Jonathan Kaplan
Abramoff helped Israeli wireless company "tap" congress
Tue Jan 10, 2006 23:05

Jack Abramoff's Israeli connections

Abramoff also allegedly convinced Congressman Robert Ney, House Administrative Committee chairman, to award a contract worth $3 million to a start-up Israeli telecommunications firm called Foxcom Wireless. The contract was for the installation of antennas in House of Representatives buildings to improve cell-phone reception. Not surprisingly, such equipment can be designed to have what is known as a "back door" to enable a third party, in this case Mossad, to listen in. That an Israeli firm should be given such a contract through a selection process that was described as "deeply flawed and unfair" is explicable, particularly as there were American suppliers of the same equipment, and it suggest that the private conversations of some of our Congressmen might not be so private after all.

In a previous scandal in 2001, FBI investigators strongly suspected that two Israeli companies, AMDOCS and Comverse Infosys, which had been allowed to obtain U.S. government telecommunications contracts, were able to use back-door technology to compromise the security of DEA, Pentagon, and White House phones.

WiFi fight involves Abramoff
By Jonathan Kaplan

In 2000, the House of Representatives was close to deciding how to improve wireless telecommunications reception inside the Capitol when LGC Wireless, one of the two companies competing for the license, indicated its surprise that a lesser known, foreign company had edged ahead.
Patrick g. Ryan
Rep. Bob Ney (R-Ohio) oversaw the process for awarding the wireless contract.

LGC, of San Jose, Calif., had a track record that included installing indoor wireless networks at New York City’s airports, in the Petronas Towers in Kuala Lumpur, and at the 2002 Winter Olympics in Salt Lake City. The company complained in a letter to the House general counsel that the process on Capitol Hill was unfair and deeply flawed.

Its fear of losing out was borne out when, in 2002, the license to build a network inside the House office buildings went to MobileAccess Networks, an upstart Israeli company formerly named Foxcom Wireless. In 2004, MobileAccess trumped LGC again, winning a $3.9 million dollar contract to build a similar network in the Senate.

“We felt that there were irregularities in the vendor selection process and formally protested the process, but to no avail,” Ian Sugarboard, LGC’s CEO, said in an e-mail. “In addition, it appeared that lobbyists had exerted undue influence on the deal.”

The process by which MobileAccess beat LGC has resurfaced because of the scandals surrounding GOP megalobbyist Jack Abramoff.

Investigations by the Justice Department and the Senate Committee on Indian Affairs have disinterred Abramoff’s past business relationships, including his associations with Michael Scanlon and the work they did for Indian tribes and his political alliances and favors for lawmakers, including Rep. Bob Ney (R-Ohio), chairman of the House Administration Committee, who oversaw the process by which MobileAccess won the license.

“[Ney] does not recall having a conversation with Jack Abramoff about the merits of Foxcom, nor does he recall a similar conversation with Neil Volz from the time Volz left the House Administration Committee through the period when the license was awarded,” said Brian Walsh, Ney’s spokesman. Volz had been Ney’s chief of staff until early 2002.

The Washington Post reported that MobileAccess donated $50,000 to the Capital Athletic Foundation, which was run by Abramoff, in 2001. Two years later, MobileAccess paid Greenberg Traurig, Abramoff’s former employer, $240,000 in lobbying fees.

The story of MobileAccess’s success dates back to 1999, when AT&T Wireless, and later Nextel Communications Inc., approached the House Administration Committee with the idea of using LGC’s network to penetrate the Capitol’s marble buildings with wireless signals. But the committee, then led by Rep. Bill Thomas (R-Calif.), did not want just one telecom company to monopolize access so that only its products would work in the Capitol.

The committee expressed interest and permitted LGC to survey the Capitol and come up with a design plan and security specifications for a network that would accept multiple carriers.

The FBI and National Security Agency reviewed the security of LGC’s technology to make sure foreign intelligence services could not penetrate the network, according to documents reviewed by The Hill.

In December 2000, Thomas’s staff, the Architect of the Capitol’s Office and the House Information Resource Office appeared set to award LGC a license. But the paperwork sat on the chairman’s desk, unsigned.

In a brief interview with The Hill this week, Thomas said that as House Administration Committee chairman he made the procurement process “more professional” and kept politics at “arms length” but that he could not recall details of the wireless decision.

A former staffer involved in the process recalled that “Thomas never reached a final decision on LGC. Frankly, one of my guys was a little out in front of the decision in how he conveyed things third-hand.”

The source added, “Bob Bean, who was [Rep. Steny] Hoyer’s [D-Md.] staff director at the time, weighed in on behalf of making sure that Foxcom got equitable consideration. Bean came to me to personally suggest steps like weighing the preferences of the telecom companies.”

Bean died last year.

Meantime, Foxcom offered a cut-rate price of $750,000 to each carrier. LGC’s initial price to the carriers was $1.15 million, which it cut to $850,000. The license was worth up to $4 million.

Fearing it was losing ground, LGC hired Barbour, Griffiths & Rogers in 2001 to help it navigate congressional politics for a fee of $120,000. According to Senate records, Foxcom did not hire Greenberg until 2003.

“The question is whether the contract was awarded on the merits or because of Abramoff’s relationship with Ney,” said Melanie Sloan of Citizens for Responsibility and Ethics in Washington, left-leaning pressure group.

Walsh said in response, “It’s unfortunate that Ms. Sloan’s own sense of ethics doesn’t preclude her from questioning the integrity of individuals based on matters she has absolutely no knowledge of.”

Bill Cune, vice president of sales for MobileAccess and a former lobbyist for Hughes Electronics, said his company’s political connections had nothing to do with its success in getting the license.

“We went and sold to the wireless service providers, the ones paying the money who said we want [Foxcom] as opposed to [LGC],” he said. “Foxcom did not make this political. Any political activity was really the result of our competition.”

Nevertheless, Cune had pressed Foxcom’s case on Capitol Hill even though he had not registered as a lobbyist.
Meantime, some participants in the process said Ney delayed a decision to consult with Hoyer. Hoyer told The Hill that neither Thomas nor Ney kept him informed.

“The minority staff may have been aware of the Foxcom application,” a Hoyer aide said, “but they were never involved in the decisionmaking for Foxcom to get that specific license.”

Ney decided to let the carriers choose the network provider because the companies would be footing the bill and they should have a voice in the process, Walsh said.

In the surveys sent to the six wireless companies, Nextel, AT&T and Cingular expressed no preference and Verizon and Sprint leaned toward Foxcom. VoiceStream’s preference was unclear.

LGC said that the mobile wireless companies, which were given the chance to decide which company would get the license, were asked to do so without being privy to any of the details that should have been used to make the selection. The committee had not specified cost or security criteria.

On Oct. 4, 2002, the House attorneys responded to LGC’s complaints. They wrote, “The wireless carrier providers — not the Committee or the House — will choose the wiring and antennae installer. … The carrier providers — not the committee or the House — are responsible for paying the installer. Accordingly, this is not a traditional House procurement and thus, House procurement policies do not apply.”

Walsh also said that LGC’s complaint was inaccurate and that over the past few years none of the wireless carriers has complained that it felt misled or was not given accurate information.

On Oct. 28, 2002, LGC said that the failure of Sprint PCS and Verizon to return their ballots was evidence that the process confused the carriers themselves.
MobileAccess finished the work late last year.

“This represents a significant step forward in improving the wireless capabilities,” Walsh said. “It is even more significant that this improvement was made without any cost to the taxpayers.”

LGC also objected to the process in the Senate, which began in November 2003 when the Senate sergeant at arms’ request for proposals was sent to bidders.

LGC alleges that the request was written in such a way that it favored MobileAccess because the contract required the use of “broadband coaxial cable.” LGC uses a patented “Category 5” cable, which is less expensive and more effective, it says.

But the request also stated, “The Senate reserves the right not to award a contract depending on the quality of the proposal(s) submitted and the availability of funds.”

An LGC spokesman said the company would have done the same $3.9 million job for $2.1 million.

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