Investors Want AT&T to Clarify Policies on Surveillance Requests; Cite Documents Characterizing NSA Relationship as a “Partnership”

Citing concern about reports of behavior that appear inconsistent with AT&T’s pledge to protect customer privacy “to the fullest extent possible,” shareholders are asking the company to clarify how it provides information to law enforcement and intelligence agencies “above and beyond what is legally required by court order or other legally mandated process.” The shareholder proposal cites an August 2015 New York Times story which reported that as recently as 2013, AT&T shared 60 million foreign-to- foreign emails a day with the National Security Agency (NSA), on a voluntary basis, not required by court order. The Times article analyzed NSA documents, one of which stated that AT&T’s relationship with the NSA was “a partnership, not a contractual relationship.”

The proposal was filed by Arjuna Capital, an investment manager.  Arjuna was a co-sponsor of a related 2014 shareholder proposal, which asked AT&T to publish semi-annual transparency reports on government requests for customer information. The proposal was withdrawn after AT&T, like Verizon Communications, agreed to publish transparency reports.

“While AT&T must comply with its legal obligations, failure to persuade customers of a genuine and long-term commitment to privacy rights could present AT&T with serious financial, legal and reputational risks” the proposal states.

AT&T is seeking to block a vote on the proposal by shareholders and has filed a request with the Securities and Exchange Commission for a “no-action” letter to allow the company to exclude the proposal from its 2016 proxy statement.

Among other arguments, AT&T suggests that “implementing the Proposal would cause AT&T to violate federal laws intended to protect the intelligence-gathering activities of the United States.”

In its response to the SEC, Arjuna Capital notes: “The Proponents do not seek classified information, but a clear understanding of the Company’s role in a controversy that spans nearly 15 years…we must not blindly accept a private/public police state without proper checks and balances. The Proponent’s request of AT&T is one such check and balance and is essential to understand the Company’s role in providing the government with customer information beyond its legal duty.”

Natasha Lamb, Arjuna’s Director of Equity Research and Shareholder Engagement, said: “As our society rocketships toward the era of Big Data, we cannot ignore the perennial threat of ‘Big Brother’ and must draw clear and transparent lines between what is acceptable and unacceptable monitoring of our citizens’, and AT&T’s customers’ communications.”

“Consumer trust is critical for business in the digital age,” said Michael Connor, Executive Director of Open MIC, a non-profit organization that works with shareholders on media issues. “This proposal highlights the need for companies to defend customer privacy and to be as aggressive as they can, legally, in explaining their policies and practices. Silence on these issues is not an acceptable position.”

For more information:

Natasha Lamb Arjuna Capital natasha@arjuna-capital.com 978-578-4123

Michael Connor Open MIC mconnor@openmic.org 212-875-9381