Sept. 21 (Bloomberg) -- House Republicans asked for records of contacts between the White House and Philip Falcone, citing concerns about possible political pressure on U.S. agencies over the billionaire’s proposed LightSquared wireless venture.
LightSquared is seeking to allay fears its planned $14 billion network may disrupt military and civilian uses of the global-positioning system. The company needs clearance from the Federal Communications Commission to proceed. The request yesterday from House Republicans adds political static to a debate that has centered on radio interference.
Some U.S. officials have been reluctant to testify on GPS interference and agencies haven’t provided information, Representative Ralph Hall, of Texas, chairman of the House Committee on Science, Space and Technology, wrote in a letter yesterday. That “does nothing to promote the case for LightSquared, nor does it put our minds at ease about the possibility that this administration may be providing special favors to high-level financial donors,” Hall wrote.
The Obama administration should turn over “all records” of contacts by Falcone, LightSquared and his Harbinger Capital Partners hedge fund, according to the letter. Six other Republicans on the panel signed the letter, which was distributed by e-mail.
Events surrounding solar-panel maker Solyndra LLC, which failed after receiving U.S. loan guarantees, “further emphasize our concern about a pattern by this administration to grant preferential treatment toward donors,” Hall and his colleagues wrote. “As with Solyndra, the lack of scrutiny of the LightSquared project is disturbing.”
Falcone, his wife Lisa Falcone, and LightSquared Chief Executive Officer Sanjiv Ahuja have each made a $30,400 political contribution to Democratic campaign organizations, the lawmakers said.
E-mails between LightSquared representatives and White House officials refer to company attendance at fundraisers for President Barack Obama, and the donations roughly coincided with LightSquared contacts with the White House, the letter said. “While some may call it a coincidence, we remain skeptical,” the lawmakers said in yesterday’s letter.
LightSquared plans to offer wireless Internet service to 260 million people. The FCC has ordered testing to ensure that the network won’t cause harmful interference to GPS operations. The service has faced hearings before the House committees on science, armed services and transportation.
“Every administration witness testifying at every hearing on LightSquared has been explicit in identifying the problems for GPS, and the need to resolve interference problems before Lightsquared is allowed to move forward,” Eric Schultz, a White House spokesman, said in an e-mail. “We fully respected the FCC’s independent process.”
The lawmakers asked for records of contacts with the Office of Management and Budget and with the Office of Science & Technology Policy, and requested replies by Oct. 7. Versions of their letter were sent to Jacob Lew, director of OMB, and to John Holdren, director of the science and technology office.
Four executive branch agencies haven’t produced documents about LightSquared requested by the Science Committee, and the “non-compliance” was “the first of many red flags raised about the situation regarding LightSquared,” the letter said.
LightSquared envisions offering wholesale service through a network of 40,000 base stations using airwaves previously reserved mainly for satellites. GPS devices rely on satellite signals, and makers of GPS gear say LightSquared’s network would disrupt navigation by planes, boats, tractors and automobiles.
The Reston, Virginia-based wireless company is backed by Falcone’s Harbinger Capital Partners hedge fund, which has invested about $3 billion in the venture.
Representative Darrel Issa, chairman of the House Committee on Oversight and Government Reform, was asked yesterday in an interview on the C-Span network about Solyndra and LightSquared. Issa said he is “looking at it” not as “one company or two companies, we’re looking at the system.”
Issa, a California Republican, pointed to broad concerns about the dangers of government attempting to pick winners and losers, Frederick Hill, a spokesman for the oversight committee, said in an e-mail.
“We look forward to working with the House Committee on Oversight and Government Reform to clear up any concerns,” Jeffrey Carlisle, a LightSquared executive vice president, said in an interview. “Unlike Solyndra, LightSquared has not asked for a dime of government money.”
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