Phil Falcone In Heat Over LightSquared

Philip Falcone, founder and manager of Harbinger Capital Partners, is facing heat for his investment in LightSquared. The wireless communications company “has been beset by technical challenges and allegations of trying to improperly influence regulators,” said the Wall Street Journal. It reportedly tried, “to persuade regulators that its network won’t interfere with other satellite-based communication systems… [like] fine-tuned GPS signals used by farmers, air-traffic controllers and the military.” LightSquare officials deny the allegations.

The US Judiciary Committee asked Falcone for records of his firm’s communications with Obama administration officials over LightSquared. In a separate matter, the Senate Agriculture Committee is considering whether Falcone should be called to testify on his investment in LightSquared.

Phil Falcone Attempting to Lay Questions of Impropriety Over LightSquared to Rest

Iowa Senator Charles Grassley sent letters to Falcone and Sanjiv Ahuja, LightSquared’s chief executive, on Wednesday; the Wall Street Journal had the opportunity to review those documents. In them, Senator Grassley asks the pair to “to ‘put questions of improper influence… to rest’ by handing over communications with government officials, regulators and lobbyists.” LightSquared said that they are reviewing the request, while Falcone and Harbinger declined to comment. Senator Grassley had previously requested documents regarding LightSquared, Falcone and Harbinger from the FCC. According to the Wall Street Journal, “The FCC declined to provide the documents, saying the Judiciary Committee lacked jurisdiction.” Further, Falcone has not been called to speak in any capacity at the congressional hearings on LightSquared.

The Stakes are High for Phil Falcone, LightSquared In Spotlight

Harbinger’s assets, which were once valued at $26 billion (in 2008), now come in at just $4.8 billion – less than 20% of their peak value. LightSquared, which formed last years, makes up the majority of assets in Harbinger’s largest fund. If LightSquared succeeds in its bid to create a nationwide 4g network, the gains could be huge.