AT&T gets in Trump's good graces after praising tax bill as legal showdown over Time Warner bid looms

AT&T gets in Trump's good graces after praising tax bill as legal showdown over Time Warner bid looms
President Trump speaks Wednesday with Vice President Mike Pence and members of Congress during a White House event celebrating the passage of the tax overhaul. (Manuel Balce Ceneta / Associated Press)

As it continues to face federal scrutiny over its blockbuster deal to take over Time Warner, AT&T said it plans to invest an additional $1 billion in the United States in 2018 and pay a $1,000 bonus to more than 200,000 AT&T employees following congressional approval of President Trump's tax overhaul.

The decision seemed to put AT&T in Trump's good graces, at least temporarily, and fueled speculation that the company may be seeking to ease tensions as it faces a legal showdown with the Justice Department over the mega-merger.


Congress voted Wednesday to approve the $1.5-trillion tax package, which cuts the corporate tax rate to 21% from 35% in a move that Republicans say will help spur the economy and create jobs. The overhaul also is intended to reduce taxes for middle- and working-class families.

At a White House ceremony Wednesday, Trump hailed the passage, saying that "companies are going to be coming back."

The president also singled out AT&T's decision to increase capital spending in the U.S. and provide employee bonuses. "And that's because of what we did. So that's pretty good," Trump said.

AT&T said in an announcement that if the president signs the bill before Christmas, employees will receive the bonus over the holidays.

The telecommunications giant is currently sparring with the federal government over its $85-billion bid to purchase Time Warner, which would create an entertainment and distribution behemoth. The Justice Department sued AT&T in November in an attempt to block the deal, saying that the combined company would stifle competition and adversely affect consumers.

Trump has publicly criticized the proposed merger, saying "I've always felt that that was a deal that's not good for the country. I think your pricing is going to go up."

The president also has repeatedly crossed swords with CNN, which is owned by Time Warner, calling the cable news network "fake news."

It remains unclear just how big of a role CNN will play in closing the merger. While sources say the Justice Department has pressured the companies to sell Time Warner's Turner Broadcasting unit — which includes CNN — to secure federal approval for the deal, AT&T has said it won't sell the cable channel and is prepared to fight the government in court.

In November, AT&T CEO Randall Stephenson denied that he is being pressured to sell Turner Broadcasting.

"I have never been told that the price of getting the deal done was selling CNN. Period," he said at an industry event in New York. "And likewise, I have never offered to sell CNN."

Stephenson praised the tax overhaul in a statement Wednesday.

"Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world," he said. "This tax reform will drive economic growth and create good-paying jobs."

A spokesman for AT&T said the company's announcement is "unrelated to our pending acquisition of Time Warner."

AT&T's decision to give workers a bonus followed a request from the company's union last month asking if it would guarantee that workers would receive the $4,000 raise that White House economists said would result from the tax cuts, the Associated Press reported. Stephenson last week discussed the idea of providing a lower bonus to employees with the head of the union representing 200,000 workers, the report said.



2 p.m.: This article was updated to include a statement from AT&T.

This article was originally published at 11:30 a.m.