What is LightSquared?
LightSquared is a company that plans to develop a wholesale 4G LTE wireless broadband communications network. 4G is the fourth generation of cellular wireless standards. Long Term Evolution (LTE) is a standard for wireless communication of high-speed data. From the LightSquared web site: “LightSquared will unleash the boundless opportunity of wireless broadband connectivity for all. We believe that it is time to transform the broadband industry to one that truly fosters innovation, creativity, and freedom of choice – with limitless and unimaginable possibilities.” It continues, “Through its wholesale-only business model, those without their own wireless network or who have limited geographic coverage or spectrum can market and sell their own products using the LightSquared network.” LightSquared, as of February, 2011, had about $1.75 billion in debt and equity. LightSquared is being promoted by Philip Falcone.
Who is Philip Falcone?
Philip Falcone is Senior Managing Director of the Harbinger Capital Partners Funds, a hedge fund. He has more than 20 years experience in leveraged finance and leveraged companies. Falcone was born in an iron-ore mining town in Minnesota. He attended Harvard, which led to a career on Wall Street, and to a successful hedge fund. He is a major Democrat donor. Falcone is a hedge fund investor who made a huge fortune shorting subprime debt.
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. LightSquared is a do or die proposition for him. He needs it to work or he is finished. Falcone has poured billions of dollars into LightSquared, but it threatens to drag him down. He has acknowledged that investors have complained about gambling so much of Harbinger’s money on a single, risky bet. For investors who want out, Harbinger is requiring investors to take some of their money in the form of an illiquid asset, a part of a LightSquared investment vehicle. As of May, 2011, LightSquared accounted for 62% of the fund’s assets.
“Tax breaks for the wealthy, corporate jet owners, hedge fund managers and oil and gas companies should be scrapped to help reduce the deficit,” said President Barack Obama in June, 2011. [emphasis mine]
Obama’s Connection to LightSquared
President Barack Obama invested $50000 of his own money in LightSquared. Does that fact have anything to do with the following incidences? Hmmmmmmmmmmmmm…
Claims made in February, 2011, about White House political favors for LightSquared are beginning to receive attention. For years there have been complaints that LightSquared owner Philip Falcone’s political connections with the White House and the Federal Communications Commission (FCC) have led to political and regulatory favoritism for his company. He has close ties to the administration and to Democrat Party officials. Falcone visited the White House and made large donations to the Democratic Senatorial Campaign Committee. Soon after the donations, the FCC granted LightSquared a very unusual waiver that allows it to build a national 4G wireless network.
E-mails contradict denials by LightSquared and the White House that campaign contributions were related to the FCC action.
FCC Chairman Julius Genachowski was scheduled to testify before the House Armed Services Committee about the political patronage in the granting of fast-track waivers for LightSquared. But Genachowski refused to appear. Rep. Mike Turner (R-OH) said, “I consider the chairman’s failure to show up today to be an affront to the House Armed Services Committee.” He added that he wanted to hear why the FCC agreed to a conditional waiver for LightSquared. “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.
Republican lawmakers called for greater scrutiny of LightSquared, and whether the Obama administration helped secure approval for the company’s multibillion-dollar effort to build a wireless broadband network.
The LightSquared deal has been criticized for its “pay for play” appearance, and because its network would interfere with the part of the wireless spectrum that is used by Global Positioning Systems (GPS). At a classified briefing, head of the Air Force Space Command General William Shelton told House members that he had been pressured to change testimony in order to compliment LightSquared, a company funded by major Democrat donor Philip Falcone. LightSquared’s plans for its national 4G phone network would seriously compromise the effectiveness of high-precision GPS receiver systems used by the military and the FAA. The White House, said Shelton, pressured him to change his testimony. Now a second official, Anthony Russo, director of the National Coordination Office for Space-Based Positioning, Navigation, and Timing, said that he rejected “guidance” from the White House’s Office of Management and Budget (OMB). Russo said the White House efforts to alter his testimony was “guidance rather than pressure.”
Rep. Austin Scott (R-Ga.) questioned whether the National Telecommunications and Information Administration, the agency responsible for advising the president on telecommunication issues, lobbied on behalf of LightSquared. The White House confirmed that its OMB suggested changes to the general’s testimony, but insisted such reviews are routine and not influenced by politics. Eric Schultz, a White House spokesman, said the OMB review of witness testimony was routine and not designed to curry political favor.
The White House is now saying that it is “routine” for Presidents to intervene with testimony, even at the detriment of military personnel. This is another example of how this administration holds the law in contempt. Add this scandal to Fast and Furious and Solyndra. All of this from the administration that touted itself, in 2008, as the most transparent in history.”
But that’s just my opinion.