From 1999, when the state began keeping electronic records of lobbying activity, through the end of 2011, AT&T spent more money trying to influence public officials than any other single corporation. In those 13 years, according to records from the California secretary of state, AT&T and its affiliates spent more than $47 million on lobbying — more than twice the figure for the next biggest corporate spender, Edison International, which shelled out about $21.9 million.
In addition, AT&T hands out, on average, more than $1 million in political contributions each year. Every current member of the Legislature has received at least $1,000; chairmen of the committees that oversee the telecommunications industry get far more.
Padilla has chaired the telecommunications panel since late 2008, collecting $41,200 from AT&T and its employee political action committee — more than the company has given since then to any other lawmaker except the leaders in each house. In the Assembly, Steve Bradford has received $23,500 from AT&T since becoming telecom chairman in 2010.
In the 2003 recall campaign against Gray Davis, AT&T spent $425,000 trying to save his governorship. As soon as he was gone, AT&T sent checks to the man who replaced him. The first arrived in Schwarzenegger's campaign account four days after he was sworn in.
In total, his political treasuries received $490,000 from the telecom company and its affiliates during his tenure.
By January 2006, Schwarzenegger had installed Susan Kennedy, a business-friendly Democrat who helped AT&T while she was a regulator on the Public Utilities Commission, as his chief of staff. At the time, AT&T was preparing its most important legislative move in years: pushing to undo decades of cable franchising and gain access to California's cable market.
Fabian Nuñez, a Los Angeles Democrat who was then Assembly speaker, introduced legislation on phone companies' behalf to do just that. AT&T spent more than $23 million that year on lobbying and advertising in favor of the bill, which Schwarzenegger signed into law that September. Today, AT&T's federal filings show billions in revenue from its cable business, the largest piece of which is in California.
Kennedy, Nuñez and other key players in that legislative effort now have financial ties to AT&T. Nuñez is a partner at Mercury Public Affairs, a public relations firm that lists AT&T as a client. Martha Escutia, a Whittier Democrat who headed the Senate utilities committee when the cable bill passed, now lobbies the Public Utilities Commission on AT&T's behalf. Kennedy has been hired by a law firm that lobbies the federal government for the company.
Nuñez declined to comment on whether he works on AT&T business. A Mercury spokeswoman noted that AT&T was a client before Nuñez joined the firm. Escutia declined to comment, as did Kennedy.
Six months after signing the cable bill, Schwarzenegger was feted at a Texas fundraiser by AT&T brass, including McNeely. The governor also attended a celebration for After-School All Stars, a charity he founded in the early 1990s. The cause for the festivities: a $500,000 donation from AT&T.
Charitable giving has long been entwined with AT&T's political strategy. The firm has given $145,000 to two charter schools in Oakland founded by Gov. Jerry Brown, $50,000 of that since Brown was elected governor. It gives to a range of other groups, and many AT&T representatives serve on their boards. The organizations often back the company's priorities.
In June, California's utilities commission held a hearing on the proposed AT&T merger with T-Mobile. Several community groups praised AT&T's contributions to them as the chief reason to support the potential new mega-firm. When AT&T was lobbying for the cable bill, groups including local Boys and Girls clubs and the NAACP — whose president was then being paid $12,000 a month by AT&T as an advisor — signed on as supporters.
And when Kennedy's replacement on the utilities commission faced a confirmation fight in the state Senate, letters of support arrived from charitable groups that had received AT&T money that year. Among them were United Way branches in the Bay Area, Fresno, Merced, San Joaquin, Butte and Glenn counties that, according to federal tax records, received a combined $589,464.
McNeely, calling his company a "good corporate citizen," denied any link between the company's giving and its political agenda.
"Absolutely not," he said. "AT&T has placed a significant corporate value in giving back to communities for more than a century. We have been active participants in the communities in which we live and work for over 100 years and we'll continue to do that for the next 100."