* LightSquared inks lobbying deal with ex-Gov. Edward Rendell
* Former Pennsylvania governor is now a law firm partner
* Falcone's telecom increasing lobbying spending
By Matthew Goldstein
NEW YORK, March 31 Billionaire hedge fund manager
Philip Falcone's upstart wireless telecom investment recently hired
former Pennsylvania Governor Edward Rendell as a lobbyist.
Rendell, a prominent Democratic politician and a political
commentator for the cable news channel MSNBC, registered last month
as a lobbyist for LightSquared, a Virginia-based company that is
backed by Falcone's $6 billion Harbinger Capital Partners hedge
The former Pennsylvania governor is now a partner with the law
firm Ballard Spahr. Adrian King, who served as Rendell's deputy chief
of staff and also is a partner at Ballard Spahr, is also registered
as a LightSquared lobbyist on a federal government website.
Rendell and King join a growing list of paid lobbyists with
political connections to both Democrats and Republicans who are doing
work for LightSquared.
Anyone taking a fee to lobby federal officials is required to
register with the clerk's office of the U.S. House of Representatives
and disclose their clients.
The telecom company is beefing up its lobbying at the same time
it is trying to fend off complaints from the U.S. Department of
Defense about potential interference problems with LightSquared's
planned wireless network. The Defense Department and other government
agencies are concerned that LightSquared's high-speed mobile
communications network will create interference problems with global
positioning systems used by the military and the aviation industry.
So far, Rendell, whose office declined to comment, has not
disclosed doing lobbying work for any firm other than LightSquared.
During his tenure as governor, Rendell served as chairman of the
National Governors Association. Shortly after President Barack Obama
was elected in November 2008, some in Washington, D.C., had
speculated that Rendell might be offered a position with the new
Falcone, whose Harbinger partners has sunk some $3 billion into
LightSquared and owns most of the fledgling telecom, declined to
comment. A LightSquared spokeswoman, Audrey Schaefer, said, "Governor
Rendell has been a strong advocate for increasing American investment
in our infrastructure and we share those values with him."
In 2010, LightSquared paid $265,000 in fees to three firms to
lobby for it in Washington, D.C., according to the Center for
Responsive Politics' website Opensecrets.org. Rendell's law firm,
Ballard Spahr, did not do any lobbying work for LightSquared last
The increased lobbying activity by LightSquared is notable given
the company's rather small size. The amount spent by LightSquared on
lobbying fees in 2010 is comparable to the $285,000 that wireless
competitor Clearwire Corp CLWR.O. paid to lobbyists, according to
The uptick in lobbying comes at a time that it is trying to sign
up potential customers and deal with concerns about the potential
interference caused by its planned network.
On March 25, Deputy Secretary of Defense William Lynn and Deputy
Secretary of Transportation John Porcari sent a joint letter to the
Federal Communications Commission raising concerns about the
"inclusiveness" of a study group LightSquared has put together to
review the interference issues. The FCC, which last year approved
LightSquared's plans to provide high-speed wireless communications to
all corners of the United States by 2015, authorized the study group
earlier this year.
LightSquared is trying to position itself as a low-cost
alternative to the big wireless operators like Verizon Communications
Inc (VZ.N) and AT&T (T.N), which recently proposed a $39 billion deal
for Deutsche Telekom AG's (DTEGn.DE) T-Mobile USA. LightSquared
recently announced deals with Best Buy Co (BBY.N) and Leap Wireless
For Falcone, LightSquared has emerged as his hedge fund's single
biggest bet. A little more than half of Harbinger's assets are
committed to LightSquared and some of his hedge fund investors have
grown uneasy waiting for the telecom bet to pay off.
Bankers with UBS (UBS.N), which helped LightSquared raise more
than $1 billion in short-term financing, are telling prospective
investors and telecom industry analysts that LightSquared could be
worth more than $10 billion when its wireless network is built out,
said several people familiar with the hedge fund and the telecom
(Reported by Matthew Goldstein, editing by Dave Zimmerman)