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AT&T wields enormous power in Sacramento

No other single corporation has spent more trying to influence legislators in recent years. It dispenses millions in political donations and has an army of lobbyists. Bills it opposes are usually defeated.

April 22, 2012|By Shane Goldmacher and Anthony York, Los Angeles Times
  • Assembly member Steven Bradford (D-Gardena) putts on the 18th green as other attendees shake hands during the Speakers Cup, a golf tournament fundraiser hosted by AT&T at Pebble Beach.
Assembly member Steven Bradford (D-Gardena) putts on the 18th green as… (Gina Ferazzi / Los Angeles…)

SACRAMENTO — As the sun set behind Monterey Bay on a cool night last year, dozens of the state's top lawmakers and lobbyists ambled onto the 17th fairway at Pebble Beach for a round of glow-in-the-dark golf.

With luminescent balls soaring into the sky, the annual fundraiser known as the Speaker's Cup was in full swing.

Lawmakers, labor-union champions and lobbyists gather each year at the storied course to schmooze, show their skill on the links and rejuvenate at a 22,000-square-foot spa. The affair, which typically raises more than $1 million for California Democrats, has been sponsored for more than a decade by telecommunications giant AT&T.

At the 2010 event, AT&T's president and the state Assembly speaker toured Pebble Beach together in a golf cart, shaking hands with every lawmaker, lobbyist and other VIP in attendance.

The Speaker's Cup is the centerpiece of a corporate lobbying strategy so comprehensive and successful that it has rewritten the special-interest playbook in Sacramento. When it comes to state government, AT&T spends more money, in more places, than any other company.

It forges relationships on the putting green, in luxury suites and in Capitol hallways. It gives officials free tickets to Lady Gaga concerts. It takes lawmakers on trips around the globe and all-expenses-paid retreats in wine country. It dispenses millions in political donations and employs an army of lobbyists. It has spent more than $14,000 a day on political advocacy since 2005, when it merged with SBC into its current form.

A handful of labor unions and trade groups have spent more on a combination of lobbying and direct political giving, but state records show that in the last seven years, no single corporation has spent as much trying to influence lawmakers as AT&T. At the same time, a tide of consumer protections has ebbed and the company has been unshackled from the watchful eye of state regulators.

Efforts to force phone companies to be more transparent about fees on cellphone bills died; so did an attempt to end monthly charges to unlist a phone number. The charge for that kind of privacy rose sixfold in a three-year period, and those fees generate $50 million annually for AT&T, according to a 2009 legislative analysis.

State controls on land-line pricing were eliminated. And in 2010, legislation to make it easier for consumers to stop receiving the phone book — another revenue source — was defeated after fierce opposition from AT&T. The bill received just 12 votes in the 40-member state Senate, the scarcest support for any measure that reached the Senate floor that year. This year, AT&T is part of a coalition of telecom and high-tech companies seeking to strip state regulators of authority over some basic telephone services.

The company, whose annual report pegged its revenue last year at $34 billion, does suffer the occasional setback. For example, the state Senate in 2009 refused to confirm a regulator for the telecommunications industry who had AT&T's strong backing. But defeats are rare.

AT&T has "shown the ability to exercise political power on an unprecedented scale," said Regina Costa, a researcher for the Utility Reform Network, a consumer group.

At the state's Division of Ratepayer Advocates, Denise Mann handles telecommunications issues.

"Every day I look at a case and I think, well, if they [AT&T] don't care, we have a good chance," she said. But if AT&T's corporate offices do care, she added, "all we can do is appeal to conscience, reason and the public interest."

Ken McNeely, president of AT&T California, said his company is active in Sacramento because of its large presence in the state.

"We have about 40,000 employees, we have about 50,000 or so retirees, millions of customers, millions of shareholders in the state," he said. "It's important for us to participate, and participate actively, in the public policy arena."

Many of the company's victories have come at the California Public Utilities Commission, a five-member panel appointed by the governor that oversees the telecommunications industry. Its members have waved through mergers, limited regulations on cellular service and helped AT&T rebuild itself into a telecom behemoth almost 30 years after it was split apart in the wake of a federal antitrust case.

The rest of AT&T's wins come at the state Capitol, where the company focuses most of its lobbying efforts. There, lawmakers have passed bills that have translated into millions of dollars for the firm's bottom line and stopped dozens of measures that AT&T has opposed.

The core of the firm's strategy has long been the two-day Speaker's Cup, the jewel of the legislative fundraising circuit. There is an annual golf outing in Del Mar for the Capitol's minority Republicans, but it raises a fraction of what Democrats get at Pebble Beach.

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