WASHINGTON-Congressional investigators appear poised to probe whether the Federal Communications Commission’s controversial move to new headquarters across town next year is the product of a generous Democratic campaign contribution and political influence peddling by close associates of Vice President Gore with ties to former FCC Chairman Reed Hundt.
“It is logical to assume that it (The Portals contract) will be a prime target for investigators,” said Craig Murphy, spokesman for Rep. Joe Barton (R-Texas).
The Portals issue was raised at a hearing last week by the House Commerce subcommittee on oversight and investigations, chaired by Barton. The subcommittee is looking into a separate matter regarding whether Peter Knight, a former long-time aide to the vice president who managed the ’96 Clinton-Gore re-election campaign, used high-level political connections to win a lucrative Department of Energy contract for a Massachusetts client.
Knight, after the Clinton-Gore victory, returned as a lobbyist for telecom firms and other clients at the firm of Wunder, Diefenderfer, Cannon & Thelan in Washington, D.C.
Democrats, especially powerful Rep. John Dingell (D-Mich.), objected to questioning about the Portals at last week’s hearing because it was not the subject of the hearing.
But while Democrats succeeded in burying the Portals controversy last week, the issue is far from dead.
Indeed, Time and Business Week recently published articles raising questions about whether former FCC Chairman Hundt’s withdrawal of opposition to The Portals’ move is connected to a $1 million payment Knight reportedly received in January 1996 from Portals investor-real estate developer Franklin Haney, around the time the FCC-Portals deal was inked. Haney is said to have contributed $230,000 to national and state Democratic Party organizations the same year.
Haney, as well as Knight and Hundt, have long-standing ties to Gore, and to each other.
Hundt told RCR there “is absolutely no truth” to the allegations of political influence peddling in connections with the portals move.
Knight could not be reached for comment.
“The vice president played no role whatsoever in the FCC’s decision to move to the Portals building nor with the hiring of any of its contractors,” said Heidi Kukis, a Gore spokeswoman.
Kukis said neither Gore nor any one on his staff spoke to Hundt about it. Kukis acknowledged that Haney has given money to the Democratic Party and that Haney was on a Gore “call sheet.” But she said the vice president did not solicit campaign contributions from Haney during the controversial 1995-1996 period that Gore made possibly illegal calls from his White House office.
The Justice Department and Congress are examining Gore’s calls and other Democratic campaign fund-raising activities, probes that are undercutting his popularity and that threaten his potential bid for the presidency in 2000.
Kukis explained the call sheet with Haney’s name was for thank-yous for previous political donations.
Steven Grigg, president of the Republic Property Corp. (a partner with Haney in The Portals project), called the allegations of Portals political influence peddling “ridiculous.”
Grigg said he has not been approached by congressional investigators, but declined further comment.
Likewise, former Hundt chief of staff Blair Levin and FCC Managing Director Andrew Fishel denied any wrongdoing in letters to Business Week’s editor. Both men said the FCC always planned to move to The Portals and any hesitation about that commitment had to do with funding, space requirements and other concerns not related to politics.
Both men counter that strong forces-communications lawyers, whose offices surround the FCC in the fashionable downtown district, and Charles E. Smith, the current FCC landlord, Smith’s Washington, D.C., lobbying firm, former FCC Commissioner James Quello and House telecommunications subcommittee Chairman Billy Tauzin (R-La.)-want to block the consolidation of eight FCC headquarter offices into a new but less attractive spot in southwest Washington, D.C., near other federal offices that are far removed from the fine restaurants and retail stories and large law offices on K, L and M streets downtown.
Levin and Fishel said the FCC is under an August 1994 court order to move to The Portals, an assertion at odds with another legal interpretation that says the General Services Administration can house any federal agency in The Portals.
The Portals controversy dates back several years to former FCC Chairman Alfred Sikes and is littered with litigation, unsuccessful legislation to appropriate $40 million to relocate the FCC and fiery exchanges between the FCC and GSA on cost, accommodations and other matters.
Having failed to secure $40 million from Congress to fund the move, GSA, the government’s leasing agent, is lending the FCC money to begin the transition to The Portals next year.
