AT&T: We don't have to disclose NSA dealings

Martha Mendoza | AP Business Writer

SAN JOSE, Calif. (AP) — AT&T, under fire for ongoing revelations that it shares and sells customers' communications records to the National Security Agency and other U.S. intelligence offices, says it isn't required to disclose to shareholders what it does with customers' data.

In a letter sent Thursday to the Securities and Exchange Commission, AT&T said it protects customer information and complies with government requests for records "only to the extent required by law."

The telecom giant's letter was a response to a shareholder revolt sparked on Nov. 20 by the New York State Common Retirement Fund, the ACLU of Northern California and others. The groups are demanding that AT&T and Verizon be more transparent about their dealings with the NSA.

In the letter, AT&T said information about assisting foreign intelligence surveillance activities is almost certainly classified. The company said it should not have to address the issue at its annual shareholders meeting this spring.

Nicole Ozer, technology and civil liberties policy director at the ACLU of Northern California said AT&T has overstepped its bounds.

"It's outrageous that AT&T is trying to block the shareholder proposal," she said. "Customers have a right to know how often their private information is ending up in the government's hands."

AT&T spokesman Mark Siegel said "the letter speaks for itself. We have no comment beyond it."

After the Sept. 11 terror attacks, U.S agencies established a warrantless program to monitor phone calls and e-mail between individuals in the United States and other countries who are suspected of having links to terrorism. But disclosures in recent weeks from former intelligence contractor Edward Snowden have exposed the breadth and depth of U.S. government surveillance programs on the Internet and over other telecommunications networks. The Washington Post reported this week that the NSA tracks locations of nearly 5 billion cellphones every day overseas, including those of Americans.

Companies are responding to the revelations in a variety of ways. Tech firms including Yahoo and Google are pushing back, adding encryption, filing motions in the FISA court, and arguing that the NSA is overstepping its bounds.

But telecommunications firms appear to be cooperating fully.

"AT&T has not made it clear to investors or customers what data it shares or with whom. Customers should not be the last to know how their personal information is being used by governmental agencies," said New York State Comptroller Thomas DiNapoli.

DiNapoli co-signed the AT&T shareholder resolution on behalf of the New York State Common Retirement Fund, which holds assets totaling about $161 billion. The fund owns more than 15 million shares of AT&T valued at roughly $517 million.

"Customer trust is critical for any business, but nowhere is it more so than for those corporations that handle our personal data and communications," DiNapoli said.

AT&T shareholders Trillium Asset Management in Boston and Durham, N.C.-based Arjuna Capital/Baldwin Brothers were also part of the revolt, which demands that AT&T publish semi-annual transparency reports similar to those from Microsoft, Twitter, LinkedIn, Facebook and Yahoo. The companies disclose the number of government requests for information and whether they comply.

But AT&T noted that those transparency reports don't disclose details about the requests or even separate out the number of National Security Letters companies receive. That information is withheld by the companies because they are barred by the federal government from revealing it, a prohibition many companies are fighting in court.

"In fact, all six Internet companies referenced in the (shareholder's) proposal state that they are not allowed to publicly disclose any such information in their Transparency or Law Enforcement Request Reports," said AT&T. "Therefore, because the proposal is over-broad, it is excludable..."

AT&T also argues that the issue of their disclosure practices with the NSA has not been a topic of "sustained debate over the last several years," a standard they say must be met to require public reporting.

Securities and Exchange Commission spokeswoman Christina D'Amico said the agency declined to comment.