LightSquared investor: Suggestion of influence peddling 'disgusting'

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Philip Falcone, the primary investor in LightSquared, a wireless startup, denied Monday that the company had sought any special treatment from the White House in securing a wavier from the FCC. House Republicans are investigating whether the White House improperly pressured Air Force Gen. William Shelton to alter his testimony to lawmakers and their staff in a secured briefing about LightSquared.

"People think we've made contributions to grease the wheels, that is so wrong, it's disgusting," Falcone said on Fox News.


LightSquared has proposed rolling out a nationwide high-speed wireless service through a network of cell towers and satellites. But tests of the LightSquared system show that the technology may interfere with military and aviation GPS systems.

Because of this, the company has been negotiating with the government to figure out how to accommodate the competing technologies. But Republicans suggest that this negotiation may have been colored by political donations to Democrats. In September of last year, officials from LightSquared asked for a meeting with the White House in preparation of the testimony. The e-mails made mention of the fact that LightSquared CEO Sanjiv Ahuja would be in Washington to attend a fundraiser with the president.

The meeting was granted, and records show Ahuja made a $30,400 contribution to the Democratic Party on the day that White House officials met with LightSquared executives. But Falcone denied that this contact was improper, arguing that the e-mails were simply meant to tell White House officials when LightSquared staff would be in town.

"People are construing one thing and quite frankly it means something very different," Falcone said.

The investor also said that he would be willing to consider releasing all e-mails between the company and White House if given the green light by legal counsel. He also noted that he was a registered Republican, and that he and Ahuja had contributed to both parties.

Further complicating the issue for LightSquared and the White House is an assertion by Gen. Shelton that the administration pressured him to alter prepared testimony at an FCC hearing to be more favorable to the company. Falcone disputed Shelton's account, arguing that the company would not want to deploy technology that genuinely threatened national defense.

"The general is wrong, quite frankly," Falcone said.

But Rep. Austin Scott (R-Ga.) questioned whether the White House was covertly lobbying on LightSquared's behalf.

“I’ve been in politics for 14 years. I have never seen an agency advocate so strongly for something like this, unless there was pressure from above or a relationship that was not being disclosed,” he said.

Falcone believes that the skepticism surrounding the LightSquared deal is motivated not by the potential for political scandal, but a push by competitors to sink the technology.

"This has been going on for years, and it's only until recently, until people perceived we would become a commercially viable project that people started voicing their opinions and negativity about GPS," Falcone said.

For its part, the White House has pushed back on criticism from Republicans, saying that the administration did nothing out of the ordinary to advance LightSquared's case. The FCC issued a notice last week that said the company could not move forward with its network until all GPS interference issues were resolved.