Subject: LightSquared: Did White House Pressure General Shelton to Help Donor? - The Daily Beast
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Thu, 15 Sep 2011 11:59:58 -0400

http://www.thedailybeast.com/articles/2011/09/15/lightsquared-did-white-house-pressure-general-shelton-to-help-donor.html

U.S. POLITICS

White House Pressure for a Donor?

Sep 15, 2011 12:24 AM EDT
The Pentagon has worried for months that a project backed by a prominent Democratic donor might interfere with military GPS. Now Congress wants to know if the White House pressured a general to change his testimony.

The four-star Air Force general who oversees U.S. Space Command walked into a highly secured room on Capitol Hill a week ago to give a classified briefing to lawmakers and staff, and dropped a surprise. Pressed by members, Gen. William Shelton said the White House tried to pressure him to change his testimony to make it more favorable to a company tied to a large Democratic donor.

The episode—confirmed by The Daily Beast in interviews with administration officials and the chairman of a congressional oversight committee—is the latest in a string of incidents that have given Republicans sudden fodder for questions about whether the Obama administration is politically interfering in routine government matters that affect donors or fundraisers. Already, the FBI and a House committee are investigating a federal loan guarantee to a now failed solar firm called Solyndra that is tied to a large Obama fundraiser.

Now the Pentagon has been raising concerns about a new wireless project by a satellite broadband company in Virginia called LightSquared, whose majority owner is an investment fund run by Democratic donor Philip Falcone. Gen. Shelton was originally scheduled to testify Aug. 3 to a House committee that the project would interfere with the military’s sensitive Global Positioning Satellite capabilities, which control automated driving directions and missile targeting, among other things.

According to officials familiar with the situation, Shelton’s prepared testimony was leaked in advance to the company. And the White House asked the general to alter the testimony to add two points: that the general supported the White House policy to add more broadband for commercial use; and that the Pentagon would try to resolve the questions around LightSquared with testing in just 90 days. Shelton chafed at the intervention, which seemed to soften the Pentagon’s position and might be viewed as helping the company as it tries to get the project launched, the officials said.

“There was an attempt to influence the text of the testimony and to engage LightSquared in the process in order to bias his testimony,” Rep. Mike Turner (R-OH) said in an interview. “The only 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.”

Philip Falcone, CEO, CIO, and senior managing director of Harbinger Capital Partners speaks at the 16th annual Sohn Investment Conference in New York May 25, 2011., Jessica Rinaldi / FILE / Landov

Turner is chairman of the House Armed Services subcommittee that oversees Shelton’s space command and GPS issues; the panel is expected to explore the issues between LightSquared and the Pentagon at a hearing Thursday. Shelton is planning to give his belated testimony then.

The White House confirmed Wednesday that its Office of Management and Budget suggested changes to the general’s testimony but insisted such reviews are routine and not influenced by politics. And it said Shelton will be permitted to give the testimony he wants, without any pressure.

OMB “reviews and clears all agency communications with Congress, including testimony, to ensure consistency in the administration’s policy positions,” said White House spokesman Eric Schultz. “When an agency is asked by a congressional committee to testify, OMB circulates the agency’s proposed [draft] testimony to other affected agencies and appropriate [executive office of the president] staff. If a reviewer has a comment to the proposed testimony, that suggestion is typically conveyed to the agency for their consideration. When divergent views emerge, they are often reconciled through discussions at the appropriate policy levels of OMB and the agencies.”

The general’s office declined to comment, and LightSquared did not return calls seeking comment. Harbinger Capital Partners, Falcone’s investment firm, said it would provide a comment Thursday.

LightSquared has previously acknowledged it met with administration officials as it tried to shepherd the project, which is consistent with President Obama’s goal of trying to expand broadband wireless access nationwide.

“Because we are the only company on the horizon that can quickly help the federal government meet its stated objective of near universal wireless coverage for all Americans, it was natural that LightSquared have meetings with the administration,” company spokesman Terry Neal said recently. “LightSquared’s network promises to expand access to wireless broadband, increase competition in the marketplace, give consumers new choices, and, ultimately, lower prices. We acknowledge we wanted to discuss that with administration officials.”

Melanie Sloan, who runs the nonpartisan ethics groups Citizens for Responsibility and Ethics in Washington, said the emerging allegations about possible White House involvement in LightSquared’s matter seemed to mirror earlier allegations in the Solyndra case.

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Eric D. Schwerin
Rosemont Seneca Partners, LLC
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