The Daily Beast

By Eli Lake

The four-star Air Force general who oversees Air Force 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.

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, 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.”

Turner is chairman of the House Armed Services subcommittee that oversees Shelton’s space command and GPS issues; the panel explored the issues between LightSquared and the Pentagon at a hearing Thursday.

On Thursday, LightSquared CEO,Sanjiv Ahuja told The Daily Beast that his company was not trying to use politics to affect the regulatory process and the firm's goal was to expand broadband access across America.

"Any suggestion that we have run roughshod over the regulatory process is contradicted by reality: Our plans to begin implementing America's first privately funded, wholesale, affordable, coast-to-coast wireless broadband service have been delayed for a year and we have been forced to commit more than $100 million to find a solution that will allow consumers to benefit from both our service and GPS,” Ahuja said.

"For a company that allegedly is ‘wired’ inside the Beltway, we've been unable to even get the House Armed Services Committee to allow us to have one representative today’s hearing — a hearing in which we are the subject,” he said.

Shelton finally gave his testimony Thursday, and made clear the Pentagon's concern about LightSquared's project.

The general told Turner's committee that preliminary tests of a new LightSquared proposal to use only a portion of the band that it was licensed originally in 2004 would cause significant disruptions to GPS.

He said the GPS spectrum was supposed to originally be a “quiet neighborhood,” meaning that lower strength signals could exist near the GPS spectrum. Speaking of the LightSquared plan, he said, “If you put a rock band in the middle of that quiet neighborhood, that’s a different circumstance.”

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 was 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.

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