LightSquared: Poster Child for Crony Capitalism

Two high-level government officials have revealed they were pressured by the Obama administration to change their testimony to Congress in order to favor a wireless company linked to a high-level Democratic Party donor, and to sound supportive of Obama’s stated goal of bringing high-speed wireless to at least 98 percent of Americans within five years. General William Shelton, a four-star General and Commander of the Air Force Space Command Center at Peterson Air Force Base in Colorado Springs, disclosed that he waspressured to add two items to his testimony; that he supported the White House policy to add more broadband for commercial use, and that the Pentagon would resolve questions relating to broadband company LightSquared through testing within the next 90 days. Anthony Russo, director of the National Coordination Office for Space-Based Positioning, Navigation, and Timing, also rejected the coercion to change his testimony, believing that it would take closer to six months to resolve concerns with LightSquared.

Rep. Paul Broun (R-GA), chairman of the House Science Committee’s Subcommittee on Investigations and Oversight, observed that four out of the five government witnesses for the Obama administration who testified about the LightSquared broadband project had virtually identical language in their testimony reflecting the administration’s views on broadband.

Rep. Mike Turner (R-Ohio), House Armed Services subcommittee chair, believes that General Shelton’s proposed testimony was leaked in advance to LightSquared. This may have prompted the suggested changes in testimony. The Center for Public Integrity has obtained emails revealing that LightSquared officials lobbied for a meeting with the White House and brought up their political contributions to Obama and Democrats.

LightSquared’s major financial backer is Philip Falcone, a high-level Democratic party donor and hedge fund capitalist. His company, Harbinger Capital, has a $3 billion majority stake in LightSquared. Falcone is a Republican but he has given substantial amounts of money to Democrats. He and his wife gave the Democratic Senatorial Campaign Committee $60,800 in 2009. On the same day that LightSquared CEO Sanjiv Ahuja made a $30,400 contribution to the Democratic Party, he sought a meeting with Obama’s top technology adviser, Aneesh Chopra, telling him he would be in town for an Obama fundraiser. In 2005, then Senator Obama made a $90,000 investment in LightSquared, known as Skyterra at the time.

The LightSquared controversy arose due to serious concerns that part of its proposed use of broadband in the terrestrial frequency might interfere with GPS (Global Positioning System) devices, including GPS used by the US military, GPS for hurricane and tornado tracking, and GPS predicting floods, landslides and volcanic eruptions. LightSquared owns the frequency bands 1525 to 1559 MHz. GPS satellites use the adjacent 1559 to 1610 MHz bands. There is a risk that LightSquared signals could overpower weaker GPS signals. The GPS industry has been lobbying Congress and the FCC to stop LightSquared plans until further testing has been completed.

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