Bush aide's party raises ethics issue
By Pete Yost
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 end to a decade-old restriction on wireless spectrum.
"Many of the attendees had nothing to do with that issue," she said.
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.
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 disclosure form.
Lobbyists listed as hosts
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 on 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. Representatives from the telecommunications industry were among the guests, Victory said.
A copy of the party's invitation, obtained by the Associated Press, 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.
Rules called unnecessary
Ten days after the catered reception at Victory's million-dollar home in Great Falls, Va., she asked the FCC to repeal restrictions that Cingular, SBC and other major cellular companies had long complained about.
The FCC voted two weeks later to phase out limits on how much of the spectrum individual carriers could own in a geographic area by Jan. 1 of this year. 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 in her letter to the FCC on Oct. 24, 2001.
The carriers argued that more air waves would create space for 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 air waves.
"This is, for some, more about corporate mergers than it is about anything else," Copps said at the time.
Cingular and SBC 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.
Parties are 'very common'
Victory 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 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 accounts.
"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 post two months earlier.
A spokeswoman at Victory's former law firm, Wiley Rein & Fielding, said in a statement that she was not aware of the party 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 a major communications law firm. The founder, Richard Wiley, was an FCC commissioner in the Nixon and Ford administrations.
