Tuesday, September 20, 2011

Obama "Pay for Play" Cronyism Scandal Explodes!

President Barack Hussein Obama, D-Kenya
Washington DC, Sep 19, 2011. Rep. Darrell Issa, R-CA, announced today that his committee plans to investigate government loan programs to private corporations in light of improper dealings between the White House and failed energy company Solyndra and wireless start-up LightSquared.

Allegations were first made in February about White House political favors for a company called LightSquared, a company that was funneling huge campaign donations to the Democrat Campaign Committee.

The chairman of the Oversight and Government Reform Committee said Tuesday morning on C-SPAN:
"I want to see when the president and his cronies are picking winners and losers… it wasn't because there were large contributions given to them."
LightSquared is owned by the Harbinger Capital hedge fund, headed by billionaire investor Phil Falcone. He visited the White House and made large donations to the Democratic Senatorial Campaign Committee. Soon after, the Federal Communications Commission (FCC) granted LightSquared a highly unusual waiver that allows the company to build out a national 4G wireless network on the cheap.

The deal has been criticized not only for its 'pay to play' appearance but also because the LightSquared network would interfere with the part of the wireless spectrum that is used by Global Positioning Systems (GPS).

LightSquared CEO Sanjiv Ahuja
Issa said the committee was looking at whether it was improper for members of Congress or White House staff to select companies eligible for subsidized government loans when those companies could give campaign donations.

Loan programs have been a popular tool to provide funding for popular industries, like tech, green energy, and American auto companies, at more favorable terms than could be secured privately.

The Obama administration has been defending itself against criticism by Republicans that it exerted improper influence to the aid of both companies.

Solyndra abruptly filed for bankruptcy earlier this month, surprising both employees and the administration, which had secured $535 million in low-interest loans for the company. Republicans in Congress quickly mocked the bankruptcy as emblematic of the president's green technology initiatives under the stimulus bill — and noted that a key Solyndra investor had been a bundler for the Obama campaign.

House Republicans say they have emails showing the White House pressuring Department of Energy bureaucrats to expedite the loan approvals, although the White House has argued that nothing improper occurred.

Naturally, due to the bankruptcy, the taxpayers will never get back the $535 million that President Obama loaned to his cronies. But half a billion dollars is just a "drop in the bucket" compared to the hundreds of billions President Obama has wasted on his other pet projects.

Republicans have also charged that the White House pressured an Air Force general to revise testimony before a closed congressional hearing to aid LightSquared, a wireless start-up company. Emails between the company and the White House make mention of the fact that the company's CEO would be attending Democratic fundraisers in Washington, and administration officials met with executives from the company on the same day that CEO Sanjiv Ahuja wrote a $30,400 check to the Democratic National Committee.

The company is facing a tough regulatory road after initial tests showed LightSquared's technology had been found to interfere with military and aviation GPS. But both the company and White House have denied any influence-peddling.

Although Issa did not specifically accuse the White House of wrongdoing, he suggested that government loan programs tempted corruption.
"This is another reason that crony capitalism … is dangerous, because they're going to pick winners that they ideologically, or in some cases because they support their candidacy, want to see win," Issa said.
Representative Issa wants answers
The congressman said he also wanted to expand the investigation to see whether congressmen were also exerting influence on the bureaucracy, which is commonly tasked with approving low-interest government loans.

"We see that as a backdoor, easy way to end up with corruption in government," Issa said.

No comments:

Post a Comment