T111809 US V Bruno PM (Downie Testimony)

1
BARR - CROSS - DREYER
1 MS. COOMBE: The Government calls Christopher
2 Downie. May I approach, your Honor, to retrieve the
3 exhibits?
4 THE COURT: Yes.
5 THE CLERK: Mr. Downie, please come right
6 down this way. Please raise your right hand. Please state
7 and spell your last name for the record.
8 THE WITNESS: Christopher Downie,
9 D-O-W-N-I-E.
10 CHRISTOPHER DOWNIE,
11 having been duly sworn by the Clerk of the Court, was
12 examined and testified as follows:
13 THE CLERK: Thank you. Please take a seat up
14 in the witness stand. Just ask that you please speak into
15 the microphone.
16 THE COURT: Miss Coombe.
17 MS. COOMBE: Thank you, your Honor. May I
18 confer with Mr. Dreyer for a moment?
19 THE COURT: Yes, you may.
20 (Pause.)
21 DIRECT EXAMINATION BY MS. COOMBE:
22 Q. Good afternoon, Mr. Downie.
23 A. Good afternoon.
24 Q. Could you please introduce yourself to the ladies
25 and gentlemen of the jury?

BONNIE J. BUCKLEY, RPR, CRR
UNITED STATES COURT REPORTER - NDNY
2
DOWNIE - DIRECT - COOMBE
1 A. Hi my name is Chris Downie.
2 Q. Mr. Downie, could you please tell us about your
3 educational background?
4 A. Starting with high school or college or...
5 Q. You can start with college. That will be fine.
6 A. Okay.
7 Q. We definitely won't go back to preschool.
8 A. Okay. My undergraduate degree was from Dartmouth
9 College, received in 1991. I received my masters in
10 business administration from NYU. I did that at night so it
11 was over a period of three years. And that's my education.
12 Q. Could you please briefly outline for us your
13 professional experience?
14 A. Sure. Out of college, I worked for two years at
15 Bear Stearns, New York City, as a financial analyst. From
16 there, I joined another investment bank called Daniels &
17 Associates. That was also based in New York. Was there for
18 six years. Left in 2000 to join a startup
19 telecommunications company called Broadstream
20 Communications, was there from 2000 to mid of 2002. After I
21 left Broadstream Communications, I worked for a year as an
22 independent contractor for Communications Technology
23 advisers. And then I became CFO of Motient Corporation in
24 April -- I'm sorry -- March of 2003. I was CFO for a year
25 and then was -- became chief operating officer a year later

3
1 and retained that position until the end of 2006. In June
2 of 2007, I joined a New York based telecommunications
3 company called Telex Group and was -- joined as the CFO in
4 June of 2007 and then became president a year later. So I
5 am currently president and CFO of the Telex Group.
6 Q. Could you please tell us how you wound up being
7 affiliated with Communication Technology advisers?
8 A. I was introduced to CTA -- actually, Jerry
9 Abbruzzese, by a colleague of mine from Daniel & Associates.
10 Q. While you were working at CTA, did you focus on
11 one particular client?
12 A. I focused on a few companies. One was Excel
13 Communications, but my primary project was Motient
14 Corporation.
15 Q. Who did you report to while you worked with CTA?
16 A. Well, I reported to Jerry Abbruzzese at CTA.
17 Q. Where did you actually work during that time?
18 A. I worked in Reston, Virginia.
19 Q. When did you become an employee of Motient?
20 A. I became an employee, I believe, in March of 2003.
21 Q. Were you the principal executive officer of the
22 company after you became the chief operating officer?
23 A. Yes. When I assumed the chief operating officer
24 title, I was the senior ranking officer in the company, and
25 it was a public company, so I had the principal executive

4
1 officer, I guess, title for public reporting purposes.
2 Q. After you became a Motient employee, what was
3 CTA's relationship with Motient?
4 A. CTA was -- from the time period, the entire time
5 period I was involved and employed with Motient, CTA was
6 engaged as a chief restructuring officer during that time
7 period. I think they -- they got the chief restructuring
8 officer title when I became COO. They were basically
9 performing operational consulting services for Motient from
10 the time when I joined in I believe April of 2002 until the
11 time I left, and thereafter, but I'm not sure.
12 MS. COOMBE: Your Honor, I apologize, I
13 forgot to mention at the beginning of this witness'
14 testimony that this is a witness who's testifying pursuant
15 to an immunity order issued by this Court.
16 THE COURT: All right. Having recently
17 reexplained that to you, the same limitations apply with
18 this witness. Thank you.
19 BY MS. COOMBE:
20 Q. While you were an employee of Motient, did you
21 have any contact with CTA?
22 A. Yes.
23 Q. How often did you have contact with CTA?
24 A. Pretty much probably every day.
25 Q. Who was your contact at CTA?

5
1 A. Jerry Abbruzzese.
2 Q. Did you ever serve on the Motient board of
3 directors?
4 A. I did not.
5 Q. Did you ever serve on the board of directors for
6 another company, Terrestar Networks Incorporated?
7 A. Yes, I did.
8 Q. Can you tell us what Terrestar Networks is?
9 A. Terrestar Networks is a satellite services company
10 basically developing satellites for wireless communications
11 principally in the United States.
12 Q. Back in 2004 and 2005, what was the relationship
13 between Motient Corporation and Terrestar Networks
14 Incorporated?
15 A. Via an investment of equity, we essentially
16 purchased a 61 percent ownership interest in Terrestar.
17 Q. By we, do you mean Motient?
18 A. Yes. I'm sorry.
19 Q. When did that happen?
20 A. Ah, it's been a while, I don't recall the exact.
21 I believe that was in 2005, early 2005.
22 Q. How long did you serve on the Terrestar board of
23 directors?
24 A. I think for about six months.
25 Q. Do you remember when you served on the Terrestar

6
1 board of directors?
2 A. I don't recall the exact dates.
3 Q. Was it while you were the principal -- the chief
4 operating officer of Motient?
5 A. Yes.
6 Q. And was it after Motient had acquired Terrestar
7 Networks?
8 A. Yes.
9 Q. Did you have any executive role at Terrestar
10 Networks?
11 A. No, I didn't have an executive title at Terrestar,
12 no.
13 MS. COOMBE: Your Honor, at this time the
14 Government moves the admission of the following exhibits:
15 GU 17, 22, 24, and 29 through 31.
16 THE COURT: Objections?
17 MR. DREYER: No objections.
18 THE COURT: Admitted.
19 MS. COOMBE: May I approach, your Honor?
20 THE COURT: You may.
21 Q. I'm handing you Government's Exhibit GU 12. This
22 is an electronic mail message, and at the bottom, it's from
23 Mr. Barr to yourself, it says: Hi Chris, as per your
24 discussions with Jerry, I am forwarding to you this proposed
25 letter agreement for Capital Business Consultants. Please

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1 followup with Jerry to get CBC engaged. Thanks. Wayne.
2 Who's Jerry?
3 A. Jerry is Jerry Abbruzzese.
4 Q. Do you remember having a conversation with
5 Mr. Abbruzzese about hiring Capital Business Consultants?
6 A. Um, I believe we had a conversation. I don't
7 recall the specifics of the conversation.
8 Q. Do you recall anything about what Mr. Abbruzzese
9 said to you about hiring Capital Business Consultants?
10 A. I don't.
11 Q. Did Mr. Abbruzzese direct you to hire Capital
12 Business Consultants?
13 A. I believe he did, yes.
14 Q. Did Mr. Abbruzzese tell you what Capital Business
15 Consultants would do for Motient?
16 A. I, I don't, I don't recall what he specifically
17 told me.
18 Q. Do you see above that is an e-mail from you to a
19 Robert Macklin. Who's Mr. Macklin?
20 A. Mr. Macklin is the general counsel or was the
21 general counsel of Motient.
22 Q. And there's a copy to a Myrna Newman. Who's Miss
23 Newman?
24 A. Myrna Newman is the controller and the chief
25 accounting officer of Motient.

8
1 Q. That message says: Rob, as we discussed a few
2 weeks back, please review and get me a revised version back.
3 Myrna, simply an advanced FYI, CBC is a group that we are
4 engaging to assist our lobbying efforts on the FCC frequency
5 front to support, protect, maximize our frequency interests
6 on both the Motient and MSV side of things. You will get a
7 copy as appropriate. CD.
8 Where did the information in this message come
9 from?
10 A. I assume from the conversation with Jerry on this
11 matter.
12 Q. Is there any other source of the information?
13 A. I don't believe so.
14 Q. Could you please briefly explain to us what
15 Motient's lobbying efforts were at this time?
16 A. Yes. For both, for both -- Motient owned
17 interests in two satellite services company. One was Mobile
18 Satellite Ventures, or MSV, as we called it, and Terrestar,
19 Terrestar Networks. Essentially both companies had rights
20 to use certain satellite spectrum that they had applied for
21 via the FCC several, several years before. However, that
22 spectrum was limited to satellite, satellite use only, and
23 both MSV and Terrestar were seeking permission from the FCC
24 to utilize that spectrum on a terrestrial basis as well,
25 which is more effective for wireless communications.

9
1 Q. Was that lobbying effort important to Motient at
2 the time?
3 A. Yes, it was.
4 Q. And I take it, as the chief operating officer, you
5 were aware of Motient's lobbying efforts?
6 A. Yes, I was.
8 THE COURT: Yes.
9 BY MS. COOMBE
11 is an electronic mail message on the bottom from Mr. Macklin
12 to yourself, and it states: I don't see this agreement as
13 being more useful, and perhaps less, than a handshake deal.
14 Since the agreement does not specify what they owe us, but
15 does specify what we owe them, I had one change.
16 And then you sent an e-mail to Mr. Barr, and is
17 that Mr. Abbruzzese's address?
18 A. Yes, it is.
19 Q. One minor edit. Please confirm that this edit is
20 acceptable and we will engage.
22 THE COURT: Mm-hmm.
23 BY MS. COOMBE:
24 Q. I'm handing you Government's Exhibit GU 15. Can
25 you tell us what this is, Mr. Downie?

10
1 A. Yes. This is an engagement letter with Capital
2 Business Consultants.
3 Q. Now, you signed this letter on behalf of Motient
4 Corporation, is that correct?
5 A. That's correct.
6 Q. And that was in your role as the chief operating
7 officer?
9 Q. And the principal executive officer at the time?
10 A. In -- yes.
11 Q. Who was responsible for managing Senator Bruno?
12 A. Jerry Abbruzzese was, was involved, was leading
13 most of our regulatory efforts.
14 Q. Do you, do you have any knowledge of whether
15 Mr. Abbruzzese was involved with Senator Bruno?
16 A. I do not.
18 THE COURT: Yes.
19 BY MS. COOMBE:
20 Q. I'm handing you Government's Exhibit GU 16.
21 MR. DREYER: GU?
22 MS. COOMBE: 16.
23 Q. I would like to direct your attention toward the
24 bottom of the page, the second message up from the bottom.
25 It's a message from Mr. Barr to yourself, and Mr. Barr

11
1 wrote: Okay. On separate note, did Motient send out March
2 check to Capitol Consultants? Thanks. WB.
3 And if we look up at the next one please, you
4 wrote to Miss Newman. Did we? I think so.
5 And if we could look at the one up above that
6 please, Miss Newman wrote back to you: I do not see it
7 having been entered into AP.
8 What is AP?
9 A. Accounts payable.
10 Q. I have pulled a check request and put on Melinda's
11 desk. The check will go out Friday unless you want her to
12 cut it special today. Sorry, I was a poor policeperson on
13 this one.
14 And above that you wrote back Friday is fine.
15 Other than checking to see if Capital Business
16 Consultants, Senator Bruno, had been paid, did Mr. Barr
17 check to see if Motient had paid any other bills?
18 A. No. Correction. Absent CTA's bills on occasion.
19 Q. Other than CTA's bills and Senator Bruno's bills?
20 A. No.
22 THE COURT: Yes.
23 BY MS. COOMBE:
25 is another electronic mail message. I would like to direct

12
1 your attention to the bottom. This is message from you to
2 Mr. Macklin and Miss Newman, and the subject says: What is
3 the ... There is a 55 K -- does that stand for thousand?
4 A. Yes.
5 Q. $55,000 bill to Goldberg Godless. 20,000 bill to
6 Capital Business Consultants.
7 If we could look up at the next one, please.
8 Mr. Macklin wrote back: Goldberg is Henry Goldberg, if I
9 recall.
10 Who was Mr. Goldberg?
11 A. Mr. Goldberg is, is another FCC lobbyist.
12 Q. Capital Business is Melhman.
13 If we could look up above that please. You wrote
14 back: We pay Goldberg 55,000. I thought Melhman was
15 Capital Coalitions and $10,000 a month.
16 Mr. Macklin wrote back to you: That was a bill
17 for services. They bill hourly. I don't know what Capital
18 Business is then, if not Melhman.
19 And you wrote back two question marks.
20 Now at this time you were the chief operating
21 officer of Motient?
22 A. Right.
23 Q. The senior executive?
24 A. Right.
25 Q. At the time of this electronic mail message in

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1 June of 2005, neither you, nor Mr. Macklin knew what Capital
2 Business Consultants was, did you?
3 A. I guess we -- I mean via the engagement letter, we
4 knew it was a third party, a consulting company.
5 Q. But at the time of this e-mail, neither one of you
6 knew what Capital Business Consultants was?
7 A. I don't think per this e-mail can suggest that I
8 didn't know that, that they were a consulting firm.
9 Q. What would you suggest that the question marks
10 mean?
11 A. The question was to try and clarify in the
12 accounts payable realm who the payments were going to. And
13 I think in this case the difference between Capital Business
14 and Capital Coalitions was the confusion, the name between
15 the two entities.
16 Q. Right. There does seem to be a lot of confusion
17 within this e-mail, doesn't there.
18 MR. DREYER: Your Honor, I object. I think
19 he explained the e-mail.
20 THE COURT: I'll allow the question.
21 A. I believe it's apparent there was confusion, yes,
22 in this e-mail.
23 Q. And part of the confusion in the e-mail, you and
24 Mr. Macklin were not aware of what Capital Business
25 Consultants was at the time that this electronic mail

14
1 message was sent; isn't that correct?
2 MR. DREYER: Asked and answered, your Honor.
3 THE COURT: Overruled. I'll permit
4 cross-examination.
5 A. Again, I believe the line of questioning was
6 trying to clarify the difference between Capital Business
7 Consultants and Capital Coalitions and what the, what the
8 respective payments were supposed to be.
9 Q. Is there any clarification in this electronic mail
10 message?
11 A. There isn't a conclusion, no.
12 Q. So at the end of this exchange, it's still not
13 clear to you and Mr. Macklin what Capital Business
14 Consultants is?
15 A. I think it's not clear who's supposed to receive
16 which, which payment and whether we made the payment or not.
17 Q. Wasn't the problem that you didn't know what
18 Capital Business Consultants was doing for Motient?
19 A. Ah, I knew that Capital Business Consultants was
20 one of our own lobbying groups. Beyond that, I didn't know
21 what specifically they were doing.
22 Q. Well, you didn't know at all what Capital Business
23 Consultants was doing, correct?
24 A. I knew we engaged them to support the FCC lobbying
25 efforts, but I don't know specifically what they were doing.

15
1 Q. You don't know generally what Capital Business
2 Consultants was doing either, do you?
3 A. Ah, I don't know on a day-to-day basis what
4 Capital Coalitions (sic) Consultants was doing.
5 Q. Mr. Downie, at the time of this e-mail in June of
6 2005, did you know anything that Capital Business
7 Consultants had done for Motient Corporation?
8 A. No.
10 THE COURT: Yes.
11 Q. I'm handing you Government's Exhibit GU 30. Can
12 you tell us what these are, Mr. Downie?
13 A. These are copies of checks.
14 Q. Who are they issued to?
15 A. Capital Business Consultants.
16 Q. And each one is for $20,000?
17 A. That is correct.
18 Q. Can you tell us how much they total up to?
19 A. $120,000.
20 Q. What did Senator Bruno do for Motient in return
21 for the $120,000 that Motient paid him?
22 A. Capital Business Consultants was engaged as a
23 lobbyist.
24 Q. What did Capital Business Consultants do for the
25 $120,000 that your company paid him?

16
1 A. I don't know.
2 Q. Are you aware of any written product, work product
3 produced by Senator Bruno?
4 A. No, I'm not.
5 Q. Are you aware of any invoices or other written
6 materials reflecting the amount of time Senator Bruno spent
7 in return for these payments for Motient Corporation?
8 A. No, I'm not.
9 Q. Was Motient a publicly traded corporation at this
10 time?
11 A. Yes, it was.
12 Q. What does that mean?
13 A. Ah, that means that it's a registered company with
14 the, you know, the SEC that's allowed to have its shares
15 listed on an exchange that buyers and sellers can actively
16 trade the, trade the stock of the company.
17 Q. And are there certain disclosure and reporting
18 obligations and that go along with being a publicly traded
19 company?
20 A. Ah, yes, there are.
22 THE COURT: Yes.
23 BY MS. COOMBE:
24 Q. I'm showing you Government's Exhibit GU 22. I
25 would like to direct your attention to the bottom of this,

17
1 where it says E-Fax. And it indicates that a fax was sent.
2 And if we could look a little farther up. It was sent from
3 E-Fax to Mr. Macklin at Motient. And then if we look a
4 little farther up above that. Do you have an understanding
5 of what E-Fax is, Mr. Downie?
6 A. I believe it's an electronic form of faxing where
7 you can receive it on your computer like a fax machine.
8 Q. This electronic mail message at the top is from
9 Mr. Macklin to Mr. Robert Brumley. Who's Mr. Robert
10 Brumley?
11 A. Robert Brumley is the -- or became the CEO of
12 TerreStar.
13 Q. When did he become the CEO of Terrestar?
14 A. I don't recall the exact date, but shortly after
15 we acquired the interest. So I think maybe like 2005. But
16 I don't really recall the specific date.
17 Q. Does looking at this help you remember that
18 Mr. Brumley was the CEO at the time of this electronic mail
19 message? In July of 2005?
20 A. I, I assume he was. Again, I don't recall the --
21 his actual date of hiring.
22 Q. Can you think of any other reason why Mr. Macklin
23 would show an agreement to Mr. Brumley?
24 A. No.
25 Q. This message states: Bob, attached is a

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1 consulting agreement for Senator Bruno. He has been working
2 for Motient the last six months on Terrestar issues, so we
3 planned to switch him to a contract with Terrestar. Let me
4 know if you are not familiar with his work/usage. If you
5 are, please execute this and fax it back to me. And there
6 is a phone number listed.
7 What did Senator Bruno do for Motient regarding
8 Terrestar issues for the past six months before this
9 electronic mail message was sent?
10 A. I don't know.
12 THE COURT: Yes.
13 BY MS. COOMBE:
14 Q. I'm handing you Government's Exhibit GU 23. Let's
15 start by looking at the first page, Mr. Downie. At the
16 bottom there's an electronic mail message from Mr. Brumley
17 to Mr. Macklin. He wrote: Can you give me some background
18 tomorrow? Happy to sign, but just want a feel for what he
19 will be doing. I will be at -- and the number is
20 redacted -- all day.
21 If we could look above that please. Mr. Macklin
22 wrote to you: Do you know anything that Senator Bruno does?
23 If we could look above that please. And you wrote
24 an e-mail: Need some help here please. And is that to
25 Mr. Abbruzzese?
19
1 A. Yes.
2 Q. Why did you ask Mr. Abbruzzese for help?
3 A. Because Jerry was leading our, our, our lobbying
4 regulatory efforts and he would know.
5 Q. Did Mr. Abbruzzese tell you what Senator Bruno had
6 been doing?
7 A. Ah, I don't recall.
8 Q. Let's look at the second page of this exhibit.
9 This is an electronic mail message from Mr. Macklin to
10 someone named Henry Goldberg. Is that the Mr. Goldberg that
11 we saw in an earlier electronic mail message?
12 A. Yes.
13 Q. He writes: Henry, can you give me an idea of the
14 kind of work he's been doing for Terrestar? I know he's
15 involved in the FCC lobbying effort, just not sure of
16 exactly what he's doing. Thanks.
17 Mr. Goldberg wrote back: I have no idea. Never
18 ran across him. Maybe Amy.
19 Can we look at the next page please? And the
20 bottom is the same as -- an electronic mail message that we
21 looked at earlier, but you wrote back to Mr. Macklin: No,
22 but I will try ask find out.
23 Can we please look at the next page? This is an
24 electronic mail message from Mr. Macklin to Miss -- to Amy
25 Melhman. Do you know who Amy Melhman is?

20
1 A. Ah, yes, she was an FCC lobbyist.
2 Q. And Mr. Macklin wrote: Amy, can you give me an
3 idea of what Senator Bruno is doing in the Terrestar
4 lobbying effort? Amy wrote back: I didn't know he was.
5 What might make you think that? Amy.
6 Can we look at the next page, please. Mr. Macklin
7 also wrote to Mr. Barr: Wayne, can you fill me in on what
8 he's doing for Terrestar exactly?
9 Can we look at the next page, please? Finally,
10 Mr. Macklin wrote back to Mr. Brumley: He's helping Jerry
11 A. in working with the current Republican administration. I
12 can have him give you a call to discuss further if you want.
13 What help did Senator Bruno give to Mr. Abbruzzese
14 regarding Republican administration?
15 A. Ah, I don't know.
16 Q. Can we look at GU 24, Mr. Downie? I don't have my
17 copy handy. If you can look at the screen. If you can't
18 see it, tell me, and we'll try to locate that. Can you see
19 that?
20 A. Yes.
21 Q. This is a fax cover sheet and it's from
22 Mr. Macklin to a Frank Gluchowski. It says: Frank, sorry
23 for the delay but we switched CEOs at Terrestar and I
24 couldn't get anyone to authorize the check or sign the
25 agreement. The check should be mailed today. Rob Macklin.

21
1 Does this help you to remember when Mr. Brumley
2 became CEO of Terrestar?
3 A. I guess from that earlier e-mail. I, I, I can't
4 see the date. 8/12. Again, I don't recall the specific
5 date, but per the e-mail of this, I would assume it's June
6 or July 2005.
7 Q. Could we look at the second page, please? Now,
8 this is an agreement between Terrestar Networks and Capital
9 Business Consultants, and it's signed by Robert H. Brumley,
10 President and CEO of Terrestar Networks as well as Joseph L.
11 Bruno. Do you know what Senator Bruno did for Terrestar
12 Networks?
13 A. No.
15 THE COURT: Yes.
16 BY MS. COOMBE
17 Q. I'm showing you Government's Exhibit GU 28. This
18 is a letter terminating Senator Bruno's contract with
19 Terrestar Networks. The second sentence says:
20 Unfortunately, changing circumstances have required
21 Terrestar to terminate this engagement prematurely effective
22 August 31, 2005. As all payments through August 31, 2005,
23 required by the agreement have been made, no further
24 payments shall be required thereunder.
25 Why was Senator Bruno's agreement with Terrestar

22
1 terminated early?
2 A. Ah, I don't recall.
3 Q. Who made the decision to cancel Terrestar's
4 contract with Senator Bruno?
5 A. I don't recall.
6 Q. Did you make that decision?
7 A. I don't think so, no.
8 Q. Did you talk to Mr. Macklin about the decision to
9 terminated Senator Bruno's contract with Terrestar?
10 A. I would imagine we did, but I don't recall if we
11 specifically spoke in this.
12 Q. Do you recall anything at all, specific or
13 generally?
14 A. No, I don't.
15 Q. Did you talk to Mr. Brumley about the decision to
16 terminate Senator Bruno's agreement with Terrestar?
17 A. I don't think so.
18 Q. Did you talk to Mr. Abbruzzese about Terrestar's
19 decision to terminate the contract with Senator Bruno?
20 A. I don't recall if I did, no.
21 Q. This agreement is signed by Mr. Macklin, the
22 termination agreement, but the agreement itself was signed
23 by Mr. Brumley. What was Mr. Macklin's position at
24 Terrestar at the time?
25 A. I think he was secretary, per the name plate, the

23
1 name.
2 Q. Per the what?
3 A. Per the name.
4 Q. Was he secretary for the board of directors?
5 A. No. I believe he was secretary of the company,
6 the -- Terrestar.
7 Q. Why did Mr. Macklin sign this instead of
8 Mr. Brumley?
9 A. I don't know.
11 THE COURT: Yes.
12 BY MS. COOMBE:
14 is a check drawn on Terrestar Networks Incorporated to
15 Capital Business Consultants for $40,000. Who were the
16 signatories to this check?
17 A. Myself and Myrna Newman.
18 Q. What did Senator Bruno do in return for this
19 $40,000 that he received from Terrestar Networks?
20 A. Ah, I don't know.
21 Q. Are you aware of any written work product that
22 Senator Bruno provided to Terrestar?
23 A. No, ma'am.
24 Q. Are you aware of any invoices that Senator Bruno
25 provided to Terrestar?
24
1 A. No.
2 Q. Are you aware of any written materials at all that
3 reflect any work performed by Senator Bruno for Terrestar?
4 A. No, I'm not.
6 THE COURT: Yes.
7 BY MS. COOMBE:
8 Q. I'm showing you Government's Exhibit GU 29. Do
9 you recognize that?
10 A. Yes. I believe it's a page from one of the
11 notebooks that I took notes in.
12 Q. What was your practice in keeping these notebooks?
13 A. I would either jot down notes of things that I
14 needed to do or people that I needed to call.
15 Q. All right. I would like to direct your attention
16 to where the arrow is. Can you read that line for us
17 please?
18 A. Ah, yes. It says Bruno TSN. I wrote hat or hot.
19 Q. Then it says 917?
20 A. Correct.
21 Q. Does that refer to some phone number?
22 A. I, I would assume so, yes.
23 Q. Do you know what area code 917 is?
24 A. No, I don't.
25 Q. Now, you said it says Bruno TSN. TSN refers to

25
1 Terrestar Networks?
3 Q. You said it says hat or hot. Can you think of any
4 reason that "hat" would be relevant to Senator Bruno and
5 Terrestar Networks?
6 A. No.
7 Q. Is it likely to you that it actually says "hot"?
8 A. Yes.
9 MS. COOMBE: May I have a moment, your Honor?
10 THE COURT: Yes.
11 (Pause.)
12 MS. COOMBE: I have nothing further, your
13 Honor.
14 THE COURT: Mr. Dryer.
15 MR. DREYER: Thank you, your Honor.
16 CROSS-EXAMINATION BY MR. DOWNIE:
17 Q. Afternoon, Mr. Downie.
18 A. Afternoon.
19 Q. Mr. Downie, you had a relationship with Jerry
20 Abbruzzese, going back how long?
21 A. Back to April of 2002.
22 Q. All right. And is it fair to say that he was your
23 boss back in 2002?
24 A. Yes.
25 Q. All right. And that relationship continued

26
DOWNIE - CROSS - DREYER
1 through other job assignments that you had, is that correct?
2 A. I was an independent contractor with him for a
3 year before I joined Motient.
4 Q. Now, what relationship, if you recall, did
5 Mr. Abbruzzese have to Motient when you were at CTA, do you
6 recall?
7 A. He was a primary operational consultant for the
8 company.
9 Q. And as a primary operational consultant, did he
10 have some impact on the restructuring of Motient after it
11 came out of bankruptcy?
12 A. Yes, he did.
13 Q. Tell us what he did.
14 A. You know, essentially, he was engaged by the board
15 of directors to put, you know, put together a restructuring
16 plan to try and reduce the cost burn of the company. The
17 company was losing significant amounts of money on a monthly
18 basis and didn't have too much money left in the bank at
19 that time, and so he working with the independent
20 contractors like myself that he had on location. We put
21 together plans to reduce the cost structure of the company,
22 try to increase, you know, increase the revenues to try and
23 keep the company going for as long as possible.
24 Q. At what point -- can you tell us at what point did
25 Motient actually, after restructuring, actually commenced

27
1 business on a positive basis, if you will?
2 A. Motient really had sort of two sides of its
3 business. It had a nationwide data network that was legacy
4 technology that was starting to not be competitive relative
5 to the more robust wireless -- more robust large mobile
6 carriers. And so the whole time I was at Motient, we were
7 basically deconstructing that network. And -- but the other
8 side of the business was via, you know, corporate finance
9 efforts and regulatory efforts supporting the two satellite
10 companies that were interested in Mobile Satellite and
11 Terrestar. So we raised, we raised some capital I believe
12 in mid of 2003 -- maybe early part of 2004 that gave us a
13 fair amount of I guess I would characterize as a more
14 positive note than we were prior to that.
15 Q. As of 2000 -- as of the end of 2004, specifically
16 December of 2004, what was Mr. Abbruzzese's position in the
17 company?
18 A. He was -- he basically represented CTA. He didn't
19 have a position in the company per se.
20 Q. Did there come a time when he did?
21 A. CTA became -- was, was designated by the board to
22 be chief restructuring officer, but Jerry himself never had
23 a position within the company.
24 Q. What about at Terrestar? Through Motient he --
25 since he was chief reinstructing officer, he also --

28
1 A. Yeah, by, by -- via that ownership, he
2 essentially, you know, had the same authorities at the
3 Terrestar level.
4 Q. Isn't it correct to say, however, that as of the
5 end of 2004 and 2005, the members of the board of directors
6 and the officers of Motient understood that Mr. Abbruzzese
7 had performed a major, a major accomplishment for Motient?
9 Q. Without Mr. Abbruzzese and CTA, there would be no
10 Motient, is that correct?
11 A. Um, that -- there would be Motient, but it
12 wouldn't, it wouldn't be in the form that it became during
13 that time frame.
14 Q. Is it also fair to say that in either late 2004
15 and early in 2005, that Motient had to launch a regulatory
16 effort in Washington in order to achieve certain permitting
17 that it had not had before?
19 Q. Explain to the jury what that program and what
20 that process involved.
21 A. In 2004, it was principally focused on mobile
22 satellite ventures spectrum interests. Essentially, as I
23 described before, MSV and Motient, because we were the
24 largest single share holder, were petitioning the FCC to
25 essentially allow that spectrum to be used on a terrestrial

29
1 basis in addition to the satellite to ground which was its
2 current limiting factor.
3 Q. In connection with that effort, was it -- is it
4 fair to say that Mr. Abbruzzese was in charge of that
5 regulatory effort that was being made?
6 A. He was leading it, yes.
7 Q. He was leading the effort. And so -- and by the
8 way, how many consultants did Motient and Terrestar have
9 during the period December 28 -- December 24 of 2004 and
10 December of 2005?
11 A. I can't recall specifically, but we had a lot of
12 consultants.
13 Q. How about 24? Does that ring a bell?
14 A. I can't recall specifically but it was definitely
15 north of ten.
16 Q. And do you know how much money you spent? Did you
17 spend about $3 million on consultants between the time that
18 Mr. Abbruzzese commenced his regulatory efforts and the time
19 he completed them?
20 A. I would suspect probably more than that.
21 Q. More than $3 million?
22 A. It was over several years.
23 Q. All right. And did you also pay consultants on an
24 average basis about 25 to $35,000 a month?
25 A. Um, I believe, as far as I recall, the consulting

30
1 fees, I would say, probably generally ranged from 10 to 30,
2 as far as I can recall.
3 Q. So the consulting arrangement that you had with
4 Capital Business was not an unusual amount, correct?
5 A. No, it was not an unusual amount.
6 Q. And a consulting agreement that calls for an-as
7 needed consultant or an on-call consultant, that was not an
8 unusual provision in a consulting agreement, is that
9 correct?
10 A. I mean the general -- generally, the consulting
11 fees served as retainers for their services. Yeah, I don't
12 think you could describe it as on-call.
13 Q. But they're performing services on an as-needed
14 basis, would that be fair to say?
15 A. That would be fair to say.
16 Q. In connection with this particular consulting
17 agreement, Miss Coombe kept referring to Joe Bruno as the
18 person on the consulting agreement. It was known to you
19 from December 2004 that Capital Business Consultants was the
20 entity that you were agreeing with in the consulting
21 agreement, is that correct? It was one of the signatories?
23 Q. But you've seen the consulting agreement?
24 Mr. Bruno, Senator Bruno signed that in his own name,
25 correct, as president?
31
2 Q. No other person signed that agreement for him? He
3 signed it himself?
4 A. I presume he signed it himself.
5 Q. And you are a public company, correct, at that
6 time?
8 Q. And Mr. Abbruzzese knew that you were a public
9 company, is that correct?
11 Q. And your subject to audits of the FCC and the IRS
12 and anybody -- and any other regulatory agency that wants to
13 come into your office and look at it?
14 A. That's right.
15 Q. When -- we saw several e-mails in which there were
16 inquiries made by Mr. Macklin and Mr. Brumley trying to
17 determine what, if anything, Senator Bruno was doing for
18 Motient and then Terrestar. And I believe there is one
19 e-mail, I can show it to you if you want me to, where you
20 volunteered to call Jerry Abbruzzese, and the phrase in the
21 e-mail is give me some help here, Jerry, or words to that
22 effect. Do you recall that?
23 A. I recall the e-mail that was shown to me here,
24 yes.
25 Q. All right. And if Jerry Abbruzzese said to you in

32
1 response to that e-mail, I want Senator Bruno to be a
2 consultant to Motient Terrestar, what would have been your
3 reaction at that time and place?
4 A. We would have made him a consultant, a consultant
5 to Motient and Terrestar.
6 Q. That's because of Jerry Abbruzzese's position in
7 the company, is that correct?
9 Q. Did Jerry Abbruzzese succeed in his regulatory
10 efforts?
11 A. Yes, he did.
12 Q. Tell the jury what he did and what the end result
13 was.
14 A. For both Mobile Satellite Ventures and Terrestar
15 we were ultimately successful in getting, getting the
16 authorities from the FCC to utilize that spectrum on a
17 terrestrial basis, which effectively made that spectrum
18 equivalent to cellular spectrum and, you know, potentially,
19 potentially very valuable.
20 We also, on the Terrestar front, received those
21 same authorities, but we also were successful in petitioning
22 the FCC to grant decisional spectrum to -- Terrestar
23 originally had I think eight megahertz of what was called
24 F-span spectrum, and ultimately the FCC awarded an
25 additional 12 megahertz of F-span spectrum to Terrestar.

33
1 Q. What did that mean to Motient and Terrestar
2 financially?
3 A. As I mentioned before, it, I guess, theoretically,
4 dramatically increased the value of that spectrum and what
5 it could be used for. And, ultimately, you know, my
6 opinion, it led to the fairly dramatic increase in
7 shareholder value that occurred at that point in time.
8 Q. The company at the end of year after approval
9 declared a value of what it was at the start of the
10 regulatory process?
11 A. Yes, it did.
12 Q. Could you tell the members of the jury what that
13 difference was?
14 A. When I started working with Motient, our market
15 cap was probably around $50 million, our stock price was a
16 dollar. After, after the two regulatory efforts, our market
17 cap ranged from 1.5 to 2 billion, the stock price was
18 between 25 and $33.
19 Q. And those efforts occurred during the time period
20 that we're speaking of; that is, at the end of 2004 up
21 through the end of 2005, is that correct?
22 A. The stock price started appreciating significantly
23 at the end of 2004, yes.
24 Q. All right. Thank you.
25 MR. DREYER: May I have a moment?

34
1 THE COURT: Yes.
2 (Pause.)
3 Q. Thank you, Mr. Downie. I have no further
4 questions.
5 MR. DREYER: Maybe we can ask the Judge at
6 sidebar how to handle this issue.
7 THE COURT: Excuse us while we talk behind
8 your back. Do we need the court reporter?
9 MR. DREYER: No.
10 MS. COOMBE: I don't think so.
11 MR. LOWELL: In fact, I think we do.
12 MR. DREYER: Well, not yet.
13 MR. LOWELL: Oh, okay.
14 (Sidebar off the record at 2:10 PM.)
15 THE COURT: There was a mistake. This
16 witness did not exercise his Fifth Amendment rights and is
17 not testifying under an immunity order. Therefore, there is
18 no consideration for you beyond those things that you'll
19 always be called upon to decide, which is the credibility of
20 the witness. But this witness has not testified under a
21 grant of immunity. He didn't seek it and he hasn't
22 testified under it.
23 Anything further from the parties?
24 MR. PERICAK: No, your Honor.
25 MR. DREYER: No, your Honor.

35
1 MS. COOMBE: Nothing further, your Honor.
2 THE COURT: You're free to go. Thank you.
4 THE WITNESS: Thank you.
5 (Witness excused.)
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T111809 US V Bruno PM (Downie Testimony)

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1

BARR - CROSS - DREYER

1 MS. COOMBE: The Government calls Christopher

2 Downie. May I approach, your Honor, to retrieve the

4 THE COURT: Yes.

5 THE CLERK: Mr. Downie, please come right

7 and spell your last name for the record.

8 THE WITNESS: Christopher Downie,

11 having been duly sworn by the Clerk of the Court, was

12 examined and testified as follows:

13 THE CLERK: Thank you. Please take a seat up

16 THE COURT: Miss Coombe.

17 MS. COOMBE: Thank you, your Honor. May I

18 confer with Mr. Dreyer for a moment?

19 THE COURT: Yes, you may.

21 DIRECT EXAMINATION BY MS. COOMBE:

22 Q. Good afternoon, Mr. Downie.

24 Q. Could you please introduce yourself to the ladies

25 and gentlemen of the jury?

1 A. Hi my name is Chris Downie.

2 Q. Mr. Downie, could you please tell us about your

4 A. Starting with high school or college or...

5 Q. You can start with college. That will be fine.

7 Q. We definitely won't go back to preschool.

8 A. Okay. My undergraduate degree was from Dartmouth

9 College, received in 1991. I received my masters in

10 business administration from NYU. I did that at night so it

11 was over a period of three years. And that's my education.

12 Q. Could you please briefly outline for us your

14 A. Sure. Out of college, I worked for two years at

15 Bear Stearns, New York City, as a financial analyst. From

16 there, I joined another investment bank called Daniels &

18 six years. Left in 2000 to join a startup

19 telecommunications company called Broadstream

20 Communications, was there from 2000 to mid of 2002. After I

21 left Broadstream Communications, I worked for a year as an

22 independent contractor for Communications Technology

23 advisers. And then I became CFO of Motient Corporation in

24 April -- I'm sorry -- March of 2003. I was CFO for a year

25 and then was -- became chief operating officer a year later

1 and retained that position until the end of 2006. In June

2 of 2007, I joined a New York based telecommunications

3 company called Telex Group and was -- joined as the CFO in

4 June of 2007 and then became president a year later. So I

5 am currently president and CFO of the Telex Group.

6 Q. Could you please tell us how you wound up being

7 affiliated with Communication Technology advisers?

8 A. I was introduced to CTA -- actually, Jerry

9 Abbruzzese, by a colleague of mine from Daniel & Associates.

10 Q. While you were working at CTA, did you focus on

11 one particular client?

12 A. I focused on a few companies. One was Excel

13 Communications, but my primary project was Motient

15 Q. Who did you report to while you worked with CTA?

16 A. Well, I reported to Jerry Abbruzzese at CTA.

17 Q. Where did you actually work during that time?

18 A. I worked in Reston, Virginia.

19 Q. When did you become an employee of Motient?

20 A. I became an employee, I believe, in March of 2003.

21 Q. Were you the principal executive officer of the

22 company after you became the chief operating officer?

23 A. Yes. When I assumed the chief operating officer