The email comes at a critical time for AT&T. A judge is deciding whether its controversial $85 billion merger with Time Warner violates antitrust law. Internal AT&T documents obtained by The Washington Post show how AT&T agreed to pay $600,000 to Cohen last year in exchange for guidance on policy matters, including issues it is facing at the Federal Communications Commission and its proposed deal with Time Warner.
Stephenson’s apology was also an extraordinary admission from a company that has long run one of Washington’s largest and most sophisticated lobbying shops and donates millions of dollars each year to hundreds of candidates on both sides of the aisle. Last year, AT&T spent nearly $17 million on federal lobbying, the third-highest among companies.
Some within Washington’s cozy K Street lobbying circles expressed bemusement that AT&T was apologizing for behavior that has become commonplace for corporations in the capital — paying for advice about the government’s most powerful decision-makers.
“It’s no secret this type of activity goes on in D.C. regularly as companies and organizations try to understand the political climate — as well as the leadership that is driving the D.C. agenda,” said Nicol Turner-Lee, a fellow at the Brookings Institution and a former policy advocate for the Multicultural Media, Telecom and Internet Council.
The White House said the Justice Department’s ongoing opposition to the AT&T-Time Warner merger shows the president was not influenced by special interests or the companies’ lobbying efforts.
“Why doesn’t the Fake News Media state that the Trump Administration’s Anti-Trust Division has been, and is, opposed to the AT&T purchase of Time Warner in a currently ongoing Trial. Such a disgrace in reporting!” Trump tweeted Friday.
When AT&T swung its deal with Cohen, the merger was very much an issue in Washington. Trump had expressed skepticism of the merger on the campaign trail.
On Jan. 12, 2017, Stephenson arrived at Trump Tower in New York to meet with then-President-elect Donald Trump. Cohen was also in the building that day, but he and Stephenson did not meet and never have met, AT&T said. Cohen was not discussed in Stephenson’s meeting with Trump, according to a person familiar with that encounter.
Cohen had reached out to AT&T before Stephenson’s huddle with the president, the person said.
AT&T said Friday that it was also approached at the time by Avenue Strategies, a lobbying firm launched by former Trump campaign manager Corey Lewandowski. But AT&T said it did not meet with Avenue a second time.
“We didn’t engage with them. We didn’t hire them,” said Larry Solomon, a spokesman for AT&T.
Instead, the telecom giant moved ahead with Cohen. Its payments flowed into Essential Consultants, a company Cohen set up in the fall of 2016 to pay pornographic-film actress Stormy Daniels $130,000 as part of a confidentiality agreement to keep her quiet about an alleged sexual encounter she had with Trump.
AT&T’s association with Cohen emerged just this week from information released by Daniels’s attorney, Michael Avenatti. Once brought to light, the company apologized and then ousted its lobbying head.
AT&T declined to answer when its CEO found out about the Cohen contract. In his companywide email, Stephenson acknowledged that his “Washington D.C. team’s vetting process clearly failed.” But the company would not answer questions about what specifically went wrong and whether it would enact changes in how it conducts business in Washington.
Some in Washington expressed sympathy for Bob Quinn, who was ousted Friday as AT&T’s senior executive vice president of external and legislative affairs. Stephenson said in his email that Quinn was retiring.
Under AT&T’s rules, Quinn had significant leeway to approve the Cohen contract because its $600,000 price tag did not trigger oversight from more senior executives, according to a person familiar with the matter who spoke on the condition of anonymity to discuss internal company practices.
But Quinn appeared to recognize that the Cohen deal was a mistake, according to another person who spoke on the condition of anonymity to freely discuss Quinn’s situation.
“People should recognize that he [Quinn] came to recognize it was a misjudgment — witness the fact last year that he terminated the contract, got out of it as fast as he could, and that’s a point that’s not being written right now as people pile on,” the person said. “But that’s factually accurate, and it ought to carry more weight in this situation.”
Quinn started with the Bell system as an operator for Illinois Bell in 1980, before AT&T was broken up by the Justice Department in a landmark antitrust action four years later. After law school, he joined AT&T as an attorney in 1993 and later ascended the ranks of the company’s massive lobbying operations. He took over the top job in Washington right before Trump’s election.
Quinn did not respond to multiple requests for comment.
Federal law requires companies such as AT&T to register individuals as lobbyists if they devote at least 20 percent of their time contacting and trying to influence key government decision-makers, including the president.
To that end, ethics experts said Friday that the wireless giant could be in the clear legally.
“I don’t know [if AT&T] had to register him, based on what I’ve learned and what has come out in media reports. They were asking him to help them get a feel on the administration and where the administration is going,” said Scott Amey, general counsel for the Project on Government Oversight.
“I think this is all showing or highlighting some of the public’s worst fears when it comes to how Washington, D.C., works and the numerous gaps in the system, and how elections and even policy are driven by those with deep pockets and those with the biggest bullpen of lobbyists,” he said.