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A. a.(1)(a) i) a)Documentg2&Q!eU%%:&PleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""markets from PCS 2000's bid in order to get the POPs down closer to the minimum eligibility  xrequirement for the Round 11 bid before submitting it to the Commission. She stated that  xpursuant to Mr. Easton's instructions, she deleted bids for three markets and printed a new copy  x{of the Control P Report (Control P Report 2) and Screen Preview (Screen Preview 2). She  xfurther stated that Mr. Easton also initialled the new copies and discarded the old copies in a trash  X- x<can.:, H% {O#-ԍxId.: Ms. Hamilton also stated that she then downloaded the results and created a Flash Report  X-(Flash Report 1).B H% {O&-ԍxId. at 23.B "|P ,N(N(ZZP"Ԍ X-  ]x15.ؠAccording to Ms. Hamilton, RTI's vice president, Ronit Milstein, reviewed the Flash  X- xReport 1 and noticed that there was a bid for $110 per POP for License B324.@H% {Ob-ԍxId. at 3.@ Ms. Hamilton  xstated that she and Ms. Milstein then went back to Ms. Hamilton's books to verify the bid for  X- xLicense B324 that had been entered.:ZH% {O-ԍxId.: Ms. Hamilton stated that she and Ms. Milstein called Mr.  X-Easton over to discuss the $180 million bid with him.:H% {OA -ԍxId.:  Xv-  x16.ؠMs. Hamilton claimed that Mr. Easton then called the Commission and that she heard  xhim say that the Commission's computer had caused an erroneous bid for the Norfolk market to  XH- xKbe entered.: H~H% {Ow-ԍxId.: Ms. Hamilton stated that she later saw a temporary employee sending, by facsimile,  X1- x signed Flash Reports which no longer showed a $110 per POP bid for License B324.:!1H% {O-ԍxId.: Ms.  x[Hamilton said that she attempted to locate the original bidding reports and discovered that the  xbinder in which they were ordinarily kept was missing. Ms. Hamilton then recalled that she had  xlthrown away a copy of the Control P Report 1 and Screen Preview 1 that Mr. Easton had  X - xMinitialled earlier and retrieved those documents from the trash can.B" H% {O(-ԍxId. at 34.B Mr. Easton asked Ms.  x[Hamilton if she had taken the sheets from her trash can, to which she instead inquired whether  xhe looked for the reports in his own office. Thereafter, Mr. Easton searched through every sheet  X-of paper on Ms. Hamilton's desk and through the other trash cans in the office.T#4 H% yOu-ԍxIndependent Counsel's Report at 13.T  Xb-  Ax17.ؠMs. Hamilton stated that it was immediately following these events when she  xcontacted the Wireless Telecommunications Bureau to inform the staff attorney of Mr. Easton's  X4-actions. Thereafter, she resigned from SMG, claiming she was no longer able to work there.A$4 H% {O-ԍxId. at 24.A  X-  x18.ؠMs. Milstein has stated that on January 24, 1996, she informed Mr. Breen that Ms.  xHamilton had told her that Mr. Easton was attempting to conceal his mistake in the bid for  X-License B324.A%V H% {O$-ԍxId. at 20.A  X- D. PCS 2000's Meeting with Commission Staff and Bid Withdrawal Payment Request "%,N(N(ZZ"Ԍ X-  ԙx19.ؠOn January 26, 1996, PCS 2000, apparently unaware of Ms. Hamilton's contact with  xthe Commission, submitted a Request for Expedited Waiver or Reduction of Withdrawal Penalty  X- xfor its Round 11 bid for Norfolk.&H% yOK-ԍxThe issues raised in PCS 2000's waiver request are being addressed in a separate Order. While the waiver request stated that the precise cause of the  x<erroneous bid was unknown to PCS 2000, the waiver request concluded that the Commission was  x[not at fault. The waiver request did concede, however, that press reports stated that PCS 2000  xattributed the error to the Commission, but claimed that those reports were erroneous in stating  Xv- x\that PCS 2000 had blamed the Commission for the error.'vXH% yO -ԍxPCS 2000's Request for Expedited Waiver or Reduction of Withdrawal Penalty at 2. The waiver request contained an  xKaffidavit by Mr. Easton, who declared that the precise manner in which the bidding error occurred  XH- xcould not be ascertained.I(HH% yO -ԍxEaston Declaration at 1.I Mr. Easton, however, made several assumptions regarding how it  X1- xcould have happened. He stated that the bidding error could have been caused by human error,  xkby an error introduced in the course of manually changing bids online in real time, or by an  xerror introduced in transferring the data file between PCS 2000's computers or in transmitting  X - xythe file over the bidding network to the Commission.:) xH% {O-ԍxId.: Mr. Easton also claimed that PCS 2000's  xprinters were not working adequately, and as such, "PCS 2000 did not receive any confirmation  X -that would have timely alerted the company to the error."j* H% yO{-ԍxPCS 2000 January 26, 1996, Waiver Request at Att. 2, p.2.j  X-  x20.ؠAlso on January 26, 1996, Ms. Hamilton spoke with Mr. Breen about Mr. Easton's  xactions. Ms. Hamilton's friend, Rosalyn Makris, was present when Ms. Hamilton spoke with Mr.  x>Breen. Ms. Hamilton has stated that she informed Mr. Breen that Mr. Easton had made the  xmistake in preparing the bid and that Mr. Easton had lied to the Commission on the telephone  xabout the bidding error. She states that she additionally told Mr. Breen that Mr. Easton changed  X-the bids on the database and then sent those altered reports to the Commission.T+H% yOj-ԍxIndependent Counsel's Report at 20.T  X-  1x21.ؠMs. Makris confirmed that Ms. Hamilton informed Mr. Breen about Mr. Easton's  x=actions. Ms. Makris stated that she understood Ms. Hamilton to be telling Mr. Breen that Mr.  xEaston had made the bidding error and was "doing whatever was necessary to coverup his  X- x-[mistake].":,* H% {O#-ԍxId.: Ms. Makris stated that Ms. Hamilton's comments to Mr. Breen were not ambiguous  X-and that Mr. Breen did not appear surprised.:- H% {O&-ԍxId.: "~N -,N(N(ZZ"Ԍ X-  "x22.ؠOn January 29, 1996, apparently still unaware of Ms. Hamilton's contact with the  x/Commission, PCS 2000 officials and their counsel met with Commission staff to discuss the  xbidding error. Mr. Lamoso, President of Unicom, and Fred Martinez, Chairman of Unicom,  xalong with their counsel, explained that ordinarily Mr. Breen and Mr. Easton submitted the bids  xtogether. On that day, however, Mr. Breen was driving from Oregon to the RTI offices in San  xMateo, California, and was not present to crosscheck the bids. Moreover, the PCS 2000  xparticipants at this meeting explained that PCS 2000's facsimile machine was overloaded and that  xPCS 2000 was not able to get any bid confirmations that day. They stated that PCS 2000 did  xnot know how the error was made, but they did not attempt to blame the Commission for the error.  X - E. Ms. Hamilton's Contact with Mr. Lamoso and the Commission's Inquiry  X -  x23.ؠOn February 5, 1996, Ms. Hamilton contacted Mr. Lamoso to inform him of Mr.  X - x<Easton's actions.D. H% {O7-ԍxId. at 2728.D Ms. Hamilton stated that she told Mr. Lamoso that Mr. Easton had lied to the  xCommission and submitted falsified documents to the Commission. Ms. Hamilton then sent Mr.  xMLamoso a copy of her declaration, after telling him that she supplied the Commission with a  Xy-copy.A/yZH% {O-ԍxId. at 27.A  XK-  x24.ؠOn February 6, 1996, Mr. Easton voluntarily took a leave of absence from his  xpositions as Chief Executive Officer of Unicom and as Director of Engineering of RTI. Mr.  X-Easton additionally resigned as a bidding agent for PCS 2000.0H% yO-ԍxMr. Easton was replaced as a registered bidding agent with Daniel J. Parks, a Director of Unicom.  X-  x25.ؠOn February 7, 1996, the Wireless Telecommunications Bureau sent Mr. Lamoso a  x.letter seeking additional information pursuant to Section 308(b) of the Communications Act of  x1934, as amended (the Act), 47 U.S.C. 308(b). The letter requested, among other things,  xdetailed information about how PCS 2000 routinely prepared and submitted its bids, how PCS  x2000 prepared, submitted, and later withdrew its Round 11 bid, and how PCS 2000 took steps to inform the Commission of the erroneous bid.  XN-  x26.ؠPCS 2000 retained the law firm of Young, Vogl, Harlick, Wilson & Simpson, LLP  x(Young, Vogl) on February 8, 1996, to conduct an investigation into the circumstances surrounding the erroneous bid.  X- F. PCS 2000's Response to the Commission's Inquiry  X -  x27.ؠOn February 14, 1996, counsel for PCS 2000 submitted a Progress Report which,  xLamong other things, indicated that PCS 2000 had engaged the services of Price Waterhouse to"! |0,N(N(ZZ "  xconduct an audit and the law firm of Young, Vogl to conduct an investigation and submit an  xindependent counsel report. On February 20, 1996, PCS 2000 submitted the independent counsel  X- xreport to the Commission and requested that it be treated confidentially. 1H% yOK-  ԍxOn May 15, 1996, PCS 2000 submitted a redacted version of the Independent Counsel's Report which it acknowledged could be disclosed to parties filing Freedom of Information Act requests with the Commission.  That report is considered herein as part of the record.  X-  3x28.ؠOn February 21, 1996, Mr. Lamoso, through his counsel, responded to the  xCommission's February 7, 1996, letter of inquiry with an 18page declaration directed at  xanswering the Commission's questions. Mr. Lamoso described in his declaration the manner in  xwhich PCS 2000 submitted bids. Mr. Lamoso also stated that PCS 2000's computer system  xwould allow the bid selector to enter a bid of the minimum established bid for that round by a single key stroke or to enter a different bid manually.  X -  !x29.ؠMr. Lamoso, who was in Puerto Rico at the time of the Round 11 bid, also explained  xthe company's data retention procedures. Mr. Lamoso stated that Michael Gavette, the bidding  x]program consultant, would move a copy of the network data file to a subdirectory called  X -"archive" where it would be maintained at all times.2 H% yOx-ԍxStatement of Javier Lamoso in Response to the Commission's Inquiry of February 7, 1996, at 5.  Xy-  x30.ؠMr. Lamoso also stated that Ms. Hamilton contacted him on February 5, 1996, and  x=supplied him with her declaration and the copies of the Control P Report 1 and Screen Preview  x1. According to Mr. Lamoso, Mr. Easton, himself, acknowledged that these reports appeared  X4- xgenuine.A34H% {O-ԍxId. at 13.A Mr. Lamoso, however, stated that the Control P Report 2 and Screen Preview 2,  xwhich were created after the three markets were withdrawn from the initial bid, were not  X-located.:4BH% {O-ԍxId.:  X-  x31.ؠAs for the report which was sent by facsimile to the Commission (Control P Report  x3), Mr. Lamoso stated that it appears that it was prepared sometime after 11:15 a.m. PST, and  X-not at 9:35 a.m., as indicated on its face.:5H% {O/!-ԍxId.:  X|-  {x32.ؠMr. Lamoso also stated that PCS 2000's relevant computer files containing its Round  x/11 bids have not been located. Although the files would have normally been moved to the  XN- xarchive directory, no copy of the questioned Round 11 bid was found.D6Nf H% {Oe&-ԍxId. at 1314.D The Round 11 bid was  xyalso missing from Mr. Easton's computer files. Mr. Lamoso claimed that it is his understanding"7 6,N(N(ZZ"  x.that Mr. Easton deleted the files, along with others, when he resigned as the bidding agent on  X- xFebruary 7, 1996.A7H% {Ob-ԍxId. at 14.A According to Mr. Lamoso, the files were deleted and purged in a manner  X-which has prevented the reconstruction of their contents.A8ZH% {O-ԍxId. at 15.A  X-  @x 33.ؠAdditionally, on February 21, 1996, PCS 2000 amended its request for a waiver of  xthe bid withdrawal payment because, according to its counsel, the original submission made  Xv- xstatements that "were not entirely accurate."9vH% yO -ԍxLetter to Michele C. Farquhar from Michael Deuel Sullivan dated February 21, 1996. Most significantly, the amended request omitted  x/a statement from Mr. Easton as to his version of the events of bidding round 11. It also no  xlonger claimed that confirmation of the bid was not received because of a printer malfunction.  xFurthermore, the amended waiver request no longer represented that the press reports erroneously  xclaimed that PCS 2000 charged the error to the Commission. Finally, it no longer stated that Mr.  xEaston supplied the Commission with copies of spreadsheet printouts indicating the bids that PCS 2000 believed it had downloaded to the Commission.  X -  ?x!34.ؠNonetheless, in its amended waiver request, PCS 2000 did still claim that Mr. Easton  x-contacted the Commission immediately upon discovering the error to indicate that the bid should  x.have been $18 million instead of $180 million. PCS 2000 does not elaborate on what transpired when Mr. Easton telephoned the Commission.  XK- G. Additional Easton Declaration  X-  x"35.ؠOn June 28, 1996, counsel representing Mr. Easton submitted an additional sworn  X- x=declaration of Mr. Easton to "supplement the record in this proceeding.":|H% {O3-ԍxSee Letter to Chairman Hundt from Thomas Gutierrez, dated June 28, 1996. In this declaration,  xsworn to on June 26, 1996, Mr. Easton admits that the bidding error was the fault of PCS 2000.  xHowever, Mr. Easton states that the mistake was made in one computer, transferred to a second  xzcomputer, corrected in the first computer, but transmitted to the Commission via the second  X- x=computer.W;H% yOi -ԍxEaston June 26, 1996 Declaration at 1.W He states that the materials he sent to the Commission by facsimile the day of the overbid were printouts from the computer which had the corrected information on it.  Xe- H. PCS 2000's Amended Application and Waiver Request  X7-  |x#36.ؠOn February 19, 1996, prior to Unicom selling its interest in PCS 2000 to SuperTel,  x Mr. Easton resigned as a Director and Chief Executive Officer of Unicom and agreed not to  x>participate in the affairs of the Board of Directors. Mr. Easton also resigned as a registered"  ;,N(N(ZZ"  xbidding agent for PCS 2000, and was replaced by Daniel Parks. Thereafter, on April 26, 1996, Mr. Breen resigned from his position on the Board of Directors of Unicom.  X-  mx$37.ؠOn July 2, 1996, PCS 2000 submitted a major amendment to each of its 15 pending  xapplications to reflect a substantial change in the ownership and control of its control group.  xAlthough arguing that the amendments should not be considered newly filed applications under  xthe rules, PCS 2000 nevertheless additionally filed a request for a waiver of Section 24.823(g)  X_- xof the Rules<X_H% yO-  |ԍxSection 24.823(g) of the Rules specify that "[a]n application will be considered to be a newlyfiled  xapplication if it is amended by a major amendment." 47 C.F.R. 24.823(g). Section 24.823(c) defines a major amendment as one which "proposes a substantial change in ownership or control." 47 C.F.R. 24.823(c). on July 2, 1996. The amendment changed the general partner of PCS 2000 from  XH- xUnicom to SuperTel. As described in detail in Section II. A., supra, SuperTel's ownership is  xidentical to Unicom's except that the 38.6% interest held by the SDE Trust is held by Richard Reiss in SuperTel, and the interest held by the Breen Family Trust has not been issued as stock.  X - III. DISCUSSION ă  X -  ?x%38.ؠThe Commission must have full confidence in the truthfulness of representations of  xits applicants and licensees. "[T]he Commission must rely heavily on the completeness and  xaccuracy of the submissions made to it, and its applicants in turn have an affirmative duty to  X{- xinform the Commission of the facts it needs in order to fulfill its statutory mandate."={H% {O-  /ԍxRKO General, Inc. v. FCC, 670 F.2d 215, 232 (D.C. Cir. 1981), cert. denied, 456 U.S. 927 and 457 U.S. 1119 (1982). The  xCommission has stated that this duty is so important that the "scheme of regulation rests on the  XM-assumption that applicants will supply the Commission with accurate information.">^MBH% {O@-  ԍxPolicy Regarding Character Qualifications in Broadcast Licensing, 102 FCC 2d 1179, 1210 (1985), recon.  {O - xdenied, 1 FCC Rcd 421 (1986), modified, 5 FCC Rcd 3252 (1990), recon. granted in part, 6 FCC Rcd 3448 (1991)  {O-(Character Policy Statement).  X-  x&39.ؠGenerally, breach of the duty to be truthful to the Commission takes two basic forms:  x>(1) misrepresentation, and (2) lack of candor (failure to disclose). The former involves false  xstatements of fact; the latter involves concealment, evasion, or other failure to be fully  xinformative. Thus, an applicant's duty can be breached by affirmative misrepresentations and/or  xby a failure to come forward with a candid statement of relevant facts, whether or not such  X-information is particularly elicited by the Commission.?h H% {O"-ԍxSee Fox Television Stations, Inc., 10 FCC Rcd 8452, 849191 (1995) (citations omitted).  X~-  ]x'40.ؠWhile issues involving a licensee's character qualifications are generally resolved in  xthe context of a hearing, in this instance, we conclude it is not in dispute that misrepresentations  xwere made and a lack of candor has been demonstrated. As a result, there exists no material and"P ?,N(N(ZZ"  X- x[substantial question of fact necessitating a hearing.@H% {Oy-  \ԍxSee 47 U.S.C.  309(e); Astroline Communications Co., L.P. v. FCC, 857 F.2d 1556, 156162 (D.C. Cir.  yOC-1988). Based on the record before us, we have  xsufficient information in order to make a determination that Mr. Easton, acting on behalf of PCS  x2000, intentionally misrepresented facts to the Commission concerning the January 23, 1996, bid for the Norfolk market.  X-  @x(41.ؠWe believe that the record demonstrates that human error is responsible for PCS  x^2000's January 23, 1996, Round 11 bid of $180 million for the Norfolk BTA. The facts,  xyreflected in the Control P Report 1 and Screen Preview 1 submitted by Ms. Hamilton, show that  xthe $180 million bid originated from PCS 2000. The reports, which are initialled and dated by Mr. Easton, clearly show a $180 million bid submission for the Norfolk market.  X -  lx)42.ؠFurthermore, based on our review of the factual record, we have determined that Mr.  xyEaston, while an officer and registered bidding agent of PCS 2000, intentionally misrepresented  xfacts to the Commission and otherwise lacked candor in his dealings with the Commission. We  xfind that Mr. Easton attempted to mislead the Commission into believing that PCS 2000 actually  xNbid only $18 million for the Norfolk BTA in Round 11, and that an error was made by the  xCommission, which resulted in the posting of the $180 million bid. Mr. Easton compounded  x<this misrepresentation by sending to the Commission forged documents purporting to be original  xLbidding data sheets, deleting and destroying other relevant files, and failing to reveal all of the  xfacts as he knew them in his January 26, 1996, affidavit submitted with PCS 2000's Request for Expedited Waiver or Reduction of Withdrawal Penalty, and his later June 26, 1996, declaration.  X-  x*43.ؠAlthough Mr. Easton is no longer an officer or director of PCS 2000, Unicom, or  x.RTI, and apparently has no direct or indirect ownership interest in PCS 2000, he was an officer  xand director at the time misrepresentations were made. Moreover, as a registered bidding agent  xof PCS 2000, Mr. Easton was acting on behalf of the applicant. Accordingly, we believe that PCS 2000 is ultimately responsible for the misrepresentations made by Mr. Easton.  X|-  Mx+44.ؠThese intentional deceptions by Mr. Easton must be considered breaches of the public  x"trust. Acts of willful misrepresentation to the Commission go to the core concern of  XN- xZtruthfulness.AN"H% {O! -ԍxSee, e.g., Character Policy Statement, 102 FCC 2d at 121011. First, we determine that the misrepresentations were intentional. BNH% {O!-  ԍxIntent to deceive is an essential element of misrepresentation or lack of candor showing. See Weyburn  {O}"-Broadcasting Limited Partnership v. FCC, 984 F.2d 1220, 1232 (D.C. Cir. 1993)  Ms. Hamilton's  xuncontroverted statement, which is fully supported by the Independent Counsel's Report,  xzdemonstrates that Mr. Easton knew when he called the Commission that PCS 2000, and PCS"  B,N(N(ZZ\"  X- x]2000 alone, was responsible for the bidding error.C H% yOy-  ԍxNot only is the statement by Ms. Hamilton uncontroverted, but it is also credible. Ms. Hamilton has no  xhreason to misrepresent facts before this Commission. She had nothing to lose. She voluntarily gave up her own job.  xMr. Easton, on the other hand, had plenty to lose and reason to dissemble considering the potential bid withdrawal payment facing PCS 2000. Despite that knowledge, Mr. Easton  xproceeded to attempt to place the blame for the $180 million bid on the Commission's bidding  xycomputer. He then sent to the Commission via facsimile transmission falsified documents. Mr.  x[Easton wrote a false time on the bidding sheets he submitted to the Commission in an obvious  xattempt to mislead the Commission into believing that the documents were created earlier. Undeniably, the creation of false documents is an intentional act of deception.  X_-  x,45.ؠAdditionally, when Mr. Easton submitted his sworn statement on January 26, 1996,  xhe knew the true nature of the bidding error, but failed to candidly convey the information to the  xCommission. The June 26, 1996, declaration submitted by Mr. Easton was likewise lacking in  xcandor in several respects. First, although Mr. Easton knew that he attempted to mislead the  x{Commission's auction personnel into believing that the bidding error was the fault of the  xLCommission, his declaration disclaims that. Second, Mr. Easton offers no explanation why the  xmaterials faxed to the Commission on January 23, 1996, which purport to show that PCS 2000  xkhad bid $18,006,000, and not $180,060,000, bore Mr. Easton's initials and a handwritten time  X - xbefore the mistaken bid was placed. Mr. Easton's second declaration states that what he sent to  xKthe Commission was the report he printed out from the computer which had the corrected bidding  X{- xMinformation on it after he had learned there was a bidding error.]D{H% yO-ԍxEaston June 26, 1996 Declaration at 1.] The declaration does not  Xd- xexplain how the materials sent by Mr. Easton bore the earlier time if, as the statement would lead  XO- xone to believe, Mr. Easton printed the materials from his computer after he had spoken with the Commission's auction personnel.  X -  >x-46.ؠMoreover, we believe the record shows that Mr. Easton destroyed relevant documents  x<to conceal his misrepresentations. The fact that the permanent records for bidding Round 11, the  xround in which the mistaken bid was made, cannot be found is telling. The destruction of documents is obviously also an intentional act.  X-  1x.47.ؠSecondly, we believe the misrepresentations were serious. As stated above, the  xCommission must rely on the accuracy of information conveyed to it by its licensees and  x[applicants. Mr. Easton made his misrepresentations directly to Commission auction personnel  xland then to the Commission as a whole in his submitted declaration. As we noted in the  X=- xCharacter Policy Statement, we are authorized to treat even the most insignificant  X(- x misrepresentations as serious.mE(@H% {O%-ԍxSee Character Policy Statement, 102 FCC 2d at 120911.m The misrepresentations made here were not insignificant.  X- x-Instead, the misrepresentations bore directly on whether or not PCS 2000 should be charged with"E,N(N(ZZ["  X- xLa bid withdrawal payment._FXH% yOy-  !ԍxSection 24.704(a)(1) of the Commission's Rules subjects a bidder who withdraws a high bid during the  xcourse of an auction to a payment equal to the difference between the amount bid and the amount of the ultimate winning bid for that market. 47 C.F.R. 24.704(a)(1)._ Mr. Easton attempted to absolve PCS 2000 of its responsibility of  xmaking a withdrawal payment by making it appear as though it was not PCS 2000 that was at  x\fault for the $180 million bid, but the Commission that was at fault. The misrepresentations,  xtherefore, were of decisional significance on the issue of whether or not any withdrawal payment should be assessed against PCS 2000.  Xv-  x/48.ؠAlthough the Commission is authorized to treat misrepresentations as disqualifying,GvH% {O -ԍxSee Pinelands, Inc., 7 FCC Rcd 6058 (1992), Character Policy Statement, 102 FCC 2d at 1210.  xwe do not believe that would serve the public interest here. PCS 2000 has taken measures to  xremove the wrongdoers from ownership and control of PCS 2000. First, PCS 2000 secured the  xresignations of Messrs. Easton and Breen from all positions held with PCS 2000. Thereafter,  xPCS 2000 made efforts to ensure the neither Mr. Easton, nor Mr. Breen has any ownership  xinterest direct or indirect in PCS 2000. Because those responsible for the misdeeds are no  xlonger associated with the company, we do not believe that disqualification is required in this  X - xinstance.H" zH% {O-  ԍxSee, e.g., Teleprompter Cable Systems, Inc., 40 FCC 2d 1027 (1973). In Teleprompter, both the applicant  xand president were convicted under federal perjury and bribery statutes. The Commission, nonetheless, granted the  x,subject applications after finding that the applicant had taken adequate measures to rehabilitate itself by hiring new management and board members.  After learning of the deception,>IX d H% yO-  zԍxThe record demonstrates that Mr. Lamoso, President of the General Partner of PCS 2000, commissioned  xto hire an independent law firm to investigate the overbid merely three days after Ms. Hamilton informed him of Mr. Easton's deceptions.> PCS 2000 moved quickly to take adequate remedial  xsteps by removing from ownership and control positions those responsible for the  xmisrepresentations. Accordingly, we have every reason to "anticipate that the future conduct of  X- x[PCS 2000] will measure up to the expectations" required upon Commission licensees.WJ H% {O-ԍxTeleprompter, 40 FCC 2d at 1035.W Our  xLanalysis that these remedial efforts allow us not to disqualify PCS 2000 are explained in greater detail in the companion item to this Order.  X4-  x049.ؠWe do continue to have grave concerns regarding Mr. Easton's fitness to be a  xCommission licensee and his fitness to participate in future Commission proceedings. PCS 2000  xjhas effectively divested Mr. Easton of his ownership interest in PCS 2000, therefore, we do not need to address that issue here. We will be addressing these concerns in a subsequent order.  X-  0x150.ؠIn contrast to Mr. Easton, at this time the Commission does not know the full extent  xof Mr. Breen's involvement in the deception. We believe that the facts appear to demonstrate  x=that although Mr. Breen was aware of Mr. Easton's actions, he chose not to report them to the"J,N(N(ZZ3"  x=Commission or take any other action to correct Mr. Easton's deception. At this point we make  xno conclusions about Mr. Breen's role in the deception. Because Mr. Breen has been effectively  xremoved from his control and ownership positions in PCS 2000, we do not need to reach any  x.determination at this time. We do note, however, that Mr. Breen is the majority shareholder in  xWestTel, L.P. (WestTel), the successful bidder in the PCS C Block reauction for the American  xSamoa market. Additionally, WestTel was the high bidder in PCS D, E, and F Block auctions  x|for the U.S. Virgin Islands; Bend, OR; Klamath, OR; Twin Falls, ID; Pocatello, ID; and  x/American Samoa. We will address our concerns regarding Mr. Breen's involvement in PCS  x2000's deception in the context where Mr. Breen has an ownership and/or controlling interest in  x.these markets, and make a determination therein of whether Mr. Breen possesses the requisite character qualifications to hold a Commission license.  X -  x251.ؠSection 503(b) of the Act provides that the Commission is authorized to impose  x.forfeiture penalties upon applicants who "willfully and repeatedly" fail to comply with the Act  xNand the Rules. Willful means that the violator knew it was taking the action in question,  X - xregardless of whether there was an intent to violate the rules.wK H% {O -ԍxSee Southern California Broadcasting Co., 6 FCC Rcd 4387 (1991).w Mr. Easton: 1) knew he was  xmisrepresenting facts to the Commission when he telephoned the Commission's bidding line; 2)  x>knew he was sending the Commission falsified documents when he sent bidding sheets by  xfacsimile; and 3) knew he was not being fully candid with the Commission when he submitted his two statements purporting to describe events surrounding the mistaken bid.  X-  "x352.ؠBecause this is a serious violation, and we count no less than three instances of  xmisrepresentation or lack of candor connected with PCS 2000's Round 11 bidding error, we  xjbelieve the maximum forfeiture allowed by statute of $1,000,000 is appropriate. We believe that  X- xjeach misrepresentation, taken alone, is of a serious enough magnitude to warrant the maximum  x\forfeiture. However, because all three instances of misrepresentation by a PCS 2000 official  xrelate to a single event, we are imposing a forfeiture of $1,000,000, as opposed to a $3,000,000 forfeiture. We find no downward adjustment factors present.  Xg-  Nx453.ؠWhile it is true, as stated above, that PCS 2000 has taken steps to remove any direct  xjor indirect interest Mr. Easton may have had in PCS 2000, that removal alone does not serve as  xka mitigating factor influencing us to reduce the amount of the forfeiture. Mr. Easton was an  x-officer, director, and registered bidding agent and indirectly held a substantial ownership interest  xyin PCS 2000 at the time he made the deceptions. PCS 2000, therefore, must be held accountable  xfor the actions of its officers and directors. The removal of Mr. Easton serves as a basis instead to persuade us not to disqualify PCS 2000.  X!-Q  IV. CONCLUSION AND ORDERING CLAUSES ă  X#-  {x554.ؠIn conclusion, we find that PCS 2000, through one of its officers and bidding agents,  xmisrepresented facts to the Commission to cover up a mistaken bid made during Round 11 of the"j$ZK,N(N(ZZF#"  xCommission C Block PCS auction. The misrepresentation was compounded with the submission  xof false documents sent to the Commission and further compounded with a sworn statement which seriously lacked candor.  X-  x655.ؠAccordingly, pursuant to Section 503(b) of the Communications Act of 1934, as  xamended, 47 U.S.C. 503(b), and Section 1.80 of the Commission's Rules, 47 C.F.R. 1.80,  xNPCS 2000 IS APPARENTLY LIABLE FOR A FORFEITURE in the amount of One Million  xDollars ($1,000,000) for willful and repeated violations for misrepresentations made to the  xLCommission. The amount specified was determined after consideration of the factors set forth in Section 503(b)(2) of the Communications Act of 1934, as amended.  X -  x756.ؠPayment of the forfeiture may be made by mailing a check or similar instrument,  x]payable to the order of the Federal Communications Commission, Post Office Box 73482,  xChicago, Illinois 606737482. The payment should note the File Number of the abovecaptioned  xproceeding. Payment by credit is acceptable and may be made by completing and submitting an  xFCC Remittance Advice (FCC Form 159) to Federal Communications Commission, Post Office Box 73482, Chicago, Illinois 606737482.  Xb-  x857.ؠIT IS FURTHER ORDERED that a copy of this Notice SHALL BE SENT to PCS 2000, L.P. by Certified Mail, Return Receipt Requested. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@William F. Caton x` `  hh@Acting Secretary