Four years ago on the campaign trail, future Maryland governor Larry Hogan blistered his Democratic opponents for what he called onerous taxes and other anti-business policies that, he said, led Fortune 500 companies to flee Maryland.
“We’ve chased out a lot of these businesses,” Hogan (R) said in May 2014, in a typical comment. “That would change on Day One in our administration.”
What a difference it makes to hold office.
When Discovery Communications announced Tuesday that it was moving its corporate headquarters from Silver Spring to New York — reducing the number of Fortune 500 companies based in Maryland from four to three — Hogan sounded considerably less alarmed.
“We’re not responsible. They assured us it didn’t have anything to do with Maryland,” the governor told reporters. “Of course, we’re disappointed when we lose one job, let alone hundreds . . . but in the grand scheme of things, it’s not the end of the world.”
Those remarks instantly drew sharp criticism from state Democrats, who hope to oust Hogan from the governorship in November.
“It’s deeply frustrating to see the governor be so out of touch as to say this is no big deal,” said Ben Jealous, a Democratic gubernatorial candidate and former NAACP president. “It’s going to impact families. It’s going to impact small businesses.”
Prince George’s County Executive Rushern L. Baker III (D), who also is seeking the Democratic nomination, said, “The governor has talked about Maryland being open for business. The way you show it is by providing the incentives and opportunities to keep important folks like Discovery Channel in the state.”
The Democrats’ pounce was inevitable, given Hogan’s past rhetoric, according to political and business analysts. Timing was also a factor, with Democrats eager to score political points as the annual General Assembly session began.
But the economic reality was that neither Hogan nor his predecessor, Martin O’Malley (D), had much influence over such corporate decisions, the analysts said. In the case of Discovery, as with companies that relocated during the O’Malley years, the principal reason for departing was a merger or other factors that neither governor could control.
Discovery “was going to move no matter what Hogan did,” said Matthew Crenson, a professor emeritus of political science at Johns Hopkins University. “He is bearing the blame for it now, partly because of the line he took earlier when he criticized his predecessors. . . . A lot of those companies were going to leave anyway, too.”
Peter L. Scher, chairman of the Mid-Atlantic region for JPMorgan Chase, said that “it’s a mistake for any politician to be looking for short-term political gains for these things.”
Discovery, which has 1,300 employees in Silver Spring, is in the process of acquiring Scripps Networks Interactive in a $14.6 billion deal that is triggering a consolidation of operations and contributed to the decision to change headquarters. The company also cited its desire to be in New York, which it called “home to the global media industry.”
Discovery did not provide specific numbers, but Chief Corporate Operating Officer David C. Leavy said several hundred Discovery jobs were expected to remain in Maryland, with the rest going to New York, Knoxville, Tenn.; Sterling, Va.; and Los Angeles.
The political assault from Democrats was — perhaps not surprisingly — selective. Those who sharply criticized Hogan had nothing bad to say about the all-Democratic Montgomery County government, which, like the state government, wooed Discovery and offered it incentives to stay.
Within Montgomery, Democrats vying to succeed outgoing County Executive Isiah Leggett (D) this fall steered clear of blaming Hogan. They said both the state and county did everything in their power to keep Discovery in Silver Spring and were simply unable to compete with New York’s thriving media scene and Knoxville’s low cost of living.
“If you’re Governor Hogan and Ike Leggett, wouldn’t you put everything you’ve got not to lose a Fortune 500 company?” said County Council member Roger Berliner (D-Potomac-Bethesda). “You don’t think we played hard? There are just some things you can’t overcome.”
Another candidate, council member Marc Elrich (D-At Large), said he was “not interested in blaming Hogan. . . . I don’t think it’d be intellectually honest.”
State Del. C. William Frick (D-Montgomery), who also is seeking the nomination to be county executive in the June 26 primary, used the relocation to buttress his argument that Montgomery is “not as competitive” and is lagging behind its regional peers in job growth.
The only Republican candidate so far, Robin Ficker, has said he would cut taxes in the county to help retain companies such as Discovery. In an interview, Ficker criticized Hogan for not going far enough to provide the company with an incentive to stay.
“We put in a huge public investment in the Silver Spring transit center, and one of the reasons we put that in was for the Discovery Channel, and now that’s all for naught,” Ficker, an attorney, said.
State Sen. William C. Smith Jr. (D-Montgomery) said he wouldn’t fault Leggett and Montgomery council members because, unlike Hogan, “they have not been parading around the state talking about the poisonous business climate.”
The state Democratic Party said Discovery’s departure marked the first time in more than two decades that a Fortune 500 company chose to move its headquarters from Maryland to another state.
During the 2014 campaign, Hogan drew criticism from the media and independent observers for exaggerating Maryland’s loss of Fortune 500 companies. He repeatedly claimed that 10 of Maryland’s 13 Fortune 500 companies left during the O’Malley administration.
In fact, based on lists provided this week by Hogan’s office and the state Democratic Party, the number of Fortune 500 companies that relocated was four: Constellation Energy, Black and Decker, Coventry Health Care and Catalyst Health Solutions. In each case, the move followed an acquisition of the Maryland company by a corporation outside the state, rather than a company headquartered in Maryland electing to move elsewhere.
Hogan spokesman Doug Mayer declined to discuss what Hogan said in 2014 but said the governor had turned Maryland’s economy around since then.
“By any normal person’s definition, Maryland is a much more competitive and business-friendly state under the governor,” Mayer said.
He said Hogan’s comment that Discovery’s move was “not the end of the world” was in the context of the creation of more than 130,000 jobs in the state during Hogan’s term.
That explanation isn’t likely to quiet the Democrats, at least at the state level. Donald Norris, emeritus professor of public policy at the University of Maryland Baltimore County, predicted they would continue to pound the governor.
“It’s going to play right into the Democrats’ narrative. If it isn’t a big deal now, why was it such a big deal four years ago?” Norris said.