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Sacramento Bee
Mar 23, 2007 - 01:00 AM

by Shane Goldmacher

AT&T execs donate funds to governor

Eight top-ranking executives at AT&T have given $5,000 apiece to Gov. Arnold Schwarzenegger's campaign committee in recent weeks, just months after the governor approved a bill easing access for the telecommunications giant to California's multibillion-dollar cable market.

None of the donors -- seven of whom reported addresses in Texas -- had previously given to Schwarzenegger.

The executives' donations -- which total $40,000 -- will help Schwarzenegger retire the $2.4 million campaign debt left from his re-election last year, and come on the heels of a $500,000 gift by AT&T to an after-school nonprofit founded by the governor.

"Basically they are saying thank you very much for the bill last year," said Robert Stern, president of the Center for Governmental Studies.

On Tuesday, Schwarzenegger flew to San Antonio for a ceremony announcing AT&T's half-million-dollar contribution to the after-school program.

While there, Schwarzenegger attended a separate fundraiser with the top-level executives of AT&T and other area businesses, according to Gordon Diamond, an AT&T spokesman.

Campaign watchdogs say both the direct giving to Schwarzenegger's campaign and the donation to his charity are perfect examples of how big business uses money to gain access to top government officials.

"When people in Texas are giving, you know it is for governmental reasons. It's all part of the pattern either to thank the governor or have access to the governor," Stern said. "This will get them access."

Julie Soderlund, a Schwarzenegger spokeswoman, said there is no connection between donations and policy.

"The governor makes decisions based upon what he believes is in the best interest of the people of California," she said.

The AT&T executive donors include six of the nine top officials in the company, according to the AT&T Web site.

They include AT&T's Chief Operating Officer Randall L. Stephenson, Chief Financial Officer Richard G. Lindner, three senior executive vice presidents, and the company's group president, according to campaign disclosures filed with the secretary of state's office.

Timothy Harden, president and CEO of AT&T West, is another donor, as is Kenneth McNeely, president of AT&T California, who testified before the California Legislature last year in support of legislation providing telephone companies broader access to the state's cable and broadband market.

Diamond said any decisions to donate to Schwarzenegger were made by employees of AT&T, not the company itself.

"I can't comment on the personal contributions made by any employees of AT&T," Diamond said, noting that the executives would have no comment on the matter.

Diamond did defend the company's recent gift to the after-school program, saying it had nothing to do with Schwarzenegger or the legislation he signed.

Including the recent $500,000 donation, AT&T has given the nonprofit $1.2 million since 2004 -- the year after Schwarzenegger's election, according to the company.

Diamond said that any effort to link AT&T's giving to after-school programs with California lawmaking was "without merit" and "frankly absurd."

"I don't think it's fair for people to try to connect the dots and say there's any connection with the legislation," he said.

After-School All-Stars has deep ties to Schwarzenegger, who founded the program and remains an honorary chair, along with his wife, Maria Shriver. The organization is dotted with Schwarzenegger associates, including financial adviser Paul Wachter and former administration aide Bonnie Reiss.

Henry Cisneros, a former San Antonio mayor who serves as chairman of the nonprofit, told the Los Angeles Times that he arranged for AT&T's $500,000 donation. At the same time, Cisneros made a $5,000 donation to Schwarzenegger's campaign account.

The recent spate of giving is not the first time AT&T's political largesse has landed the company in the headlines.

Last year, AT&T lobbied the Capitol heavily for legislation -- which eventually passed -- allowing phone companies access to the state's cable TV and Internet market.

To ensure passage of a favorable law, AT&T spent an eye-popping $23.6 million on lobbying in 2006, much of it in TV commercials urging the Legislature to act.

The company also was a major campaign contributor.

In the spring, AT&T was the chief sponsor of the Speaker's Golf Cup at Pebble Beach, a million-dollar fundraiser for the California Democratic Party.

The host of the weekend event, Assembly Speaker Fabian Nez, D-Los Angeles, was the main author of the cable-access legislation the company was pushing.

And the day before the November election, the Democratic Party, where the proceeds of the AT&T-backed Pebble Beach bash went, gave Nez $4 million.

"I think AT&T is a particularly aggressive player in the pay-to-play game," said Doug Heller of the Foundation for Taxpayer and Consumer Rights. "AT&T is one of America's largest corporations, and they throw money around not because of any set of beliefs. The only thing they believe in is getting what they want and using campaign contributions to get to that end."

Schwarzenegger and AT&T were not always allies.

In 2003, the phone company poured $146,000 into the effort to defeat the recall of then-Gov. Gray Davis. But after Schwarzenegger was sworn into office, AT&T began donating to him, giving him more than $150,000 since 2004.

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