WASHINGTON-Labor Secretary Alexis Herman last week reiterated her innocence in connection with a Justice Department probe into whether she profited from helping Mobile Communications Holdings Inc. obtain a global satellite phone license last year.
“As I said, first of all, the allegations aren’t true, and unfortunately in this day and age it goes with the territory,” said Herman, following a speech last Tuesday at the National Press Club. “I think that is the attitude that you have to have if you’re going to be in public service.”
Herman is one of several Clinton cabinet members to be investigated by the Justice Department for alleged misconduct.
In two weeks, Attorney General Janet Reno will decide whether to extend the probe and appoint a special prosecutor. The current probe focuses on her previous activities as a White House aide.
MCHI maintains it has done nothing wrong.
Allegations of influence peddling against Herman were made during her Senate confirmation hearing last year and resurfaced again in more detail early this year.
In 1995, the Federal Communications Commission denied Washington, D.C.-based MCHI’s big low-earth-orbit satellite application on financial grounds. However, the telecom agency agreed to give MCHI another chance if it could shore up its financing in a year’s time.
Between 1995 and last July, when the FCC waived financial qualifications and granted MCHI a big LEO license, it is alleged that Herman accepted a cash-filled envelope from African businessman Laurent Yene as payment for her help on behalf of MCHI.
Yene was affiliated with a consulting firm Herman previously owned.
Herman sold her consulting firm for $88,000 to Venessa Weaver, a friend and former business associate, after joining the White House’s public-liaison office in 1993.
Weaver subsequently had a professional and personal falling out with the 42-year-old Yene. Weaver’s attorney, Lawrence Barcella, has called Yene a “vengeful and unreliable former boyfriend and businessman.”
Yene claims Herman was part of an elaborate scheme in which she would receive 10 percent of fees from her former consulting firm in exchange for business brought to Weaver and Yene at International Investments and Business Developments.
Weaver, who had exceptional access to the White House, and Yene were hired by Singapore businessman Abdul Rahman to seek financing for the struggling MCHI’s $1.1 billion Ellipso project.
USA Today previously reported that Weaver and her sister donated $150,000 to the Democratic Party in the fall of 1996, something that has grabbed the attention of federal investigators. During the same election cycle, the Center for Responsive Politics reports that MCHI Chief Executive Officer David Castiel and Michael Stone, another MCHI employee, contributed $2,000 to Democrats and $1,000 to Republicans.
White House officials have acknowledged to Newsweek that Herman had social contact with Rahman, who runs a Singapore-based aircraft firm called Global Aero Design Centre Pte. Ltd.
In an RCR interview in January, Greg Simon, former domestic policy adviser to Vice President Al Gore, said Herman asked him in 1996 to meet with MCHI representatives.
Simon said the MCHI contingent, which included Washington, D.C., lawyers Weldon Latham and Jill Stern, complained the mobile satellite start-up was forced to meet stiffer financial qualifications than those required of larger firms, including Motorola Inc., TRW Inc. and Loral Corp., which received big LEO satellite licenses.
Simon said he told MCHI representatives the White House does not get involved in licensing issues, a fact seasoned attorneys would normally know, and that MCHI should take its grievances to the FCC and Congress.
MCHI did, in fact, engage in an aggressive lobbying campaign on Capitol Hill and enticed various lawmakers to contact the FCC in support of the firm. That prompted Motorola and TRW last June to accuse MCHI of illegal lobbying at the FCC.
Then-FCC General Counsel Bill Kennard, who now heads the agency, subsequently absolved MCHI of any wrongdoing.
Simon said the White House did not attempt to influence or pressure the FCC on the MCHI application.
However, a letter promoting MCHI sent to White House official Kate Carr was forwarded to the FCC.
In addition, the Small Business Administration in April 1996 wrote FCC Commissioner Susan Ness to urge the agency to grant a big LEO license to MCHI.
Peter Cowhey was acting chief of the International Bureau last summer when the FCC decided to waive financial qualifications for MCHI and grant its big LEO satellite application. The bureau justified its action on the grounds that spectrum had become available to accommodate MCHI after another firm withdrew its application. Cowhey is now in the private sector.
