Donald Gips, the top Obama aide who became ambassador to South Africa, cashed in his stock options for LightSquared, a new wireless Internet firm, for as much as $500,000 ten days after the company won a favorable decision from the Federal Communications Commission, newly released documents show.
Gips, a friend and major campaign fundraiser of President Obama, was the White House personnel chief until being appointed ambassador to South Africa in 2009.
In his 2009 personal financial disclosure form, Gips reported owning stock options for 176,250 shares of the wireless firm. At the time, the FCC was weighing a request by hedge fund billionaire Philip Falcone to take over the company, then known as SkyTerra.
According to the proxy statement filed with the Securities and Exchange Commission, Falcone offered the owners of SkyTerra stock $5 a share. The sale was subject to several conditions, including FCC consent.
The FCC staff gave Falcone its approval on March 26, 2010.
Gips’ 2010 financial disclosure, newly obtained by iWatch News, shows that he sold his shares on April 5, 2010—ten days after the FCC okayed the merger. Gips reported earning between $250,000 and $500,000 from the sale.
iWatch News recently reported that LightSquared’s ties to Obama’s supporters and the administration’s policy interests run deep and that several major Democratic campaign contributors and longtime Obama supporters have held investments in the company and its affiliates during its tangled decade of existence.
Obama installed one of his biggest fundraisers, Julius Genachowski, a campaign “bundler” and broadband cheerleader, as chairman of the FCC, which granted LightSquared a special waiver to operate.
Sen. Charles Grassley, R-Iowa, said Friday the FCC should make public all documents showing how the LightSquared decision was reached.
"The new details about the political and financial relationships between the administration and the principals behind LightSquared make the case for transparency even stronger than before,” Grassley said in a statement.
“The more that’s revealed, the more questions there are. Without transparency, the public can’t know whose interests the FCC is pursuing and so can’t trust the agency’s work. The FCC should comply with my request for information to uphold the public’s trust,” Grassley said. He is one of 34 senators questioning the FCC decisions on LightSquared.
In a statement to iWatch News in June, relayed by the White House, Gips said “I never communicated with anyone in the administration or at the FCC at any point about LightSquared’s plans,” and “I have never met Phil Falcone and have no knowledge of any visits he made to the White House.”
Gips served on the Obama transition team with Genachowski before they were appointed to top administration positions.
Genachowski has lauded LightSquared’s potential to provide wireless broadband service which, the chairman says, “would result in billions of dollars of new private investment and the creation of tens of thousands of jobs.” But LightSquared’s efforts have proven to be controversial, as tests have shown that its wireless signals create interference for GPS devices. GPS users ranging from the Pentagon to boaters oppose the new wireless network, as well as a third of the Senate.
To meet concerns, the company has offered to reduce the power of its signals, move them to a part of the spectrum away from the GPS signals, and help pay for a technical fix that will shield GPS devices.
The FCC is now weighing LightSquared’s proposal.