Sen. Grassley reports ‘unseemly invitation’ to Ethics Committee

Sen. Chuck Grassley (R-Iowa) on Monday accused Harbinger Capital, the hedge fund that has invested heavily in wireless start-up LightSquared, of improperly trying to influence him.

In a letter to Phil Falcone, the billionaire managing director of Harbinger, Grassley said he reported “questionable contact” to the Senate Ethics Committee.

Grassley pointed to an October email sent to his office in which Falcone said LightSquared could be a political “win” for Grassley.

{mosads}“The last thing I want to do is to make this more political than it already is,” Falcone said in an email. “It doesn’t belong in that arena. However, since we are already there, I believe I can make this into a win for the Senator, Lightsquared and the consumer.”

In a separate incident, Todd Ruelle, chairman and CEO of Fine Point Technology, spoke to one of Grassley’s aides on the phone. Ruelle said he “only gets paid if this deal goes through” and that “there will be a call center in the Midwest, possibly in Iowa, if this deal goes through.”

Grassley’s office contacted the Senate Ethics Committee about “the unseemly invitation to discuss a quid pro quo.”

A spokesman for Harbinger denied that Ruelle was working on behalf of the investment firm.

“Mr. Ruelle does not, nor has he ever worked for Mr. Falcone, Harbinger or LightSquared as an employee or a consultant,” the spokesman said. “No one at Harbinger or LightSquared has had any discussions or negotiations with Mr. Ruelle with respect to approaching or contacting Senator Grassley’s office regarding an alleged quid pro quo, or a call center in Iowa, which in any event would be inconsistent with the LightSquared wholesale business model. If such conversations occurred, Mr. Ruelle was acting entirely on his own and without the knowledge, authority, or endorsement of Mr. Falcone, Harbinger or LightSquared.”

Ruelle’s company, Fine Point Technology, did not respond to a request for comment.

LightSquared plans to launch a nationwide wireless broadband service, but tests have shown its network could interfere with GPS devices. The Federal Communications Commission (FCC) granted the company a conditional waiver last year, but officials say the company will not receive final approval to launch its network until it can demonstrate it has fixed the interference problem.

Grassley has pledged to block President Obama’s two nominees to the FCC unless the agency releases internal records related to its review of LightSquared.

Republicans have questioned whether the FCC and the White House have shown inappropriate favoritism to the broadband company.

Documents obtained by The Hill through a Freedom of Information Act request show that Ruelle also contacted White House staffers about LightSquared.

In September, he emailed Tom Power, the White House’s deputy chief technology officer for telecommunications, about an appearance by Falcone on Fox News with host Megan Kelly.

“I have arranged to hit back HARD!” Ruelle wrote.

In a response, Power told Ruelle to stop contacting him.

“Todd: Per my recent email and voice mail to you, I must ask that you stop communicating with me regarding the LightSquared matter,” Power wrote. “As you know the [Federal Communications Commission] and [National Telecommunications and Information Administration] are the government agencies that are responsible for this matter. You should direct all relevant communications to those agencies. Thank you.” 

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