After Donald Trump’s unexpected victory against Hillary Clinton in November 2016, AT&T needed reliable information on how a new president with no history in politics might handle a variety of issues vital to the company, from net neutrality to its planned merger with Time Warner.
A pitch from Michael Cohen, Trump’s personal attorney, to provide consulting services seemed like the ideal solution.
It proved, instead, to be a “big mistake,” AT&T Chief Executive Officer Randall Stephenson said in a memo to the company’s 252,000 employees reviewed by the Washington Examiner on Friday.
“Our company has been in the headlines for all the wrong reasons these last few days, and our reputation has been damaged,” he wrote. “Our Washington, D.C., team’s vetting process clearly failed, and I take responsibility for that.”
The Dallas-based company’s payments to Cohen, under a one-year contract valued at $600,000, have come under a national spotlight as special counsel Robert Mueller reviewed the lawyer’s handling of a $130,000 payment to porn star Stormy Daniels.
An attorney for the actress, whose real name is Stephanie Clifford, says the money was intended to prevent disclosure of an affair with the president prior to the election, and his efforts to overturn the agreement have led to the disclosure that a number of firms paid Cohen for his insights in the early days of the Trump administration.
Drugmaker Novartis, for instance, paid Cohen $1.2 million through his Delaware company, Essential Consultants, for healthcare advisory services.
The firm is the same one used to handle the payment to Daniels, and attorney Michael Avenatti’s further revelation that it was able to raise $4.4 million in a matter of days from several businesses under regulatory scrutiny made for another “tough week” for Trump’s self-described fixer, said Chris Krueger, an analyst with Cowen Washington Research Group.
“We have no idea where this ends,” he wrote, “though we will once again wheel out our ‘Game of Thrones’ principle: If you think this has a happy ending, you haven’t been paying attention.”
As for AT&T, everything the company did “was done according to the law and entirely legitimate,” Stephenson wrote. “But the fact is, our past association with Cohen was a serious misjudgment.”
The telecommunications firm, which is still awaiting a decision from senior U.S. District Judge Richard Leon on the Justice Department’s suit attempting to block the Time Warner merger, limited its contract with Cohen to consulting and advisory services, Stephenson said. He wasn’t permitted to lobby on the company’s behalf under the arrangement, which expired in December.
Cohen was one of several consultants that AT&T retained, Stephenson added. “Companies often hire political consultants, especially at the beginning of a new administration, and we have done so in previous administrations.”
When the telecommunications firm was contacted by Mueller’s office, it cooperated fully, providing all the information requested in November and December, Stephenson said. “Since then, we have received no additional questions from the special counsel’s office and have considered the matter closed,” he wrote.
Bob Quinn, the senior executive vice president of external and legislative affairs whose office retained Cohen, is retiring, Stephenson said, and the unit will report to General Counsel David McAtee in the interim.
“David’s number one priority is to ensure every one of the individuals and firms we use in the political arena are people who share our high standards and who we would be proud to have associated with AT&T,” the CEO said. “My personal commitment to you is — we will do better.”
