"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Friday, September 16, 2011

LightSquared - A New Scandal

A new scandal is brewing involving a company that received favoritism from the Obama Administration.   The company is LightSquared; it's in the wireless broadband industry, and its majority owner is Philip Falcone, a former hedge fund titan who's also a big Democratic Party donor.   The allegation is that someone at the White House leaked testimony from General William Shelton, head of the U.S. Space Command, to the company in advance of the General's Congressional testimony, where he was going to say that the LightSquared network could have a bad impact on the military's satellite communications.    The White House, it is allegged, also pressured Shelton to tone down his criticism.  Some other nuggets from this story at Pajamas Media:

  • At one time President Obama was a personal investor, with $50,000 of his own money.
  • FCC Chairman Julius Genachowski was slated to testify before the House Armed Services Committee about the political patronage in the granting of fast-track waivers for the company. But Genachowski refused to appear.
  • LightSquared employs an army of eight high-powered lobbying firms, including one headed by former Democratic House Majority Leader Dick Gephardt. In 2011 alone, LightSquared spent $720,000 on lobbyists.
  • iWatch, a project of the Center for Public Integrity, has conducted an exhaustive investigation of LightSquared and its high-level Obama connections.  They found that in addition to the president, Donald Gips — Obama’s former personnel chief — had $500,000 invested in LightSquared. Gips raised half a million dollars as a “bundler” for the president’s 2008 campaign, and now has the politically coveted position of U.S. ambassador to South Africa.
  • iWatch also had harsh words for Genachowski. Genachowski also was one of Obama’s biggest fundraisers, bundling $500,000 for Obama’s presidential run. Under his chairmanship, the FCC granted special rulings and waivers to allow LightSquared to operate.
  • Falcone and his company also made major contributions while his case was pending before the commission. In September 2010, LightSquared CEO Sanjiv Ahuja made a $30,400 contribution to the Democratic Party, the maximum donation allowable by law. Falcone twice gave the maximum allowable.
  • iWatch traced LightSquared payments to contacts within the administration. On September 22 Ahuja met with James Kohlenberger, Obama’s chief of staff for the White House Office of Science and Technology. A day later Ahuja gave $30,400 to the Democratic National Committee. A week later, on September 30, Falcone and his wife reportedly each gave $30,400 to the Democratic Senatorial Campaign Committee.
  • In two separate rulings, the FCC favorably approved LightSquared requests: on March 26, 2010, and on January 26, 2011. The rulings allowed the company to switch from a satellite company to a wireless system based on 400,000 towers. The tower system could interfere with many GPS signals.
  • GPS proponents have been dismayed by the quick FCC rulings. “The whole process has been highly unusual,” said Dale Leibach, a spokesman for the industry group Coalition to Save Our GPS . “The FCC typically doesn’t act quickly on matters before them, and they acted with great haste and lightning speed” on LightSquared.
This stinks even more than Solyndra, if that's possible.  

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