New York comptroller questions AT&T surveillance report plan

[January 09, 2014]  By Ross Kerber

BOSTON (Reuters) — A plan by AT&T Inc to explain how it shares some customer information with government agencies may not be enough to restore public trust, an attorney for New York State Comptroller Thomas DiNapoli told securities regulators in a letter provided to Reuters on Wednesday.

The attorney's letter dated January 6 keeps alive a surveillance debate the telecommunications giant had aimed to settle in December — part of a growing national discussion of privacy rights fueled by the revelations of former government security contractor Edward Snowden.

Under pressure from shareholder activists, AT&T promised last month to publish a semi-annual rundown of things like how many law-enforcement agency requests it gets in criminal cases.

But DiNapoli's office is worried the company's report could exclude pertinent details, for instance its sharing of customer calling records or requests for information the U.S. company might receive from foreign governments on calls by religious dissidents. By leaving out such specifics, the letter from DiNapoli's attorney states, AT&T's report "would fail to address its essential objectives of restoring public trust."

AT&T representatives did not respond to questions.

DiNapoli oversees the $160.7 billion New York State Common Retirement Fund, which owned 15.7 million AT&T shares as of November. That month DiNapoli and other privacy advocates had proposed shareholder resolutions at AT&T and rival Verizon Communications Inc for their springtime shareholder meetings.

The resolutions asked each company for details of customer information-sharing, and followed revelations from Snowden of close ties between government agencies and technology firms.

The shareholders say the ties could pose business risks if customers lose faith in the companies to protect confidential information.

Both companies have asked the SEC for permission to leave the proposals off their proxy material partly because of their promises to publish more details on their data sharing. The agency will likely rule on the requests in coming weeks.

Jonas Kron, senior vice-president of Trillium Asset Management, the lead sponsor of the resolution at Verizon, said it is reviewing Verizon's request to the SEC. How Trillium responds, he said, will depend on the substance of the first report Verizon issues that is due early this year.

Kron noted concerns such as whether Verizon would only provide details of its interaction with "law enforcement" agencies, which could exclude spy agencies like the Central Intelligence Agency. A Verizon spokesman declined to comment beyond its filings to the SEC.

(Reporting by Ross Kerber in Boston; additional reporting by Sinead Carew in New York; editing by Richard Valdmanis and Alden Bentley)

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