Rep. Ro Khanna, a Democrat who represents Silicon Valley, wants AT&T’s CEO, Randall Stephenson, to appear before Congress and explain why his company retained the services of Essential Consultants–the law firm of Donald Trump’s personal attorney Michael Cohen–in early 2017 as Trump was preparing to take office.
“I plan to speak to my colleagues on the Energy & Commerce committee to see how we can get the CEO to explain himself to the American people,” Khanna tells Fast Company Wednesday evening.
Stephenson himself visited the president at Trump Tower less than two weeks before Trump took office. AT&T’s plan to acquire Time Warner was, at the time, awaiting government approval, and the FCC’s Ajit Pai was considering ways to dismantle Obama-era net neutrality rules.
“I will be asking Congress to hold hearings to find out what work was produced, what advice was given, who made the decision to retain the firm, and what policy issues were discussed,” Khanna says. “Did they discuss network neutrality? Did they talk about the FCC? Did they discuss antitrust?”
Khanna also said AT&T should release all documents exchanged between AT&T and Essential Consultants.
AT&T’s retainer of Essential unexpectedly came to light when it appeared in legal papers published by Stormy Daniels’s lawyer, Michael Avenatti. One of the documents stated, “Essential received $200,000 in four separate payments of $50,000 in late 2017 and early 2018 from AT&T.” CNBC reported today that the total could be as much as $600,000.
UPDATE 7:30 p.m. ET, Wednesday: AT&T released a statement Wednesday saying it had been contacted by the Office of the Special Counsel Robert Mueller regarding the payments to Cohen. “. . . we cooperated fully, providing all information requested in November and December of 2017,” AT&T said. “A few weeks later, our consulting contract with Cohen expired at the end of the year. Since then, we have received no additional questions from the Special Counsel’s office and consider the matter closed.”
The telecom giant originally explained that it engaged Essential to gain “insights into understanding the new administration.” It added: “They did no legal or lobbying work for us, and the contract ended in December 2017.”
That last bit created the impression that AT&T had paid the money not for actual services, but rather for influence over, or access to, the new administration. The company said today that Cohen’s firm did “actual work,” but it provided no information on the nature of the work.
“I’m sure they were not interested in the president’s thinking on golf tips,” Khanna said.
In a memo to employees today–reported by CNBC–AT&T was a bit more forthcoming, saying Essential was hired to “help us understand how the president and his administration might approach a wide range of policy issues important to the company, including regulatory reform at the FCC, corporate tax reform, and antitrust enforcement.”
Reached for comment, AT&T referred us back to its earlier statement, but did not directly address whether it would comply with a request to appear before Congress.
Essential Consultants LLC is the same secret shell company set up to pay porn star Stormy Daniels to keep her from speaking about her alleged affair with Trump before he became president. The New York Times reports that Cohen’s company allegedly received payments of at least $4.4 million shortly before Trump was elected president and continuing until January of this year. Columbus Nova, Novartis, and Korea Aerospace Industries also retained the firm.
A lot at stake
AT&T had a lot riding on the new administration in early 2017. The Time Warner deal would effectively transform AT&T from a video distributor to a company that both distributes and owns substantial video content. (The DOJ has sued to block the deal, which is now being hashed out in court.) Meanwhile, doing away with net neutrality regulations would free AT&T to charge large internet companies for internet “fast lanes” and potentially favor its own content over others on the web. (The FCC struck down the 2015 network neutrality rules.) AT&T had a lot to gain or lose in the first year of the new administration.
During 2017, AT&T paid $16,780,000 to 31 lobby firms, according to the required government filings. It also gave $2 million in cash, and $82,483 worth of telecom gear to the Trump campaign.
Khanna acknowledges that there may be a perfectly innocent explanation for what AT&T did. “I’m calling for a release of all the documents and for full transparency,” he says.
“I think that if they do that, in the long run it will be better,” Khanna says. “It will show the American people that they care about transparency, and people might be more forgiving. But keeping it a secret is unforgivable.”