Martin: No Clue Sued Top Aide Joined Troubled MCube Board

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Washington – Federal Communications Commission chief of staff Daniel Gonzalez did not inform FCC chairman Kevin Martin when he became a director of MCube Petroleum, a Seattle-based oil and gas venture now under federal investigation for fraud, Martin told reporters Thursday.

Gonzalez, Martin’s top aide since April 2005, has been sued by a pair of creditors in state court in Seattle in a case stemming from his former MCube duties.

“I did not know that he was … with this board. He notified me that he had some outside activities and told him he would have to comply with whatever the government ethics rules are on what you’re allowed to do and not do, which I am confident he ended up doing,” Martin said after appearing before the Senate Commerce Committee on unrelated matters.

An ethics attorney at the FCC said Gonzalez did not violate federal rules by joining the board. Gonzalez has not responded to two emails seeking comment.

From May 2006 to January 2007, Gonzalez was a director of MCube. The firm had oil and gas interests in Indonesia. It is under federal investigation for running a Ponzi scheme that involved 200 investors and about $54 million. A Ponzi scheme rewards original investors with money collected from new investors, not from investment-generated returns.

In November, Gonzalez was sued by two MCube creditors, Donald and Beverly Jefferson, who claimed Gonzalez and others personally guaranteed repayment of a short-term, $100,000 loan on which MCube defaulted after six months.

The FCC’s chief of staff, who directs a 2,000-person bureaucracy, holds considerable sway over some of the most powerful media companies in the country owing to the delegated powers granted by the FCC chairman.

Martin took two questions on the Gonzalez-MCube affair before turning to reporters interested in discussing routine FCC matters.

Asked why Gonzalez was moonlighting as a corporate board member, Martin replied: “Well, I don’t know anything about the allegations you’re talking about against the corporation. The commission staff all have to comply with whatever the Office of Government Ethics rules about what outside activities they can take on. I’m sure he ended up complying with those.”

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