Tuesday, January 21, 2003

Bush official: Party not payoff

The Associated Press

WASHINGTON - The Bush administration's point person for telecommunications policy allowed wireless phone company lobbyists to help pay for a private reception at her home, and then 10 days later urged a policy change that benefited their industry, according to documents and interviews.

Assistant Commerce Secretary Nancy Victory said she regards the lobbyists as personal friends, and cleared the arrangement in advance with her department's ethics office. She did not report the October 2001 party as a gift on her government ethics disclosure form.

"My friends paid for this party out of their personal money," Victory said in an interview last week with The Associated Press.

Victory added she believed it was "ridiculous" to draw a connection between the party and her letter 10 days later to the Federal Communications Commission urging an immediate end to a decade-old restriction on wireless spectrum.

"Many of the attendees had nothing to do with that issue," she said, declining to further identify the guests.

Ethics experts said the arrangement at the very least heightens public concerns about the appearance of a conflict of interest, and may have run afoul of federal ethics standards.

"Going ahead with this party seems insensitive to public concern about whether this Bush administration is in the pocket of corporations and lobbyists. It doesn't look good for her or the administration," said Kathleen Clark, a law professor at Washington University in St. Louis who teaches legal and government ethics.

Stephen Gillers, a professor at New York University's law school, said Victory had a legal obligation to disclose the lobbyists' largesse on her financial disclosure form.

"Victory's industry friends could pay for the party out of their own pocket, but she had a duty to reveal their contribution to the public," Gillers said. Under federal ethics rules, Victory can correct the matter by revising her financial disclosure form.

Victory serves as administrator of the National Telecommunications and Information Administration and is the administration's policy representative before the independent Federal Communications Commission.

The party Oct. 14, 2001 was paid for by six hosts, including lobbyists for three companies with a stake in wireless communications and an attorney from Victory's old law firm where her husband is a partner specializing in communications law.

Corporate representatives from the telecommunications industry were among the dozens of party guests, according to Victory.

A copy of the party's invitation, obtained by AP, clearly names at the top lobbyists Brian Fontes of Cingular Wireless, Priscilla Hill-Ardoin of SBC Telecommunications and Rich Barth of wireless phone manufacturer Motorola.

It said the hosts "invite you and your guest to a reception in honor of Nancy Victory," and urged attendees to RSVP to a number or e-mail address at Victory's old law firm.

Ten days after the catered reception at Victory's million-dollar home in Great Falls, Va., she asked the FCC to immediately repeal restrictions that Cingular, SBC and other major cellular companies had long complained about.

The FCC voted two weeks later to phase out by Jan. 1, 2003, the limits on how much of the spectrum individual carriers could own in a geographic area. The agency had put the limits in place in the early 1990s to promote competition.

In today's market, "rules such as these that draw arbitrary lines in the name of ensuring competition are simply not needed," Victory wrote the FCC on Oct. 24, 2001.

The carriers argued that more airwaves would give them the space to provide advanced mobile services, but critics said the change would squeeze out smaller competitors and drive up rates.

Casting the single vote against the change, FCC Commissioner Michael Copps said that the agency had not done enough to study the shortage of airwaves.

"This is, for some, more about corporate mergers than it is about anything else," Copps said at the time.

Cingular and SBC both had formally urged the FCC to end the restrictions. Motorola did not weigh in on the issue, but it's largest commercial cellular customers, including Cingular, advocated repeal.

Victory declined to name any of the invited guests, but said a government ethics officer told her in advance that "these parties are very, very common" and that there was no ethical problem as long as those at the reception were personal friends.

Victory said she did not provide the ethics officer with a list of those from industry, "nor should that be necessary. They're my friends." The ethics officer, she said, also told her she didn't have to report the party as a gift.

At least one company whose lobbyist helped pick up the tab, SBC, is checking to see if the approximately $480 its lobbyist spent came from corporate funds. Fontes and Barth said they don't remember how much they paid or whether the money came from corporate funds.

"A group of folks who either worked with Nancy or have known her for many years just got together to toast her," Fontes said. Victory had been confirmed by the Senate for her new government post two months earlier.

Kirsten Lovett, a spokeswoman at Victory's former law firm, Wiley Rein & Fielding, said in a statement that "I do not know anything about the party to which you refer as it was not a firm function" even though the invitation's RSVP listed a number and e-mail address at the firm and one of its partners was a co-host.

Wiley Rein & Fielding, is one of the largest communications law firms in town. The founder, Richard Wiley, was an FCC commissioner and chairman during the Nixon and Ford administrations.

Conference takes aim at spam
Software aims to snare hackers
More Technology News

Hritz new president of AK Steel
Tristate Summary

Endowments drop at U.S. universities
Magic Johnson promotes HIV drug
War fears prompt overseas slide
Foreman savors grilling success
Disney settles 'whistle-blower' suit
Bush official: Party not payoff