In the National Post, Colby Cosh points out the weirdest element of President Trump’s deal with Nippon Steel for the takeover of venerable US Steel:
A “golden share” is a special kind of equity that gives its holder veto power over specified corporate decisions. It is often used in privatizations to give governments some vestige of control over corporate entities originally created by the state (or, in Canada, the Crown) for public purposes. In this unusual case, the U.S. government is magically gaining a golden share in exchange for permitting the sale of one private company to another. The government will be given the right to choose some U.S. Steel board directors, to forbid any name change, and to veto factory closures, offshoring, acquisitions and other moves.
As the Cato Institute immediately pointed out, this is a de facto nationalization of U.S. Steel — the sort of thing that would have had Cold War conservatives climbing the walls and hooting about socialism. But at least socialism professes to be social! Yesterday a lefty energy reporter named Robinson Meyer was nosing around in the revised corporate charter for the newly-acquired U.S. Steel, and he discovered a remarkable detail that the Cato folks had missed: the decision powers of the golden share have been legally assigned to Donald Trump in person and by name for the duration of his presidency. Only after Trump has left the White House do those golden-share powers revert to actual U.S. government departments (Treasury and Commerce).
The stench of banana-republicanism here is truly overwhelming. Again, any species of government foreign-investment review is bound to have a personal character, but such decisions are not supposed to involve the legally explicit assignment of a valuable corporate asset to the decision-maker in his own person. Can this be described as anything but legalized, open bribery — assuming that U.S. courts will find it legal if the terms of sale are challenged? Where in the U.S. Constitution, or in the history of the United States, can any warrant for this extraordinary behaviour conceivably be found? And will unholy bargains of this nature soon become routine?
