Human Events Blog

Crony capitalism meltdown: LightSquared CEO resigns, White House connections revealed

Today’s exciting news in crony capitalism comes from LightSquared, the crony capitalist company that your friends in the Obama Administration were trying to quick-step through the regulatory maze – to the point of pressuring a four-star general to change his testimony before Congress – even though its 4G technology could have screwed up 75 percent of our GPS system, with ominous implications for air-traffic control. 

Not only was this potentially dangerous technology hustled past regulatory agencies by the otherwise hyper-regulatory Obama Administration at warp speed, but Obama’s FCC was also curiously helpful to LightSquared, crippling its competitor GlobalStar with a well-timed exercise of regulatory muscle.

Unlike most entries in the long list of Obama corruption scandals, the President actually had a personal financial interest in this one, having invested $50,000 in the company during its formative days in 2005, when the company was called SkyTerra. 

Also connected financially to LightSquared: far-left sugar daddy George Soros.  He’s a “significant” investor in the hedge fund founded by LightSquared money man (and top-dollar Obama contributor) Philip Falcone, and has also donated big money to groups which have lobbied on behalf of the company.  It has not been determined if Soros is direct investor in LightSquared, because no one who could answer that question definitively will disclose the information. 

Soros is after more than just a dollar return on his investment, as the Daily Caller explains:

Also during those late spring months in 2010, several advocacy groups funded by left-wing billionaire George Soros were advocating for the adoption of “open-access” Internet rules. Soros’ Open Society Institute has donated more than $1 million to the four organizations that comprise the Public Interest Spectrum Coalition. He is reported to have invested $200 million personally in Harbinger.

Public Interest Spectrum Coalition member groups hold the position that spectrum “belongs to the public” and should be subject to as little corporate influence as possible. Their goal is to create a community-oriented, taxpayer-subsidized and highly regulated broadband system, essentially making Internet access a public utility.

(Emphasis mine.)  A community organized Internet, funded by the most bankrupt government in history?  That sounds lovely.

Even Obama’s FCC was eventually forced to suspend LightSquared’s license, due to the dangers of interference with the GPS network.  The National Telecommunications and Information Administration concluded that “there was no feasible way to prevent the two systems from clashing with each other,” as reported by Forbes. 

This led to unhappy days at the high-flying company our White House worked so very hard to nurture.  In fact, LightSquared announced last week that it would lay off 45 percent of its workforce, although it hasn’t actually gone bankrupt.  The company is still hopeful that it might find some way to make its technology work in a manner acceptable to federal regulators.

Among those who lost their jobs was CEO Sanjiv Ahuja, who suddenly announced his resignation on Tuesday.  Unsurprisingly, he didn’t feel like discussing his ties to the White House, but the Daily Caller was certainly in the mood to talk about “a pattern of political contributions to Democrats that appeared engineered to create a favorable political climate for LightSquared”:

Ahuja, who had never donated to Democrats before and has not since, gave the maximum allowable $30,400 contribution to the Democratic National Committee on the same day his lawyers were trying to arrange a meeting for him at the White House with top Obama technology adviser Aneesh Chopra and other officials.

In emails between Ahuja’s lawyers and White House officials Ahuja wanted to meet with, his lawyers pointed out that he would attend an Obama fundraiser on or about the same day he wanted the meeting.

The House Energy and Commerce Committee also announced on Tuesday that they would be looking into the LightSquared affair.  A statement from the committee reads:

Leaders of the House Energy and Commerce Committee today requested additional information regarding the interference dispute between LightSquared and GPS and the actions taken by federal agencies, including the Federal Communications Commission, in approving LightSquared’s terrestrial network without better addressing potentially serious interference concerns. 

As the committee with jurisdiction over federal communications policy, committee members have been monitoring the progress of the proposed deployment of the broadband network. However, with the recent tentative decision to limit LightSquared’s license to satellite-based service, there remain many unanswered questions, particularly whether the processes used by the FCC, National Telecommunications and Information Administration, and the interagency National Executive Committee for Space-Based Positioning, Navigation and Timing were appropriate. The issues underlying the dispute also have broader implications for spectrum management generally.

Energy and Commerce Committee Chairman Fred Upton (R-MI), Communications and Technology Subcommittee Chairman Greg Walden (R-OR), and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) sent letters to the FCC, NTIA, and PNT ExCom Co-Chairs requesting all written and electronic communications from April 2009 to present between any individual associated with LightSquared, Harbinger Capital Partners, SkyTerra Communications, GPS manufacturers, and PNT ExCom regarding the process used to evaluate the proposed spectrum license transfer, testing, and potential interference.

Given how quickly The Most Transparent Administration In History usually responds to requests for documentation, I would suggest the Committee look for its answers in the dumpster behind the White House on a Friday night about six years from now.

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