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FCC Confidential

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Published by TiCam- 05-20-08
news FCC Confidential

One of our jobs is to dig into the often dubious link between government power and private profit. So allow us to update the tale of Haiti, two U.S. telephone companies and American politicians.
The story starts with the discovery by the Federal Communications Commission in 2006 that its file containing long-distance contracts between U.S. telephone companies and the Haitian government was missing. That's odd enough, and so the FCC asked all carriers to resubmit copies to restore the record.
Our Mary O'Grady then filed a Freedom of Information Act request to see those records. One company appealed for confidentiality: Fusion Telecom, a New York-based company that did a robust business with the Haitian telecom monopoly in the 1990s and early this decade. The FCC says it is considering our FOIA request, but can't say when it might rule and has met with Fusion about our request.
Our interest in this story goes back to the time Jean Bertrand Aristide was running Haiti "either as president or behind the throne" from October 1994 to February 2004. Long-distance revenues were one of the country's few sources of hard currency. Yet after Mr. Aristide left power, the coffers at Teleco Haiti were found to be empty. More than a few Haitians would like to know what happened to the money.
At least some of it was directed to an offshore account. We learned that much when a New Jersey-based company called IDT coughed up its long distance agreement with Haiti, after we filed a previous FOIA. The IDT contract shows that when the official settlement rate of the monopoly was 23-cents per minute, IDT had access to the Haitian network at a rate of 8.75 cents per minute. Under FCC regulations at the time, IDT was entitled to negotiate a better rate than the official 23-cent rate. But it had to make that rate public and all other carriers would then get to pay the same rate.
Strangely, however, IDT did not file its contract at the FCC in 2003 when it began doing business in Haiti. It also kept secret that it was making its payments to an offshore account in the Turks and Caicos instead of to Teleco Haiti.
These facts became known thanks to former IDT employee Michael Jewett, who says he was told that the offshore account belonged to Mr. Aristide. He says he was fired in 2003 when he objected to the scheme. In 2004 Mr. Jewett filed a wrongful dismissal suit in New Jersey federal court. IDT denied the charge and called him a disgruntled employee, but the contracts have vindicated him on the facts of the discounted rate and the IDT payments to an offshore account. His suit is still pending.
Fusion Telecom had a separate contract with Teleco Haiti over a longer period. Fusion's CEO is Marvin Rosen, who was finance chairman of the Democratic National Committee during the 1996 Clinton fund-raising scandals. Fusion's board of directors in the past has included Joseph P. Kennedy II and Thomas "Mack" McLarty, Bill Clinton's Latin American envoy and White House chief of staff. These Democrats knew Mr. Aristide well following Bill Clinton's use of U.S. troops to return the Haitian to power in 1994 after he had been removed in a coup.
We'd expect a company with such a pedigree to follow the law in doing business with Mr. Aristide. Certainly, it should set a transparent example for a country where corruption is all too common. So it is passing strange that Fusion is fighting so hard to keep its public contracts a secret from the public.
After the Haiti file vanished from the FCC records room, Fusion told the commission that many of its original documents were destroyed by Hurricane Wilma in October 2005. But the company said it was confident it could "produce copies of all documents requested." Fusion later came up with a 1999 contract, which it now argues is no longer a matter of public record because Haiti is no longer regulated as a monopoly market.
If there's nothing to hide, why hide the contract? This should be an easy call for FCC Chairman Kevin Martin.
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