Calling the Shots

In the Southwestern Bell and AT&T slugfest over supposed consumer savings, the biggest sucker punch of all is headed your way

"You can't deny that getting to know people personally is helpful [for a lobbyist]," says Hamric, who says she also has friends who lobby for AT&T. "That's what lobbying is all about: getting to know legislators well enough where they will see you or return phone calls so you can put your position in front of them."

Bell external affairs employees also play social director. Lisa Hughes, an area vice president based in Austin, spent $2,819 wining, dining and entertaining legislators, their staffs and families during the first three months of this year, according to reports at the ethics commission.

The filings also indicate that Brad Parrott, an external affairs vice president in San Antonio, routinely treats legislators to rounds of golf, such as when he carted Senator Buster Brown of Lake Jackson around to San Antonio courses in December.

Bell is far from the only company with lobbyists who treat legislators to dinners, drinks and golf games. But it may be the only company that uses its own employees, usually based in the legislator's hometown, to do it.

"Southwestern Bell is unique in that there is no other corporation or institution with operations that are so pervasive that they literally have a physical presence and employees in virtually every single legislator's district," says Rutan of AT&T.

Bell, which operates in five states and is headquartered in San Antonio, does its business out of more than 2,800 buildings across Texas. It has more than 37,000 Texan employees, including about 7,000 workers each in Dallas and Houston.

AT&T, with its corporate offices in New Jersey, has 9,000 employees in Texas, many of whom work in a regional service center in Dallas.

About 25,000 Bell employees in Texas are members of the Communications Workers of America (CWA). During hearings on the telecommunications bill, Bell's union workers have packed the back of the committee room, wearing round white stickers that say, "For Jobs. HB 1701."

Taking money from Bell by reducing long-distance access charges hurts the company and therefore threatens jobs, says Joe Gunn, president of the Texas AFL-CIO, for which CWA is the largest affiliate. Gunn, a former Bell employee and CWA union boss, says the federation takes the general position that what is good for Bell is good for the union. And CWA members, at Bell's behest, aren't shy about reminding some legislators, mostly Democrats, that the union has been good to them in the past by helping in their election campaigns.

"We help the legislators in some districts get their jobs; now we're asking them to help us keep ours," Gunn says boldly.

AT&T has CWA employees, too, but only about 4,000 of them.
AT&T also cannot match Bell's totals in campaign contributions. Bell's political action committee donated about $450,000 to legislators and statewide elected officials in 1998, compared to the $150,000 given by AT&T's PAC, according to ethics commission filings. Those totals do not include donations given directly by company executives or lobbyists.

The disclosures at the PUC indicate that Bell gave $31.6 million in charitable and other contributions from 1995 to 1997, most of it funneled through its parent company's foundation. Bell estimates its charitable contributions are $14.1 million annually, with $1.5 million going to Dallas-area charities and $1.7 million to Houston-area charities. Contributions are both big and small.

"We know if we need help, Southwestern Bell will be there to assist in some projects that we may have," says Puente, the San Antonio legislator. "For example, I had a high school mariachi group in my district that didn't have any uniforms, and I mentioned it to Bell. Sure enough, they sponsored their uniforms."

In gearing up for the legislative session, Bell sent correspondence to lawmakers reminding them of the company's financial investment and philanthropy in Texas, going so far as to break out the numbers by legislative district. In a January newsletter that Bell called its "Report to Legislators," the company heaped praise on itself for a $461-million investment, even though almost all of it was required under the 1995 telecommunications reform law.

Bell spent $308 million to upgrade its own facilities and another $153 million to build new telecommunications facilities (such as the internal wiring and other equipment needed for high-speed Internet access) for schools, libraries and nonprofit health care centers. Bell didn't make as much noise about the fact that the company was obligated to do these things by the Legislature itself.

Legislators required the investment in schools, libraries and nonprofit hospitals as a counterbalance to the perks it gave Bell in the 1995 reforms, which included the ability to ring up extra profits without being subject to a regulated rate cut. Bell is making the most of it, using the required contributions to further endear itself with legislators. In separate correspondence, Bell gave legislators a regional breakdown listing the communities in which the company had upgraded its facilities as well as the schools, libraries and hospitals that had received new facilities and service discounts. Cole makes no apologies for that.

"It's a direct contribution for the benefit of our children here in the state of Texas," he says.

Bell's crowing pierces the ears of AT&T's Rutan, who continues his blood feud with Bell even though the companies agreed to a deal in the Senate and could shake hands in the House before they're through. "I don't think it's an improper factor for a legislator to consider the commitment that a particular company has to the state," he says. "What concerns me is a situation where that winds up being the sole determining factor, where Southwestern Bell's ability to be generous in the state of Texas is in a large part created by things like profits from the excessive access charge."

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