Friday, September 16, 2011

Obama's Crony Capitalism – Solyndra, LightSquared, Who’s Next?

A “flattering pix” of Obama Bundler Philip Falcone, the majority owner of LightSquared (Kevin Wolf/AP)

First it was Solyndra and now it’s LightSquared, is there no end to the Obama Administration’s “Crony Capitalism” where Friends-of-Barack (FOB) Donors get favors at the expense of the rest of us. At least with Solyndra, it was only money – although it was $535 Million of our hard earned Taxpayer dollars – but with LightSquared the White House is gambling with our National Security.

According to a 15 Sep 2011 Daily Beast Article “White House Pressure for a Donor?”
General William Shelton, the Air Force Space Command Commander, gave classified testimony last week before the House Armed Services Committee’s Strategic Forces subcommittee that the White House tried to pressure him to change his testimony to make it more favorable to a company tied to Philip Falcone, a large Democrat donor. Seems Harbinger Capital, the hedge fund belonging to Falcone, is the principal owner of LightSquared. This seems to confirm that the Obama White House routinely politically intervenes in government matters affecting donors or fundraisers.

At issue is a conditional Federal Communications Commission waiver granted in January to LightSquared to build terrestrial wireless capacity in a section of the wireless spectrum close to the GPS bandwidth. The FCC license has come under scrutiny because technical experts have warned that LightSquared’s proposal would disrupt GPS signals thus threaten aviation safety, disrupt military and rescue operations, interfere with high-tech farming equipment and even render useless the everyday navigation devices used by millions. Obviously this would seriously affect National Security.

Not only was General Shelton’s prepared testimony leaked in advance to LightSquare but he was asked to revise it to suggest he supported the White House policy towards commercial broadband at any cost and that the Pentagon would try to resolve the questions around LightSquared in just 90 days. Obviously this administration doesn’t understand Military ethics and integrity – something they should have taken away from the General Eric Shinseki episode during the Bush Administration. Needless to say, it didn’t work this time either and Shelton gave his testimony on 8 Sep making the Pentagon concerns clear that the LightSquared project would cause significant disruptions to GPS with National Security implications.

According to Rep. Mike Turner (R-OH), the subcommittee chairman, “There was an attempt to influence the text of the testimony and to engage LightSquared in the process in order to bias (Shelton’s) testimony …. people who were involved in the process in preparation for the hearing included the Department of Defense, the White House, and the Office Management and Budget.” Even the White House had to admit that its OMB “suggested changes to the general’s testimony” but tried to downplay the interference as routine and that “OMB reviews and clears all agency communications with Congress …” (as an aside, I prepared Army HASC and SASC testimony for 3 years on the Pentagon ARSTAF and I NEVER had to staff testimony outside the Pentagon.)

Even LightSquared acknowledged it met with White House officials to push their project and according to White House emails dubbed “Lightsquared interference meeting,” the meetings took place at a conference center near the White House so that the Obama administration would not have to disclose names—especially lobbyists—in the White House visitors’ logs. On the very day the LightSquared CEO made a $30,400 contribution to the Democratic Party, two of his deputies appealed to the White House for the meetings with Obama’s top technology advisers.

Melanie Sloan, who runs the nonpartisan ethics groups Citizens for Responsibility and Ethics, said the White House LightSquared involvement seems to mirror the Solyndra case and it “sounds like a pattern of the White House improperly pressuring people at agencies involving decisions that affect companies tied to donors and fundraisers …. It’s always a problem when the White House is pressuring anyone’s testimony. I don’t care if you are a four-star [general] or a GS-15 [career employee], you should be giving your true opinion and not an opinion the White House is seeking for political expediency."

Although the White House maintains it has not tried to influence the FCC licensing process for LightSquared, Sen. Chuck Grassley (R-IA) stated “The FCC’s fast-tracking of LightSquared raises questions about whether the government is rushing this project at the expense of all kinds of other things, including national security and everyone who uses GPS, from agriculture to emergency medical technicians …. there’s no way to know whether the agency is trying to help friends in need or really looking out for the public’s interest.” In April, Grassley asked FCC Chairman Julius Genachowski (a major Obama campaign “bundler”) to hand over all records of communications, including emails between Falcone and the FCC, and LightSquared and the FCC but Genachowski refused.

For a good unbiased report on the E-Mail exchanges showing meetings between White House technology advisers and LightSquared officials, go to The Center for Public Integrity (a nonprofit investigative journalism organization) article at:

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