Less than three years after closing on a big federal loan deal, Open Range Communications has laid off most of its employees, stopped accepting new customers and filed for bankruptcy - owing the federal government more than $70 million.
Yet despite its dire finances, the Colorado-based company wants to hang on to its Washington lobbyist, Jon L. Christensen. A former Republican congressman who served two terms, he has earned more than a quarter-million dollars in lobbying fees from the company since last year, Senate records show.
Open Range filed for bankruptcy protection last month after closing on a $267 million loan deal from the U.S. Department of Agriculture (USDA) during the waning days of the George W. Bush administration.
Ethics watchdogs say there’s nothing illegal about Open Range keeping Mr. Christensen even though it’s bankrupt. They say the move underscores just how crucial corporations that do business with the government view their lobbying representatives in Washington.
“It seems hard to imagine why the company would need a lobbyist in this situation,” said Melanie Sloan, executive director of the Washington-based watchdog group Citizens for Responsibility and Ethics in Washington.
“It just goes to show how instrumental lobbyists are if they’re more important than customers and employees. Certainly, an explanation is warranted,” she said.
Reached by phone, Mr. Christensen said he could not comment because of the ongoing bankruptcy. A bankruptcy attorney for Open Range did not respond to messages. A message left on the company’s voice mail also was not returned.
In court filings, bankruptcy attorneys for Open Range referred to Mr. Christensen, among others, as a so-called “ordinary course professional” providing services outside the scope of the company’s bankruptcy. The company said that without such professionals, Open Range would incur additional and unnecessary expenses by hiring others without the same background and expertise.
The filings also state that the continuation of the hiring arrangements would “avoid any disruption in the professional services required in the day-to-day operation of its business and are thus in the best interests of [Open Range] and its estate.”
In an affidavit filed in the bankruptcy case, Mr. Christensen, a lawyer, said he represented the company as counsel and that it has requested him to continue to provide services during the bankruptcy case.
A development in the bankruptcy case occurred Tuesday with news of a potential buyer. Open Range plans to sell itself for $2 million to a Minnesota company called totheHome.com LLC, according to a report by the Denver Business Journal.
The article said an auction of Open Range’s assets is scheduled for Nov. 14. If no higher bid emerges, the report said, closing the deal with totheHome.com would occur on Nov. 17.