LightSquared Attempted to Bribe Senator Grassley With A Call Center

This blog was one of the first blogs to report the LightSquared scandal. At the time it seemed that the administration was the sole culprit in the case when it pressured Air Force Major General William Shelton to change his testimony about the adverse effect LightSquared's proposed 4G LTE network would have on GPS. Later it was learned that the waiver granted by the FCC which was chaired by Julius Genachowski, a law school buddy of President Obama was tantamount to a $10 billion gift to LightSquared if it could successfully build out its wireless network. Further digging revealed that many in the Obama administration were invested personally in LightSquared and that one Obama crony,
Donald Gips had reaped a $500,000 profit when he sold his stock options and that Senator Obama had once purchased $50,000 worth of Skyterra stock, the company that owned the broadband spectrum which was acquired by Harbinger Capital and renamed LightSquared.

Okay, team Obama got caught with its hand in the cookie jar and unless it can come up with another retirement plan soon they may have to live out the rest of their lives in the middle class. Now a new wrinkle to the case is emerging and this case may turn toxic. Sen. Chuck Grassley has been a consistent and persistent critic of LightSquared and now he is charging that LightSquared is attempting to use "improper influence" to silence him. If one wants to bribe a Senator one should know the Senator's price and in this case it seems LightSquared missed big time. Senator Grassley is hopping mad and has written a letter to Harbinger Capital's CEO Philip Falcone expressing his outrage. Grassley states that twice his staff has been contacted urging him to "pull punches" in his investigation. If the Senator would agree to not rough up LightSquared too much Iowa, Grassley's home state, would be rewarded with a "call center".

On January 6, 2012, at approximately 12:45 p.m., a member of my staff who is investigating the Federal Communication Commission’s (FCC) decision to grant a waiver to LightSquared, a company owned by your hedge fund, Harbinger Capital Partners, received a phone call from Mr. Todd Ruelle of Fine Point Technologies. Mr. Ruelle indicated that he “only gets paid if this deal goes through” and that “there will be a call center in the Midwest, possibly in Iowa, if this deal goes through.” This statement is of particular concern in light of your e-mail to my staff on October 5, 2011, which read in part, “The last thing I want to do is to make this more political than it already is. It doesn’t belong in that arena. However, since we are already there, I believe I can make this into a win for the Senator, Lightsquared and the consumer.” Taken together, these two statements implied an invitation to pull punches in my investigation. I won’t be a part of that. …

In the course of his phone call to my staff, Mr. Ruelle indicated that while he had not yet been paid by you or Harbinger Capital Partners, he had been offering you advice regarding LightSquared’s negotiations with me and the FCC. Mr. Ruelle stated that he did not appreciate the involvement of lawyers and suggested that you directly ask to meet with me, which you then did.

In addition to this comment, he also told my staff that he had booked you for an appearance on Fox News. A recent FOIA request made public by Citizens for Responsibility and Ethics in Washington (CREW) yielded an e-mail from Mr. Ruelle to a federal employee forwarding his e-mails to Fox News bookers where he arranged for you to appear on the Fox News Channel. In this e-mail chain, Mr. Ruelle writes to the federal employee, in reference to your appearance in which you rebutted charges of political influence with the Obama administration and the FCC. Mr. Ruelle wrote: “I have arranged to hit back HARD!” After that email, the government employee asked Mr. Reuelle not to contact him in the future

Grassley has referred the matter to the Senate Ethics Committee which is a pretty savvy thing to do. As of now, since he does not chair a committee Grassley has been hamstrung in his investigation by the majority party but the Ethics Committee is composed of an equal number of senators from each party. Meanwhile LightSquared and team Obama must tread water since the FCC had better not act while LightSquared is stymied in a Senate investigation.