Senator says he was asked to ‘pull punches’ in LightSquared inquiry
Sen. Charles E. Grassley said hedge fund billionaire Philip Falcone and a telecommunications executive implied that they wanted a weaker inquiry into the U.S. handling of Falcone’s LightSquared Inc. wireless venture.
Statements by the men “implied an invitation to pull punches in my investigation,” Grassley, an Iowa Republican, said in a letter to Falcone that was distributed electronically Monday. “I won’t be part of that.”
Grassley is reviewing whether authorities improperly accelerated the Reston, Va., company’s partial approval last year. LightSquared’s plans to bring high-speed data service to as many as 260 million people need clearance from U.S. officials, who are weighing test results that show interference with the global-positioning system.
Falcone, whose Harbinger Capital Partners hedge fund is backing the venture with a $3-billion investment, said in an October email that LightSquared could be made “a win” for Grassley, the senator said in his letter.
The executive, Todd Ruelle, said in a Jan. 6 telephone conversation with a member of the senator’s staff that a call center might be placed in Iowa if the service wins U.S. approval, Grassley wrote.
Grassley asked Falcone for details of any contacts with Ruelle and whether the man “has any contractual relationship” with LightSquared or Harbinger Capital Partners, according to the letter.
Ruelle hasn’t worked for LightSquared, Harbinger or Falcone “as an employee or a consultant,” said Lew Phelps, a Harbinger spokesman. Terry Neal, a spokesman for LightSquared, referred questions to Phelps.
Ruelle didn’t return telephone calls seeking comment.
The Federal Communications Commission’s preliminary approval in January 2011 attracted Grassley’s attention. The senator has demanded copies of correspondence between FCC Chairman Julius Genachowski and Falcone, and has said he will block two nominees to the FCC until he gets the information. Separately, he has queried LightSquared, Harbinger and GPS companies about their contacts with the FCC and the White House.
The record provided by Grassley doesn’t necessarily show wrongdoing, said Melanie Sloan, a former prosecutor and executive director of the Citizens for Responsibility and Ethics in Washington.
“There’s a lot of pieces missing,” Sloan said. “I can understand why Grassley’s troubled. It’s fair to ask questions.”
Grassley called Ruelle’s statement an “unseemly invitation to discuss a quid pro quo,” and Grassley’s staff was advised by the Senate Ethics Committee to avoid further contact with him, according to the senator’s letter.
Ruelle is listed as chief executive of Fine Point Technologies on the New York company’s website. Closely held Fine Point develops software for network operators, according to the website.
