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AT&T CEO Disavows Cohen Hiring As ‘Big Mistake’ As Top DC Exec Resigns And Questions About DOJ Lawsuit Return
WASHINGTON, May 13, 2018 – AT&T CEO Randall Stephenson on Friday announced that the company was parting ways with the executive responsible for hiring Trump “fixer” Michael Cohen in an apparent effort to grease the skids for the company’s merger with Time-Warner.
The revelations of the AT&T payment to Cohen revived questions over whether Trump punished the company by ordering a Justice Department lawsuit to block its merger with Time-Warner.
The announcement ended a week of media scrutiny for the telecom giant. In a letter distributed to employees in which he acknowledged that the $600,000 contract with Cohen for advice on the pending merger, Stephenson admitted it had been “for all the wrong reasons” and was “a big mistake.”
“To be clear, everything we 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.”
Vowing to “do better,” Stephenson took responsibility for the vetting failure that had led to Cohen being brought on board as a “political consultant” despite being a personal injury lawyer with no experience in telecommunications or mergers and acquisitions law.
Stephenson also announced that the executive most directly responsible for the decision — Executive Vice President for External and Legislative Affairs Bob Quinn — will retire, and that AT&T’s internal lobby shop will report to General Counsel David McAfee “for the foreseeable future.”
Cohen offered insights into the incoming administration
According to a representative in AT&T’s Washington office, Cohen pitched his services to the company during the transition period between Trump’s November 2016 election victory and the January 2017 inauguration.
Cohen told AT&T executives that he was leaving the Trump Organization to consult for a small number of companies, to which he’d provide information on “key players” within the administration and their priorities, as well as insights into “how they think.”
Companies often retain persons close to an incoming presidential administration as consultants or lobbyists. Because former Secretary of State Hillary Clinton was widely expected to win the 2016 election, many such organizations were unprepared for dealing with a Trump White House.
Cohen took full advantage of AT&T’s electoral miscalculation, and despite his lack of total lack of qualifications — apart from a relationship with the incoming president — the decision was made to hire Cohen at a rate of $50,000 per month.
While his contract expressly forbade lobbying activity unless he’d notified the company beforehand, AT&T never asked him to set up meetings, nor did he set any up himself.
AT&T also revealed Friday that Special Counsel Robert Mueller and his team knew about the payments as of November 2017, when his office contacted the company for information as part of the ongoing probe into Russian interference in the 2016 election.
The AT&T representative indicated that there’d been no further contact with Mueller’s office since December of last year and that the company “considers the matter closed.”
The company’s relationship with Cohen became public after attorney Michael Avenatti, who currently represents adult film actress Stormy Daniels in a lawsuit against the president, released documents detailing how AT&T paid Cohen.
The company funneled the money through Essential Consultants LLC, a Delaware-based shell corporation he’d established as a vehicle through which he paid Clifford $130,000 just before the 2016 election in exchange for her not revealing a prior sexual relationship with Trump.
Cohen payments put DOJ effort to block merger back in the spotlight
Stephenson’s admission that AT&T hired Cohen to potentially leverage his relationship with Trump once again raised the question of whether the president personally intervened in the company’s merger with Time-Warner, which owns the cable news outlet CNN, a frequent target of his ire.
Trump has often spoken of his desire to personally direct the Justice Department’s operations and had frequently launched specific attacks on CNN’s coverage of him over the course of his 2016 campaign.
Trump has long been angry at CNN for reporting on his alleged ties to Russia and the investigation thereof
His feelings towards the network grew even more hostile just days before his inauguration when he learned that it would soon air its first report on the so-called Trump-Russia “dossier” compiled by British ex-spy Christopher Steele.
Steele’s report, which was commissioned by opposition research firm Fusion GPS on behalf of several of Trump’s opponents — including Clinton — came into the FBI’s possession after the ex-spy passed it through an intermediary to Sen. John McCain, R-Az., who then passed it to then-director James Comey.
The now-controversial document contained raw intelligence alleging, among other things, that the Russian government had been “cultivating, supporting and assisting [Trump]” since 2011, that the Kremlin provided him with “valuable intelligence” it had illegally obtained on his electoral opponents — particularly former Secretary of State Hillary Clinton.
In exchange for the information on Clinton — the release of which was allegedly timed by WikiLeaks to help the campaign — Trump is alleged to have agreed to “sideline Russian intervention in Ukraine as a campaign issue” among other concessions.
Numerous media reports since 2016 have indicated that figures associated with Trump’s campaign were allegedly aware that Russia had obtained information about Clinton.
Former campaign foreign policy advisor George Papadopoulos reportedly bragged to an Austrailian diplomat that Russia had “thousands of emails,” according to a New York Times story that revealed how the diplomat’s report of the conversation was instrumental in kicking off the FBI’s investigation into Russian election interference.
Others close to Trump, including Trump’s son, Donald Trump Jr. and his now-Senior Adviser Jared Kushner, reportedly became aware that Russia had such material when Rob Goldstone, a British music publicist with ties to a Russian oligarch, emailed the younger Trump to arrange a meeting.
In Goldstone’s email, which Trump Jr. released on Twitter, he offers the campaign documents that he claimed “would incriminate Hillary and her dealings with Russia and would be very useful to [Trump Sr].”
Trump Jr. quickly replied: “[i]f it’s what you say I love it especially later in the summer.”
Less than a week later Goldstone came to Trump Tower with an entourage that included Natalia Veselnitskaya, an attorney reported to have links with Russian intelligence. The White House would later attempt to claim that the topic of discussion was adoptions, specifically the Russian ban on adoptions by American parents instituted in retaliation for sanctions levied under the 2012 law known as the Magnitsky Act.
Trump Jr. was also in communication with WikiLeaks founder Julian Assange beginning in September 2016.
Others who are thought to have had knowledge of Russia’s plans include longtime Trump associate and political consultant Roger Stone and even Trump himself.
Stone has made a number of contradicting claims about his relationship with Assange and appeared to have advance knowledge that WikiLeaks would publish emails belonging to Clinton campaign chairman John Podesta, while Trump encouraged Russia to find emails from Clinton’s private server during a 2016 campaign rally and would later praise WikiLeaks for publishing stolen emails from Podesta and the Democratic National Committee.
Both have denied having any prior knowledge of Russia’s actions or of what WikiLeaks would publish
Both the FBI and a cybersecurity firm engaged by the Democratic National Committee concluded that the emails stolen from both Podesta and the Democratic National Committee were stolen by hackers associated with Russian intelligence and turned over to WikiLeaks. Assange has denied that Russia was the source of the emails.
Manafort convention request raises the possibility of a quid-pro-quo, he is later forced to raise bail money
Some commentators have suggested that the Trump campaign followed through with the alleged agreement to “sideline Russian intervention in Ukraine as a campaign issue” through actions taken by Trump campaign manager Paul Manafort to change the language in the GOP platform which dealt with Ukraine.
The GOP platform initially called for the United States to provide “lethal defensive weapons” to Ukraine, but was changed at Manafort’s request to “appropriate assistance” during the July 2016 Republican National Convention in Cleveland, Ohio. The change is among the matters being looked into by Mueller’s team.
Manafort, who briefly took over management of the campaign from Corey Lewandowski, was a longtime advisor to Kremlin-backed Ukrainian leader Victor Yanukovych, who was forced out of office in 2014 by massive protests over his rejection of an association agreement with the European Union in favor of pursuing closer ties with Russia, from which Ukraine gained independence after the fall of the Soviet Union.
Manafort resigned as Trump’s campaign manager in August 2014 after payments he’d received from former Yanukovych became public. An FBI investigation into the payments was later rolled into Mueller’s investigation after his appointment in May of last year, and in October 2017 Manafort became the subject of one of the Russia probe’s first indictments after a DC grand jury charged him and his longtime associate Rick Gates with conspiracy, money laundering, financial, and making false statements to investigators.
Four months later, a separate grand jury operating out of the Eastern District of Virginia charged the pair with 22 further counts of tax, financial crimes, and bank fraud, some of which were allegedly committed as recently as last year.
What Cohen (allegedly) did on his summer vacation
Cohen, too, is alleged by Steele to have played a role in Russia’s alleged election interference by allegedly meeting with a Kremlin official during an August 2016 trip to Prague, located in the Czech Republic.
Cohen has repeatedly denied traveling to Prague, though recent media reports have indicated that Mueller’s office has proof that it happened. Mueller has reportedly also interviewed executives from several other companies that are said to have paid Cohen, as well as a now-sanctioned Russian oligarch connected to one of those companies.
Both CNN’s reports on the allegations in the Steele dossier and its publication by Buzzfeed News added fuel to the fire started by an American intelligence community assessment, which declared with “high confidence” that Russia had been behind the theft of emails from the Democratic National Committee and Clinton campaign chairman John Podesta.
Trump and his allies have strongly denied the allegations in the dossier, and since taking office he has offered varying explanations as to whether he accepts the conclusions of the American intelligence community, which he and his supporters have sometimes disparaged as part of a conspiracy against him by the news media and the so-called “deep state.”
Trump specifically invoked CNN when he promised to block the merger
His public feud with CNN has led to questions whether he would retaliate by following through on a campaign promise to block the AT&T-Time-Warner merger, which he promised to do at an October 2016 campaign rally in Gettysburg, Pennsylvania, days after the deal was announced.
“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said.
His fury at CNN for the negative stories it reported about his campaign and wall-to-wall press coverage sparked by its reporting on the dossier and the intelligence community assessment was even more evident at his final news conference before taking office, during which he refused to take questions from CNN’s Jim Acosta, who he angrily dismissed as “fake news.”
While some dismissed Trump’s attacks on CNN and his comments about the merger as yet another example of Trumpian bluster, the questions over whether he’d intervened personally took on a new life last November when the Justice Department filed a lawsuit to block the merger.
The DOJ lawsuit raised eyebrows because ‘vertical’ mergers are rarely challenged
The lawsuit is unusual because the DOJ rarely intervenes in so-called “vertical” mergers between companies that represent two links in a supply chain, such as Time-Warner (which produces news and entertainment content) and AT&T (which owns the infrastructure to deliver it to consumers).
When the Justice Department intervenes in a merger on antitrust grounds, it is usually a “horizontal” merger, which joins two competitors in the same industry.
Because such mergers are often more closely reviewed by regulators, the Trump administration’s intervention in the vertical one between AT&T and Time-Warner became even noticeable when Federal Communications Commission Chairman Ajit Pai began taking actions to facilitate broadcast TV giant Sinclair Broadcasting’s purchase of Tribune Media, even though regulators would traditionally be more skeptical of such a deal, which would give Sinclair control of far more stations than allowed under current media ownership rules.
Trump has publicly praised Sinclair, and Sinclair often returns the favor
Even as Trump has attacked and threatened CNN along with most other major media outlets that cover his administration, he has repeatedly praised Sinclair’s coverage, which he has called “far superior to CNN and even more fake NBC.”
Sinclair, which is based in Hunt Valley, Maryland, is notorious for forcing its local stations to air “must run” political content reflecting its owners’ conservative views.
Many of these segments are commentaries by the company’s “chief political analyst,” Boris Epshteyn, in which the former White House staffer obsequiously defends the administration from which he resigned after less than three months service. Another “must-run” segment which was met with widespread ridicule and criticism forced Sinclair’s local anchors to denounce “fake stories” and journalists who “use their platforms to push their own personal bias and agenda to control what people think” as “dangerous to our democracy.”
Once again, Giuliani makes things worse
Trump’s attacks on outlets that report stories which are unflattering to him or his administration gave rise to suspicions that he had involved himself in the decision to try and block the AT&T/Time-Warner merger. Those were allegations the White House strongly denied at the time.
But Trump attorney Rudolph Giuliani reignited the controversy Friday when addressing whether AT&T’s decision to hire Cohen was the kind of “swampy” behavior that Trump had promised to end.
Giuliani echoed a statement by White House Press Secretary Sarah Huckabee Sanders, who on Friday told reporters that Trump wasn’t affected by AT&T’s payments to Cohen because the Justice Department was opposing the merger.
But in an interview with The Huffington Post, Giuliani went further by suggesting that the president had personally intervened to block it, contradicting the White House’s prior assertions that Trump wasn’t involved.
“He did drain the swamp…the president denied the merger,” Giuliani said. “They didn’t get the result they wanted.”
The former New York City mayor — who resigned from his law firm this week over his representation of the president — attempted to walk back his statement on Saturday, telling CNN that Trump personally told him that he did not interfere.
The president also weighed in with a tweet late Friday, attributing the opposition to “the Trump Administration’s Anti-Trust Division,” and suggesting that his administration’s opposition to the merger was going unreported.
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Part II: Senators Josh Hawley and Ted Cruz Want to Repeal Section 230 and Break the Internet
WASHINGTON, August 20, 2019 — Section 230 of the Communications Decency Act has been termed one of the most important and most misunderstood laws governing the internet.
In recent months, prominent critics from both sides of the aisle have called for the statute to either be repealed or altered so significantly that, if enacted, it would no longer serve its original purpose.
Sen Josh Hawley, R-Mo., introduced a bill that would eliminate Section 230 protections for big tech platforms unless they could prove their political neutrality to the Federal Trade Commission every two years. Sen. Ted Cruz, R-Texas, has called for the statute to be repealed altogether.
But any such proposal should first carefully consider Section 230’s unique role in the digital ecosystem.
The concept behind Section 230 has its origins in the First Amendment
The statute’s basic premise — protecting the rights of speakers by limiting the liability of third parties who enable them to reach an audience — is hardly new; the First Amendment has served that purpose for decades.
In the 1959 case Smith v. California, the Supreme Court ruled that booksellers could not be held liable for obscene content in the books being sold, because the resulting confusion and caution would lead to over-enforcement, or “censorship affecting the whole public.”
Five years later, the court ruled in New York Times Co v. Sullivan that failing to protect newspapers from liability for third party advertisements would discourage them from doing so, and therefore shut off “an important outlet for the promulgation of information and ideas by persons who do not themselves have access to publishing facilities.”
“In theory, the First Amendment — the global bellwether protection for free speech — should partially or substantially backfill any reductions in Section 230’s coverage,” wrote Eric Goldman, a law professor at Santa Clara University, in an April blog post. “In practice, the First Amendment does no such thing.”
In a paper titled “Why Section 230 Is Better Than the First Amendment,” Goldman explained some of the “significant and irreplaceable substantive and procedural benefits” that are unique to the controversial statute.
Section 230 has pragmatic applications for a range of legal claims
For one, Section 230 has pragmatic applications for defamation, negligence, deceptive trade practices, false advertising, intentional infliction of emotional distress, and dozens of other legal doctrines, some of which have little or no First Amendment defense.
In addition, Section 230 offers more procedural protections and greater legal certainty for defendants. It enables early dismissals, which can save smaller services from financial ruin. It is more predictable than the First Amendment for litigants. It preempts conflicting state laws and facilitates constitutional avoidance.
Most major tech platforms support Section 230, and experts widely agree that the internet would not have been able to develop without the protection of such a law.
“If we were held liable for everything that the users potentially posted…we fundamentally would not be able to exist,” said Jessica Ashooh, Reddit’s director of policy, at a July forum.
But also in July, one prominent tech company broke with the others to support a “reasonable care” standard like that proposed by Danielle Citron and Benjamin Wittes, law professors at the University of Maryland. IBM Executive Ryan Hagemann wrote in a blog post that this “would provide strong incentives for companies to limit illegal and illicit behavior online, while also being flexible enough to promote continued online innovation.”
Should online platforms be responsible for deleting objectively harmful content?
Companies should be held legally responsible for quickly identifying and deleting content such as child pornography or the promotion of mass violence or suicide, Hagemann continued. Adding this standard to Section 230 “would add a measure of legal responsibility to what many platforms are already doing voluntarily.”
But Goldman took a different tack. He strongly cautioned against proposals offering Section 230 protections only to defendants who were acting in so-called good faith, warning that “such amorphous eligibility standards would negate or completely eliminate Section 230’s procedural benefits.”
Hagemann, on the other hand, has defended the importance of a compromise-oriented middle ground. Current rhetoric from Congress suggests that changes to the statue are imminent, he said at a panel two weeks after IBM’s statement, and finding a compromise will prevent an extreme knee-jerk reaction from lawmakers who may not view the digital economy with the necessary nuance.
Senators Cruz and Hawley are gunning for effective repeal of Section 230
And as feared, members of Congress such as Cruz and Hawley have skipped right over compromise and started calling for the complete evisceration of Section 230.
Few would claim that Section 230 is perfect; it was written for a digital landscape that has since evolved in previously unimaginable ways. But allowing a body of five commissioners to determine the vague standard of “politically neutral” every two years would almost certainly lead to extreme inconsistency and partisanship.
Moreover, some fear that — contrary to Hawley’s stated intent — his bill might actually be the one thing that cements the major tech giants in their current place of power.
“Even if its initial application were limited to websites above a certain size threshold, that threshold would be inherently arbitrary and calls to lower it to cover more websites would be inevitable,” said TechFreedom President Berin Szóka.
Rather than keeping tech giants like Facebook and Google in check, conditioning Section 230 protections on perceived neutrality could actually benefit them by stifling any potential competition.
“At a time when we’re talking about antitrust investigations and we’re wondering if the biggest players are too big, the last thing we want to do is make a law that makes it harder for smaller companies to compete,” said Ashooh of Reddit.
“Admittedly, it feels strange to tout Section 230’s pro-competitive effect in light of the dominant marketplace positions of the current Internet giants, who acquired their dominant position in part due to Section 230 immunity,” wrote Goldman. “At the same time, it’s likely short-sighted to assume that the Internet industry has reached an immutable configuration of incumbents.”
Other articles in this series:
Section I, Monday: The Communications Decency Act is Born
Section II, Tuesday: How Section 230 Builds on and Supplements the First Amendment
Section III, Wednesday: What Does the Fairness Doctrine Have to Do With the Internet?
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A Short History of Online Free Speech, Part I: The Communications Decency Act Is Born
WASHINGTON, August 19, 2019 — Despite all the sturm und drang surrounding Section 230 of the Communications Decency Act today, the measure was largely ignored when first passed into law 23 years ago. A great deal of today’s discussion ignores the statute’s unique history and purposes as part of the short-lived CDA.
In this four-part series, Broadband Breakfast reviews the past with an eye toward current controversies, and the future of online free speech.
This article looks at content moderation on early online services, and how that fueled concern about indecency in general. On Tuesday, we’ll look at how Section 230 is similar to and different from America’s First Amendment legacy.
On Wednesday, in Part III, Broadband Breakfast revisits the reality and continuing mythology surrounding the “Fairness Doctrine.” Does it or has it ever applied online? And finally, on Thursday, we’ll envision what the future holds for the legal treatment of “hate speech.”
While most early chat boards did not moderate, Prodigy did – to its peril
The early days of the internet were dominated by online service providers such as America Online, Delphi, CompuServe, and Prodigy. CompuServe did not engage in any form of content moderation, whereas Prodigy positioned itself as a family-friendly alternative by enforcing content guidelines and screening offensive language.
It didn’t take long for both platforms to be sued for defamation. In the 1991 case Cubby v. CompuServe, the federal district court in New York ruled that CompuServe could not be held liable for third party content of which it had no knowledge, similar to a newsstand or library.
But in 1995, the New York supreme court ruled in Stratton Oakmont v. Prodigy that the latter platform had taken on liability for all posts simply by attempting to moderate some, constituting editorial control.
“That such control is not complete…does not minimize or eviscerate the simple fact that Prodigy has uniquely arrogated to itself the role of determining what is proper for its members to post and read on its bulletin boards,” the court wrote.
Prodigy had more than two million subscribers, and they collectively generated 60,000 new postings per day, far more than the platform could review on an individual basis. The decision gave them no choice but to either do that or forgo content moderation altogether.
Many early supporters of the internet criticized the ruling from a business perspective, warning that penalizing online platforms for attempting to moderate content would incentivize the option of not moderating at all. The resulting platforms would be less useable, and by extension, less successful.
The mid-1990s seemed to bring a cultural crises of online indecency
But an emerging cultural crisis also drove criticism of the Stratton Oakmont court’s decision. As a myriad of diverse content was suddenly becoming available to anyone with computer access, parents and lawmakers were becoming panicked about the new accessibility of indecent and pornographic material, especially to minors.
A Time Magazine cover from just two months after the decision depicted a child with bulging eyes and dropped jaw, illuminated by the ghastly light of a computer screen. Underneath a bold title reading “cyberporn” in all caps, an ominous headline declared the problem to be “pervasive and wild.”
And then it posed the question that was weighing heavily on certain members of Congress: “Can we protect our kids—and free speech?”
The foreboding study behind the cover story, which was entered into the congressional record by Sen. Chuck Grassley, R-Iowa, was found to be deeply flawed and Time quickly backpedaled. But the societal panic over the growing accessibility of cyberporn continued.
Thus was born the Communications Decency Act, meant to address what Harvard Law Professor Howard Zittrain called a “change in reality.” The law made it illegal to knowingly display or transmit obscene or indecent content online if such content would be accessible by minors.
Challenges in keeping up with the sheer volume of indecent content online
However, some members of Congress felt that government enforcement would not be able to keep up with the sheer volume of indecent content being generated online, rendering private sector participation necessary.
This prompted Representatives Ron Wyden, D-Ore., and Chris Cox, R-Calif., to introduce an amendment to the CDA ensuring that providers of an interactive computer service would not be held liable for third-party content, thus allowing them to moderate with impunity.
Section 230—unlike what certain politicians have claimed in recent months—held no promise of neutrality. It was simply meant to protect online Good Samaritans trying to screen offensive material from a society with deep concerns about the internet’s potential impact on morality.
“We want to encourage people like Prodigy, like CompuServe, like America Online, like the new Microsoft network, to do everything possible for us, the customer, to help us control, at the portals of our computer, at the front door of our house, what comes in and what our children see,” Cox told his fellow representatives.
“Not even a federal internet censorship army would give our government the power to keep offensive material out of the hands of children who use the new interactive media,” Wyden said. Such a futile effort would “make the Keystone Cops look like crackerjack crime-fighters,” he added, referencing comedically incompetent characters from an early 1900s comedy.
The amendment was met with bipartisan approval on the House floor and passed in a 420–4 vote. The underlying Communications Decency Act was much more controversial. Still, it was signed into law with the Telecommunications Act of 1996.
Although indecency on radio and TV broadcasts have long been subject to regulation by the Federal Communications Commission, the CDA was seen as an assault on the robust world of free speech that was emerging on the global internet.
Passage of the CDA as part of the Telecom Act was met with online outrage.
The following 48 hours saw thousands of websites turn their background color to black in protest as tech companies and activist organizations joined in angry opposition to the new law.
Critics argued that not only were the terms “indecent” and “patently offensive” ambiguous, it was not technologically or economically feasible for online platforms and businesses to screen out minors.
The American Civil Liberties Union filed suit against the law, and other civil liberties organizations and technology industry groups joined in to protest.
“By imposing a censorship scheme unprecedented in any medium, the CDA would threaten what one lower court judge called the ‘never-ending world-wide conversation’ on the Internet,” said Ann Beeson, ACLU national staff attorney, in 1997.
By June of 1997, the Supreme Court had struck down the anti-indecency provisions of the CDA. But legally severed from the rest of the act, Section 230 survived.
Section II, tomorrow: Is Section 230 all that different from the First Amendment?