Senator asks LightSquared to release all communications with White House

Introduction

Sen. Charles Grassley is putting pressure on wireless company LightSquared to make public all records of its contacts with White House aides as it sought to set up a national broadband network.

The Iowa Republican wants to know if campaign contributions to Democrats influenced a decision by the Federal Communications Commission to grant initial government approval to the company’s plans in late January despite fears its network could interfere with global positioning systems, posing dangers to aircraft, military operations and search and rescue missions.

In two letters sent Wednesday to LightSquared and its hedge fund owner, Philip Falcone, Grassley asked both to voluntarily turn over records of all communications with government officials. Falcone is head of Harbinger Capital Partners.

“If Harbinger has nothing to hide and would like to put questions of improper influence at the FCC, Department of Commerce, and White House to rest, the public release of these communications would allow Congress and the American people to fully examine the facts and decide for themselves,” Grassley wrote. “Incomplete information about this project only undermines public confidence in the FCC’s decision to allow this project to move forward.”

LightSquared spokesman Terry Neal said, “We received the letter and we are reviewing it.” Grassley’s letters to the companies were first reported by the Wall Street Journal.

Last month, House Republicans launched a broad investigation into White House ties to campaign donors seeking government contracts, loans and other benefits, including LightSquared, whose employees made large contributions to Democrats while gaining access to presidential aides.

The calls for investigation came in response to an iWatch News report detailing numerous e-mail contacts between LightSquared and White House aides. On the day that LightSquared CEO Sanjiv Ahuja made a $30,400 contribution to the Democratic Party, two of his deputies appealed for meetings with top technology advisers to Obama, for instance. The White House emails were obtained through a Freedom of Information Act request.

Darrell Issa, chairman of the House Committee on Oversight and Government Reform, is scrutinizing LightSquared as part of a broader effort examining government actions that pick what he called “winners and losers.”

Issa’s investigation taps into mounting criticism in Congress, mostly among Republicans, that many Obama fundraisers and other supporters have enjoyed close ties to his administration. In the run-up to his 2008 election, candidate Obama had pledged to curb the influence of lobbyists and campaign donors in government.

An iWatch News investigation earlier this year found that nearly 200 of Obama’s 2008 campaign bundlers have landed plum government jobs and advisory posts, won contracts worth millions of dollars for their business interests, or attended numerous elite White House meetings and social events.

The White House has denied LightSquared received any special treatment. “The Federal Communications Commission is an independent agency with its own standards and procedures for considering these types of decisions and we respect that process. In fact, the Chairman (FCC Chairman Julius Genachowski) expressly said the White House never lobbied the FCC on LightSquared,” White House spokesman Eric Schultz said in a statement.

Schultz noted that the Obama administration has taken the position that LightSquared should not “be allowed to move forward unless interference issues were resolved.”

Republicans have seized on the controversy, likening it to Solyndra, the failed California solar panel firm backed by a major supporter of the president that collapsed after receiving $535 million loan guarantee. The firm faces multiple investigations. The Solyndra story was first reported by iWatch News in May.

LightSquared rejects that comparison, saying it is “100 percent privately funded and has not asked, nor will ask, for public money for our network. We are going to invest $14 billion in private investor money on a plan that will create 15,000 jobs in each of the five years of the network build. Unlike Solyndra, LightSquared has not asked for a dime of government money for this plan, which is based on an FCC authorization received in 2005.”

LightSquared argues its wireless broadband plan would offer wireless service to more than 260 million Americans. But it faces critics in Congress who argue its operations could threaten aviation safety, disrupt military and rescue operations—and even interfere with everyday devices such as cell phones.

In his letter sent Wednesday, Grassley challenged several claims the company has made in a public relations campaign, which included placing advertisements in major newspapers. He questioned the assertion that the company has a cheap and easy fix to the GPS interference problems, noting the FCC has advised congressional staff that it remains a “hard problem.”

“Making a representation that this problem has been solved without full and independent testing and without agreement from the Department of Defense, FCC and other affected stockholders again raises questions,” Grassley’s letter states.