"AT&T hiring Michael Cohen as a political consultant was a big mistake," the company's CEO Randall Stephenson said Friday morning.
AT&T paid Cohen, President Trump's personal lawyer and fixer, $600,000 through a contract that ended in December 2017.
The payments are now under scrutiny in part because Cohen is under federal investigation.
"To be clear, everything we did was done according to the law and entirely legitimate. But the fact is, our past association with Cohen was a serious misjudgment," Stephenson wrote in a memo to employees.
"In this instance, our Washington D.C. team's vetting process clearly failed, and I take responsibility for that," he added.
Stephenson announced that Bob Quinn, one of the executives involved in the Cohen deal, "will be retiring."
Quinn was in charge of AT&T's legislative affairs operation in Washington.
Stephenson expressed regret to the company's employees, citing the negative attention around AT&T in recent days.
"To all of you who work tirelessly every day to serve customers and represent the brand proudly, thank you. My personal commitment to you is -- we will do better," he wrote.
Information about the business arrangement has tricked out for several days.
It was first revealed by Stormy Daniels' lawyer Michael Avenatti on Tuesday.
Avenatti said he was aware of four months of payments to Cohen totaling $200,000. But AT&T had Cohen under contract for virtually all of 2017 for $50,000 a month. On Thursday a source with knowledge of the matter confirmed that AT&T paid Cohen $600,000 for the year.