House probes $267M loan to bankrupt broadband firm [The Hill]
On Wednesday, the Energy and Commerce Committee of the U.S. House of Representatives began an investigation into a loan for $267 million to Open Range Communications from the U.S. Department of Agriculture.
Open Range filed for bankruptcy earlier in November, despite receiving the largest loan given out as part of the USDA Rural Utilities Service's broadband development plan. Rep. Fred Upton, chairman of the committee said that the bankruptcy of Open Range puts "$73.5 million of taxpayer money at risk."
The committee wants to look more closely at the RUS's application process for Open Range to figure out why the agency decided to invest so much in the company. The committee also wants to understand what type of oversight the RUS exercised after the funds were distributed to make sure they were used as the program intended.
The loan was approved in March of 2008 as part of the broadband stimulus project which was aimed at providing broadband to rural communities. Since the first funds were granted, the program has had its fair share of failures and controversies.
There are references in the investigation letter to concerns over the general oversight by the USDA over the broadband loan programs. One allegation stated that a total of $340 million had been improperly granted, because of either incomplete applications, defaulted loans, or inappropriate purposes for granting the loans.
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