Apple 2.0

Covering the business that Steve Jobs built

Mr. Cook came to Washington and escaped unscathed

May 21, 2013: 3:05 PM ET

No one laid a glove on Apple's CEO, not even the subcommittee's hostile chairman.

Cook testifies. Image: NBC.com

Cook testifies. Image: NBC.com

FORTUNE -- In February, the Huffington Post's Jason Gilbert reviewed the performance of Apple (AAPL) shares on days that Tim Cook spoke in public and concluded, as his headline put it,

The Last 6 Times Tim Cook Has Talked, Apple's Stock Has Dropped.

So it was with some trepidation that Apple investors tuned in to C-Span.org Tuesday morning to watch Cook's appearance before the Senate's Permanent Subcommittee on Investigations, which had conducted a detailed probe of Apple's offshore tax havens.

The subcommittee's staff report, released on Monday, was savage. The New York Times' front-page headline was scathing (Billions in Taxes Avoided by Apple...). Chairman Carl Levin's (Dem., Mich.) press release was fierce:

"Apple wasn't satisfied with shifting its profits to a low-tax offshore tax haven," he said of Apple's Irish subsidiaries. "Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere. We intend to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed."

But those nervous Apple investors needn't have worried. Cook's testimony was calm and precise, and when it was over, nobody had laid a glove on him.

The senators, for their part, were mostly respectful -- and on occasion fawning.

Claire McCaskill (Dem., Mo.) couldn't say often enough how much she loved Apple. Ron Johnson (Rep., Wisc.) praised the company's tax minimization strategies as shareholder friendly. Rob Portman (Rep., Ohio) only wanted to talk about his tax reform proposals. Rand Paul (Rep., Ken.) thought the committee owed Apple an apology. John McCain (Rep., Ariz.), after a bout of tax dodging rhetoric, wanted to know why his iPhone was constantly updating its apps.

Screen Shot 2013-05-21 at 5.21.46 PMEven Levin was having a hard time getting up a head of righteous steam. Working from staff-prepared notes (and whispered instructions) on material he didn't seem to have mastered fully, he was left, at the end, with no choice but to filibuster.

Levin spent the last long minutes of Apple's appearance before the subcommittee repeating -- again and again -- two talking points with which Tim Cook clearly disagreed (that the company had "shifted" its crown jewels to entities that paid "no taxes") but to which Apple's CEO was never given a chance to respond.

You could almost hear Apple partisans everywhere shouting for Cook to interrupt the harangue.

But his forbearance served him well. In the two hours that Cook was on the stand, Apple's shares actually rose -- from $438 to $444 -- in defiance of the HuffPo curse.

You can stream the full hearing at C-Span.

UPDATE: Apple has posted its execs' opening statements:

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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