are widely attended and paid for by third parties, but only if certain conditions are met.
The event must “further agency programs or operations,” and the agency’s interest in an official attending must outweigh “concern that the employee may be, or may appear to be, improperly influenced in the performance of official duties,” according to the federal rules.
As an example, the Office of Government Ethics said an industry-wide seminar attended by more than 100 people could be allowed if the employee’s participation would be in the agency’s interest. But those attending should “represent a range of persons interested in a given matter” and the event must provide a “structured opportunity” to exchange ideas and views among invitees.
The office clarified in a 2007 memo that performing arts presentations would not count even if they, like the honors gala, have a reception before or afterward at which officials can mingle with other attendees.
Canter, the former White House ethics lawyer, said it would be a “stretch” for the FCC to argue the exemptions apply to the Kennedy Center’s annual show, where famous musicians perform and celebrities laud those who are being honored. “It’s not what we would consider a widely attended gathering,” she said.
Kedric Payne, general counsel and senior director of ethics at the Campaign Legal Center, a nonpartisan watchdog group, noted that federal rules also require agencies to weigh the market value of the attendance, its relevance to the agency, any sensitive pending matters involving the donor and whether accepting free tickets creates an appearance of preferential treatment.
“The ethics rules are designed to prevent this exact situation,” he said, adding that it is an “obvious conflict of interest” for an official to “accept expensive gifts from anyone with decisions pending before the agency. This matters because it makes the public question whether official decisions are free from the improper influence of wealthy special interests.”
An FCC official familiar with the legal guidance given to the commissioners said they were told the event met the criteria for the “widely attended gathering” exception. (The source was not authorized to talk publicly about agency legal discussions.)
Shaub, the former Office of Government Ethics head, disagreed, saying it would be “hard to understand what compelling interest the FCC could think it had in letting its commissioners” attend the gala.
“What possible reason could have outweighed the obvious ethics concerns?” he asked.
Federal rules require written authorization for an official to accept free entry to a widely attended gathering. The FCC did not respond to our requests to provide the authorizations for the Paramount tickets or say who authorized them. Two senior ethics officials at the agency, Kathleen Fulp and Lauren Northrop, did not respond to requests for comment.
While December’s event came at a particularly sensitive time for Paramount and the FCC, it wasn’t the first.
More than a year earlier, in September 2024, Paramount had filed paperwork seeking the commission’s approval for its merger with Skydance Media. A month later, the FCC launched an investigation of CBS after a conservative group complained about a “60 Minutes” interview with Democratic presidential candidate Kamala Harris. Trump later filed a lawsuit alleging the network deceptively edited the interview — an accusation CBS denied.
Then in November, less than two weeks after his election victory, Trump declared he would appoint Carr as FCC chair. Almost immediately, Carr accused CBS of biased election coverage and said it would be an obstacle to approving the Paramount-Skydance merger.
That December, Carr and three other commissioners — Rosenworcel, Gomez and Geoffrey Starks — accepted Kennedy Center gala tickets from Paramount worth a combined $48,156.
On Jan. 16, 2025, just days before Rosenworcel stepped down from the commission, she announced the agency was dismissing the election complaint against CBS. She and Gomez called the outcome a victory for the First Amendment.
But days later, Carr, the incoming FCC chair, reopened the investigation.
To resolve Trump’s lawsuit, CBS agreed to pay the president $16 million, a decision criticized by legal experts who decried Trump’s claims as baseless.
Two days after Trump posted on social media that he had received the settlement money, the FCC took up the Paramount-Skydance merger. To meet Carr’s demands, Paramount agreed to appoint an independent ombudsperson who would evaluate claims of bias. The company also pledged to eliminate its diversity, equity and inclusion initiatives.
By then, Starks and Simington had unexpectedly stepped down from the commission. Trusty, a Trump appointee, had been confirmed by the Senate the previous month.
Trusty and Carr voted in favor of the merger. Gomez voted against, blasting the approval for requiring “never-before-seen forms of government control over newsroom decisions and editorial judgment.”
Experts said that while Trusty had no conflict yet, Carr and Gomez did. The fact that Gomez voted against Paramount did not mean she didn’t face a conflict under the rules, Shaub said.
Federal rules only require those who accept improper gifts to make a prompt reimbursement, but Shaub and the other experts said Carr and Gomez should have abstained from the vote.
“If you repay the face value of the ticket, the gift rules don’t require you to recuse — though common sense and any kind of conscience might lead you to recuse voluntarily for the good of the country,” Shaub said. “But if you refuse to repay the donor, I don’t see how anything short of recusal could remotely remediate the problem.”
With the Paramount-Skydance merger greenlit by the FCC, Ellison, the new company’s CEO, then set his sights on acquiring Warner Bros. Discovery.
Warner at first rebuffed Paramount’s overtures and on Dec. 5 — two days before the Kennedy Center gala — accepted a bid from Netflix to buy its studio and streaming assets. Ellison responded by making numerous calls to administration officials and had a long talk with Trump, according to The Wall Street Journal.
On the night of the gala, Trump told reporters the Netflix deal “could be a problem” and that he planned to get directly involved with the regulatory approval. Inside the Kennedy Center, Carr and his wife sat with Ellison in an exclusive skybox, Bloomberg reported. (Gomez said in her statement to ProPublica that she declined Paramount’s “invitation because of serious concerns about press independence connected to conditions Paramount agreed to as part of its merger transaction before the FCC.”)
Hours after the gala ended, Paramount announced it was launching its hostile takeover bid of Warner Bros. Discovery.
About three months later, Carr publicly endorsed Paramount over Netflix on CNBC, promising swift approval.
If one or more commissioners choose to abstain from a merger vote because of ethical concerns, what would happen next is unclear. Under federal conflict of interest rules, an agency designee could theoretically permit commissioners to vote after considering several factors, including “the difficulty of reassigning the matter,” the nature of the relationship between the commissioners and Paramount, and the “effect that resolution of the matter would have upon the financial interests” of the firm.
Carr could bypass a full commission vote entirely, as he did with the recent acquisition of Tegna by Nexstar Media Group. In that case, Carr delegated authority to FCC staff to approve the takeover.
But any decision on the Paramount deal — whether by the full commission or by staff at the direction of the chair — is likely to be challenged.
Richard Painter, a former White House ethics attorney in the administration of George W. Bush, said while courts often defer to the government’s judgment, they also can become skeptical if a regulatory agency is shown to have violated ethics rules.
“A judge may very well say that the merger decision of the FCC isn’t worth jack because the process was corrupted,” he said.
Jul 14, 2026
Tax Them Now
IF WE TAX THEM NOW
WE WON'T HAVE TO EAT THEM LATER
Signs of extreme wealth are nearly everywhere you look. Elon Musk’s wealth recently soared beyond $1 trillion after SpaceX went public. Ultra-wealthy couples are taking over large swaths of major cities for their weddings. And even President Donald Trump’s wealth while in office grew on a scale without precedent in modern presidential history.
All of this has some progressives convinced that the political appetite for a national wealth tax on the ultra-rich is stronger than it has been in years.
Enter “Tax the Greedy Billionaires,” a progressive national advocacy campaign trying to seize this moment by pushing members of Congress to run on a wealth tax ahead of the 2026 midterms.
Igor Volsky, the organization’s campaign director, was blunt when asked whether this kind of project would have been possible even five years ago: “No.”
“What we’ve seen over the last couple of years is the kind of blatant exercise of billionaire power that so many folks have been warning us about over the past couple of decades,” said Volsky. “That’s why the issue is in the zeitgeist.”
Their proposal is relatively simple. The group is pushing Democrats to run on what is known as a Five & Dime tax plan that would impose a 5 percent tax on household net wealth over $50 million and 10 percent on net wealth over $250 million. The Tax Policy Center, a joint research project between the Urban Institute and the Brookings Institution, has found that such a plan would raise $6.8 trillion in the first 10 years.
But wealth taxes have long faced practical and legal objections, including how to value hard-to-price assets, how to prevent avoidance and whether a national tax on net wealth would survive constitutional challenge.
Liberal members of Congress, like Rep. Chris Deluzio (D-Pennsylvania), argue the need for this kind of tax has never been higher because the way the ultra-wealthy generate wealth — through return on investments and taking loans against their assets — has led those families to pay “historically low taxes at a time when the share of wealth held by the richest Americans has really soared.”
“Generating revenue for our government by breaking some of that power and impacting these folks is the fiscally responsible thing to do,” Deluzio told us. “When you have people making a paycheck who are school teachers or firefighters or nurses who have a higher effective tax rate than a millionaire, that’s some crazy stuff.”
The idea of taxing the rich is not necessarily new in American politics. Democrats have long argued that the wealthy should have to “pay their fair share,” and in 2024, Democratic nominee Kamala Harris would often tie the rise of the wealthy to the need to protect democracy, homing in on the way billionaires like Musk were spending in elections.
But in a sign of how the proverbial Overton window has shifted in the past two years, Tax the Greedy Billionaires’ argument centers far less on protecting democracy and far more on how that wealth is making life harder for others, from raising rents in American cities to driving up health care costs.
And Volsky, who says the “pay your fair share” talking point is “outdated,” argued that is why a key goal for the group is showing members of Congress — even skeptics — that the public is likely “far ahead of them on this issue.”
A 2026 poll by the Pew Research Center backs this up.
The poll found that roughly 6 in 10 adults say the feeling that wealthy people and corporations don’t pay their fair share “bothers them a lot.” Among Democrats, 81 percent said that about wealthy people, compared with 41 percent of Republicans.
Musk has become one of the clearest symbols of this shift. He played a major role in Trump’s 2024 campaign and the first year of his administration, slashing government spending and jobs as his personal wealth continued to soar.
“At a time when Elon Musk is set to become a trillionaire after wreaking havoc on our government, it’s clear we need to rein in the unprecedented power of the ultra-wealthy,” Rep. Greg Casar (D-Texas), the chair of the Congressional Progressive Caucus, said in support of a wealth tax.
So where does this issue go from here?
Volsky’s goal is to thrust this issue into the conversation this year, with the hope of a wealth tax becoming a key issue in Democrats’ 2028 presidential nominating process. Many Republicans have firmly opposed a wealth tax. Rep. Virginia Foxx (R-North Carolina) said during a speech on the House floor this year that Democrats are telling “half truths” about how the wealthy pay their taxes.
And some Democrats, like California Gov. Gavin Newsom, have opposed a wealth tax in his state, arguing that the wealthy will just leave the state or shift their wealth. Newsom says he supports a national wealth tax.
Volsky called Newsom’s positioning on the issue “incredibly disappointing” and argued it suggests he feels he needs wealthy individuals to support his future political aspirations. But he added that his belief is that Newsom is the Democratic exception, not the rule.
“The public is really far ahead on this issue,” Volsky said. “This old playbook of asking the ultra-rich or billionaires to just pay your fair share so that we could raise enough revenue to pay for a particular program simply isn’t meeting the scope of the crisis that we’re in or the challenge that we face.”
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