AT&T’s leader calls hiring Michael Cohen a ‘big mistake’
WASHINGTON — Randall Stephenson, AT&T’s chief executive, said Friday that the Dallas-based company had made a “big mistake” by hiring President Donald Trump’s personal lawyer, Michael Cohen, to advise on the telecommunications giant’s deal to buy Time Warner.
“Our company has been in the headlines for all the wrong reasons these last few days, and our reputation has been damaged,” Stephenson wrote in a memo to employees. “There is no other way to say it — AT&T hiring Michael Cohen as a political consultant was a big mistake.”
Stephenson’s note followed the revelation that the company had paid Cohen $600,000 to advise on the $85.4 billion merger with Time Warner and other regulatory matters.
Stephenson also said in the memo that the company’s head of lobbying and external affairs, Bob Quinn, 57, would be retiring.
Federal prosecutors are investigating Cohen’s business dealings, including a $130,000 payment he made to pornographic film actress Stephanie Clifford, known professionally as Stormy Daniels, as part of a
deal to buy her silence about an affair she says she had with Trump. The president has denied Clifford’s claims.
The payment to Clifford was the first known activity involving Essential Consultants, a shell company incorporated in Delaware by Cohen. It was through Essential Consultants that AT&T retained Cohen.
AT&T was one of multiple companies Cohen approached after the election. The Swiss drugmaker Novartis paid Essential Consultants $1.2 million for a yearlong contract to provide insights on the new administration’s approach to health care policy.
Novartis said its former chief executive, Joe Jimenez, hired Essential Consultants. Like Stephenson, Norvartis’ current chief executive, Vasant Narasimhan, also distanced himself from Cohen, saying this week that he had no role in the decision to hire Cohen.
Novartis said it discovered soon after signing the contract that Cohen could not provide the services he had promised and allowed the contract to expire.
For AT&T, the disclosure of its ties to Cohen comes at a critical moment. The company is defending its merger with Time Warner in federal court against the Justice Department’s efforts to block the deal.
Stephenson insisted in his memo that “everything we did was done according to the law and entirely legitimate” and that Cohen did not do any lobbying on behalf of AT&T. Nonetheless, Stephenson added, retaining Cohen “was a serious misjudgment.”
“In this instance,” he continued, “our Washington, D.C., team’s vetting process clearly failed, and I take responsibility for that.”
Time Warner was not aware of AT&T’s contract with Cohen, according to a person familiar with the company’s thinking. Within Time Warner this week, officials were surprised to learn about the contract with Essential Consultants.
AT&T has said Cohen approached employees in the company’s Washington office shortly after the election. The company signed a contract with him three days after Trump took the oath of office. He promised to provide advice on who the “key players” would be in Trump’s administration and “their priorities, and how they think,” AT&T said in a fact sheet released Friday.
AT&T noted in the fact sheet that Cohen was among “several consultants” the company hired as Trump was assuming the presidency. AT&T said it would not disclose the names of the other people and firms hired.
Quinn was promoted to replace AT&T’s longtime head of lobbying, James Cicconi, just before the company announced its merger with Time Warner. Quinn, who began working at AT&T in the 1980s, is well connected in the political circles of both parties. But he, and the rest of the company, was surprised by the election results and had few connections to Trump’s circles.
Quinn declined to comment.
Earlier this week, the company said it had been contacted late last year about Cohen by the office of Robert Mueller, the special counsel investigating Russian meddling in the 2016 election and other matters. AT&T said it had “cooperated fully” with the inquiries.
Novartis said this week it had also spoken with Mueller’s team about the payments to Cohen. Novartis said it had cooperated fully and considers its role in the matter closed.
The Wall Street Journal reported that Cohen had made an overture to provide consulting services to Ford Motor Co. in January 2017 but was quickly rebuffed, people familiar with the matter said.
Analysts said they did not expect the revelations about AT&T’s ties to Cohen to affect the government’s lawsuit to block the company’s merger with Time Warner.
AT&T and Time Warner had suggested before the trial that the Justice Department’s decision to block a merger of two companies that do not compete was influenced by presidential politics. Trump has been vocal in his disdain for CNN’s coverage of his administration. CNN is owned by Time Warner.
But Judge Richard J. Leon of U.S. District Court in Washington has been strict about keeping politics out of the case, which focuses on antitrust law and whether the deal would violate competition policy and harm consumers. Leon is expected to deliver an opinion by June 12.