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Posted at 05:57 PM ET, 09/19/2011

Harbinger’s Falcone defends LightSquared, D.C. connections


LightSquared booth at Satellite 2011 Convention at Washington Convention Center on March 15. (Jeffrey MacMillan/FOR THE WASHINGTON POST)
LightSquared investor Philip Falcone on Monday denied allegations that the troubled company sought regulatory favors from the Obama administration as it also contributed to the Democratic party and politicians.

“People think we have made contributions to grease the wheels ... that’s so wrong, it’s disgusting,” Falcone said in an interview on Fox News.

Falcone has contributed $50,500 to Democrats since 2007. He’s also contributed $85,500 to Republicans since 2007.

The interview comes amid growing controversy over LightSquared’s plan to create a satellite-based mobile network that has proven to cause dangerous interference with global positioning systems.

Last week, House strategic forces subcommittee staff said Air Force Gen. William Shelton complained to them that the White House had asked him to change his testimony before their hearing on LightSquared held last week to make it more favorable for the company. The White House had allegedly leaked the testimony to LightSquared ahead of the hearing, according to staff.

The White House has denied the allegations. Falcone also refuted the claims, saying, “the general is wrong, quite frankly.

But the episode has put additional heat on the company, which is facing greater scrutiny by federal lawmakers who want to know why it received important federal approvals despite its clash with GPS technology.

Republican lawmakers have launched investigations into Falcone’s and the company’s ties to White House and Federal Communications Commission officials to determine whether any special favors were granted to the Reston-based satellite firm.

Falcone said in an interview on Fox News that neither he nor the executives used political donations to the Democratic party to gain access to White House officials. And he said a controversial waiver granted by the FCC last January wasn’t influenced by political connections or special influence. The FCC has denied any special treatment, stressing that it won’t allow the company to launch the network without resolving interference problems.

iWatch News published a report last week showing 2010 e-mail correspondence between LightSquared and White House officials regarding business issues as executives of the company contributed to the Democratic Party.

The White House has denied any special treatment for LightSquared. Falcone on Monday said he has never met President Obama, even as White House records show he and other LightSquared executives have met with White House officials.

And he said criticism of the FCC’s waiver is overblown. He said the company, previously known as Skyterra, had long planned to deploy a mobile broadband network. Harbinger took over Skyterra in March 2010 and the FCC granted a waiver in January 2011 that would allow it to operate non-satellite, or mass market, mobile phones on its network.

But by doing so, the company’s devices would also interfere with GPS technology, which has drawn the ire of GPS makers and federal officials who rely on the technology.

“It’s irrelevant. Quite frankly, when we first approached the FCC, it was more of an interpretation of their waiver to acquire the company in 2010,” Falcone said, adding that the waiver was granted upon their request.

“So we didn’t apply for a waiver. What everybody is talking about does not affect the network, it’s all about the devices that we we’re trying to deploy,” he said.

Defense Department and Federal Aviation Administration officials have warned that the company’s proposed network would endanger lives if GPS systems are affected, and cost the agencies billions of dollars for filters and antennas to accommodate the company’s nearby network on the same satellite band.

Republican lawmakers — particularly Sen. Chuck Grassley (R-Iowa), ranking member of the Judiciary committee — have asked the FCC why it granted a conditional waiver last January that allows the company to use non-satellite phones on its network that would cause the interference, without a full commission vote and without testing the technology by themselves. Grassley has also asked for documents pertaining to its decision to grant the Jan. 11 waiver, which the lawmaker and other critics describes as fast-tracking the company’s plans.

The FCC Chairman Julius Genachowski has responded to Grassley, saying his committee doesn’t oversee the FCC and that according to congressional rules, the agency does not respond to such requests.

Asked by Fox News whether Falcone was willing to disclose correspondence with the FCC, Falcone said there would be nothing in any communications between the company and agency to show wrongdoing. But the billionaire financier didn’t agree to disclose the communications.

“Well, I wouldn’t go down that path,” he said. “I don’t know if it’s necessary. … See, everybody is missing the point here.”

Related:

FCC Chair decides not to appear before House hearing on LightSquared

LightSquared gains waiver to operate mobile broadband network

By  |  05:57 PM ET, 09/19/2011

 
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