Grassley says he was told Iowa might receive a call center if LightSquared gained approval. LightSquared rejects bribery claims

LightSquared’s owner fired back Tuesday at Sen. Chuck Grassley’s suggestion that an associate of the broadband company tried — if ever so clumsily — to bribe the senator.

Time and again, a LightSquared attorney wrote to the Iowa Republican, Grassley twisted or misstated the facts to leave an impression of impropriety where none exists. Grassley has been a leading Capitol Hill critic of LightSquared and its billionaire investor Phil Falcone’s plans to build a new nationwide wireless network.


“We are deeply concerned about various unsupported allegations,” wrote Mark Paoletta of Dickstein Shapiro, who represents both LightSquared and Harbinger Capital, the hedge fund operated by Falcone, which owns a majority stake in LightSquared. Paoletta wrote the letter on behalf of Harbinger.

In a Jan. 23 letter, Grassley pressed Falcone about the company’s relationship with Todd Ruelle, who does not work for LightSquared but whose relationship with the company is at the center of the dispute.

According to Grassley, Ruelle, an executive at Fine Point Technologies, told his office that Iowa might receive a call center if LightSquared gains regulatory approval. That, and a comment from Falcone about creating a “win-win” situation for the senator, led Grassley to suggest that the company might be trying to get him to “pull punches” in his investigation.

Grassley, however, maintains that the letter was truthful and that questions remain about the role Ruelle has played.

“Sen. Grassley’s letter was and is accurate and fully reflects the contact to his office and his subsequent efforts to seek the company’s perspective before sending his letter,” a spokeswoman for the senator wrote in an email Wednesday. “Those efforts prior to the letter were not fruitful. And the companies still have not fully explained their relationship with Mr. Ruelle or provided documents that they previously committed to provide.”

Nonsense, LightSquared responded in so many words. Ruelle, who has been silent until this point, also denied any improper behavior in a separate letter sent to the senator Tuesday night.

“[Grassley] made allegations without doing his due diligence,” Ruelle said in an interview Wednesday. “He made claims against a private citizen taking information that was twisted by a staff member and went to the public media. That’s dangerous.

“I believe in free speech, but it’s another thing to be defaming somebody,” he added.

In a section of the LightSquared letter under the header “unsubstantiated allegations,” Paoletta wrote that, contrary to Grassley’s assertion, an employee from the company did respond to his requests for information about the nature of the relationship between Ruelle and Falcone.

A Grassley staff member contacted Michael Bopp, another lawyer working for the wireless company, and asked about any connection with Ruelle.

“Contrary to what your letter states,” Paoletta wrote, “Mr. Bopp did not ignore the question but instead told your staff that he did not believe that Mr. Ruelle was a paid employee or counsel to Mr. Falcone, LightSquared or Harbinger, but acknowledged that there had been communication between the two.”

What’s more, Paoletta said, Grassley’s office tried to sell the story of a possible bribe to the media before gathering all the facts.

A week after the phone call in question between Ruelle and Grassley’s office, “LightSquared personnel received a call from a reporter at Bloomberg News with information that your staff had contacted him with a story related to an alleged quid pro quo involving a purported request that you drop the investigation of LightSquared in exchange for a call center in Iowa,” Paoletta wrote.

Grassley’s staff at the time had never mentioned such an allegation to Bopp, Paoletta added.

“It concerns me that Senate staff would propose such an unsubstantiated story without giving Harbinger and LightSquared an opportunity to address the allegations,” Paoletta wrote.

As far as the call center goes, Ruelle wrote in his letter, the subject only came up when the Grassley staffer said that the broadband company would not create jobs in rural America.

“A quid pro quo was not intended, nor in my view, even suggested,” Ruelle wrote.

The email trail from Jan. 6, the day of the phone call in question, reveals that Ruelle defended his call center comment as an innocuous response to the staffer’s statement.

The LightSquared letter also pointed out that a Grassley staffer followed up with Ruelle shortly after he allegedly pitched the illicit deal.

Paoletta, referring to his earlier stint working for the House Energy and Commerce Committee, wrote: “As a chief investigative counsel for a congressional committee for 10 years, I would have terminated immediately any conversation in which a bribe was offered, or even hinted at; I certainly would not have sent an email thanking that person for such a call and attempting to set up another meeting.”

Later in the letter, Paoletta clarified that Ruelle is an acquaintance of Falcone’s but was never authorized to act on behalf of the company, nor was he paid to do so.

Falcone, in an email response to Grassley, characterized Ruelle as one of many people trying to give him advice on the situation. The hedge-fund magnate firmly denied encouraging Ruelle formally or informally to reach out to Grassley’s office on his behalf, however.

“I absolutely did not direct him to call you or anyone in your office,” Falcone wrote in an email to Grassley. “I don’t control what he does or who he does it with because he doesn’t work for me.”

Falcone did acknowledge that Ruelle helped to coordinate an interview for him with Fox News. Grassley had pointed to that help as evidence of a link between Falcone and Ruelle.

But Falcone said there’s nothing more to read into it.

Further, Falcone defended his comments about creating a “win-win” situation for the senator as straightforward and good public policy. Paoletta claims that Grassley’s office cherry-picked a line from an ongoing conversation Falcone had been having with the senator’s office to distort the meaning.

“I’m a supporter of the senator, and I’m shocked that he would defame a private citizen,” Ruelle said, lamenting that federal laws immunizing public officials leave him little recourse.

This article tagged under: LightSquared

Chuck Grassley

Bribery