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Bankrupt wireless firm got loan push from taxpayer ‘superhero’
Hailed as a “superhero” by taxpayer watchdogs, Republican Sen. Mike Crapo quietly petitioned the George W. Bush administration to award a massive loan guarantee to a wireless company that just went bankrupt, owing U.S. taxpayers more than $70 million.
Mr. Crapo, of Idaho, made his pitch in February 2008 in a previously undisclosed letter to the U.S. Department of Agriculture (USDA) on behalf of Open Range Communications, according to records obtained by The Washington Times through the Freedom of Information Act.
The three-term lawmaker wrote that the company’s then-pending loan application could provide wireless Internet to millions of Americans in rural areas, “making possible mobile and broadband services for the first time in these rural communities.”
“The unprecedented public-private partnership … will enable the Department of Agriculture to leverage its investment in unserved and underserved areas,” Mr. Crapo wrote, predicting the project would help what he called “an agrarian renaissance in rural communities.”
Instead, three years after Open Range won a $267 million loan guarantee from USDA, the company filed for bankruptcy, fired most of its employees and stopped accepting new customers. The company owes $73.5 million to the USDA.
Awarded “superhero” status recently by Citizens Against Government Waste for efforts to cut spending, Mr. Crapo said through a spokesman he supported the project as a longtime supporter of improvements in broadband service for rural communities.
“Sen. Crapo works to ensure that taxpayer dollars are used wisely, and he is disappointed to learn about this development,” said Crapo spokesman Lindsay L. Nothern. “Broadband is one of the issues our office hears about over and over from city to county leaders seeking to improve economic development.”
Officials in Mr. Crapo’s office said they could find no record of Mr. Crapo being contacted directly by Open Range officials or their lobbyists, but Mr. Nothern said records do show “one meeting at the staff level related to the 2008 letter.”
Open Range boasted a significant lobbying operation in Washington, enlisting lobbyists from both sides of the political aisle and spending nearly $400,000 this year alone. The company filed for bankruptcy in October, and last week, a House committee began an investigation into the company’s loans.
Among those who have lobbied for the company in recent years are former Nebraska Republican Rep. Jon Christensen and former Texas Democratic Rep. Charlie Stenholm. Other lobbyists for the company identified in Senate disclosure forms included Norman Brownstein, fundraiser for Mr. Obama’s 2008 campaign, and Alfred Mottur, who has raised money for the Democratic Senatorial Campaign Committee.
Also listed as a lobbyist was Brent Gattis, a former deputy chief of staff for the House Committee on Agriculture and top aide to Rep. Bob Goodlatte, Virginia Republican, among other lawmakers.
Mr. Crapo’s letter was disclosed in response to a request for all correspondence to and from members of Congress concerning the Open Range loan. Altogether, USDA provided 20 pages of records, and Mr. Crapo’s letter was the only one in support of the loan.
By the time the USDA responded to Mr. Crapo, the department already had announced approval of a $267 million broadband loan to Open Range to provide broadband service to 518 rural communities in 17 states.
Letters such as the one Mr. Crapo wrote generally are not made public short of the filing of an open records request, a process that can take months, depending on the agency.
“Of course these letters should be made public,” said Bill Allison, editorial director at the Sunlight Foundation, a nonpartisan group that monitors lobbying. He said the Crapo letter illustrates how lawmakers can advocate for projects outside of the public’s view.
Mr. Crapo doesn’t appear to have benefited from big campaign donations from Open Range or its lobbyists, according to a review of Federal Election Commission (FEC) filings, but Mr. Allison said such letters don’t always involve lawmakers doing favors for donors, but can be written in a “pro forma” sort of way in response to a meeting or request.
“What it shows is how poor stewards of the purse they can be,” he said. “These [congressional] offices don’t have the resources to vet a company.”
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