VICTORY FLAP

It was revealed last week that lobbyists for Cingular Wireless, SBC Communications and Motorola were among the “close personal friends” who paid for a party held at the home of U.S. Assistant Secretary of Commerce Nancy Victory in October 2001. The problem is that the event occurred just days before Victory wrote to the FCC, urging the commission to lift the spectrum ban on wireless, which it did shortly thereafter.

Each company insists the lobbyists — Cingular's Brian Fontes, SBC's Priscilla Hill-Ardoin and Motorola's Richard Barth — did not lobby Victory directly on spectrum cap issues and that their actions were within guidelines. Also, a source close to the situation said the timing of the party and Victory's assessment that the spectrum cap should be lifted “fully and immediately” are not as suspicious as they appear because the party had been rescheduled from an earlier date due to the Sept. 11 attacks. (For full coverage, visit www.telephonyonline.com.)

Nevertheless, the timing of the revelation couldn't be worse for those involved, as concern is growing over the role that lobbyists play on Capitol Hill and in the halls of the FCC. The Bell companies in particular have been accused of buying last year's House passage of the Tauzin-Dingell broadband deregulation bill, and statistics support the allegation. At the time, the watchdog group opensecrets.org reported that 81% of House members who voted for the bill had received twice as much in financial contributions from the RBOCs as they had from those that were in opposition.

Given this sort of scrutiny, the first of many questions that come to mind regarding Victory's party is: What were these people thinking?

Since the revelation, everyone involved has been scurrying for cover like rats caught in a flashlight beam. According to sources, Victory now has decided to officially disclose the party because the independent Office of Government Ethics advised her last week that it constituted a gift.

And some of the explanations for what happened are troubling. Motorola said Barth acknowledged paying for the party out of his own pocket but couldn't recall the amount or whether he had been reimbursed out of the company till. SBC first said that Hill-Ardoin paid $480 with her own funds. But later, after digging into the matter further, the RBOC was forced to acknowledge that Hill-Ardoin had run the amount through her corporate expense account. She has since reimbursed SBC, according to a company spokesman, who added that SBC believes Hill-Ardoin has not committed any ethics violations regardless of who paid for her share.

As much as we want to believe SBC, the next question that comes to mind is: What will they be saying about this next week?