DNC Chair Caught in Global Crossing Scandal
JW Investigates McCauliffe’s Link to Bankrupt Company
When Enron filed for bankruptcy, the largest in our nation’s history, Clinton crony Terry McAuliffe was among the first to cast his verbal stones. The DNC Chairman criticized greedy Enron executives for hurting the “small people,” calling for a full investigation. He lashed out at the wealthy special interests. He questioned the company’s ties to the Bush Administration. Armed with what he perceived to be a winning campaign issue against Republicans and their popular president, McAuliffe was relentless. Ironically, the Bush Administration’s cozy ties with Enron are subject to JW’s investigation.
So why has the Democratic Party’s most spotlight hungry mouthpiece faded from view? Two words. Global Crossing.
While the SEC and FBI begin to probe the questionable accounting practices of telecommunications giant Global Crossing, Ltd., which went belly up on January 28, Judicial Watch has launched a full investigation into Terry McAuliffe’s ties to the company.
In what is an unprecedented case of political profiteering, McAuliffe turned a $100,000 initial investment in the company into $18 million in less than a year and a half—a nifty 18,000% profit. According to the New York Times, McAuliffe made millions more trading the stock and options after the company went public in 1998.
But McAuliffe’s shady ties to the company go beyond his questionable investment windfall. According to the press reports, McAuliff also did “political work” for Global Crossing CEO Gary Winnick, working out of an office in downtown Washington owned by Winnick. On one occasion, McAuliffe set up a golf outing for Winnick and then-President Clinton. Winnick would later give a million dollars to Clinton’s presidential library. The question is: what did he and Global Crossing receive in return?
Crossing the Line
Shortly after Winnick’s generous contribution to Clinton’s legacy building library, Global Crossing was awarded a $400 million contract by the Pentagon.
Due to irregularities in the bidding process, brought to light by separate complaints filed by those who had lost out on the contract, the Bush Administration cancelled the deal, precipitating a free fall of Global’s stock price.
Like Enron, Global Crossing had artificially inflated its stock price while executives engaged in massive stock selling in the year leading up to filing for bankruptcy. While Global brass made billions, employees lost their life’s savings as their 401(k) retirement plans were casualties in the Chapter 11 filing.
While Enron was an equal opportunity influence peddler, Global Crossing’s political leanings are noticeably one-sided. The company was the fifth largest corporate donor to the Democratic Party during the 2000 election cycle, but moved swiftly into first place this year. So far, Global has donated $350,000 to the Democratic Party for the 2002 campaign, and none to the GOP.
Further, Winnick, through his Pacific Capital Group, donated all of his 2000 campaign budget of $250,000 to the Democratic Party, and none to the GOP.
Global Crossing reportedly sponsored a fundraising dinner for Senate Majority Leader and Democrat Tom Daschle and gave thousands to Henry Waxman during the last election cycle. The company paid former Justice Department lawyer and Janet Reno assistant Anne Bingaman $2.5 million for her lobbying efforts. And former Defense Secretary William Cohen, a Republican, the man at the helm when Global Crossing was awarded a lucrative Pentagon contract, was named a Director of Global Crossing in an April 2001 company press release. He reportedly got a $500,000 consulting fee from the company as well.
Finally, Judicial Watch has filed Freedom of Information Act requests with various government agencies regarding Global Crossing and is contemplating shareholder lawsuits as well.
“Terry McAullife’s astonishing profit reeks of potential insider trading, especially given his role in selling government favors for campaign contributions during the Clinton Administration,” said JW Chairman Larry Klayman.