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AT&T CEO calls hiring Trump lawyer Michael Cohen a 'big mistake'

Randall Stephenson also tells employees in a memo Friday that its chief lobbyist is retiring after 30 years with the company.

President Donald Trump

President Donald Trump listens to AT&T CEO Randall Stephenson during the "American Leadership in Emerging Technology" event in the East Room of the White House in Washington, DC, last June.

The Washington Post

AT&T CEO Randall Stephenson told employees in a memo Friday that hiring President Donald Trump's personal attorney, Michael Cohen, was a "big mistake."

Stephenson also announced in the memo that AT&T's top lobbyist, Bob Quinn, who has been with AT&T for more than 30 years and who oversaw the hiring of Cohen, is retiring.  

Reuters first reported news of the memo, which CNET has also reviewed. Stephenson expressed his regrets to employees for being in "the headlines for all the wrong reasons these last few days" and for the damage it's done to the company's reputation.  He stated that the company's "Washington, DC team's vetting process clearly failed."

AT&T confirmed earlier this week that it had hired Essential Consultants, a company established by Cohen and reportedly used to pay $130,000 in hush money to porn actress Stormy Daniels, to advise the company on the new administration starting in early 2017.

"To be clear, everything we did was done according to the law and entirely legitimate," Stephenson wrote in the memo. "But the fact is our past association with Cohen was a serious misjudgment."

AT&T said in an accompanying fact sheet to employees explaining the debacle that in early 2017, as Trump was taking office, it had hired several consultants to help the company understand how the president and his administration might approach a wide range of policy issues, including, "regulatory reform at the FCC, tax reform, and antitrust enforcement, specifically our Time Warner deal." This is a common practice among large companies following an election, the company states.

US-POLITICS-INVESTIGATION-TRUMP-COURT

President Donald Trump's personal lawyer Michael Cohen arrives to the US Courthouse in New York on April 26, 2018.

Hector Retamal / AFP/Getty Images

Cohen approached AT&T during the post-election transition period stating that he planned to leave the Trump Organization to consult for a "select few companies" who wanted his opinion on the new president and administration.

AT&T's Washington team hired Cohen after the inauguration for this purpose at $50,000 per month for a contracted period of one year, the memo states. The company added that Cohen's contract was limited to consulting work and at no time did he lobby on behalf of AT&T. The company did not ask him to set up meetings with the new president nor did Cohen offer to do so, the company states.

Stephenson did meet with president-elect Trump at Trump Tower in New York City on Jan. 12, but that meeting occurred before Cohen was hired. 

AT&T said it was contacted in November and December 2017 by the special counsel office headed by Robert Mueller regarding Cohen, and the company cooperated fully. Since then, the company says it hasn't been questioned further and it considered the matter closed.

And things might have ended there if not for Cohen's legal troubles. Since early this year, it's come to light that Cohen is being investigated by federal prosecutors for payments he reportedly made days before the 2016 election to Daniels, whose real name is Stephanie Clifford, as part of a nondisclosure agreement barring her from discussing a sexual affair she says she had with Trump. Documents related to Cohen's clients were seized last month by federal prosecutors.

News of money AT&T paid to Cohen's firm surfaced late Tuesday when Michael Avenatti, who is representing Daniels, shared on Twitter an executive summary of payments made to an account that was used to pay Daniels. According to the document, AT&T made four payments of $50,000 each between Oct. 3 of last year and Jan. 3 to Essential Consultants.

An unnamed source told CNBC Wednesday that the contract AT&T had with Cohen may have included payments up to $600,000. The source also said the payments were for "actual work done," adding: "And it wasn't to pay for access to the president."

AT&T has still not confirmed how much money it paid Cohen's firm.

Other companies, including a firm connected to Russian oligarch Viktor Vekselberg, also paid Essential Consultants for services, according to the documents.

Revelations of AT&T's dealings with Cohen come as the company awaits the outcome of an antitrust lawsuit filed by the US Justice Department to block AT&T's $85 billion merger with Time Warner.

The US government argues that combining a telecom giant, which owns wireless and wired Internet assets, with one of the premiere media properties in the world, would create too powerful a player in the media landscape. AT&T denies this will harm competition and says that the deal is necessary for it to compete against tech titans like Google and Netflix.

Trump, who has repeatedly called CNN, which is owned by Time Warner, "fake news," said on the campaign trail the day the deal was announced that he'd try to block the merger if elected.

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