WASHINGTON-The House Commerce subcommittee hearing last week on the Federal Communications Commission’s controversial move to the Portals building was inconclusive, according to subcommittee Chairman Rep. Joe Barton (R-Texas).
The subcommittee expects to hold many more hearings before deciding whether there is a link between Tennessee developer Franklin Haney, two $1 million payments to Washington lobbyists and the Clinton-Gore 1996 re-election campaign.
FCC funding impacted
An inconclusive hearing could have a direct impact on the FCC’s planned move to the Portals building. The House of Representatives passed the spending bill that contains funding for the FCC. Included in the bill is language stating no funding may be used for rent for the Portals or relocation expenses until the current investigations find that the lease is lawful.
The bill authorizes $182 million for the FCC, which is $5 million less than this year’s budget. This bill must still be approved by the Senate and go through the conference process where discrepancies are worked out. All of this must be accomplished before Oct. 1. Barton admitted there was some doubt his subcommittee’s investigation would be concluded before then.
Haney questions
Haney joined the Portals development project officially in March 1996, securing financing for the project and agreeing to become a partner in the development slated to house a consolidated FCC headquarters. A supplemental lease agreement (SLA) signed in January 1996 required the General Services Administration, the governmental leasing agent, to pay rent regardless of whether the FCC actually occupied the building.
A document signed by Haney Sept. 7, 1995, says the SLA-including the fixed-rent agreement-was necessary or it “could sour the parties to the financing and kill the deal.” Haney denied knowledge of the letter, saying he was “the idea man” and his representatives may have pursued the SLA “as part of their due diligence.”
The timing of the fixed-rent agreement is significant because Haney claimed in his opening statement, “I did not become a partner in the Portals until three months after the SLA was signed and over two-and-one-half years after the original lease was signed. The arrangements for the lease, additional space, FCC occupancy and [fixed-rent date] were all in place long before I became a partner in the Portals. At no time did my representatives or I use improper influence to obtain any of the arrangements about space, tenancy or lease terms.”
Because of the fixed-rent clause, the federal government has paid $14 million in rent for a building it doesn’t occupy.
Haney consistently has refused to cooperate with subcommittee investigators, preferring instead to be questioned in a public forum. Republicans attempted on several occasions during the hearing to have Haney questioned in private. Each time Haney refused. Along those same lines, Republicans refused to allow the various Haney representatives present at the hearing to answer any questions. Each of them, according to Barton, will be questioned in a similar public hearing. One such hearing was scheduled to take place last Friday.
The Haney testimony came as a result of a protracted dispute where, in addition to refusing to be questioned, Haney also refused to turn over documents to the subcommittee. Haney was found in contempt of Congress by the House Commerce Committee. A request that the contempt charge be taken up by the full House was withdrawn when Haney agreed to testify.
Although Barton told reporters Haney would have been questioned in a similar manner if he was a Republican, Haney is a well-known and well-connected Democrat who once worked for Vice President Al Gore’s father. Indeed, one line of questioning focused on a $50,000 contribution Haney made to the Nebraska Democratic Party. Republicans tried to prove the payment represented a quid pro quo for statements favorable to the Portals project possibly made by Sen. Bob Kerrey (D-Neb.) in 1995.
A statement apparently was drafted for Kerrey to say at a Senate appropriations subcommittee mark-up in July 1995, but oversight and investigations subcommittee staff could not confirm that Kerrey actually made the statement.
The subcommittee also is investigating two $1 million payments. One of the payments was to Knight and the other to former Tennessee Democratic Sen. Jim Sasser. Sasser is now ambassador to China.
Haney said the payment to Knight represented three years of legal work on a variety of projects, including the Portals, but he was unable to produce a written agreement to that effect.
The payment to Sasser is questionable because Sasser labeled the payment a “contingency” payment. Contingency payments are illegal on federal leasing deals. Haney said the payment was for loan financing and represented 1 percent of the loan amount of $100 million.
Both Knight and Sasser are expected to testify before the subcommittee in the near future.
GSA criticizes FCC
In other Portals action, the GSA last week accused the FCC of continuing a campaign to scuttle the move to the Portals. GSA released a letter saying the FCC is not following normal relocation rules. The FCC has instructed HDG and Herman Miller, FCC contractors, not to release any information without the FCC’s consent. In a July 30 letter, GSA told the FCC “the purported prohibition on release of contractor information … does not extend to GSA.”
The letter further states that GSA hopes and trusts the prohibition is “not reflective of an intent by FCC to restrict GSA’s access to the contractors in question, you certainly understand that any such effort by FCC would be counterproductive to a timely relocation.”
