Worse than Solyndra
Add the name LightSquared to your crony capitalism watch list. The story emerging has elements even worse than the squandering of half a billion dollars on an Obama bundler's venture.
Brendan Sasso of The Hill reports:
LightSquared plans to provide high-speed wholesale wireless service nationwide through a network of satellites and land-based cell towers, but tests earlier this year revealed it interferes with GPS devices, including those used by the military.
One of the major investors in LightSquared is prominent Democratic donor, Philip Falcone.
The Daily Beast reported Thursday that the White House asked Air Force Gen. William Shelton to alter his planned remarks to lawmakers and their staff in a secured briefing about LightSquared.
According to the report, Shelton was pressured to change his testimony to show he supported the White House's policy to expand wireless broadband access and that the Pentagon would try to resolve the GPS interference issues with more testing within 90 days.
The Center for Public Integrity reported Wednesday that LightSquared sent emails to White House aides, at times mentioning its fundraising for Democrats and President Obama.
"We cannot afford to have federal telecommunication policy, especially where it affects national security, to be made in the same way this White House has parceled out a half billion dollars in loan guarantees to the failed Solyndra Corporation, a large political campaign contributor of the president," Turner said, referring to the bankrupt solar firm that received government loans.
Ed Lasky adds:
Richard Pollock at Pajamas Media:
Other commercial industry figures agreed that the new wireless system could interfere with aviation safety, disrupt military and rescue operations, and interfere with high-tech farming equipment and consumer navigation devices.
For years within the telecom industry there have been persistent complaints that LightSquared majority owner Philip Falcone's political connections with the White House and the Federal Communications Commission have led to political and regulatory favoritism for his company. Falcone is a hedge fund investor who made a fortune shorting subprime debt. He is worth $2.2 billion and has been close to the administration and to Democratic Party officials. (snip)
LightSquared employs an army of eight high-powered lobbying firms, including one headed by former Democratic House Majority Leader Dick Gephardt. In 2011 alone, LightSquared spent $720,000 on lobbyists.
Falcone is a controversial figure. He is losing a lot of his investors' money and investors are pulling out of his funds as quickly as they can. This deal is a do or die proposition for him. He needs it to work or he is washed up.
Phil Falcone, the billionaire hedge fund manager, hockey nut and gossip-page staple, has poured billions of dollars into his White Whale, an ambitious satellite wireless network called LightSquared. But like Ahab's obsession, LightSquared threatens to drag down Falcone.
Falcone has acknowledged that investors grumbled about gambling so much of Harbinger's money on a single, risky bet.
The grouches say the LightSquared investment makes Harbinger less of a diversified hedge fund and more like a private-equity firm. (Another non-diversified bet, Falcone's wager against subprime in 2007, did pretty well by investors. Ok, really well.)