Falcone, LightSquared push back against charges of political favoritism

Philip Falcone, the head of the hedge fund Harbinger Capital Partners and the principal backer of wholesale LTE provider LightSquared, pushed back strongly against accusations that LightSquared benefited from political favors from the White House.

Philip Falcone LightSquared Harbinger


In a series of interviews, Falcone and LightSquared CEO Sanjiv Ahuja disputed assertions that LightSquared tried to use political donations to curry favor with the White House and the FCC. The furor erupted last week after a Daily Beast report suggested the White House influenced congressional testimony of a four-star Air Force general to put LightSquared's potential GPS interference in a more favorable light. Emails uncovered by Center for Public Integrity, a public watchdog group, through a Freedom of Information Act request also indicate that LightSquared officials lobbied for a meeting with the White House and mentioned political donations to President Obama and Democrats.

Falcone said emails between LightSquared employees and the White House were business as usual and that there was nothing inappropriate about them. "How LightSquared operated, and how LightSquared will continue to operate, is no different than what everybody else does," Falcone told Politico. "It's completely appropriate and was within the guidelines of how business is conducted."

In a separate interview with Fox News, Falcone said that it is "absolutely false" to suggest that LightSquared obtained in advance the written testimony of Air Force Gen. William Shelton. The original Daily Beast report, which cited unnamed officials familiar with the matter, said that when the White House reviewed the testimony of Shelton, who oversees Air Force Space Command, it requested that the testimony be altered to add two points: that the general supported the White House policy to increase broadband connectivity and that the Pentagon would try to clear up the GPS interference questions with testing in 90 days. The report said that Shelton, when pressed by a member of Congress, said the White House tried to pressure him to change his testimony.

"People think we've made contributions to grease the wheels, that is so wrong, it's disgusting," Falcone told Fox News. Falcone has contributed $50,500 to Democrats since 2007. He's also contributed $85,500 to Republicans since 2007, according to the Washington Post.

On Monday, the Daily Beast reported that Anthony Russo, director of the National Coordination Office for Space-Based Positioning, Navigation, and Timing, said that he was also asked by the White House's Office of Management and Budget to insert a 90-day testing timeframe into his own congressional testimony, but that he refused. OMB argues it routinely reviews the testimony of administration officials before they go before Congress to ensure their testimony is consistent with administration policy, and that all officials have testified about the dangers posed to GPS receivers from LightSquared's network.

As it stands, the FCC has said that more tests are needed to sort out GPS interference concerns about LightSquared's planned network. The FCC's notice on the testing came days after the National Telecommunications and Information Administration sent a letter to the Departments of Defense and Transportation, which said that the NTIA wants to have more tests, and that those tests be completed by Nov. 30. The FCC, however, gave no timetable in the public notice for when its requested tests will be completed.

Falcone said he remained confident that the network will get off the ground. "The FCC mandated the most aggressive build-out in the history of telecommunications," Falcone told the Daily Beast. "We expect that we will have consumers on this network by the second half of 2012."

For more:
- see this Politico article
- see this Washington Post article
- see this Daily Beast article
- see this Fox News article
- see this The Hill article

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