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AT&T CEO Says Hiring Michael Cohen Was a “Big Mistake.” But Its Merger With Time Warner Isn’t in Any Worse Shape.

May 11, 2018, 4:29 PM UTC

AT&T CEO Randall Stephenson said Friday that hiring President Donald Trump’s lawyer Michael Cohen as a political consultant was a “big mistake.” It also announced that AT&T Senior Vice President Bob Quinn, who oversaw Cohen’s hiring, would be retiring.

That came after the lawyer of porn star Stormy Daniels, Michael Avenatti, revealed that a Cohen-owned holding company paid the actress $130,000 to keep her quiet about an affair she claims to have had with Trump. That holding company, in turn, received millions in funding from various contributors—including AT&T which was, and still is, seeking regulatory approval for its merger with Time Warner.

“AT&T hiring Michael Cohen as a political consultant was a big mistake,” the CEO’s letter stated, noting that everything was done according to the law. “Our reputation has been damaged.”

The admission echoes one made by Swiss drugmaker Novartis on the same day. The company, which said it had paid $1.2 million to Cohen’s holding company, said it had “made a mistake in entering into this engagement.”

AT&T also announced a number of personnel changes in the hopes of better vetting when it comes to hires with ties to Washington. In lieu of Quinn’s retirement, the memo revealed that the company’s general counsel, David McAtee, would begin overseeing the company’s D.C. operations.

“We will do better,” Stephenson wrote Friday.

Avenatti’s documents revealed payments from AT&T to Cohen totaling $200,000 by January 2018. The Washington Post later revealed that AT&T agreed to pay $600,000 in total to Cohen in return for a number of items, including advice on passing the telecom giant’s proposed $85 billion merger with Time Warner.

AT&T has said that Cohen’s hiring was for “insight into understanding the new administration,” and that Cohen’s role involved no lobbying.

The telecom firm added that Special Counsel Robert Mueller had sought information from AT&T regarding Cohen in November and December, but has not heard from the attorney since.

Still, the new revelation in the Time Warner-AT&T merger saga hasn’t shaken investor confidence in the potential union by much. Shares of Time Warner have suffered no dramatic drops since AT&T’s connection with Cohen first came to light earlier this week.

Though it should be said that investors have been skeptical as to whether the merger would gain regulatory approval from the very beginning. When the deal was first announced in October 2016, AT&T (T) agreed to pay $107.50 ($53.75 in cash and $53.75 in AT&T stock) per Time Warner share (TWC). And while Time Warner shares today hover 14% below that price, the company’s stock has not broken above $104 since news of the deal first broke.

Notably, it’s not uncommon for companies to hire Washington insiders in a bid to shape legislations or lawmaker opinion. But the furor that has come with AT&T’s payments to Cohen does highlight a new and difficult dynamic companies have had with Washington since the Trump 2016 election—trying to maintain an amicable relationship with Washington, while at the same time distancing themselves from the divisive commander-in-chief’s mounting scandals.