FCC insiders are raising concerns over the Justice Department’s sudden push to settle a multi-billion dollar fraud lawsuit against Democratic megadonor Charlie Ergen’s Dish Network and BlackRock, just before they were set to be deposed.
Last year, Elon Musk tweeted that Dish Network CEO and major political donor Charlie Ergen “is trying steal” wireless internet through his lobbying. He previously accused Ergen of engaging in “sneaky moves” at the FCC. Musk was criticizing Ergen’s failed lobbying and lawfare efforts to have the government punish SpaceX who was competing for spectrum.
Dish Network satellite dishes (AP Photo/Paul Sakuma, File)
A protest at BlackRock HQ (Photo by Erik McGregor/LightRocket via Getty Images)
A Senior FCC official told Breitbart News he is raising alarm bells over what he calls “a suspicious reversal by the Justice Department” to protect Ergen, as well as executives at Blackrock, to prevent them from testifying about allegedly fraudulent conduct in a wireless auction.
Under FCC regulations, the agency grants discounted “bidding credits” to small businesses called “designated entities” in wireless spectrum auctions. In 2015, Dish Networks — hardly a small business with a valuation over $25 billion at the time — with backing from BlackRock-financed Northstar Wireless and SNR Wireless who went on to win the auctions, describing themselves as “”very small businesses”. These credits were worth $3.3 billion dollars and pushed out legitimate smaller businesses out of the auction.
Northstar and SNR disclosed they received financing from Dish but claimed to act independently. After the FCC further reviewed the arrangements, then Chairman Ajit Pai determined Dish and its “shell bidders want this spectrum at a taxpayer-funded discount” and Dish had “de facto control” over the companies and denied the credits.
The FCC and Justice Department also endorsed a False Claims Act qui tam which VermonTel, a smaller company pushed out by Dish, filed in 2015. The suit has alleged the entire bidding process was fraudulent. Qui tam actions allow certain private parties to litigate fraud cases on behalf of the U.S. government.
The DC Circuit Court of Appeals has repeatedly ruled against attempts to dismiss the lawsuit, most recently last November. The court found that it had been properly alleged that Northstar and SNR were “shell companies” created by Dish which had “undisclosed agreements to act on DISH’s behalf or transfer spectrum rights to DISH,” which made “little sense unless” unless they had “agreed in advance that DISH would ultimately control the licenses won at auction.”
After almost nine years of litigation, the case was set to be heard including deposing Dish’s CEO Charlie Ergen, which was scheduled for February 15. However, just before Ergen and BlackRock were to be deposed, the Justice Department told VermontTel to either settle or else the Department would drop the case. In a letter to FCC and DOJ leadership obtained by Breitbart News, the company claimed this would be “unethical settlement that would result in no recovery for the government.” The letter alleged “the DOJ is more interested in cutting a sweetheart deal for a large political supporter than in protecting the interests of the government.”
Ergen is “a major Democratic donor” who has been “accused both of using his position atop DISH to leverage campaign donations from other executives” according to The Hill. In 2015, Breitbart News reported on Dish Network’s decision to drop Fox News which resulted in major subscriber loss — Dish has since brought Fox back to the network. Since 2008, Ergen, his wife, and Dish’s PAC have given collectively over $5.4 million to Democrats. BlackRock has backed Democrats to support its ESG agenda and is trying to stop Donald Trump this election.
The senior official at the FCC tells Breitbart, “the Justice Department has supported the lawsuit for the last several years. Why would they want to drop the case just after major victories in court?” The official added, “there’s no plausible reason to want this case to settle except to help Dish and prevent the depositions from Ergen and BlackRock. If the FCC was defrauded, we want to find out and compensate the taxpayers. If there was no fraud, they can show that at at trial.”
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
