Choosing a method of accounting for a merger or acquisition does not af­fect the combined companies’ subsequent competitive strength or ability to generate cash.

The discretionary accounting choices can have a substan­tial impact, however, on reported earnings. As a consequence, seemingly es­oteric debates over mergers and acquisitions (M&A) have turned into high-level political issues.

In September 2000, Democratic vice presidential nominee Joseph Lieberman took a position on the long-standing debate over pooling-of- interests accounting (see following section).

On March 14 of the same year, Cisco Systems chairman John Cham­bers donated $100,000 to the Republican House of Representatives and Senate campaign committees. The next day, Virginia congressman Tom Davis, head of the Republicans’ House campaign, and the House Com­merce Committee chairman, Republican Thomas Bliley of Virginia, wrote to FASB chairman Edmund Jenkins urging a delay of the proposal to ban pooling. Chambers, whose company had been an active user of the pool­ing method,² insisted that the timing of the contribution and letter was co­incidental. “I had no knowledge of a letter being written,” he said.³ Indeed, Chambers indicated that he had written the check a few weeks be­fore it was reported, while Davis said that he had been pursuing the pooling issue on his own constituents’ behalf before the letter went to FASB’s Jenkins.