- ‘I Am Alive’ app gains popularity in terror-ravaged Lebanon
- Gun giveaways gain popularity among Republican candidates
- S.C. hospital worker slapped with $525 federal fine for refilling $0.89 soda
- Teen from ‘Jihad Jane’ plot becomes youngest ever to serve time on U.S. terror charges
- Iranian woman forgives son’s killer at the gallows
- Nebraska principal sorry for ‘don’t tattle’ flier
- Illinois readies to spend $100M for Obama museum in Chicago
- John Edwards back in court — this time as a lawyer for Va. boy’s malpractice case
- Covered California reports more than 200K in overtime Obamacare sign-ups
- Thanks, Chuck: Hagel says U.S. sending Ukraine sleeping mats, helmets
Obama team sued for failure of Bush loan
Blamed in bankruptcy
Nearly a year after members of Congress called for an investigation into the collapse of a Colorado wireless company that went bankrupt after receiving a multimillion-dollar loan package from the George W. Bush administration, a trustee is suing the Obama administration over accusations that officials hastened the wireless firm’s collapse.
In a complaint unsealed late last week, the liquidating trustee for Open Range Communications said the Federal Communications Commission (FCC) and the U.S. Department of Agriculture (USDA) were responsible for the company’s bankruptcy.
Open Range won a $267 million loan guarantee in the waning days of the Bush administration, but it went bankrupt last year, owing more than $70 million to the government after federal officials cut off loan advances.
With Republicans last year investigating the high-profile collapse of Solyndra LLC — a California solar-panel maker that went bankrupt after winning a half-billion-dollar loan deal from the Obama administration — Democrats cited the Open Range case as an example of a big federal loan made under the Bush administration that also collapsed.
“The main distinction between the Solyndra guarantee and the Open Range loan appears to be that the Open Range loan was approved in 2008, when President Bush was in office,” three prominent Democrats on the House Energy and Commerce Committee wrote to Republican colleagues last year.
But nearly a year later, a trustee in the company’s bankruptcy case is faulting the Obama administration’s handling of the loan. The trustee also filed court papers saying the agencies purportedly at fault coordinated at one point with the Executive Office of the President.
Open Range’s plans originally called for providing wireless service in more than 500 rural communities in 17 states. The company planned to lease spectrum space from satellite provider Globalstar Inc., but the FCC later suspended Globalstar’s license. In turn, the USDA cited Open Range’s inability to find spectrum space in its decision to suspend loan advances.
“Thus, through no fault of Open Range, the United States, through the FCC, prevented Open Range from fulfilling its business plan … and then the United States, through the [USDA’s Rural Utilities Service], denied Open Range funding on the basis of the United States’ own conduct,” attorneys for the trustee, Charles Forman, argued in recently unsealed court records.
The records, first reported by the online business news site Law360, also said the relationship between the USDA and Open Range went beyond a typical lender-and-borrower relationship, with the government employing a field representative dedicated to Open Range.
Mr. Foreman’s complaint says that as finances worsened at Open Range, discussions took place involving the “USDA, FCC and/or the Executive Office of the President” concerning the search for spectrum space and the company’s 2009 loan deal.
The purpose of those talks included “coordinating and mitigating adverse actions taken by the United States against Open Range so as to minimize political repercussions of an Open Range default … near the time of the November 2010 elections,” according to Mr. Forman’s complaint.
Filed in U.S. Bankruptcy Court in Delaware, the complaint seeks more than $20 million in damages.
Justin DeJong, a spokesman for the Rural Development office in the USDA, which handled the loan, referred specific questions about the complaint to the Justice Department, which is representing the government in the bankruptcy case.
A spokesman for Justice declined to comment, but officials are expected to file a response within a few weeks. The White House did not respond to an email Monday concerning the complaint.
In January, Open Range creditors told a judge that the government wasn’t turning over information needed to investigate the company’s collapse, including details from a meeting among FCC Chairman Julius Genachowski, Agriculture Secretary Thomas J. Vilsack and unidentified representatives from the White House, according to court records.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at email@example.com.
- HHS nominee Sylvia Burwell entangled in MetLife lawsuit
- HHS nominee got $1.2M at 'zero' salary job at Wal-Mart
- Federal workers watch 'Star Trek' on clock
- Sen. Menendez pal Salomon Melgen collected $20 million from Medicare
- U.S. picks up $700 million tab for coalition's food and laundry in Afghanistan
Latest Blog Entries
TWT Video Picks
By John R. Bolton
Reality calls for attaching Gaza to Egypt and the West Bank to Jordan
- Obama taunts GOP, takes nationally televised victory lap on Obamacare
- Joe Biden's first Instagram pic mocked as shill for sunglass ad
- Jews being told to register in Ukraine: John Kerry
- BOLTON: A 'three-state solution' for Middle East peace
- Army goes to war with National Guard, seizes Apache attack helicopters
- Rand and Ron Paul ride to the rescue for Bundy in Nevada standoff with feds
- Cliven Bundy's Nevada ranch wrecked by retreating feds
- CURL: The state of the Union worse than you thought
- 'Culture of intimidation' seen in Nevada ranch standoff
- CNN op-ed claims right-wingers 'more deadly than jihadists'
Top 10 handguns in the U.S.