Bachmann accuses Obama of 'crony capitalism' for ties to LightSquared

Republican presidential candidate Rep. Michele Bachmann (R-Minn.) accused President Obama of overlooking national security to help wireless start-up LightSquared in an open letter on her congressional website Thursday.

"Sadly, I believe President Obama is willing to overlook the risks the LightSquared 4G network could pose to the American people and national security because he would rather grant political favors to two of his supporters involved in this situation," she wrote, referring to Federal Communications Commission Chairman Julius Genachowski and billionaire Philip Falcone, who is a top investor in LightSquared.

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"Our national leadership should be ashamed. The support of LightSquared is crony capitalism at its worst," she wrote.

LightSquared plans to launch a wholesale wireless broadband service, but tests earlier this year revealed its network interferes with Global Positioning System (GPS) devices, which are considered critical to public safety.

"If these GPS systems are interrupted, the United States aviation, military and rescue operations will be effectively dismantled," Bachmann said. 

One of Genachowski's goals at the FCC is to expand wireless broadband access, but he has said his agency will not allow LightSquared to move forward until the GPS interference issues are resolved.

LightSquared is currently preparing for a second round of testing to determine if several proposals it has made will be able to solve the interference problem.

"We have conducted — and continue to conduct — an entirely fact-based, engineering-driven, independent process to evaluate harmful interference issues raised by the GPS industry," FCC spokeswoman Tammy Sun said.

A LightSquared spokesman emphasized his company does not plan to activate a network that will interfere with GPS. "When testing revealed a problem with GPS, LightSquared moved to new spectrum and a new launch plan," he said. 

Bachmann accused the administration of trying to pressure Air Force Gen. William Shelton into changing his congressional testimony to say the GPS interference issues could be mitigated.

"Clearly, in his support for LightSquared, the president has put political posturing over national security," she said.

According to a Daily Beast report, the White House's Office of Management and Budget asked Shelton to change his testimony to say he supported the administration's goal of expanding broadband access, and that the military would try to resolve the interference problems within 90 days.

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A spokeswoman for Shelton said the general's testimony was his own and that it is common policy for the administration to review congressional testimony.

Eric Schultz, a White House spokesman, said reviewing congressional testimony is "fully consistent with OMB’s longstanding role." He also said the White House has never lobbied the FCC on behalf of LightSquared and that the administration's official position is that LightSquared should not be allowed to move forward unless the interference issues are fixed.   

Falcone, the LightSquared investor, made thousands of dollars in donations to the Democratic Senatorial Campaign Committee in 2008 and 2009, but has also donated to former Sen. Norm Coleman (R-Minn.) and the Republican Party of Minnesota, according to campaign records on Open Secrets, an online database.

A LightSquared spokesman said Falcone is a registered Republican.

—This story was updated at 7:21 p.m.