WASHINGTON-The Justice Department is investigating whether Labor Secretary Alexis Herman, in her role as a White House aide during President Clinton’s first term, sold political clout to win Federal Communications Commission approval for a global satellite phone license for Mobile Communications Holdings Inc. last summer.
Before heading to New York with Clinton and others last week to advocate for increased minority participation in the financial community, Herman told reporters that while she accepts that Justice is obliged to investigate allegations against any Cabinet member, “I want you to know that these allegations are not true.”
Clinton, when pressed about yet another investigation of his Cabinet, replied, “I don’t believe that for a minute.”
“MCHI has done nothing wrong and no one has shown us that we have done anything wrong,” said, Joe Tedino, a MCHI spokesman. “We are confident that false statements about the company will be proven false.”
The FCC last July awarded big low-earth-orbit satellite licenses to MCHI and Constellation Communications, despite finding their financial qualifications lacking.
In January 1995, when it granted big LEO licenses to Motorola Inc., TRW Inc. and Loral Corp., the FCC’s International Bureau declined to grant permits to MCHI, Constellation and American Mobile Satellite Corp. because they didn’t meet financial requirements. But the bureau gave MCHI and the other two firms a year to shore up their finances. The full commission later affirmed the bureau’s handling of MCHI’s application.
The FCC says the reason for the turnabout last summer, when it waived MCHI and Constellation’s financial qualifications and granted their applications (AMSC withdrew its application), is additional radio spectrum became available to accommodate more big LEO applicants.
But Laurent Yene, a 42-year-old African businessman, told federal investigators last fall the MCHI license was bought with political support from Herman.
Yene, according to news accounts, said Herman-then head of the White House public liaison office-was part of an elaborate scheme that had her receiving 10 percent of fees from the consulting firm she sold to Vanessa Weaver (a Herman friend and business associate) for $88,000 after Herman joined the White House in 1993.
Yene had a business and romantic relationship with Weaver that soured, according to E. Lawrence Barcella, Weaver’s lawyer.
Yene and Weaver, Barcella told RCR, had a client with ties to MCHI.
“These are allegations from a vengeful and unreliable former boyfriend and businessman,” said Barcella. “There’s not a scrap of evidence to it.”
USA Today reported that together with her sister, Weaver, who was hired by Singapore businessman Abdul Rahman to get help on the MCHI big LEO satellite application, donated $150,000 to the Democratic Party in the fall of 1996.
Yene, interviewed on ABC’s World News Tonight last week, said he took a cash-filled envelope to Herman’s house that supposedly constituted her 10 percent cut for helping MCHI acquire a big LEO satellite license from the FCC.
Yet when Yene first lodged complaints against Herman during her Senate confirmation last year, he made no mention of any cash payment or a scheme to siphon off consulting fees for Herman.
Herman, according to USA Today, arranged a meeting in 1996 between MCHI executives and a top government telecom official at the White House.
Current and former officials in the FCC International Bureau, the unit that oversees satellite licensing, said they do not recall being pressured by the White House to grant MCHI’s license but remember the application attracting intense lobbying.
Indeed, Motorola and TRW last June accused MCHI of illegal lobbying at the FCC. The firms said MCHI enticed scores of congressmen and a White House official-Kate Carr-to pressure FCC officials to grant its application in a proceeding in which such lobbing was prohibited.
The FCC’s Office of General Counsel, then-headed by current FCC Chairman Bill Kennard, subsequently absolved MCHI of any wrongdoing.
Larry Irving, Clinton’s top telecom adviser at the National Telecommunications and Information Administration, said he knows nothing about the Herman influence peddling allegations.
Neil Egglestrom, a lawyer for Herman, told reporters, “The allegations against Secretary Herman are just not true. We have not been contacted by the Justice Department. If we are, we’ll provide whatever information they need to help put this matter to rest.”
The preliminary 90-day Justice probe will end next month under the independent counsel law, which requires initial examination of concrete and credible charges of criminal wrongdoing against a Cabinet official.
At that point, the probe will either continue for another 60 days or be dropped. Attorney General Janet Reno also has the option of appointing a special prosecutor to determine whether Herman is guilty of any crime.
