House Republicans scrutinizing decisions benefiting Obama donors

Committee to explore White House role in aiding fundraisers tied to companies such as LightSquared

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LightSquared CEO Sanjiv Ahuja

Michael Probst/AP

House Republicans have launched a broad investigation into White House ties to campaign donors seeking government contracts, loans and other benefits, and are requesting White House contacts with a company whose employees made large contributions to Democrats while gaining access to presidential aides.

Among those facing Republican scrutiny: Wireless firm LightSquared, which won initial government approval in late January despite fears its network could interfere with global positioning systems, posing dangers to aircraft, military operations and search and rescue missions.

Darrell Issa, chairman of the House Committee on Oversight and Government Reform, has “broad concerns about the danger of government trying to pick winners and losers,” Issa spokesman Frederick Hill said Tuesday in confirming the investigation.

“The committee is reviewing information brought to its attention related to LightSquared as part of a broader effort examining government actions that pick winners and losers,” Hill added.

Issa’s investigation comes amid mounting criticism in Congress that many Obama fundraisers and other supporters have enjoyed close ties to his administration. In the run-up to his 2008 election, candidate Obama had pledged to curb the influence of lobbyists and campaign donors in government.

In a separate development on Tuesday, seven Republicans on a House science and technology committeee asked the White House to turn over all records of its contacts with LightSquared. "While some may call it a coincidence," said Rep. Ralph Hall, R-Tex, chairman of the House Science, Space and Technology Committee, "we remain skeptical that shortly after two separate sets of meetings and meeting requests one year apart, LightSquared employees made five-figure donations to the Democratic Party."

An iWatch News investigation earlier this year found that nearly 200 of Obama’s 2008 campaign bundlers have landed plum government jobs and advisory posts, won contracts worth millions of dollars for their business interests, or attended numerous elite White House meetings and social events.

White House spokesman Eric Schultz denied LightSquared received any special treatment. Administration officials have been “explicit in identifying the problems for GPS, and the need to resolve interference problems before Lightsquared is allowed to move forward,” he said in a statement.

Last week, iWatch News reported that LightSquared had numerous e-mail contacts with White House aides. On the day that LightSquared CEO Sanjiv Ahuja made a $30,400 contribution to the Democratic Party, two of his deputies appealed for meetings with top technology advisers to Obama, according to White House emails obtained under The Freedom of Information Act.

Republicans have seized on the controversy, likening it to Solyndra, the failed California solar panel firm backed by a major supporter of the president that collapsed after receiving $535 million loan guarantee. The firm faces multiple investigations.

Jeffrey Carlisle, LightSquared’s Executive Vice President, Regulatory Affairs and Public Policy, said it would work with the committee “to clear up any concerns.” But he stressed that LightSquared is a well-funded project that bears no similarity to the bankrupt energy company.

“LightSquared is 100 percent privately funded and has not asked, nor will ask, for public money for our network. We are going to invest $14 billion in private investor money on a plan that will create 15,000 jobs in each of the five years of the network build. Unlike Solyndra, LightSquared has not asked for a dime of government money for this plan, which is based on an FCC authorization received in 2005,” he said in a statement on Tuesday.

Issa spokesman Hill said that the committee is more interested in probing the system for granting government contracts and regulatory approvals, than targeting specific companies.

LightSquared argues its $14 billion wireless broadband plan would create thousands of jobs and offer wireless service to more than 260 million Americans. But it faces critics in Congress who argue its operations could threaten aviation safety, disrupt military and rescue operations—and even interfere with everyday devices such as cell phones.

Rep. Michael Turner, R-Ohio, who chairs the House Armed Services Committee’s Strategic Forces Subcommittee, first called for an investigation of the firm’s dealings with White House officials at a hearing last Thursday.

Witnesses at the contentious hearing, at which LightSquared was not invited to testify, also raised a litany of aviation and military safety concerns, which could be costly to fix. Several wondered how it could have obtained initial approval to operate from the Federal Communications Commission on January 26 given the extent of the possible disruptions.

Gen. William L. Shelton, commander of the Air Force Space Command, testified that LightSquared’s powerful signals would disrupt military equipment and “effectively jam vital GPS receivers,” for instance.

Filtering out the interference, Shelton said, could cost billions of dollars, a financial burden Republicans don’t want to fall on taxpayers.

“Given that General Shelton testified that the bill to U.S. taxpayers to retrofit U.S. military GPS devices with filters could be in the billions of dollars, I would hope that the Administration proactively examined interference problems and moved quickly to respond to any red flags before getting this far,” Sen. Charles Grassley, R-Iowa, said in a statement released to iWatch News. 

“If not, the question ‘why not?’ is another in a long series of questions surrounding LightSquared, the FCC, and the White House,” Grassley said, adding: “The taxpayers shouldn’t have to pay for retrofitting.” 

LightsSquared has said it being targeted by communications titans that are against competition. The company also contends that the GPS systems infringe on its space.

“We understand that some in the telecom sector fear the challenges for their business model that LightSquared presents. We understand the opposition of some in the GPS industry; many of their devices “squat” on someone else’s spectrum and while technological fixes are readily available, some companies are loath to make the necessary engineering changes and would instead prefer to get access to someone else’s spectrum for free,” company CEO Sanjiv Ahuja said in a statement.

But that tack appears to have irritated Rep. Thomas E. Petri, who chairs the subcommittee on aviation of the Committee on Transportation and Infrastructure.

In a Sept. 15 letter to CEO Ahuja, the Wisconsin Republican said that GPS “was located on this part of the spectrum” long before LightSquared came along. He said the company had purchased the spectrum “at bargain prices” because it was not intended to support cell towers. He urged the company to find way to filter interference “rather than pointing fingers.”

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