In 1996, Congress created the Telecommunications Development Fund, a quasi-public, quasi-private effort to help telecom companies get off the ground. Since then, the Center for Public Integrity reports, it "has paid more than $7 million in executive salaries and other expenses while investing only $9.4 million of seed money in start-ups." Meanwhile,
Though TDF claims it is a completely private corporation, officials from the FCC, the Small Business Administration and the Treasury Department have sat on its board of directors. Federal statutes prohibit sitting government officials from serving on corporate boards. Violations of those rules can carry a penalty of as much as five years in jail and $50,000 in fines for each count.
Yet in some ways, TDF acts more like a private entity than a part of the government. For example, it has hired two different Washington firms to lobby Congress on its behalf.
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