WASHINGTON-The Justice Department is investigating the Federal Communications Commission’s planned Portals move, the second probe to examine whether lobbyist and former Clinton-Gore campaign manager Peter Knight got an illegal $1 million kickback for helping a Tennessee developer lock the agency into a 20-year, $400 million lease.
A Justice Department spokesman said the FCC-Portals probe will be rolled into the larger, ongoing investigation of Democratic and Republican fund-raising activities in the 1996 election cycle.
The House Commerce Committee has been investigating the FCC-Portals lease for months and is believed to be close to subpoenaing Knight, Portals developer Franklin Haney and possibly others.
On Friday, a congressional source said former FCC Chairman Reed Hundt will be questioned soon by House investigators.
If hearings are held, they will be chaired by Rep. Joe Barton (R-Texas), head of the oversight and investigations subcommittee.
Ken Vest, a spokesman for Haney, said the Tennessee developer plans to fully cooperate with the committee. The committee has accused Haney and Knight of stonewalling investigators and say the two men have yet to answer “the million-dollar question.”
Vest said Congress should be focusing on “the $14 million question” and should force the FCC to move into the Portals, a reference to the amount of money taxpayers will have paid by the time the FCC steps inside its new headquarters in July-if it does. Some have suggested there are less expensive alternatives to the Portals.
Last November, House telecommunications subcommittee Chairman Billy Tauzin (R-La.) asked Attorney General Janet Reno to launch a criminal investigation of the FCC-Portals lease. The law bans contingency or performance fees in federal leases.
Ken Johnson, Tauzin’s spokesman, said the congressman received a letter Feb. 9 from the Justice Department notifying him that a federal probe on the Portals is moving forward.
Haney, Knight and Hundt are friends of Vice President Gore. Haney and his affiliates are reported to have contributed some $250,000 to the Democratic Party. Hundt has been accused of reversing his initial opposition to the Portals move after Knight got involved.
The former FCC chief, whose requests for $40 million in moving expenses were repeatedly turned down by Congress, has denied any wrongdoing.
The FCC-Portals matter gained national attention last week after NBC News reported on the $7 million taxpayers have paid to date for the unoccupied Portals and the $14 million in back rental payments that will be owed five months from now.
The TV segment did not address the Haney-Knight kickback allegation.
“People are paying $1.7 million a month for an empty building today? What genius did that? The American taxpayer,” answered Tauzin on NBC.
The $14 million figure was calculated by the General Accounting Office in a recent report required under the 1998 FCC appropriations bill.
Another GAO report requested by Senate Commerce Committee Chairman John McCain (R-Ariz.) is due out late next week.
“It’s a colossal, classic Washington, D.C., bureaucratic foul up and the taxpayer is going to have to pay and pay and pay,” said McCain in an NBC interview.
In the meantime, finger-pointing is rampant.
The FCC says the General Services Administration, the government’s leasing agent, failed to meet public-safety and other building requirements. GSA says the FCC finds excuses to back out every time the relocation gets near. Regarding Justice’s probe of the FCC-Portals lease, Haney and Knight have been exchanging verbal barbs for weeks.
“GSA is unaware of anything that would dissuade us from moving ahead with the FCC consolidation,” said Hap Connors, a GSA spokesman. GSA is supposed to lend the FCC the money need to move, but that has not happened.
Today, the FCC is spread out among nine buildings in the busy downtown section of Washington, D.C. The Portals is removed from trendy restaurants and retail shops as are the offices of lobbyists and communications lawyers.
The FCC and GSA have been trying to find new space to consolidate FCC operations since 1987.
“With all the questions still lingering about the million-dollar payment from Mr. Haney to Mr. Knight, we have to ask: Was the decision by the FCC to move to the Portals made to benefit American taxpayers and the FCC, or a web of key players with close political ties to Al Gore, including the million-dollar man, Peter Knight?” said a House Commerce Committee source.
