A hopping model for charge transport in the organic polymer polyaniline (PANI) is formulated in terms of known dimer-based oxidation states, and the equilibration of these states (particularly the intermediate oxidation state emeraldine) with an acid bath. When solved exactly the model, which invokes motion of electron holes among the nitrogen lone pairs of semi-quinone radicals, provides a satisfactory description of the conductivity at all oxidation states, with all pH and buffer equilibrations. An important sensitivity of the doping to counter-ion concentration is predicted and confirmed experimentally. Absorbed water is critical to maintaining a stable conducting state, and laser-Raman measurements show a reversible undoping of the sample through protonation of the counter-ion when water is removed. These observations allow us to interpret the anomalous magnetization data. The magnetic susceptibility measurements in these materials are interpreted as being due to a statistical distribution of localized spins in one-dimensional antiferromagnetic Heisenberg chains.